Baker v. General Motors Corp., Docket Nos. 24083

• Citation: 74 Mich.App. 237,254 N.W.2d 45
• Decision Date: 28 March 1977
• Docket Number: 24084 and 24150,Docket Nos. 24083
• Parties: A. G. BAKER, Jr. and L. R. Fondren et al., Plaintiffs-Appellees, Cross Appellants, v. GENERAL MOTORS CORPORATION, Defendant-Appellant. Kenneth R. COLLIER and Johnny S. Robinson, et al., Plaintiffs-Appellees, v. GENERAL MOTORS CORPORATION, Defendant-Appellant, and Michigan Employment Security Comm., Defendant. Robert J. SEIDELL and John F. Schaeffer et al., Plaintiffs-Appellants, v. GENERAL MOTORS CORPORATION and the Michigan Employment Security Commission, Defendants-Appellees.
• Court: Court of Appeal of Michigan (US)

Page 45

254 N.W.2d 45

74 Mich.App. 237

A. G. BAKER, Jr. and L. R. Fondren et al., Plaintiffs-Appellees, Cross Appellants, v. GENERAL MOTORS CORPORATION, Defendant-Appellant.

Kenneth R. COLLIER and Johnny S. Robinson, et al., Plaintiffs-Appellees, v. GENERAL MOTORS CORPORATION, Defendant-Appellant, and Michigan Employment Security Comm., Defendant.

Robert J. SEIDELL and John F. Schaeffer et al., Plaintiffs-Appellants, v. GENERAL MOTORS CORPORATION and the Michigan Employment

Security Commission, Defendants-Appellees.

Docket Nos. 24083, 24084 and 24150.

Court of Appeals of Michigan.

March 28, 1977.

Rehearing Denied May 10, 1977.

Released for Publication May 31, 1977.

J. R. Wheatley, Detroit, for General Motors Corp.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., E. J. Setlock, Asst. Atty. Gen., Detroit, for Michigan Employment Security Commission.

Jordan Rossen, Detroit, for A. G. Baker, L. R. Fondren, Kenneth R. Collier and Johnny S. Robinson et al.

Jordan Rossen, Marston, Sachs, Nunn, Kates, Kadushin & O'Hara, Detroit, by Charles Looman, Flint, for Robert J. Seidell and John F. Schaeffer et al.

Before T. M. BURNS, P. J., and KELLY and WALSH, JJ.

WALSH, Judge.

In the cases of Baker v. General Motors Corp. and Collier v. General Motors Corp., Nos. 24083 and 24084, the company applied for leave to appeal from judgments of the Genesee and Wayne County Circuit Courts, respectively, which held that the plaintiffs were entitled to unemployment compensation. In Seidell v. General Motors Corp., No. 24150, the plaintiffs applied for leave to appeal from a judgment of the Ingham County Circuit Court which held that plaintiffs were disqualified for such benefits. By orders dated January 21, 1976, we granted the parties' applications for leave to appeal and consolidated the cases for review.

The facts are essentially undisputed. On September 6, 1967, at 11:59 p. m. the 1964 national agreement between General Motors and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (hereinafter the "International") expired, as did agreements between individual company plants and union locals. In June 1967 the International notified GM of its intention to terminate the national and local agreements. On July 10, 1967, the International and the company commenced negotiations on the national agreement. During the week of August 27, a vote was taken of the UAW membership and strikes were authorized, if necessary, on national and local issues. Negotiations continued beyond the expiration date of the existing agreements until December 15, 1967, when a contract settlement was reached. As part of the settlement, the company agreed to waive the provision of the national agreement prohibiting a strike with respect to those plants at which the International authorized a strike over local issues, provided the company was notified five working days in advance of the union's intention to strike. The agreement was ratified on December 28, 1967. Union members continued in their employment during the course of negotiations on a new national contract.

On January 10, 1968, pursuant to the agreement, the International gave the company 10 days notice of its intention to authorize strikes at five Michigan plants and five out-of-state plants. These authorizations were based upon the strike vote taken in August. Later that month strikes occurred at foundries in Saginaw, Michigan; Defiance, Ohio; and Tonawanda, New York. ¹ Following the strikes, the plants employing the UAW members involved in these lawsuits experienced shutdowns or curtailments of production and the members became unemployed.

Union members filed for unemployment compensation which claims were approved by the Michigan Employment Security Commission upon redetermination. The company appealed to a hearing referee who reversed the commission's decision. The referee found that the claimants were disqualified under § 29(8)(a)(II) of the Michigan Employment Security Act, M.C.L.A. § 421.1 et seq.; M.S.A. § 17.051 et seq., because they had financed the labor dispute which caused their unemployment. The Michigan Employment Security Appeal Board upheld the referee's determination which decision in turn, was affirmed by the Ingham County Circuit Court and overturned by the circuit courts of Genesee and Wayne Counties.

At issue in the instant case is the construction and application of M.E.S.A. § 29(8)(a)(II). At the time of claimants' unemployment that section provided:

"(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.A. § 421.29(8) (a)(II); M.S.A. § 17.531(8)(a)(II).

The 1964 constitution of the International provided for regular monthly membership dues of $5.00 of which $3.75 was allocated to the union administrative fund and $1.25 to the union strike fund. On October 8, 1967, while a strike was in progress at Ford Motor Company, the International held a special convention in Detroit, one of the major purposes of which was amendment of the dues structure. The convention amended article 16 of International's constitution to provide for "emergency dues" commencing with October 8, 1967, and continuing "during the current collective bargaining emergency as determined by the International executive board and thereafter, if necessary, until the International Union Strike Fund has reached the sum of twenty-five million dollars ($25,000,000) . . .". During the emergency, administrative dues consisted of $3.75 per month and strike fund dues consisted of $11.25 or $21.25 per month depending upon the average hourly wage at the member's plant. After termination of the emergency or achievement of the $25,000,000 goal, union dues were to consist of two hours straight-time per month. The local union was to get 40% of the dues and the remaining 60% was to be divided evenly between the administrative and strike funds of the International.

At the hearing before the referee, counsel stipulated that: (1) the claimants had paid emergency dues for October and November, (2) that the dues allocated by the constitutional amendment to the strike insurance fund were remitted by the local unions and placed by the International in the strike fund, and (3) UAW members on strike at the three foundries were paid benefits from the International's strike insurance fund.

The hearing referee found that the claimant's unemployment was the result of a labor dispute in active progress at functionally integrated plants. While the referee found that the claimants did not participate in the labor dispute and were not directly interested, he did hold that the claimants financed the dispute by the payment of the dues set by the UAW convention of October 8. The referee defined "regular union dues" as dues the amount and purposes of which were set prior to inception of a labor dispute: he found that the labor dispute in the present case had its inception after termination of local agreements and negotiations of future terms, since a controversy then existed.

The Appeal Board agreed with the referee as to the cause of plaintiffs' unemployment, the functional integration of the plants at which the strikes occurred with those at which plaintiffs were employed, and the fact that plaintiffs neither participated in nor were directly interested in such disputes. The Board also upheld the referee's determination that plaintiffs had financed the labor dispute causing their unemployment, on a different basis however. The Board found that the dues established by the convention were neither regular nor were they set in purposes and amount prior to inception of the labor dispute, which the Board found had commenced in June, 1967.

On appeal, the Ingham County Circuit Court held that the Appeal Board's decision regarding plaintiffs' direct involvement in the labor dispute was a factual question. As the court found the Board's determination supported by the record, it refused to substitute its judgment for that of the Board. The Genesee County Circuit Court found that as the emergency dues were paid prior to the strikes which resulted in claimants' unemployment, their payment did not constitute financing a labor dispute. The court held that "a labor dispute in active progress" should not be so broadly construed as to include good faith bargaining prior to an impasse. The Wayne County Circuit Court held that claimants had not financed the dispute as the 1967 Ford strike was not functionally integrated with the 1968 General Motors strikes, the General Motors strikes were not contemplated at the time the special dues were paid, and the dues were used only to revitalize the strike fund during the Ford strike. The court also refused to disqualify claimants on the basis that their unemployment was not caused solely by the labor dispute. The...