Arvin North American Automotive v. Review Bd. of Indiana Dept. of Employment and Training Services, s. 93A02-9102-EX-89

• Decision Date: 24 August 1992
• Docket Number: Nos. 93A02-9102-EX-89,93A02-9011-EX-690,93A02-9001-EX-691,s. 93A02-9102-EX-89
• Citation: 598 N.E.2d 532
• Parties: 123 Lab.Cas. P 57,081 ARVIN NORTH AMERICAN AUTOMOTIVE, Appellant-Plaintiff, v. REVIEW BOARD OF THE INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, et al., Appellees-Defendants. ARVIN NORTH AMERICAN AUTOMOTIVE, Appellant-Plaintiff, v. REVIEW BOARD OF THE INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, et al., Appellees-Defendants. CUSTOM EXTRUSIONS, Appellant-Plaintiff, v. REVIEW BOARD OF THE INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, et al. and William E. Burns, et al., Appellees-Defendants. 1
• Court: Indiana Appellate Court

Page 532

598 N.E.2d 532

123 Lab.Cas. P 57,081

ARVIN NORTH AMERICAN AUTOMOTIVE, Appellant-Plaintiff, v. REVIEW BOARD OF THE INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, et al., Appellees-Defendants.

ARVIN NORTH AMERICAN AUTOMOTIVE, Appellant-Plaintiff, v. REVIEW BOARD OF THE INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, et al., Appellees-Defendants.

CUSTOM EXTRUSIONS, Appellant-Plaintiff, v. REVIEW BOARD OF THE INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, et al. and William E. Burns, et

al., Appellees-Defendants.

Nos. 93A02-9102-EX-89, 93A02-9011-EX-690, 93A02-9001-EX-691.

¹

Court of Appeals of Indiana Fifth District.

Aug. 24, 1992.

Transfer Denied Nov. 18, 1992.

S.R. Born, Douglas C. Haney, Ice Miller Donadio & Ryan, Indianapolis, for appellant-plaintiff Custom Extrusions.

Ronald R. Snyder, Kenneth J. Yerkes, Lester H. Cohen, Barnes & Thornburg, Indianapolis, for appellant-plaintiff Arvin North American Automotive.

Nora L. Macey, Richard J. Swanson, Janice E. Kreuscher, Segal and Macey, Indianapolis, for appellees-defendants William E. Burns, et al. and Delbert K. Abbott, et al.

Edward J. Fillenwarth, Fillenwarth Dennerline Groth & Baird, Indianapolis, for appellees-defendants Oran K. Abbett, et al.

RUCKER, Judge.

Appellants Custom Extrusion (Custom), and Arvin North American Automotive (Arvin I and II) ² (collectively referred to as "Employers") appeal from decisions of the Review Board of the Indiana Department of Employment and Training Services (Review Board) granting unemployment benefits to employees who had previously been on strike. We rephrase the common issues for our review as:

1. Is an employer's hiring of permanent replacements for striking employees a sufficient basis for a finding that the employment relationship has been severed?

2. Is a striking employee required to make an unconditional offer to return to work in order to qualify for unemployment benefits?

3. Was the Review Board's decision supported by the evidence?

Arvin II raises the additional issue of whether each of the striking employees carried the burden to prove termination of his or her employment.

We affirm.

Custom operates a manufacturing plant in Connorsville, Indiana with a normal complement of 31 bargaining unit employees. The employees, who are represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and its affiliated Local 151 (UAAIW) went on strike March 11, 1989. The following day Custom notified the striking workers that it would begin hiring permanent replacements if the striking workers did not return to work by March 14. The workers did not return to employment and by March 21 Custom had hired a full complement of replacement workers. On that date, UAAIW representatives offered to accept Custom's last offer of contract terms if all 31 strikers could return to work. Custom informed the representatives that replacement workers would not be terminated to make room for returning strikers. Thereafter, Custom had job openings available due to employee turnover.

Arvin I operates a manufacturing facility at North Vernon, Indiana where 202 bargaining unit employees are represented by Local 301 of the UAAIW. The employees began to strike April 13, 1989. On April 24, Arvin I began employing replacement workers, and by that time some strikers had begun returning to work. By June 27 there were 30 job openings available. On that same date, Arvin I informed its striking employees that it would not terminate the replacement workers in order to accommodate returning strikers, but rather would place the strikers' names on a preferential recall list for future job openings. By September 25, 1989, there were 10 job openings available.

Arvin II operates three manufacturing facilities in Bartholomew County: "Gladstone," "Arvinyl," and "Tech Center." The three facilities constitute a single bargaining unit of 1,027 employees who are represented by Local 1331 of the International Brotherhood of Electrical Workers (IBEW). The three facilities had been treated as separate divisions under the bargaining agreement. Arvin II employees went on strike May 1, 1989 and on May 9, 1989, Arvin II began hiring replacement workers. The strike continued until December 12, 1989, at which time Arvin II and IBEW reached a negotiated settlement.

Throughout the course of the strike against Arvin II a number of striking employees presented themselves for work. The replacement workers were not terminated to accommodate returning strikers and many strikers who presented themselves for work were not reinstated.

At the beginning of the strike there were 680 job openings at Gladstone. Arvin II transferred 450 jobs from its Gladstone facility to other Arvin plants in order to maintain production. By May 31, 1989, Arvin II had filled 258 positions at Gladstone. Thereafter, the strategy of Arvin II involved returning jobs to the Gladstone plant when there were sufficient available returning strikers and replacements to operate a product line. Arvin II eventually returned 215 of the 450 positions to Gladstone on a piecemeal basis.

By June 13, 1989, Arvin II had filled all 90 pre-strike positions at the Tech Center plant. The pre-strike workforce at the Arvinyl plant totaled 258 workers, and by July 17, 1989, Arvin II had filled 269 positions at that plant with permanent replacements and returning strikers. Thereafter, Arvin II trimmed the size of the Arvinyl workforce. The strike ended on December 12, 1989, with an agreement between Arvin II and IBEW which did not reinstate the strikers. The size of the Gladstone workforce was not returned to pre-strike levels.

The striking employees from Custom, Arvin I and Arvin II filed applications with the Indiana Employment Security Division requesting unemployment benefits under the terms of Ind.Code Sec. 22-4-1-1 et seq., commonly referred to as the Indiana Employment Security Act (the "Act"). Each of the three groups of claims were referred to an Administrative Law Judge (ALJ) for an initial determination of whether the Act's labor dispute provision disqualified the claimants from receiving benefits. After conducting a hearing in each case, the ALJ entered written Findings of Fact supporting the striking workers' entitlement to unemployment benefits. Employers appealed to the Review Board; after a hearing, the Review Board modified the ALJ decisions only regarding the effective starting date in Arvin I for entitlement to benefits. In all other respects the Review Board sustained the ALJ's decisions.

It is from the decisions of the Review Board the employers now appeal. Additional facts will be recited where relevant.

This court has exclusive, original jurisdiction to review decisions of the Review Board of the Indiana Department of Employment and Training Services for errors of law pursuant to I.C. Sec. 22-4-17-12. On review we must determine whether the decision of the Review Board is reasonable in light of its findings. Shortridge v. Review Bd. of Employment Sec. Div. (1986), Ind.App., 498 N.E.2d 82, 87.

I.

Employers argue on various grounds that the Review Board's decisions in allowing unemployment benefits to the striking workers are contrary to fact and law. The common thread woven through each of the Employers' arguments is that the act of hiring permanent replacements for striking employees does not automatically terminate employment. Accordingly, absent an affirmative termination of the employment relationship, as when the striking employee makes an unconditional offer to return to work which is refused, the replaced employee is not entitled to benefits.

Eligibility for unemployment benefits turns on the application of I.C. Sec. 22-4-15-3 which dictates in relevant part:

(a) An individual shall be ineligible for waiting period or benefit rights: For any period with respect to which his total or partial or part-total unemployment is due to a labor dispute at the factory, establishment, or other premises at which he was last employed.

(b) This section shall not apply to an individual if he has terminated his employment, or his employment has been terminated, with the employer involved in the labor dispute ...

Under the terms of the Act, a claimant is ineligible for benefits if his or her unemployment is the result of a labor dispute unless the claimant or the employer has terminated the employment. Id.

Whether the hiring of permanent replacements for striking employees terminates the employer-employee relationship, thereby making the employees eligible for benefits, was squarely addressed in Jackson v. Review Bd. of Indiana Sec. Division (1966), 138 Ind.App. 528, 215 N.E.2d 355. In that case striking employees were replaced by their employer within a week after a strike had begun. When the strike ended the employees sought reinstatement and were informed by their employer that work was not available. On an appeal from the denial of benefits, this court determined the striking employees were permanently replaced, the relationship of employer and employee had therefore been severed and the labor dispute section was not applicable. Jackson, 215 N.E.2d at 360.

In the case before us, Employers argue Jackson is no longer good law because it predates the 1980 amendment to the Act which replaced a "work stoppage" disqualification for benefits with a "labor dispute" disqualification. According to Employers, in light of the amendment and various federal court decisions, the hiring of permanent replacements is no longer relevant in determining benefit eligibility and does not terminate the employment relationship. We disagree.

Employers' argument in this case has already been addressed by this court in A-1 Compressor, Inc. v. Review Bd. of Indiana Employment Sec. Div. (1985), Ind.App., 481 N.E.2d 1120, trans. denied. In that case we rejected the applicability of federal labor law and affirmed the continued...