Accardi v. Pennsylvania Railroad
Headline: Court requires employers to count wartime military service when computing severance pay, ruling returning World War II veterans must receive seniority credit so their separation allowances include service time.
Holding: The Court decided that the railroad must include the years veterans spent in military service when calculating separation allowances, because those years count as seniority under the 1940 Act.
- Requires employers to count military service when calculating severance benefits.
- Prevents unions and companies from using labels to deny veterans’ seniority-based rights.
- Remands for courts to determine interest owed on awarded damages.
Summary
Background
Six World War II veterans who had worked as tugboat firemen for the Pennsylvania Railroad left to serve and were restored to their jobs with seniority credit under the Selective Training and Service Act. In 1960 the railroad and unions agreed to abolish the fireman position on new diesel tugs and paid separation allowances based on months of "compensated service," which did not include time spent in the armed forces. Each veteran received less severance pay than he claimed and sued to recover the shortfall.
Reasoning
The Court looked to the Act’s plain purpose: to protect a returning servicemember’s employment rights as if he had worked continuously. The Justices said "seniority" must be given a practical meaning that preserves the benefits a veteran would have had absent military service. Because the separation allowances were tied to length of service and thus reflected seniority perks, the railroad could not exclude the years spent in military service. The Court reversed the Court of Appeals, affirmed the District Court’s award of stipulated damages, and sent the case back to resolve an outstanding interest question.
Real world impact
Employers and unions cannot use technical labels to deny veterans benefits that flow from seniority. Veterans must be credited with military service when calculating seniority-based severance payments. The judgment requires payment of the stipulated shortfall and the lower courts will determine interest on those awards.
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