Featherston v. Jersey Central Power & Light Co.

FOLLMER, District Judge. The appellant, a physician, filed a petition in the District Court under the provisions of the Selective Training and Service Act of 1940, 50 U.S.C.A.Appendix, § 301 et seq., seeking reinstatement and claiming compensation for loss of wages alleged by him to have been suffered by reason of the appel-lee’s refusal since January 1, 1946, to reemploy him as “Medical Director.” The appellant had been a practicing physician in New Jersey since 1924 and on or about June 8, 19,34, was employed by the appellee as Chief Company Physician “in a capacity similar to that of * * * general counsel.” The circumstances surrounding such employment were that at about this time the appellee, which employed approximately eighteen hundred persons, changed its insurance carrier and under an arrangement with the new carrier, the ap-pellee undertook to operate and control investigation and defense of claims and medical supervision of employees’ functions which had theretofore been controlled and handled directly by the carrier. That it was considered primarily the responsibility of the carrier is howe-ver evidenced by the fact that the carrier reimbursed the ap-pellee for the monthly allowance to the appellant and for the fees and expenses of other physicians, counsel and investigators in connection with the claims against the appellee and any subsequent litigation. Under the original arrangements no salary had been agreed upon but after the first two months, during which monthly bills were submitted by appellant, it was agreed that he should be compensated at the rate of two hundred fifty ($250) dollars monthly, for what is referred to as his executive work, and should be allowed, in addition thereto, fees for medical examinations, treatments, and unusual conferences. When this new arrangement was entered into with the insurance carrier in 1934, and when the appellant assumed his duties, he occupied a desk in an office shared with appellee’s Safety Director, Claims Investigator, and Welfare Director. He revised medical form? used by the appellee, was responsible for the designation of physicians for pre-em-ployment examinations and treatments in various localities, and he sometimes made these examinations himself on applications for employment from persons residing in the vicinity of Asbury Park, New Jersey. For such services he received fees in addition to his monthly salary, on vouchers submitted therefor, the same as any of the other physicians designated by the appellee in the various localities. This arrangement-continued until October 6, 1942, when the appellant entered the United States Army as a Major. At the company office the appellant performed only executive duties in the nature of reviewing his files on compensation cases, non-compensation cases, and pre-employment medical records. During this period appellant was maintaining three other offices, two for other business concerns by whom he was employed as medical examiner, and one office for his general practice, At the same time he was an attending surgeon on the staff of two hospitals, and was also retained as a medical examiner by another concern, although not having a separate office with that concern. The amount received from the appellee was not a large portion of, but, on the contrary, a minor part of the income received by the appellant from these various sources as a physician. While the appellant made what might be termed a daily appearance at his office in the appellee’s plant he die1002 oided when he would go there, he arranged his own vacation schedule, and time he spent ■at the appellee’s office varied from fifteen minutes to about an hour and a half. The appellant’s service in the Army, with the rank of Lt. Colonel, terminated November 28, 1945, with his terminal leave expiring February 2, 1946. Upon his return from such service he duly made his application for re-employment. In the intervening period, however, there had been a shift in the presidency of the appellee and in 1944 the ownership of the appellee changed. Its common stock came under the control of the Associated Gas and Electric Company, now General Public Utilities Company, and the immediate holding company became NY PA NJ Utilities Company. Among the changes occurring at that time and incident to the shift in ownership as above indicated, there was a change of insurance carriers, the new carrier being the one used generally by the new system of ownership. The new carrier did not follow the method used by the previous carrier but employed counsel, medical examiners, and investigators of its own choosing. Consequently, the department which the appellant had formerly supervised ceased to exist and its former personnel was no longer in ' the employ of the appellant. The appellee still requires pre-employment examinations but such examinations are made by the physicians in the various localities depending upon the residence of the applicant, the same as was done prior to appellant’s entry into the armed forces, and fees for such services are paid as the need for such examination arises, the same as formerly. . As we have already pointed out, these services were not part of the executive duties for which the appellant received his monthly salary. The appellee defended upon two grounds: (1) That the appellant did not hold a position in the employ of the appellee within the meaning of the Statute at the time he entered the Army, and (2) that appellee’s circumstances had so changed as to make it impossible or unreasonable to reengage the services of the appellant. The District Court, without deciding the first question, dismissed the petition on the second ground. Appellant contends that the conditions which existed when he left the appellee’s employ still prevail with the exception that the appellee had changed its policy and delegated to an insurance company a portion of the duties that the appellant previously discharged. We have carefully reviewed the record in this case. The Court’s findings of fact are fully supported by the evidence and there is no substantial dispute in relation thereto. The sole question is whether such facts sustain the Court’s conclusion that appellee’s circumstances had-so changed that it would be unreasonable to compel it to re-employ appellant. Appellant contends that the decision of this Court in Kay v. General Cable Corporation, 3 Cir., 144 F.2d 653, 655, which also involved a physician, is controlling. In that case the plaintiff was not only a physician for the defendant company but was employed as a physician for an employees’ Health Association. Upon his return from the service the employees’ Health Association declined to reémploy him, preferring the new physician. The defendant company thereupon also declined, contending that it made for greater efficiency to have the same physician for the, company and for the health association. This Court in the Kay case (supra) held that: “Accepting the defendant’s contention that there would be some loss of efficiency and possibly some additional expense involved, more than that is needed to justify refusal to reinstate a person within the protection of the Act. In most cases it is possible to give some reason for the refusal. ‘Unreasonable’ means more than inconvenience or undesirable. The defendant’s argument upon this point, if carried to its necessary conclusion, would defeat the main purpose of the Act and limit its operation to .merely capricious or arbitrary refusals. Men and women returning from military service find themselves, in countless cases, in competition for jobs with persons who have been filling them in their absence. Handicapped, as they are bound to be by prolonged absence, such competition is not part of a fair and just system, and the intention was to eliminate it as far as reason1003 ably possible. The Act intends that the employee should be restored to his position even though he has been temporarily replaced by a substitute who has been able, either by greater efficiency or a more acceptable personality, to make it desirable for the employer to make the change a permanent one.” Other Courts have also so held.1 We have here no occasion to change what we previously stated, nor do we mean to intimate here that physicians 2 or attorneys 3 may not, as distinguished from the term “independent contractor,” under proper circumstances be considered as “employed,” within the meaning of the Act, nor are we taking issue with the decisions involving a situation where merely the particular position ceased to exist but some other position of like seniority status and pay was available.4 The position in this case may.in a sense be called temporary in that it existed only so long as the insurance carrier permitted the particular arrangement by delegating its duties to the appellee. The then insurance carrier, as well as the new one, could have changed or terminated this arrangement at any time, but more important, so far as the supervisory work which appellant performed prior to his entry into the Army is concerned and for which he was paid the salary which he is now seeking, there is no such position nor any equivalent position now existing in this company.5 The insurance carrier could not be required to continue the arrangement. The new ownership had its own insurance carrier which could and did refuse to reimburse appellee for such expenses, preferring, as it did, to control the same directly, as had been done prior to the appellant’s employment. The correspondence shows that the possibility of such a change was anticipated when appellant went into the Army. The change took place in 1944 and not when appellant sought reinstatement. No ulterior purpose motivated the appellee in taking the action which it did in so far as it related to the employment of this appellant. This is not a situation involving caprice, nor is the refusal based upon mere “inconvenience” or “undesirability.” There is now no need for this particular type of physician in this company and the Act under all of the circumstances of this case does not require it to be set up again for the benefit of this ex-service man. As we said in the Kay case, supra, with reference to a bona fide change in an employer’s circumstances: “The Act says, unless the ‘employer’s’ circumstances have changed. Primarily, no doubt, this was intended to provide for cases where necessary reduction of an employer’s operating force or discontinuance of some particular department or activity would mean simply creating a useless fob in order toreemploy the plaintiff * * (Emphasis supplied.) We are of the opinion, under all of the facts and circumstances, that there was here such a change as would make it unreasonable to require the appellee to re-engage the appellant. In view of our conclusion on this question, it becomes unnecessary to consider the other question as to whether appellant held a position in the employ of the appellee within the meaning of the Statute at the time he entered the army. The judgment of the District Court is affirmed. Footnotes [1] MacMillan v. Montecito Country Club, Inc., D.C.Cal., 65 F.Supp. 240; Houghton v. Texas State Life Insurance Company, D.C.Tex., 68 F.Supp. 21; Meyers v. Barenburg, D.C.Md., 68 F.Supp. 697. [2] Kay v. General Cable Corp., 3 Cir., 144 F.2d 653. [3] Meyers v. Barenburg, supra. [4] Sullivan v. West Co., Inc., D.C.E.D. Pa., 67 F.Supp. 177. [5] McFadden v. Dienelt, D.C.Cal., 68 F. Supp. 951.