Aalbers v. Iowa Dept. of Job Service

• Decision Date: 23 November 1988
• Docket Number: No. 87-1547,87-1547
• Citation: 431 N.W.2d 330
• Parties: G.A. AALBERS, et al., Appellants, v. IOWA DEPARTMENT OF JOB SERVICE n/k/a Department of Employment Services, Department of Inspection and Appeals, Employment Appeal Board and Geo. A. Hormel & Company, Appellees.
• Court: Iowa Supreme Court

Page 330

431 N.W.2d 330

G.A. AALBERS, et al., Appellants, v. IOWA DEPARTMENT OF JOB SERVICE n/k/a Department of Employment Services, Department of Inspection and Appeals, Employment Appeal Board and Geo. A. Hormel & Company, Appellees.

No. 87-1547.

Supreme Court of Iowa.

Nov. 23, 1988.

Arthur C. Hedberg, Jr. and Mark T. Hedberg, Des Moines, and Charles Orlove, Chicago, Ill., for appellants.

Blair H. Dewey, Des Moines, and William C. Whitten, for appellee Employment Appeal Bd.

Timothy G. Costello and Kevin J. Kinney of Krukowski & Costello, S.C., Milwaukee, Wis., James W. Cavanaugh of Geo. A. Hormel & Co., Austin, Minn., and Richard C. Bauerle of Johnson, Bauerle, Hester & Walters, Ottumwa, for appellee Geo. A. Hormel & Co.

Russell L. Samson and Elaine M. Brown of Dickinson, Throckmorton, Parker, Mannheimer & Raife, P.C., Des Moines, for amicus curiae Iowa Association of Business and Industry.

Considered en banc.

LARSON, Justice.

In August 1985, Local P-9 of the United Food and Commercial Workers Union (UFCW) went out on strike at the Austin, Minnesota, plant of George A. Hormel and Company. Soon afterwards, in an apparent attempt to put further pressure on Hormel, members of the Austin union picketed Hormel's Ottumwa, Iowa, plant. The Ottumwa plant was not a party to the labor dispute affecting the Austin plant; nevertheless, several hundred members of the Ottumwa local, including these claimants refused to cross the picket line. The management of the Ottumwa plant advised them that they were in violation of their collective bargaining agreement and warned them that continued refusal to work would result in their termination. Some returned, and those who did not were fired.

Approximately 500 of the fired employees applied for unemployment compensation under Iowa Code chapter 96 (1985). Hormel resisted the claims on the ground that the employees had been fired for misconduct and thus were not entitled to benefits. See Iowa Code § 96.25(2) (1985). A Job Service representative ruled against the claimants. Following appeal proceedings within Job Service, which resulted in denial of compensation, the claimants petitioned for judicial review. The district court ruled against the claimants, who appealed. We affirm.

When the Austin local failed to reach a bargaining agreement at the Hormel plant in Austin, it sought authorization from its parent union, UFCW International, for a strike sanction. The president of the international responded, stating:

Your request for strike sanction against George A. Hormel and Co.'s Austin, MN plant is granted to Local 9. Because of the history preceding this sanction, let me make it clear that only strike sanction is granted; it is granted only regarding the Austin plant; neither boycott sanction nor sanction to extend the picket lines to other operations has been requested and neither is granted.

....

While we will not today answer unanswered questions, with recent history in mind I can tell you that any request to carry Austin's dispute to other locals will have to meet a heavy burden of justification regarding the economic and legal repercussions.

In October 1985, the Hormel plant at Ottumwa notified the union by letter that it considered its contract with the Ottumwa workers to be valid and enforceable and that it interpreted the contract to prohibit any type of strike activity, including sympathy strikes. Hormel advised the workers that it retained the right to discipline any of them who might honor an Austin picket line at the Ottumwa plant.

In mid-January 1986, the Austin local requested expanded strike authorization. It also specifically requested the international union to grant its request for a sanction extending its picket lines to the Ottumwa plant. The president of the international union replied immediately, stating:

I will not sanction extension of P-9's picket lines to other Hormel plants. And, as much as I believe in the sanctity of a picket line, I cannot in good conscience urge other Hormel members to risk their jobs to respect an unsanctioned picket line in a hopeless cause.

Officers of the Ottumwa local testified that they had notice of the parent union's refusal to sanction an extension of the strike, and a story about the refusal was published by the local newspaper in Ottumwa.

In the early morning of January 21, before Ottumwa's first shift began, pickets from Austin arrived at the plant. Approximately eighty-five percent of the first shift initially refused to cross the picket line, although they reported for work later in the day. On January 22, the local newspaper quoted the union local's president as stating, "the picket lines are unauthorized by the international. We're going to have a lot of discharges over this."

On January 23, Hormel sent a letter to all employees who had honored the picket line, warning that "the company reserves its right to use immediate termination and permanently replace any employees based on the facts and circumstances which may exist."

On January 27, the Austin employees again picketed the plant, and less than 100 of the 800 scheduled workers appeared for work. The company then sent telegrams to local and regional offices of the union asking it to confirm that the Ottumwa picketing was not authorized. The union did not respond. The next day, January 28, Hormel's plant manager made a radio appeal to all employees to return to work and stated that they had until midnight to do so. Following the radio warning, eighty-five additional employees showed up for work, but the rest continued to honor the picket line. Approximately 500 employees who had honored the Austin pickets signed prepared forms which stated:

I (name) am notifying the Hormel Co. that I am not resigning. I am, according to Section 6.2 of the contract, choosing to honor the authorized picket line that is at the Ottumwa plant gate.

Soon after the forms were presented to Hormel's personnel manager, termination letters were sent to all employees participating in the work stoppage.

On February 21, the Austin pickets left, and several hundred of the fired Ottumwa employees marched to the plant entrance, where representatives of the union requested reinstatement of all of the discharged employees. The plant manager refused.

These claims for unemployment compensation followed. The claims were initially denied by a Job Service representative, and the claimants appealed. A consolidated hearing was held then before the Job Service chief hearing officer, who reversed the initial determination and awarded unemployment benefits. The company appealed the hearing officer's ruling, and the Job Service appeal board reversed the hearing officer, disallowing benefits. The claimants appealed to the district court, which affirmed.

The claimants argue on appeal that (1) the National Labor Relations Act preempted jurisdiction because a collective bargaining agreement was involved; (2) there was insufficient evidence to support the board's findings of misconduct; and (3) the court erred in its finding of fact that the claimants could not have had a good faith belief that they had a contractual right to strike.

I. The Preemption Argument.

When a dispute arises over a matter in which the primary and exclusive jurisdiction lies in the National Labor Relations Board, we must defer to that board. See generally San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 243, 79 S.Ct. 773, 778, 3 L.Ed.2d 775, 782 (1959) ("When the exercise of state power over a particular area of activity threatened interference with the clearly indicated policy of industrial relations, it has been judicially necessary to preclude the States from acting."); Hollander v. Peck, 261 N.W.2d 507, 509 (Iowa 1978).

In the present case, two sections of the parties' collective bargaining contract are involved. The first, section 3.5, provides:

The Union in its behalf and on behalf of the employees agrees that during the life of this Agreement, there shall be no strikes, slowdowns, refusals to or interferences with work, sympathy strikes or refusals to work, or picketing by the Union or the employees. No officer or representative of the Union shall authorize, aid or condone any such activity, and no employee shall participate in any such activity.

The second, section 6.2, provides:

It is agreed that in the event an authorized picket line is in effect at the entrance to the plant, the Company shall not discipline employees who choose to honor such picket line. The Union agrees to use whatever influence they possess to remove such picket line from the plant.

The claimants contend that, since interpretation of these contract provisions is required, the state has no jurisdiction to adjudicate the parties' rights.

The general rule of preemption does not apply, however, in cases "where the regulated conduct touche[s] interest[s] so deeply rooted in local feeling and responsibility that, in the absence of compelling Congressional direction, [the Court] could not infer that Congress had deprived the States of the power to act." San Diego Bldg. Trades, 359 U.S. at 244, 79 S.Ct. at 779, 3 L.Ed.2d at 782.

The Supreme Court has recognized such an exception in state unemployment compensation cases. See, e.g., New York Tel. Co. v. New York Labor Dep't, 440 U.S. 519, 540-46, 99 S.Ct. 1328, 1341-44, 59 L.Ed.2d 553, 569-72 (1979). The issue in New York Telephone Co. was whether the National Labor Relations Act preempted the jurisdiction of the states in the exercise of their power to regulate unemployment benefits to strikers. In holding that it did not, the Court stated that "the silence of Congress in 1935 actually supports the contrary inference that Congress intended to allow the States to make this policy determination for themselves." Id. at 540, 99 S.Ct. at 1341, 59 L.Ed.2d at 569. The Court further stated that

[u]ndeniably, Congress was aware of the possible impact of unemployment compensation...