BAUGH ET AL.,
APPELLANTS
vs.
UNITED TELEPHONE CO.
OF OHIO, APPELLEE. ALBERTE
ET AL.,
APPELLANTS v. UNITED
TELEPHONE CO. OF OHIO,
APPELLEE.
ATKINS ET AL., APPELLANTS v.
UNITED TELEPHONE
CO. OF OHIO,
APPELLEE
Nos. 77-932, 77-933, 77-934
SUPREME COURT OF OHIO
377 N.E.2d 766, 54 Ohio St. 2d 419, 8 Ohio Op. 3d 427
June 28, 1978, Decided
APPEALS from the Court of Appeals for
Trumbull County.
HEADNOTE
Unemployment compensation -- Labor dispute -- Right to
receive benefits -- Statutory disqualification inapplicable,
when.
SYLLABUS
Where, during the course of a bona fide labor
dispute, the employer terminates the employer-employee relationship
through his affirmative action of replacing the striking employee,
preventing any volition on the part of said employee to return to
work, the employer thereby has severed the labor dispute as the
proximate cause of unemployment, and the statutory disqualification
provision, R. C. 4141.29(D)(1)(a), is inapplicable as a bar to the
right to receive unemployment compensation benefits.
STATEMENT OF THE CASE
The collective bargaining agreement between the appellee, The
United Telephone Company of Ohio, and the appellants, the traffic
department employees ("traffic employees") of that company, expired
in October of 1971. The traffic employees thereafter continued
working under the provisions of the expired agreement. However, on
January 4, 1972, the traffic employees, members of Local 1067,
International Brotherhood of Electrical Workers, commenced a work
stoppage resulting in an economic strike.
Following a period of negotiation, the union representatives of
the traffic employees notified the company, on May 22, 1972, that
the company's last proposal was unacceptable. At this point an
apparent impasse existed. The company then mailed a letter, dated
May 25, 1972, to each of the striking employees. This letter stated
that an impasse existed, and unless the striking employees returned
to work by June 1, 1972, the company would commence hiring
permanent replacement employees.
The traffic employees, in accordance with their decision reached
at a meeting on May 30, 1972, refused to return to work on June 1,
1972. The company then, on or around June 1, 1972, did commence the
hiring of permanent replacement employees. Additionally, each
striking traffic employee received a second letter from the company
shortly after June 1, 1972, advising the employee that he or she
had been permanently replaced.
Following a series of negotiating sessions, a strike settlement
agreement, effective July 31, 1972, was reached. As part of this
agreement the company consented to return traffic employees to
full-time employment only when the permanent replacements hired by
the company terminated their relationship with the company. Until
all traffic employees could be returned on a full-time basis, they
would work every third week.
Immediately after their permanent replacement by the company on
June 1, 1972, the traffic employees applied for unemployment
compensation on that date. The Administrator of the Ohio Bureau of
Employment Services' decision in each case herein that the
employees were not disqualified by reason of separation of
employment from receiving unemployment benefits was affirmed by the
Board of Review.
The company filed appeals with the Court of Common Pleas, which
reversed the decisions of the Bureau of Employment Services. The
Court of Appeals thereafter affirmed the judgments of the Court of
Common Pleas.
The causes are now before this court pursuant to the allowance
of appellants' motions to certify the record. The causes have been
consolidated for final decision herein as they involve the same
legal issues.
COUNSEL
Messrs. Green, Schiavoni, Murphy & Haines, Mr.
Eugene Green and Mr. Ronald G. Macala,
for appellants in each case.
Messrs. Guarnieri & Secrest and
Mr. Charles A. Young, for appellee in each
case.
JUDGES
LOCHER, J. O'NEILL, C. J., HERBERT, CELEBREZZE, W. BROWN, P. BROWN
and SWEENEY, JJ., concur.
AUTHOR: LOCHER
OPINION
{*421} The appellants have presented two propositions of
law: (1) The disqualification from unemployment compensaton
benefits imposed upon an employee under the "labor dispute"
provision of R. C. 4141.29(D)(1)(a) is extinguished when the
employee is permanently replaced during the course of that labor
dispute, and (2) an employee, unable to return to his job on a
full-time basis because of his permanent replacement during the
course of a labor dispute, is deemed to be in a lay-off status
during those periods when no work from his employer is available
and is entitled to unemployment compensation benefits for that
time. Simply phrased, the threshold question is whether the
appellants are disqualified under the facts of the instant cause
from receiving unemployment compensation benefits because of R. C.
4141.29.
R. C. 4141.29, with respect to an individual's right to receive
these benefits, in relevant part, provides:
"(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. * * *" (Emphasis added.)
In affirming the trial court's reversal of the Bureau of
{*422} Employment Services' decision in each case that
appellants could not be disqualified by reason of separation from
employment, the Court of Appeals, relying upon this court's prior
decisions in Baker v. . Powhatan Mining
Co. (1946), 146 Ohio St. 600, and Leach
v. . Republic Steel Corp. (1964), 176 Ohio St.
221, found that the reason for appellants' unemployment was a labor
dispute and thus they were disqualified, pursuant to R. C.
4141.29(D)(1)(a). The inapplicability of Baker,
supra, and Leach, supra, to the
resolution of the instant cause is readily discernible upon an
examination of these cases. The issue in Baker,
supra, although concerning the disqualification provision
in G. C. 1345-6, now R. C. 4141.29, was "whether the industrial
conditions which prevailed at the mines [production men did not
report to work although work was available] where claimants were
employed were such as to constitute a strike * * *." Similarly,
despite the ultimate application of the disqualification clause in
Leach, supra, the question therein considered was
-- in a case where a labor dispute closed the employer's
establishment, and the strike is summarily ended by an injunction,
is unemployment compensation payable from the end of the strike
until the employee is recalled to work after the employer's
establishment is readied for a resumption of its operations.
It is thus apparent that the precise question, whether the
statutory disqualification pursuant to R. C. 4141.29(D)(1)(a)
imposed upon an employee because of a labor dispute terminates when
the employer permanently replaces the employee during the course of
the labor dispute, has never been addressed by this court.
The disqualification provision of R. C. 4141.29(D)(1)(a) applies
only if "unemployment was due to a labor dispute."
We find that the words " due to " mean "
caused by." They do not mean merely "occurring
during the course of." Thus, the element of causation is
indispensable. Hence, the vital question is not whether the
unemployment occurred in the course of the labor dispute, but
whether the unemployment was caused by the labor dispute.
{*423} Skookum Co. v. .
Employment Div. (1976), 24 Ore. App. 271, 545 P. 2d 914;
Brechu v. . Rapid Transit Co.
(1957), 20 Conn. Sup. 210, 131 A. 2d 211. In construing an
analogous disqualification provision,* the Supreme Court of
California has recognized that the section creates a test of
proximate causation as to the reason for an applicant's
unemployment. Ruberoid Co. v. . California
Unemployment Ins. Appeals Board (1963), 59 Cal. 2d 73, 378
P. 2d 102; Isobe v. . California
Unemployment Ins. Appeals Board (1974), 12 Cal. 3d 584,
526 P. 2d 528. In Ruberoid, supra, the court
stated that the loss of benefits must be attributable to a trade
dispute which is the direct cause of the
unemployment.
The Wisconsin Supreme Court has also impliedly recognized the
proximate-causation test created in its state's disqualification
provision, which, in relevant part, provides: "[a]n employee who
has left * * * his employment with an employing unit
because of a strike or other bona fide labor
dispute * * *." (Emphasis added.) Section 108.04(10), Wisc. Stats.
In Marathon Electric Mfg. Corp. v. .
Indus. Comm. (1955), 269 Wis. 394, 69 N. W. 2d 573, after
noting the accepted rule of law that an employer-employee
relationship continues to exist during a labor dispute or strike
(also, see Annotation 63 A. L. R. 3d 88, 120, Section 7 [d]), the
court, at page 407, concluded that its state's disqualification
provision "should be construed as only applicable to those persons
still retaining an employee status who are out of work due
to a bona fide labor dispute." (Emphasis added.) The
Supreme Court of Wisconsin has thus interpreted the
disqualification provision to be inapplicable to a loss of
employment caused by the discharge of a striking employee during
the course {*424} of a labor dispute. Marathon,
supra; Rice Lake Creamery Co. v. . Indus.
Comm. (1961), 15 Wis. 2d 177, 112 N. W. 2d 202;
Carley Ford, Lincoln, Mercury v. .
Bosquette (1976), 72 Wis. 2d 569, 241 N. W. 2d 596.
Accordingly, we find that the General Assembly did not intend
that the statutory disqualification from unemployment compensation
benefits contained in R. C. 4141.29(D) (1)(a) be applicable if,
during the course of a bona fide labor dispute,
the employer terminated the employee status and thereby caused the
unemployment. In such an instance, although the labor dispute
directly caused the initial unemployment, the statutory
disqualification terminated with the severance of the employee
status. At that moment in time the direct cause of the unemployment
became the act of the employer. From then on the employer's action
and not the labor dispute was the proximate cause of
unemployment.
Thus, pivotal to the resolution of the instant cause is a
determination of whether the employer terminated the appellants'
status as employees. While the facts are not in dispute, their
legal consequence is in contention. Appellants claim that the
employer-employee relationship was severed by their permanent
replacement, and thus they are entitled to receive unemployment
benefits. Appellee argues that it may lawfully hire permanent
replacements and that this does not effectuate a discharge of the
striking employees or entitle them to unemployment compensation
benefits. After a perusal of the facts, we find that the board's
determination that appellants were not disqualified from receiving
unemployment compensation benefits was proper. In the instant
causes, we are confronted with the affirmative action of the
employer in notifying the appellants pursuant to a letter, dated
May 25, 1972, not only that their union representatives had been
informed of the employer's intention to hire permanent
replacements, but further that, if each employee did not report to
work on June 1, the immediate hiring of permanent replacements
would commence and, if at the end of the strike a replacement
occupied the employee's former job, the employee {*425}
had no job. A second letter was sent to the employees shortly after
the June 1 deadline, informing them that their positions had been
filled. The only possible conclusion that can be drawn from these
facts is that the employer's severance of the employee status was
the proximate cause of appellants' unemployment. As of June 1,
1972, it was the employer's action and not the labor dispute that
prevented the appellants from being employed. Indeed, the very
action of the appellants is consistent with their assertion of
termination as they immediately filed applications for unemployment
benefits. Cf. Rice Lake Creamery Co. v. .
Indus. Comm., supra (15 Wis. 2d 177). Nor do we find the
fact that negotiations between the employer and appellants
continued after June 1, 1972, in any manner decisive of the
question of the severance of appellants' employee status. This is
because such strike activity is ambivalent, in that it may
demonstrate an effort to regain the employee status or be construed
to reveal appellants' belief their status had not been
terminated.
Accordingly, we hold, in a manner consistent with numerous other
jurisdictions (Ruberoid, supra; Marathon, supra; Carley
Ford, supra; Knight-Morley Corp. v. . Michigan
Employment Security Comm. [1958], 352 Mich. 331, 89 N. W.
2d 541; Skookum Co. v. . Employment Div.,
supra [24 Ore. App. 271]; Annotation, 63 A. L. R. 3d 88,
208, Section 31[b]), that, since the employer's action of permanent
replacement prevented any volition on the part of the workers to
return to work and since it severed the labor dispute as the cause
of unemployment, the statutory disqualification provision of R. C.
4141.29 is inapplicable to bar appellants' right to receive
unemployment compensation benefits.
Therefore, the judgment of the Court of Appeals is reversed.
Judgment reversed.
DISPOSITION
Judgment
reversed.
OPINION
FOOTNOTES
* Section 1262 of the California Unemployment Insurance Code
provides:
"An individual is not eligible for unemployment compensation
benefits, and no such benefits shall be payable to him, if he left
his work because of a trade dispute. Such individual shall remain
ineligible for the period during which he continues out of work by
reason of the fact that the trade dispute is still in active
progress in the establishment in which he was employed."