The opinion of the court was delivered by: GOURLEY
This is a suit for declaratory judgment, pursuant to the Federal Declaratory Judgment Act, 28 U.S.C.A. § 400, and the questions presented arise under Sections 8(a), 8(b), and 8(c) of the Selective Training and Service Act of 1940, as amended, 50 U.S.C.A.Appendix, § 308(a, b, c).
The defendants in said action are former and present employees of the plaintiff company who will be referred to as veterans and non-veterans, and the Lord Employees Association is the duly authorized and certified bargaining representative for the employees of the plaintiff company.
All the defendants have entered their appearance herein, and admitted all the allegations of fact contained in the Complaint. There are two groups of defendants, one (those of non-military service and the Lord Employees Association) asserts that upon the facts which exist, the employees of non-military service are entitled to retain their present positions with the company on the basis of the seniority rights of said employees; the other group of defendants (those of military service) asserts that upon the agreed statement of facts, and under the provisions of the Selective Training and Service Act, 50 U.S.C.A.Appendix, § 301 et seq., they are entitled to be re-employed by the plaintiff and, if necessary, to replace the defendant employees of non-military service.
The conflicting claims of the two groups of employees and that of the bargaining agent with the plaintiff company creates such a controversy between the parties as to justify the Court assuming jurisdiction, and could not be construed under any circumstances as an advisory decree.
In a situation such as exists in the instant case, the Federal Declaratory Judgment Act, Judicial Code, Section 247d, together with the Federal Rules of Civil Procedure, more particularly Rule 57, afford the only possibility of relief. The employer is placed in a situation where it must adopt a policy of employment which either accepts the National Selective Act as nullifying the seniority provisions in the union contract, or a position which follows the policy that the union contract is not affected by the Selective Service Act.
If the employer follows the union contract and disregards the veterans' contention under the Selective Training and Service Act, the employer is immediately subject to a suit by the veteran employees for failing to comply with the provisions of the Act. If, however, the employer accepts the veterans' position and disregards the seniority provisions of the union contract, he is immediately threatened with a proceeding under the provisions of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., for an unfair labor practice in disregarding a provision of the contract.
It appears, therefore, that a very real and immediate controversy exists, and the present proceeding avoids the possibility of such litigation and permits all parties concerned or interested to have their claims adjudicated.
It definitely was the intention of the Federal Declaratory Judgment Act, and Rule 57 of the Federal Rules of Civil Procedure, that a matter of this nature would be governed thereby. It has further been held by the Supreme Court of the United States that 'controversy' involved in a declaratory judgment must necessarily be of a justiciable nature and exclude the situation where an advisory decree is requested upon a hypothetical state of facts. Ashwander et al. v. Tennessee Valley Authority et al., 297 U.S. 288, 56 S. Ct. 466, 80 L.Ed 688.
Prior to the entry of the United States into World War II, Lord Manufacturing Company was a growing concern, but employed only about 500 employees. In November, 1943, the number of employees had increased to 2,818, which is the maximum employment during the history of the Company. During the present reconversion period less than 650 employees are required. About 500 employees have entered the armed services during World War II and are now rapidly returning and applying for reemployment under the Selective Service Act. Therefore, at the present time, and for many months in the future, the number of applicants for jobs will be greater than the jobs available.
From October 25, 1944, to September 19, 1945, the United States Navy operated the plant of Lord Manufacturing Company, during which time the employees of Lord Manufacturing Company continued to work at the plant; and when such operation ceased, the Navy terminated the employment of all such employees, who were in most cases promptly rehired by Lord Manufacturing Company as private operations were resumed. Regardless of this break in employment of all employees, all parties involved in this suit have regarded the employment by Lord Manufacturing Company as continuous, where the employee was promptly rehired by the Company.
In each of the actual and existing controversies hereinafter set forth, and in future similar controversies which will inevitably arise, due to continued return of former employees of the plaintiff who have been in the armed services, the fundamental question involved is whether the rehiring of employees who have been in the armed services shall be on the basis of seniority, or on a basis of super-seniority, or veteran's preference under the Selective Service Act, as interpreted by the Director of Selective Service. Hereinafter, for the purpose of convenience and clarity of statement, former employees who have entered the armed services and have been honorably discharged therefrom and have made application for reinstatement in their former jobs within 90 days of discharge, are referred to as 'Veterans,' and those employees who have not entered the armed services are referred to as 'Non-Veterans.' Wherever the seniority of a veteran is referred to, said seniority includes full credit for the time spent in the armed services, with each day of armed service being equivalent to a day of employment by the plaintiff.
On July 22, 1943, the plaintiff entered into a certain collective bargaining agreement with the defendant, Lord Employees Association, which organization was certified by the National Labor Relations Board on May 25, 1943, as the bargaining agent for all production and maintenance employees of the Lord Manufacturing Company. Thereafter, this agreement was modified and extended from time to time by other written agreements, and, as so modified and extended, was in full force and effect at the time pertinent for our consideration.
It is unnecessary to recite at length the terms of these bargaining agreements, but it is sufficient for our purpose to note that they each provide in great detail for the principal of service seniority in all dealings between the employer and employees. The contract provides, among other things, as follows:
'Seniority shall be defined as meaning job security and continuous work preference for particular work as well as work shifts, so long as employment or work is available.
'(a) The application of seniority rules shall be by departments. A department is defined as meaning all work, regardless of its nature, performed or carried out under the employee's department head.
'(b) Job placements and promotions to a higher paying job, or granting preference for particular work will be based at all times on seniority, together with equal consideration being given to his Selective Service military status.
'(c) An employee may be 'farmed out' to another department without losing his or her seniority position in his or her original department, if the employee and the department heads affected, viz.: the foreman or the Company, be agreeable to such temporary transfer, provided, however, that in any event, such temporary transfer shall not exceed a duration of thirty (30) calendar days.
'(d) An employee shall cease to have seniority:
'(2) If he is discharged.
'(3) If he is absent from work without notice to the Company for five (5) consecutive days.
'(5) If six (6) consecutive months elapse since he has last worked for the Company, except that if such period or longer of lapsed employment is due to depressed economic conditions resulting in unemployment, provided the employee reports in person to the Company within at least every six (6) month interval from the last reporting date, then and in such event, such lapse shall not affect the seniority rights of any employee upon his return to employment following resumption of productive or renewed working conditions.
'(6) If absence from employment for any period of time is due to any conscripted or voluntary enlisted service of the employee, in any of the armed forces of the United States for periods of training and/or participation in warfare, such absence shall in no way affect the seniority rating of such employee upon his return to employment at the end of such period of conscripted or voluntary enlisted service, provided, however, said employee reports for employment within forty (40) days (now extended by law to 90 days) after discharge from military service in accordance with terms of Selective Service Act.
'The Company may at its option select an employee for promotion to a supervisory or administrative position without regard to seniority rules. In such event, however, the Company agrees to inform the Association in writing of such action, and if such promotion shall be for a probationary period on a temporary trial, said probationary period shall not exceed ninety (90) days in any event.
'The Company agrees to furnish to the Association when requested a seniority list.'
'Article XII -- Lay-Offs and Rehiring
'Whenever the Company due to conditions beyond its control, is compelled to reduce the working force, in whole or in part, the proposed plan of reduction or shut-down shall first be disclosed fully to the Bargaining Committee of the Association.'
'Only after the work week for the employees in any one or more departments has been reduced to thirty-two (32) hours per week shall the Company undertake any partial or complete lay-off or shut-down in such department or departments.
'In the event of such partial or complete lay-off or shut-down, the same shall be effected according to the rules of seniority, with employees holding higher seniority rating and possessing proper qualifications for their job receiving first consideration among those retained in employment. Qualification for the job being interpreted as past experience and capability of performance on a particular job.
'At the time of rehiring either after lay-off or shut-down, the order of precedence in rehiring shall likewise be based on seniority rating of employees, with the employees holding higher seniority rating and possessing proper qualification for their jobs receiving first consideration among those rehired.'
In September, 1945, in pursuance to authority delegated previously thereto by the President to the Director of Selective Service, the Selective Service System interpreted the provisions of the Selective Service Act and provided, inter alia, certain rights and privileges for an honorably discharged veteran. Under date of November 26, 1945, the defendant, Lord Employees Association, notified the Lord Manufacturing Company that said Association representing the employees would not be bound by said interpretations, and would consider their contract broken with said company if the interpretations were acknowledged or recognized by the Company.
'8(b) In the case of any such person who, in order to perform such training and service, has left or leaves a position, other than a temporary position, in the employ of an employer and who (1) receives such certificate, (2) is still qualified to perform the duties of such position, and (3) makes application for reemployment within ninety days after he is relieved from such training and service or from hospitalization continuing after discharge for a period of not more than one year --
'(A) if such position was in the employ of the United States Government, its Territories or possessions, or the District of Columbia, such person shall be restored to such position or to a position of like seniority, status, and pay;
'(B) if such position was in the employ of a private employer, such employer shall restore such person to such position or to a position of like seniority, status, and pay unless the employer's circumstances have so changes as to make it impossible or unreasonable to do so.'
'8(c) Any person who is restored to a position in accordance with the provisions of paragraph (A) or (B) of subsection (b) shall be considered as having been on furlough or leave of absence during his period of training and service in the land or naval forces, shall be so restored without loss of seniority, shall be entitled to participate in insurance or other benefits offered by the employer pursuant to established rules and practices relating to employees on furlough or leave of absence in effect with the employer at the time such person was inducted into such forces, and shall not be discharged from such position without cause within one year after such restoration.'
The Director of Selective Service, in his interpretation of the rights and privileges provided by the Selective Service Act, contended, inter alia, as follows:
'(a) A qualified person is entitled by law to reinstatement in his former position or to a position of like seniority, status, and pay:
'(1) If such position was in the employ of a private employer, the United States Government, its territories or possessions, or the District of Columbia;
'(2) If such position was other than a temporary position;
'(3) If he left such position in order to enter upon active military or naval service in the land or naval forces of the United States;
'(4) If he satisfactorily completed his period of training and service or period of active duty and received a ...