JOHNSON et al.,
Appellees,
vs.
ADMINISTRATOR, OHIO
BUREAU OF EMPLOYMENT SERVICES, et al.,
Appellants
Nos. 13491, 13500
COURT OF APPEALS OF OHIO, SECOND APPELLATE DISTRICT, MONTGOMERY
COUNTY
611 N.E.2d 896, 82 Ohio App. 3d 293
January 21, 1993, Decided
T.C. Case No. 89-690
COUNSEL
Peter M. Fox, for appellees.
Lee I. Fisher, Attorney General, and
David E. Lefton, Assistant Attorney General, for
appellant Administrator, Ohio Bureau of Employment Services.
Kirkland & Ellis and Elizabeth
Miller Roesel, for appellant Miami Paper Corporation.
JUDGES
Brogan, Judge. Grady, P.J., and Wolff, J., concur.
AUTHOR: BROGAN
OPINION
{*295} Brogan, Judge.
Appellants, Administrator, Ohio Bureau of Employment Services
("OBES") and Miami Paper Corporation ("the company"), appeal from
the judgment of the Montgomery County Court of Common Pleas in
favor of appellees, Hugh E. Johnson et al. ("the employees").
The underlying facts and procedural history of the case are as
follows. Appellees are employees represented by the United
Paperworkers International Union ("the union") in collective
bargaining negotiations with the company. In the fall of 1984, the
company and the union entered into negotiations for a new contract
to replace the contract set to expire on April 5, 1985. Wages under
the old contract were in excess of both local and national
averages. Moreover, in the first five months of 1985, the employer
had generated losses of $ 882,000. During December 1984, the union
rejected an offer from the company which contained decreases in
wages.
When negotiations resumed on February 8, 1985, the company
claimed that its competitive situation in the market had further
deteriorated due to an oversupply of paper and lower prices from
foreign producers. The company sought concessions in its
negotiations with the union. In early April 1985, the company, at
the union's request, agreed to extend the terms of the expiring
collective bargaining agreement on a day-to-day basis while the
parties continued to negotiate a new agreement. Between February 8,
1985 and June 19, 1985, twenty-one negotiation sessions were
held.
In late May 1985, the company proposed a contract that was
represented as a "final offer." That offer called for mandatory
overtime and wage reductions of approximately seven percent.
However, the proposal included a $ 1,000,000 concession from the
employer's previous position. The union unanimously rejected this
final offer. The company interpreted the union's position as an
impasse in negotiations. At the time the parties' positions over
the three-year contract period remained approximately $ 8,100,000
apart.
On July 8, 1985, believing that impasse had been reached and
that any further compromise would jeopardize its business position,
the company unilaterally implemented the terms of its final offer.
In response, the union filed a complaint with the Regional Director
of the National Labor Relations Board ("NLRB"), alleging that the
company was bargaining in bad faith and that negotiations had not
reached an impasse. The regional director, however, rejected the
union's arguments.
On August 28, approximately seven weeks after the terms of the
final offer went into effect, the employees went on strike while
the company was in the midst of overhauling its machinery. The
employees then filed for, and were {*296} initially
granted, unemployment compensation on the basis that they had been
"locked out" by the company. However, a subsequent request for
reconsideration made by the company led to a redetermination of the
matter. The Unemployment Compensation Board of Review ("board of
review") found that the employees had become unemployed due to a
labor dispute other than a lockout, and reversed the decision to
grant unemployment benefits.
The employees appealed to the Montgomery County Court of Common
Pleas, which reversed the board of review's determination and
reinstated the unemployment benefits.
The company and OBES timely filed a notice of appeal from the
decision of the trial court. Both the company and OBES assert the
following assignment of error: The trial court abused its
discretion in failing to defer to the determination of the board of
review that the employees were not entitled to unemployment
compensation pursuant to R.C. 4141.29(D)(1)(a). The company further
asserts that the trial court erred in holding that Ohio's "status
quo" test for unemployment benefits, as applied to this case, is
not preempted by the National Labor Relations Act. The employees
argue that the trial court was correct in concluding that the
company's unilateral implementation of its final offer constituted
a constructive lockout, thereby qualifying them for unemployment
compensation.
The law controlling the outcome of this case is found at R.C.
4141.29(D)(1)(a) and in Bays v. Shenango Co.
(1990), 53 Ohio St.3d 132, 559 N.E.2d 740.
R.C. 4141.29(D)(1)(a) states:
"(D) Notwithstanding division (A) of this section, no individual
may serve a waiting period or be paid benefits under the following
conditions:
"(1) For any week with respect to which the administrator finds
that:
"(a) His unemployment was due to a labor dispute other than a
lockout at any factory, establishment, or other premises located in
this or any other state and owned or operated by the employer by
which he is or was last employed; and for so long as his
unemployment is due to such labor dispute."
In Bays, the Supreme Court of Ohio stated,
id. at 134-135, 559 N.E.2d at 742-743:
"'* * * the sole test under * * * the Unemployment Compensation
Law, * * * of whether the work stoppage is the responsibility of
the employer or the employees is reduced to the following: Have the
employees offered to continue working for a reasonable time under
the preexisting terms and conditions of employment so as to avert a
work stoppage pending the final settlement of the contract
negotiations; and has the employer agreed to permit work to
continue for a reasonable time under the pre-existing terms
{*297} and conditions of employment pending further
negotiations? If the employer refuses to so extend the expiring
contract and maintain the status quo, then the resulting work
stoppage constitutes a "lockout" and the disqualification of
unemployment compensation benefits in the case of a "stoppage of
work because of a labor dispute" does not apply.'"
The employer may refuse to accept the employees' offer to extend
the terms of the preexisting collective bargaining agreement if it
has a "'compelling reason for failing to so agree such that the
extension of the contract would be unreasonable under the
circumstances.'" Id. at 135, 559 N.E.2d at 743,
quoting Oriti v. Bd. of Review (1983), 7 Ohio
App.3d 311, 314, 7 OBR 394, 398, 455 N.E.2d 720, 724. The test of
whether a work stoppage is the result of a strike or a lockout
requires the court to determine "'which side, union or management,
first refused to continue operations under the status quo after the
contract had technically expired, but while negotiations were
continuing.'" Id., 53 Ohio St.3d at 135, 559
N.E.2d at 743, quoting Philco Corp. v. Unemp. Comp. Bd. of
Review (1968), 430 Pa. 101, 103, 242 A.2d 454, 455.
Thus, the BaysOritiPhilco status quo analysis
requires the factfinder to answer several questions when
determining whether a work stoppage is the result of a strike or a
lockout: (1) Did the employees manifest an intention to maintain
the status quo by offering to continue working for a reasonable
time under the terms of the existing agreement; (2) did the
employer agree to maintain the status quo by allowing the employees
to continue working for a reasonable time under the existing
agreement; (3) if the employer fails to agree to accept the
employees' offer to extend the existing agreement, did the employer
have a compelling reason for failing to agree such that an
extension would be unreasonable under the circumstances; (4) when
either party first refused to continue under the status quo, had a
"reasonable" period of time elapsed between the agreement to
maintain the status quo and the subsequent refusal to continue
thereunder; and (5) when either party first refused to continue
under the status quo, were negotiations "continuing" or had the
relationship of the parties broken down to the point where
meaningful negotiations had ceased, e.g., such as
where a lawful impasse had been reached.
We conclude that the trial court erred in reversing the decision
of the board of review. "Upon appeal, a court of law may reverse
such decisions only if they are unlawful, unreasonable, or against
the manifest weight of the evidence." Irvine v. Unemp.
Comp. Bd. of Review (1985), 19 Ohio St.3d 15, 17-18, 19
OBR 12, 15, 482 N.E.2d 587, 590, citing Brown-Brockmeyer
Co. v. Roach (1947), 148 Ohio St. 511, 518, 36 O.O. 167,
170, 76 N.E.2d 79, 83-85. In making such a determination, the trial
court is not permitted to make factual {*298} findings or
to determine the credibility of witnesses. Hall v. Am.
Brake Shoe Co. (1968), 13 Ohio St.2d 11, 13, 42 O.O.2d 6,
7-8, 233 N.E.2d 582, 590. "The resolution of purely factual
questions is for the board of review and its referees as triers of
facts." Angelkovski v. Buckeye Potato Chips Co.,
Inc. (1983), 11 Ohio App.3d 159, 161, 11 OBR 242, 244, 463
N.E.2d 1280, 1282, citing Brown-Brockmeyer Co. v. Roach,
supra.
"The duty or authority of the courts is to determine whether the
decision of the board is supported by the evidence in the record."
Irvine, supra, citing Kilgore v. Bd. of
Review (1965), 2 Ohio App.2d 69, 71, 31 O.O.2d 108, 109,
206 N.E.2d 423, 424. "[A] reviewing court will not reverse on the
manifest weight of the evidence where reasonable minds could weigh
the evidence and arrive at contrary conclusions."
Angelkovski, supra, 11 Ohio App.3d at 161, 11 OBR
at 244, 463 N.E.2d at 1283, citing Parker v.
Anheuser-Busch (Jan. 28, 1982), Franklin App. No.
81AP-718, unreported, 1982 WL 3957. "'Our statutes on appeals from
such decisions [of the board] are so designed and worded as to
leave undisturbed the board's decisions on close questions. Where
the board might reasonably decide either way, the courts have no
authority to upset the board's decision.'" Irvine,
supra, 19 Ohio St.3d at 18, 19 OBR at 15, 482 N.E.2d at
590, quoting Charles Livingston & Sons, Inc. v.
Constance (1961), 115 Ohio App. 437, 438, 21 O.O.2d 65,
65-66, 185 N.E.2d 655, 656.
Our review of the record supports the decision of the board of
review. The BaysOriti "status quo" test contains a
distinct definition of a "lockout," which requires the factfinder
to determine "'which side, union or management, first refused to
continue operations under the status quo after the contract had
technically expired, but while negotiations were continuing.'"
Bays, supra. If management is the first to disturb
the status quo, then such action constitutes a lockout and the
employees are entitled to unemployment compensation. On the other
hand, if the union is the first to disturb the status quo, then
such action constitutes a strike and the employees are not entitled
to unemployment compensation. However, the
BaysOriti definition of a lockout applies only
while negotiations are "continuing."
In this case, the record clearly indicates that the company
reasonably believed that impasse had been reached when it
unilaterally implemented its final offer on July 8, 1985. While the
company was clearly the first party to "blink" in this labor
dispute, the record supports the conclusion that meaningful
negotiations were no longer "continuing" at the time the company
implemented the terms of its final offer. Therefore, according to
the dictates of the BaysOriti analysis, the
company did not deviate from the status quo because negotiations
were no longer "continuing" when it implemented its {*299}
final offer. Thus, the referee's determination of whether the work
stoppage was a strike or a lockout properly could be made with
reference to the definition of a "lockout" contained in
Zanesville Rapid Transit, Inc. v. Bailey (1958),
168 Ohio St. 351, 7 O.O.2d 119, 155 N.E.2d 202.
While it is clear that management may lawfully implement the
terms of its final offer after impasse has been reached, the terms
of such an offer may nonetheless constitute a lockout for the
purposes of unemployment compensation. Cf. id.
Zanesville states the following definition of a "lockout"
as it relates to R.C. 4141.29(D)(1)(a), id. at
354-355, 7 O.O.2d at 122, 155 N.E.2d at 205-206, quoting
Almada v. Admr., Unemp. Comp. Act (1951), 137
Conn. 380, 389-391, 77 A.2d 765, 771:
"'The imposition by the employer of changes in working
conditions or wages, even though they deprive the employees of some
advantage they already possess, does not necessarily constitute a
lockout. Changes in the terms of employment might still be such
that under all the circumstances the employees would still be
expected in reason to accept them rather than quit work. To
constitute a lockout * * * the conditions of further employment
announced by the employer must be such that the employees could not
reasonably be expected to accept them and they must manifest a
purpose on the part of the employer to coerce his employees into
accepting them or some other terms. * * *
"'* * * The point is that, in order to constitute a lockout, the
conduct of the employer in laying down terms must lead to
unemployment inevitably in the sense that the employees could not
reasonably be expected to accept the terms and, in reason, there
was no alternative for them but to leave their work. * * *'"
We note that the BaysOriti definition of a
lockout differs from the Zanesville definition.
According to BaysOriti, a lockout occurs even if
the terms of the employer's unilaterally implemented offer are
favorable to the employees if the employer is the first to deviate
from the status quo of the pre-existing agreement while
negotiations continue. Even after negotiations have ceased,
however, Zanesville holds that a lockout may occur
if the terms of the employer's unilaterally implemented offer are
so unfavorable to the employees that they could not reasonably be
expected to continue to work under such terms.
In this case, the board of review referee found that the terms
of the company's implemented offer were not so unfavorable that the
employees could not have reasonably been expected to continue
working under the terms. The referee found that "wages under the
implemented offer were competitive with wage rates paid by other
pulp and paper mills in the midwest." Moreover, {*300} the
referee found that noneconomic considerations did not play a
significant role in the union's decision to strike. Given these
facts, the board of review concluded that the work stoppage did not
constitute a "lockout" as defined in Zanesville,
supra, and that the employees were not entitled to
unemployment compensation. We conclude that the record supports the
board of review's findings in this regard.
Finally, we note that the referee incorrectly interpreted
Oriti when he found that the employees "accepted"
the terms of the company's implemented offer by continuing to work
under the company's terms for fifty days, thus creating a "new
status quo" which was first changed when the employees went out on
strike.
We find nothing in either Bays or
Oriti which would indicate that the term "status
quo" refers to anything but that period during which the parties
agree to maintain the existing terms and conditions of employment
manifested by the pre-existing collective bargaining agreement.
Because the status quo is the terms and conditions of the
pre-existing collective bargaining agreement, a
priori the analysis of whether a strike or lockout
occurred must take place at that point in time when either party
first refuses to continue under the terms of the pre-existing
agreement while negotiations continue. We find no support in the
law for the proposition that a company's unilaterally implemented
final offer can create a "new" status quo in the absence of a newly
ratified collective bargaining agreement.
Accordingly, appellants' first assignment of error is
sustained.
Given the outcome of this appeal, we need not reach the
company's second assignment of error, that Ohio's status quo test,
as applied to this case, is preempted by the NLRA.
In light of the foregoing, the judgment of the Montgomery County
Court of Common Pleas will be reversed and the decision of the Ohio
Unemployment Compensation Board of Review in favor of
defendants-appellants will be reinstated.
Judgment reversed.
Grady, P.J., and Wolff, J., concur.
DISPOSITION
Judgment
reversed.