Baker v. General Motors Corporation
| Decision Date | 02 July 1986 |
| Docket Number | No. 85-117,85-117 |
| Citation | 92 L.Ed.2d 504,478 U.S. 621,106 S.Ct. 3129 |
| Parties | A.G. BAKER, Jr., et al., Appellants v. GENERAL MOTORS CORPORATION and Michigan Employment Security Commission |
| Court | U.S. Supreme Court |
A Michigan statute makes an employee ineligible for unemployment compensation if he has provided "financing," by means other than the payment of regular union dues, for a strike that causes his unemployment. As authorized by their international union, appellant employees of appellee General Motors Corp. (GM) were required to pay, in addition to their regular union dues, "emergency dues" to augment the union's strike insurance fund. Although the union and GM reached an agreement on national issues at a time when negotiations for a collective-bargaining agreement were taking place, three local unions went on strike at GM foundries, and strike fund benefits were paid to the striking employees from the fund in which emergency dues had been deposited. As a result of the strikes, operations were temporarily curtailed at other GM plants, idling more than 19,000 employees, most of whom are appellants in this case. Appellants' claims for unemployment benefits were ultimately denied by the Michigan Supreme Court on the ground that the emergency dues payments constituted "financing" of the strikes that caused appellants' unemployment, thus making appellants ineligible for unemployment compensation under the Michigan statute. The court further held that its construction of the state statute was not pre-empted by federal law on the asserted ground that it inhibited the exercise of rights guaranteed by § 7 of the National Labor Relations Act (NLRA).
Held: The "financing" disqualification from receiving unemployment compensation, as construed by the Michigan Supreme Court, is not preempted by federal law. While in financing the local strikes appellants were exercising associational rights protected by § 7 of the NLRA, that protection does not deprive the State of the power to make the policy choice that otherwise would be authorized by Title IX of the Social Security Act, which gives the States a wide range of judgment as to the particular type of unemployment compensation program they may provide. The employers did nothing to impair the exercise of appellants' § 7 rights. Whether or not appellants were participants in the decision to strike, or to expend funds in support of the local strikes, the fact that their unemployment was entirely attributable to the voluntary use of the union's bargaining resources—untainted by any unlawful conduct by the employer—is a sufficient reason for allowing the State to decide whether or not to pay unemployment benefits. Appellants were not laid off sim- ply because they paid emergency dues but rather became unemployed because there was a meaningful connection between the decision to pay emergency dues, the strikes that ensued, and ultimately their own layoffs. While federal law protects the employees' right to authorize a strike, it does not prohibit a State from deciding whether or not to compensate employees who thereby cause their own unemployment. An employee's decision to participate in a strike, either directly or by financing it, is not only an example of causing one's own unemployment, it is one that furthers the federal policy of free collective bargaining regardless of whether or not a State provides compensation for employees who are furloughed as a result of the labor dispute. Pp. 632-638. 420 Mich. 463, 363 N.W.2d 602, affirmed.
Jordan Rossen, Detroit, Mich., for appellants.
Peter G. Nash, Washington, D.C., for appellees.
Louis R. Cohen, Washington, D.C., for the U.S., as amicus curiae, by special leave of Court.
In Michigan an employee is ineligible for unemployment compensation if he has provided "financing"—by means other than the payment of regular union dues—for a strike that causes his unemployment.1 The question presented by this appeal is whether Michigan's statutory disqualification is implicitly prohibited by § 7 of the National Labor Relations Act.2
This case has a long history. Two appeals to the State Supreme Court and a series of administrative proceedings have determined the relevant facts and the meaning of the governing statutory provision. Before addressing the federal question, we shall therefore summarize the events that gave rise to the controversy and the propositions of state law that were resolved on each appeal.
The story begins in June 1967, when the international union 3 representing the work force in the automobile industry notified the three major manufacturers—General Motors, Ford, and Chrysler that it intended to terminate all national and local collective-bargaining agreements when they expired on September 6, 1967. In August, after the UAW and GM had opened negotiations for a new national agreement, the members of the Union employed by GM voted to authorize strikes, if necessary, on national and local issues. When the agreements expired, the UAW began a national strike against Ford, but did not immediately strike any GM plants.
On October 8, 1967, while the Ford strike was continuing,4 the UAW held a special convention to authorize "adequate strike funds to meet the challenges of the 1967 and 1968 collective bargaining effort." 5 At that convention the UAW amended its constitution to authorize the collection of "emergency dues" 6 that would be used to augment the Union's strike insurance fund. In a letter to GM employees explaining the purpose of the dues increase, the Union stated:
" " 420 Mich. 463, 513, 363 N.W.2d 602, 624-625 (1984) (footnote omitted).
The emergency dues were payable immediately and were to remain in effect during the "collective bargaining emergency." See n. 6, supra. They were much larger than the regular dues. Before the emergency, each UAW member paid strike insurance dues of $1.25 per month and administrative dues of $3.75. The amendment increased the contribution to the strike insurance fund to $21.25 per month for employees in plants where the average straight-time hourly earnings amounted to $3 or more, and to $11.25 in plants where the average earnings were lower. Thus, for the former group the increase of $20 was 16 times as large as the regular contribution to the strike fund; for the latter group the $10 increase was 8 times as large.
The strike against Ford was settled in October, before the first scheduled collection of the new special strike fund dues. Notwithstanding this development, emergency dues of $42 million were subsequently collected until November 30, 1967—when the UAW determined that it would not strike any GM plants "at least during the month of December 1967." 7 At this point the UAW advised its membership that even though "the collective bargaining emergency has not yet ended," the emergency dues would be waived during December and January and dues would revert to the regular rate of $5 per month. In December, the UAW and GM reached agreement on all national issues.
In January 1968, however, three UAW local unions went on strike at three GM foundries for periods of 10, 11, and 12 days.8 Strike fund benefits of $4 to $6 a day, totaling $247,245.31, were paid to the striking UAW employees from the fund in which the emergency dues collected in October and November had been deposited. At that time the emergency dues constituted about half of the money in the fund.9 As a result of the strikes, operations were temporarily curtailed at 24 other functionally integrated GM plants, idling more than 19,000 employees. Most of these employees are appellants in this case. Their claims for unemployment benefits were considered at three levels of administrative review 10 and three levels of judicial review,11 and were ultimately denied by the State Supreme Court. The First Appeal
In its first opinion in this case the Michigan Supreme Court decided two statutory questions and remanded a third for further consideration by the Board of Review.
It first held that appellants' unemployment was "due to a labor dispute in active progress" at other establishments operated by the same employing unit and functionally integrated with the establishments where appellants were employed within the meaning of the statute. It rejected the argument that the layoffs were due not only to the strikes, but also to a combination of management decisions and seniority provisions in the collective-bargaining agreement, holding instead that the strikes were a "substantial contributing cause" of the unemployment and need not be its sole cause.12
After finding the requisite causal connection between the strikes and the layoffs, the court considered the relationship between the emergency dues and the strikes. Appellants contended that their payments were expressly excepted from the coverage of the statute because they were "regular union dues." The State Supreme Court rejected this argument, explaining that the term "regular" had been used "to exclude from possible treatment as financing those dues payments re- quired uniformly of union members and collected on a continuing basis without fluctuations prompted by the exigencies of a particular labor dispute or disputes." 13 The exception for regular union dues thus did not encompass "unusual collections for the purpose of supporting a labor dispute." 14
The court did not decide whether...
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