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ALABAMA POWER CO. V. DAVIS, 431 U. S. 581 (1977)

U.S. Supreme Court

Alabama Power Co. v. Davis, 431 U.S. 581 (1977)

Alabama Power Co. v. Davis

No. 76-451

Argued April 25-26, 1977

Decided June 6, 1977

431 U.S. 581


Respondent, who left employment with petitioner for military service but who returned after completion of such service and continued in employment until his retirement, held entitled under § 9 of the Military Selective Service Act, which requires an employer to rehire a returning veteran without loss of seniority, to credit toward his pension under petitioner's pension plan for his period of military service. Pp. 431 U. S. 583-594.

(a) A benefit is a right of seniority secured to a veteran by § 9 if it would have accrued with reasonable certainty, as opposed to being subject to a significant contingency, had the veteran been continuously employed by the employer, McKinney v. Missouri-K.-T. R. Co., 357 U. S. 265; Tilton v. Missouri Pac. R. Co., 376 U. S. 169, and if it is in the nature of a reward for length of service, rather than short-term compensation for services rendered, Accardi v. Pennsylvania R. Co., 383 U. S. 225; Foster v. Dravo Corp., 420 U. S. 92. Pp. 431 U. S. 585-589.

(b) Here, not only is the "reasonable certainty" requirement met on the basis of respondent's work history both before and after his military service, but it also appears that the "true nature" of the pension payments is a reward for length of service, especially in view of the lengthy period (20 years or 15 years if age 50) required by the pension plan for pension rights to vest in the employee. Pp. 431 U. S. 591-594.

(c) Moreover, respondent's claim is supported by the functions of pension plans in assuring financial security for long-term employees and, by providing such security, in encouraging such employees to retire when their efficiency declines. P. 431 U. S. 594.

542 F.2d 650, affirmed.

MARSHALL, J., delivered the opinion for a unanimous Court.

Page 431 U. S. 582

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