Baker v. General Motors Corp.

• Decision Date: 17 January 1985
• Docket Number: Docket Nos. 59861-59863,No. 3,3
• Citation: 363 N.W.2d 602,420 Mich. 463
• Parties: A.G. BAKER, Jr., Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, and Michigan Employment Security Commission, Defendant-Appellee. (After Remand) Kenneth R. COLLIER, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, and Michigan Employment Security Commission, Defendant-Appellee. (After Remand) Robert J. SEIDELL, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, and Michigan Employment Security Commission, Defendant-Appellee. (After Remand) Calendar420 Mich. 463, 363 N.W.2d 602, 120 L.R.R.M. (BNA) 2741
• Court: Michigan Supreme Court

Page 602

363 N.W.2d 602

A.G. BAKER, Jr., Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, and Michigan Employment Security Commission, Defendant-Appellee.

(After Remand)

Kenneth R. COLLIER, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, and Michigan Employment Security Commission, Defendant-Appellee.

(After Remand)

Robert J. SEIDELL, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, and Michigan Employment Security Commission, Defendant-Appellee.

(After Remand)

Docket Nos. 59861-59863.

Calendar No. 3.

420 Mich. 463, 363 N.W.2d 602, 120 L.R.R.M. (BNA) 2741

Supreme Court of Michigan.

Argued June 9, 1983.

Decided Dec. 28, 1984.

Released Jan. 17, 1985.

John A. Fillion and Jordan Rossen, Detroit, Altshuler & Berzon by Fred Altshuler and Trina Grillo, San Francisco, Cal., and Rothe, Mazey, Mazey & Hamburger by William Mazey, Southfield, for plaintiffs-appellants.

J.R. Wheatley, Fildew, Hinks, Gilbride, Miller & Todd by Jonathan N. Wayman, Detroit, and Otis M. Smith, Detroit (M.J. Basford and E.J. Dilworth, Jr., Detroit, of counsel), for General Motors Corp. RYAN, Justice (After Remand).

The issues in this case are whether the plaintiffs were properly disqualified under M.C.L. Sec. 421.29(8)(a)(ii); M.S.A. Sec. 17.531(8)(a)(ii) from receiving unemployment benefits for "financing" the labor dispute which caused their unemployment and whether, if the plaintiffs were properly disqualified for "financing," M.C.L. Sec. 421.29(8)(a)(ii); M.S.A. Sec. 17.531(8)(a)(ii) is invalid as violative of the Supremacy Clause of U.S. Const., art. VI, cl. 2 or of the First Amendment right to freedom of association. These issues arise in the context of the following facts.

On September 6, 1967, the United Automobile Workers contract with General Motors expired. Prior to its expiration, UAW members at GM had overwhelmingly authorized a strike. However, the UAW did not choose GM as its "target" company. Instead, the UAW called a national strike against the Ford Motor Company beginning on September 7, 1967. On October 2, 1967, the UAW called a national strike against the Caterpillar Tractor Company. However, work at GM continued without interruption during this entire time.

In early October, 1967, faced with stalemated bargaining at Ford and Caterpillar, the UAW called a special national UAW convention for October 8, 1967. The stated purpose of the special convention, according to the "UAW Proceedings," ¹ was threefold:

"PURPOSE OF CONVENTION

"The Special Convention is being held to:

"1. Review the status of our 1967 collective bargaining effort.

"2. To consider revision of the dues program of the International Union, UAW, to provide adequate strike funds to meet the challenges of the 1967 and 1968 collective bargaining effort.

"3. To consider revisions of the Constitution of the International Union as it relates to the payment of dues, strike fund, membership eligibility, strike insurance program and other matters related to emergencies facing the International Union, UAW." ²

During the one-day special convention, the UAW amended Article 16 of its constitution to allow strike fund dues to be increased. Amended Article 16 read (in pertinent part) as follows:

"Article 16.

"Section 2(a) (New):

"Emergency Dues

"All dues are payable during the current month to the financial secretary of the local union.

"Commencing with the eighth (8th) day of October, 1967, until October 31, 1967, and for each month thereafter during the emergency as defined in the last paragraph of this subsection, union administrative dues shall be three dollars and seventy-five cents ($3.75) per month and Union Strike Insurance Fund dues shall be as follows:

"1. For those working in plants where the average straight time earnings * * * is three dollars ($3.00) or more, twenty-one dollars and twenty-five cents ($21.25) per month.

"2. For those working in plants where the average straight time earnings * * * is less than three dollars ($3.00), eleven dollars and twenty-five cents ($11.25).

* * *

"This schedule of dues shall remain in effect during the current collective bargaining emergency as determined by the International Executive Board and thereafter, if necessary, until the International Union Strike Insurance Fund has reached the sum of twenty-five million dollars ($25,000,000), at which time the dues structure established in 2(b) below, shall become effective." ³ (Emphasis added.)

Prior to the amendment of Article 16, each UAW member paid strike insurance dues of $1.25 per month and administrative dues of $3.75. Therefore, the amendment to Article 16 increased member's strike fund dues by 800% or 1,600%. ⁴

The national strikes at Ford and Caterpillar ended before the first collection of the new special strike fund dues in October, 1967. ⁵ Nevertheless, the new emergency strike fund dues were collected from the UAW membership in October and November, 1967. Since there was no contract at GM until December 15, 1967, the dues were collected "by hand" by union stewards and not by GM through an automatic checkoff system.

In January and February, 1968, UAW members at GM foundry plants in Michigan, Ohio, and New York went on strike over disputed local issues. In accordance with UAW regulations, the striking GM foundry plant workers were paid strike benefits from the UAW's International Union Strike Insurance Fund (SIF). Due to the GM foundry plant strikes, work shortages developed at non-striking GM plants. As a result of these work shortages, GM laid off the plaintiffs ⁶ in early 1968.

Following their layoff, the plaintiffs filed unemployment compensation claims with the Michigan Employment Security Commission. GM opposed these claims. GM asserted that the plaintiffs were disqualified from receiving unemployment benefits because they had "financed" the labor dispute which caused their unemployment by paying the emergency strike fund dues. GM cited the Michigan Employment Security Act Sec. 29(8), which stated (in pertinent part):

"(8) An individual shall be disqualified for benefits for any week with respect to which his total or partial unemployment is due to a labor dispute in active progress, or to shutdown or start-up operations caused by such labor dispute, in the establishment in which he is or was last employed, or to a labor dispute (other than a lockout) in active progress, or to shutdown or start-up operations caused by such labor dispute, in any other establishment within the United States which is functionally integrated with such establishment and is operated by the same employing unit. No individual shall be disqualified under this subsection 29(8) if he is not directly involved in such dispute.

"(a) For the purposes of this subsection 29(8), no individual shall be deemed to be directly involved in a labor dispute unless it is established that:

* * *

"(ii) He is participating in or financing or directly interested in the labor dispute which causes his total or partial unemployment. The payment of regular union dues (in amounts and for purposes established prior to the inception of such labor dispute) shall not be construed as financing a labor dispute within the meaning of this subparagraph...." M.C.L. Sec. 421.29(8)(a)(ii); M.S.A. Sec. 17.531(8)(a)(ii).

Over GM's objections, the MESC approved plaintiffs' claims.

GM appealed the MESC decision to a hearing referee who reversed the MESC and disqualified the plaintiffs from unemployment benefits since they had "financed" the labor dispute which caused their unemployment by paying the emergency strike fund dues. The plaintiffs appealed the referee's decision to the Michigan Employment Security Appeal Board which affirmed the referee's decision that the plaintiffs were disqualified from benefits under the "financing" provision of MESA Sec. 29(8) by their payment of emergency strike fund dues. The plaintiffs then appealed to three circuit courts. Two of the circuit courts reversed the appeal board's decision, while one affirmed the appeal board's decision. On appeal, the Court of Appeals held that the plaintiffs had "financed" the labor dispute which caused their unemployment by paying emergency strike fund dues and that they were, therefore, disqualified under MESA Sec. 29(8)(a)(ii). Baker v. General Motors Corp., 74 Mich.App. 237, 254 N.W.2d 45 (1977).

After granting leave to appeal, this Court decided three issues. Baker v. General Motors Corp., 409 Mich. 639, 297 N.W.2d 387 (1980). First, the Court determined that the plaintiffs' unemployment was "due to a labor dispute in active progress" and was not due to the GM/UAW seniority system. Second, the Court determined that the amended strike fund dues paid by the plaintiffs in October and November, 1967, were not "regular union dues," but rather were extraordinary emergency dues. Third, the Court determined that, while the dues were not ordinary, the payment of extraordinary dues did not automatically disqualify the plaintiffs from receiving unemployment compensation. For extraordinary or emergency dues to disqualify the plaintiffs, the "financing" through the payment of non-ordinary dues must have a "meaningful connection" to the labor dispute which caused the plaintiffs' unemployment. To determine whether a "meaningful connection" existed in this case, the Court remanded the case to the Board of Review ⁷ for further proceedings to determine "whether plaintiffs' emergency dues payments were sufficiently connected with the local labor disputes which caused their unemployment to constitute 'financing' of those labor disputes." Baker, supra, p. 668, 297 N.W.2d 387.

On remand, the Board of Review conducted hearings on June 2, 3, and 22, September 15, and October 13, 1981. At the completion of the October 13 hearing, the board closed the record to further evidence. However, during final arguments on December 8, 1981, the board reopened the record (over pl...