CARTER et al.,
Appellants,
vs.
OHIO UNEMPLOYMENT COMP. BD. OF
REVIEW, et al., Appellees
No. E-94-015
COURT OF APPEALS OF OHIO, SIXTH APPELLATE DISTRICT, ERIE
COUNTY
655 N.E.2d 1373, 101 Ohio App. 3d 527
March 3, 1995, Decided
Trial Court Nos. 93-CV-357,
93-CV-359.
COUNSEL
Ronald G. Macala and Salvatore J.
Falletta, for appellants Brian P. Carter et al.
John D. Latchney, for appellants Tim A.
Maschari et al.
Betty D. Montgomery, Attorney General,
Betsey Nims Friedman and Angela R.
Stokes, Assistant Attorneys General, for appellee
Administrator, Bureau of Employment Services et al.
William F. Snyder, for appellee G. & C.
Foundry Company.
JUDGES
Abood, Presiding Judge. Glasser and Sherck, JJ., concur.
AUTHOR: ABOOD
OPINION
{*528} This is an appeal from a judgment of the Erie
County Court of Common Pleas which affirmed the decision of the
Ohio Unemployment Compensation Board of Review which found that
appellants are not entitled to unemployment compensation.1
Appellants Brian Carter et al. have set forth the following
assignments of error:
"Assignment of Error No. 1:
"The trial court erred to the prejudice of appellants by making
an unreasonable legal conclusion from essentially undisputed
evidence by its conclusion determining that appellants refused to
continue the 'status quo,' rather than the employer.
"Assignment of Error No. 2:
"The trial court erred as a matter of law in adopting the
conclusion of the Board of Review in which it was determined that
the workers needed 'to express a willingness to continue to work'
after July 30, 1992, in order for a lock-out to have existed.
{*529} "Assignment of Error No. 3:
"The trial court erred to the prejudice of appellants in this
matter by its failure to remand the case for a determination
regarding the 'ending date of the alleged labor dispute.'"
Appellants Tim A. Maschari et al., in a separate brief, set
forth the following assignments of error:
"Assignment of Error No. 1:
"The trial court erred as a matter of law in coming to an
unreasonable legal conclusion based on essentially undisputed facts
by determining that appellants were the first party to alter the
status quo, rather than the employer.
"Assignment of Error No. 2:
"The trial court erred as a matter of law in failing to remand
the case for a determination as to the 'ending date' of the alleged
labor dispute."
The facts that are relevant to the issues raised on appeal are
as follows. All appellants were employees of G. & C. Foundry
Company and members of the United Electrical, Radio and Machine
Workers of America, Local 714. During the relevant time period,
relations between the union and the employer were governed by a
collective bargaining agreement, which was to terminate on June 30,
1992. On April 22, 1992, the employer notified the union by letter
that it was proposing that "revisions and modifications or
additions be made to the existing Agreement." On April 27, 1992,
the union notified the employer by letter of its desire "to modify
our existing collective bargaining agreement." Negotiations for a
new contract began on May 26, 1992, but the parties were unable to
reach agreement. On June 29, 1992, the employer submitted its final
offer. On June 30, 1992, appellants voted to strike but continued
to work. On July 6, 1992, the employer received a letter from the
union which contained an offer to meet on July 7 for further
negotiations and stated that "unless negotiated otherwise, the
current wages, benefits and working conditions will remain the
same." The parties met on July 7 but did not reach agreement. The
union then announced that the employer's final offer had been
rejected and a strike vote taken. On July 8, the employer wrote a
letter to all hourly employees, in which it explained that the
company had been unable to reach an agreement with the union and
offered them, as of July 13, 1992, continuing employment under the
terms of the final offer. On July 13, the employer posted a notice
which stated, "If you are at work today, you are working under the
terms of our final offer. If you don't accept that, you are free to
leave and we will seek permanent replacements." Appellants
continued to work, and on July 30, 1992, the employer received a
letter stating that the union was going to strike at midnight on
that date, which it did.
{*530} Appellants then filed claims for unemployment
compensation. Since R.C. 4141.28(D)(1)(a) requires the
Administrator of the Ohio Bureau of Employment Services to conduct
a hearing when there is reason to believe that the unemployment of
twenty-five or more individuals is related to a labor dispute, a
hearing was held on September 28, 1992 to determine the reason for
unemployment.
On October 23, 1992, the hearing officer issued a decision in
which it determined the applicable law to be R.C. 4141.29(D)(1)(a),
which provides as follows:
"(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 [.]" (Emphasis added.)
The hearing officer found further that (1) during the
negotiations which began on May 26, 1992, neither party offered or
asked to continue operating according to the terms of the old
contract; (2) on June 29, the employer submitted its final offer,
which was not accepted by the union; (3) on July 2, the union
advised the employer that it had voted to strike; (4) after the
expiration of the contract on June 30, the employer unilaterally
imposed its final offer and proceeded to operate according to those
terms and conditions; (5) union members continued to work until
midnight, July 30, when they advised the employer they were
engaging in a work stoppage; (6) the employer continued to operate
until the time of the hearing according to the terms of the final
offer and paid employees according to those terms; and (7) the
employer disrupted the status quo when it unilaterally implemented
its final offer and thereby created a lockout even though the
employees continued to work. The hearing officer ruled that because
appellants were unemployed due to a lockout they were entitled to
unemployment compensation.
On November 5, 1992, the employer filed an application to appeal
the administrator's decision. The Unemployment Compensation Board
of Review granted the application, and on April 15, 1993 a hearing
was held. On June 17, 1993, the board held that appellants were
unemployed due to a labor dispute other than a lockout within the
meaning of Ohio unemployment compensation law and reversed the
decision of the administrator. The board found that the evidence
clearly established that appellants were not willing to work after
July 30, 1992 under any conditions and that they had worked for
thirty days after the expiration of the old contract and after
their strike vote only because they felt they had to do so under
the National Labor Relations Act. The board further found that the
union had not offered, either expressly or impliedly, to work after
July 30 under the terms of the expired contract and that its
members therefore {*531} did not become unemployed due to
a lockout when the employer implemented its final offer.
On July 19, 1993, appellants filed a notice of appeal in the
Erie County Court of Common Pleas, and on January 14, 1994, oral
arguments were heard. On February 25, 1994, the trial court found
that the decision of the board was reasonable, lawful and not
against the manifest weight of the evidence and affirmed the
board's ruling. A timely appeal was filed with this court.
The first and second assignments of error of appellants Carter
et al. and the first assignment of error of appellants Maschari et
al. will be considered together since they present the same
arguments. Appellants assert that the trial court erred in
affirming the board's ruling that they were the first party to
alter the status quo, thereby creating "a labor dispute other than
a lockout." Appellants assert that the letter they sent the
employer on July 6, which stated that "unless negotiated otherwise,
the current wages, benefits and working conditions will remain the
same," constituted an offer to continue working under the terms of
the old agreement and was a manifestation of their intent to
maintain the status quo. Appellants argue that, when the employer
unilaterally implemented its final offer on July 13, 1992, it
altered the status quo and created a lockout. Appellants further
assert that they continued to work for a reasonable time under the
terms of the existing agreement.
Appellees respond that appellants' unemployment was due to a
labor dispute other than a lockout. Appellees assert that
appellants never offered to continue working under the terms of the
old contract for a reasonable time and that the employer did not
impose unreasonable or intolerable conditions for continued
employment, both of which would have had to occur in order for a
lockout to exist. They assert further that appellants were never
willing to work under the terms of the old contract and continued
to work for thirty days after the contract expired only because
they had to in order to comply with federal labor law.
The Supreme Court of Ohio first addressed the issue of what
conditions create a lockout in Zanesville Rapid Transit,
Inc. v. Bailey (1958), 168 Ohio St. 351, at 355, 7 O.O.2d
119, at 122, 155 N.E.2d 202, at 205-206:
"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. *
* * [I]n 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."
{*532} While the court's focus in
Zanesville was on whether the employer imposed
unreasonable conditions which left the employees no alternative but
to stop working, the Supreme Court adopted another analysis of the
conditions leading to a lockout in Bays v. Shenango
Co. (1990), 53 Ohio St.3d 132, 559 N.E.2d 740. In
Bays, the court reasoned that the actions of both
the employer and the employees must be scrutinized in order to
determine which party first refused to continue operations under
the status quo after the contract expired. In its analysis, the
Bays court adopted the status-quo test as
developed in Erie Forge & Steel Corp. v. Unemp. Comp.
Bd. of Review (1960), 400 Pa. 440, 443-445, 163 A.2d 91,
93. The Erie Forge court focused on two conditions
in its determination of whether a work stoppage was the
responsibility of the employees or the employer: first, whether the
employees offered to continue working for a reasonable time under
the pre-existing terms so as to avoid a work stoppage pending final
settlement of the contract negotiations; and, second, whether the
employer agreed to allow work to continue for a reasonable time
under the pre-existing terms pending further negotiations. The
Erie Forge court held that because the employer
refused to extend the contract and maintain the status quo after a
good faith offer by the union to work under the old contract
indefinitely, the resulting work stoppage constituted a
lockout.
The Bays court and other Ohio courts
considering similar issues both before and after
Bays made their analyses based on facts which
included in each case an offer by employees to continue working
under the terms of an expired contract during negotiations and a
refusal by the employer to accept the offer. In each case, the
court held that the employer's failure to accept employees' offer
to extend an expired contract for a reasonable time constituted a
lockout. See Oriti v. Bd. of Review, Ohio Bur. of Emp.
Serv. (1983), 7 Ohio App.3d 311, 7 OBR 394, 455 N.E.2d
720. Napper v. Ameritech Publishing, Inc. (1992),
79 Ohio App.3d 284, 607 N.E.2d 91. It is clear from the cases
considered by Ohio and other state courts that a good faith offer
by the employees to continue working under the terms of the expired
contract while negotiations continue is a decisive factor in
determining whether a lockout exists.
The standard of review that the trial court is to apply to board
of review decisions is set forth in R.C. 4141.28(O) as follows:
"Any interested party * * * may appeal from the decision of the
board to the court of common pleas. * * * If the court finds that
the decision was unlawful, unreasonable, or against the
manifest weight of the evidence, it shall reverse and
vacate such decision or it may modify such decision * * *;
otherwise such court shall affirm such decision." (Emphasis
added.)
The Supreme Court of Ohio set forth the standard to be applied
by this court when reviewing a trial court's judgment in an appeal
from an administrative {*533} agency in Lorain
City Bd. of Edn. v. State Emp. Relations Bd. (1988), 40
Ohio St.3d 257, 260-261, 533 N.E.2d 264, 267:
"In reviewing an order of an administrative agency, an appellate
court's role is more limited than that of a trial court reviewing
the same order. It is incumbent on the trial court to examine the
evidence. Such is not the charge of the appellate court.
The appellate court is to determine only if the trial court
has abused its discretion." (Emphasis added.)
After a thorough review of the record of proceedings before the
trial court and the board of review as summarized above, this court
finds that (1) on June 30, 1992, the date the old contract was to
expire, appellants voted to strike and notified the employer of
that strike vote by a letter dated July 2, 1992, in which they also
offered to meet again with the employer and stated that "unless
negotiated otherwise, the current wages, benefits and working
conditions will remain the same"; (2) that language, even though
conveyed in conjunction with the notice of the strike vote,
constituted a good faith offer and notice of intent to continue
working under the terms of the old contract for a reasonable period
of time during negotiations; (3) under these conditions the union's
strike vote and notification thereof to the employer, without
actually going out or setting a date certain for the strike, did
not constitute a change in the status quo; (4) the notice posted by
the employer on July 13, 1992 constituted an express refusal to
accept the union's offer to continue to work under the old contract
while negotiations continued; and (5) the trial court abused its
discretion when it found that the decision of the board of review
that appellants were the first to alter the status quo and were
unemployed due to a labor dispute other than a lockout was not
unlawful, unreasonable or against the manifest weight of the
evidence.
Accordingly, the first and second assignments of error of
appellants Brian Carter et al. and the first assignment of error of
appellants Tim Maschari et al. are found well taken.
The sole issue remaining for this court to consider is the claim
by appellants Brian Carter et al. in their third assignment of
error and by Tim Maschari et al. in their second assignment of
error that the trial court erred in failing to remand the case to
the board for a determination of the ending date of the alleged
labor dispute. Appellants assert that the board's failure to rule
on this question was arbitrary, unreasonable and contrary to law
and argue that it was within the board's discretion to consider the
matter.
In their appeal to the court of common pleas, appellants
asserted that the board erred by failing to make a finding as to
the ending date of the labor dispute, which appellants claim was
either late October 1992, when permanent replacements were hired
thereby depriving appellants of the ability to return to
{*534} work, or early February 1993 when the employer
refused to reinstate workers after they made an across-the-board
offer to return to work.
Appellees respond that the board did not have original
jurisdiction to consider the ending date of the labor dispute
because the question had not been before the administrator at the
initial hearing to determine the reason for unemployment. Appellees
state that the administrator had not ruled on this question because
pursuant to statute he is to examine each weekly claim for benefits
separately, and at the time of the initial applications for
benefits which gave rise to the hearing there were no permanent
replacements, and the only issue for consideration was whether
there was a lockout or other labor dispute.
R.C. 4141.28(D)(1)(a), which provides for the hearing to
determine the reason for unemployment, also provides that "[a]
similar hearing * * * may be scheduled when there is a dispute as
to the duration or ending date of the labor dispute." It is clear
from the record, however, that at the time of the original hearing
on September 28, 1992 the issue before the administrator was the
reason for unemployment, not the duration of the labor dispute. The
administrator made a finding that appellants were unemployed due to
a lockout, and the employer appealed that ruling. The question of
the duration of the dispute was not before the board of review, and
the trial court therefore did not abuse its discretion by not
remanding the case for determining that question. Accordingly, the
third assignment of error of appellants Brian Carter et al. and the
second assignment of error of appellants Tim Maschari et al. are
not well taken.
On consideration whereof, this court finds that substantial
justice was not done the parties complaining, and the judgment of
the Erie County Court of Common Pleas is reversed. Costs of this
appeal are assessed to appellees.
Judgment reversed.
Glasser and Sherck, JJ., concur.
DISPOSITION
Judgment
reversed.
OPINION
FOOTNOTES
1 Sixty-nine former employees of G. & C. Foundry Company have
appealed the trial court's judgment. A majority of the appellants
have appealed and filed a brief as Brian Carter et al., and four
others have appealed and filed a brief with separate assignments of
error as Tim A. Maschari et al. The two cases have been
consolidated for appeal to this court. Appellees Administrator,
Ohio Bureau of Employment Services, and G. & C. Foundry Company
each have filed briefs in answer to the two appellants' briefs.