Bays v. Shenango Co.

• Decision Date: 22 August 1990
• Docket Number: No. 89-1198,89-1198
• Citation: 53 Ohio St.3d 132,559 N.E.2d 740
• Parties: BAYS, et al., Appellants, v. SHENANGO COMPANY, et al., Appellees.
• Court: Ohio Supreme Court

Page 132

53 Ohio St.3d 132

559 N.E.2d 740

BAYS, et al., Appellants, v. SHENANGO COMPANY, et al., Appellees.

No. 89-1198.

Supreme Court of Ohio.

Submitted May 29, 1990.

Decided Aug. 22, 1990.

The cause is now before this court upon an allowance of a motion to certify the record.

Stewart Jaffy & Associates Co., L.P.A., and Stewart R. Jaffy, Columbus, for appellants.

Day, Ketterer, Raley, Wright & Rybolt, William S. Cline and Catherine A. Pastore, Canton, for appellee Shenango Company.

Anthony J. Celebrezze, Jr., Atty. Gen., Merl H. Wayman and Merrill H. Henkin, Columbus, for appellee Administrator, Ohio Bureau of Employment Services.

ALICE ROBIE RESNICK, Justice.

R.C. 4141.29(D)(1)(a) provides in part:

"Notwithstanding division (A) of this section, no individual may serve a waiting period or be paid benefits under the following conditions:

"(1) For any week with respect to which the administrator finds that:

"(a) His unemployment was due to a labor dispute other than a lockout at any factory, establishment, or other premises located in this or any other state and owned and operated by the employer by which he is or was last employed; and for so long as his unemployment is due to such labor dispute. * * * " (Emphasis added.)

Appellants contend that because their unemployment was due to a lockout by Shenango, they were qualified to receive unemployment compensation benefits pursuant to R.C. 4141.29(D)(1)(a). Shenango and the Ohio Bureau of Employment Services reject this contention and argue that appellants' unemployment was due to a labor dispute other than a lockout, or, in other words, a strike.

A "lockout" has been defined by this court as " * * * a cessation of the furnishing of work to employees or a withholding of work from them in an effort to get for the employer more desirable terms. Iron Molders' Union v. Allis-Chalmers, Co., 166 F., 45, 52, 20 L.R.A. (N.S.), 315, 91 C.C.A., 631; 25 Words and Phrases, 566; 33 Ohio Jurisprudence (2d), 189, Section 65.

"Such a definition does not circumscribe all the manifestations of an alleged lockout situation. It does not, of course, confine a lockout to an actual physical closing of the place of employment. See Barnes v. Hall, 285 Ky., 160, 146 S.W. (2d), 929." Zanesville Rapid Transit, Inc. v. Bailey (1958), 168 Ohio St. 351, 354, 7 O.O.2d 119, 121, 155 N.E.2d 202, 205.

This court in Leach v. Republic Steel Corp. (1964), 176 Ohio St. 221, 223-224, 27 O.O.2d 122, 123, 199 N.E.2d 3, 5, distinguished the term "strike" from "labor dispute":

"As generally understood, a 'strike' is a cessation of work by employees in an effort to obtain more desirable terms with respect to wages, working conditions, etc., whereas a 'labor dispute' is of a broader scope and includes a controversy between employer and employees concerning wages, working conditions or terms of employment."

In its discussion of when a strike exists, this court in Baker v. Powhatan Mining Co. (1946), 146 Ohio St. 600, 33 O.O. 84, 67 N.E.2d 714, relied on a pertinent Colorado Supreme Court decision, Sandoval v. Indus. Comm. (1942), 110 Colo. 108, 130 P.2d 930. When determining whether employees had engaged in a strike, the Sandoval court looked at which party, the union or the employer, sought to change the status quo. The court determined that the employer had maintained the status quo because it had made employment available to the employees under the terms of the then expired contract. Because the employees refused to work unless there was a change in the status quo, this "constituted a demand for a modification of working conditions and rates of pay and * * * their refusal to work until there was a compliance with such demand, did constitute a strike." Sandoval, supra, at 122, 130 P.2d at 937.

The status-quo test was fully developed in Erie Forge & Steel Corp. v. Unemp. Comp. Bd. of Review ("Vrotney Unemployment Compensation Case") (1960), 400 Pa. 440, 443-445, 163 A.2d 91, 93-94:

"In the very delicate and sensitive negotiations which are involved in the development of a new collective bargaining agreement to replace one that is nearing its expiration, all parties must be sincere in their desire to maintain the continued operation of the employer's enterprise. The law contemplates that collective bargaining will be conducted in good faith, with a sincere purpose to find a basis for agreement. Neither an adamant attitude of 'no contract, no work' on the part of the employees, nor an ultimatum laid down by the employer that work will be available only on his (employer's) terms, are serious manifestations of a desire to continue the operation of the enterprise. While either or both of these positions may legitimately be taken by the parties during the bargaining negotiations prior to the expiration of the existing contract, when the contract has in fact expired and a new agreement has not yet been negotiated, the sole test under * * * the Unemployment Compensation Law, * * * of whether the work stoppage is the responsibility of the employer or the employees is reduced to the following: Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of the contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the pre-existing terms and conditions of employment pending further negotiations? If the employer refuses to so extend the expiring contract and maintain the status quo, then the resulting work stoppage constitutes a 'lockout' and the disqualification of unemployment compensation benefits in the case of a 'stoppage of work because of a labor dispute' does not apply."

The court of appeals in Oriti v. Bd. of Review (1983), 7 Ohio App.3d 311, 7 OBR 394, 455 N.E.2d 720, adopted the "Vrotney" test to a factual situation similar to the one in the case before us and held:

" * * * [W]here employees offer to continue working under the terms of a pre-existing collective bargaining agreement pending final settlement of a labor dispute, the failure of the employer to accept such an offer constitutes a lockout unless it is demonstrated that the employer has a compelling reason for failing to so agree such that the extension of the contract would be unreasonable under the circumstances." Id. at 314, 7 OBR at 398, 455 N.E.2d at 724.

The status-quo test requires that actions of both the employer and the union be scrutinized in order to ascertain whether the parties sought to maintain the status quo. "Since the purpose of our unemployment compensation system is to compensate an individual when work has been denied him through no fault of his own, logically the test of whether a work stoppage resulted from a strike or a lock-out requires us to determine which side, union or management, first refused to continue operations under the status quo after the contract had technically expired, but while negotiations were continuing." Philco Corp. v. Unemp. Comp. Bd. of Review (1968), 430 Pa. 101, 103, 242 A.2d 454, 455.

The Board of Review in the instant case found that Shenango did not maintain the status quo. We agree.

The agreement entered into between Local 6968 and Shenango included both quarterly cost-of-living adjustments as well as "roll-ins." At the time of the negotiations, the most recent cost-of-living adjustment had been made on July 1, 1985. The "roll-in" provided that on September 30 of each contract year, an amount equal to the cost-of-living adjustment then payable would be included in the standard hourly wage scale. Thus, according to the contract, on September 30, 1985, Shenango was obligated to "roll in" this final cost-of-living adjustment into the base wage rate.

In its offer to extend the contract for thirty days, however, Shenango excluded the last roll-in which was to be paid on September 30, 1985 and was part of the prior existing contract. An employer deviates from the status quo if it refuses to allow work to continue for a reasonable time under the existing terms and conditions of employment while negotiations continue. See Erie Forge, supra; Oriti, supra. Here, Shenango refused to accept the obligations as set forth in the 1982 contract. We also note that the record contains no evidence that Shenango had a compelling reason to refuse to maintain the status quo. See Oriti, supra. Hence, we find that Shenango did not maintain the status quo.

We turn next to whether the union representing the claimants offered to maintain the status quo. " * * * [A] determination of which side, union or management, first refused to continue operations under the status quo after the contract had technically expired, but while negotiations were continuing, must be made in order to conclude whether work stoppage was the result of a strike or lockout. * * * " (Emphasis deleted.) (Citation omitted.) Lozaro v. Commw. Unemp. Comp. Bd. of Review (1985), 91 Pa.Commw. 428, 431-432, 497 A.2d 680, 682.

The Board of Review herein determined that the union, on September 27, 1985, offered to extend the agreement for one year, including the same formula for computing cost-of-living adjustments. The board determined that this offer of the union did not maintain the status quo because of the inclusion of four additional cost-of-living adjustments. The court of common pleas, in its findings of fact, stated that the union's proposal of a one-year extension was made with the same cost-of-living adjustment as contained in the contract. It concluded that the employees offered to continue working under the terms of the pre-existing agreement, and thus, attempted to maintain the status quo. The court determined that the board's finding that the employees did not offer to work under the terms of the existing agreement was against the manifest weight of the evidence and contrary to law. The court of appeals reversed the trial court.

This...