Bergseth v. Zinsmaster Baking Company

• Decision Date: 21 March 1958
• Docket Number: No. 37310,37310
• Citation: 252 Minn. 63,89 N.W.2d 172
• Parties: Sigrid BERGSETH and Jessie Swetlen Coonce, Respondents, v. ZINSMASTER BAKING COMPANY, Relator, and Frank T. Starkey, Commissioner of Department of Employment Security, Respondent.
• Court: Minnesota Supreme Court

Page 172

89 N.W.2d 172

252 Minn. 63

Sigrid BERGSETH and Jessie Swetlen Coonce, Respondents, v. ZINSMASTER BAKING COMPANY, Relator and Frank T. Starkey, Commissioner of Department of Employment Security, Respondent.

No. 37310.

Supreme Court of Minnesota.

March 21, 1958.

On Appeal from Clerk's Taxation of Costs

April 18, 1958.

SYLLABUS BY THE COURT.

Claimants, who were retired under a compulsory retirement provision of a pension program which was part of a collective bargaining agreement between the employer and claimants' union, left voluntarily and without good cause attributable to their employer under M.S.A. § 268.09 and hence were not entitled to unemployment benefits.

McCabe, Van Evera, Donovan & Mundt, William P. Van Evera, Duluth, for relator.

Miles Lord, Atty. Gen., George C. Gubbins, Jr., Asst. Atty. Gen., for respondents.

DELL, Chief Justice.

Certiorari to review the decision of the commissioner of employment security, the sole question being whether an individual, who is automatically retired from her employment under the terms of a collective-bargaining agreement between her employer and her union, is entitled to receive unemployment benefits.

Claimants, members of Local 21 of the Bakery and Confectionary Workers Union, were employed at relator's baking plant. Pursuant to a union contract a pension plan was inaugurated October 1, 1955, which provided for employer contributions to a pension fund at the rate of two and one-half cents per hour for each employee. Monthly pensions were to be given employees with 15 years or more of service. Severance pay was provided for employees who had worked more than 10 but less than 15 years at the rate of $50 a year for each year commencing with the 11th year. Retirement was required on the first day of the month immediately following an employee's 65th birthday or on October 1, 1956, whichever was later.

The question of whether or not retirement should be automatic and mandatory at 65 was submitted to the union membership at a regular meeting on March 10, 1956, at which time a majority voted in favor of the mandatory provision. Although they were aware of the date and purpose of the meeting, neither of the claimants was present. Each of them knew, however, of the union's decision before the date on which the compulsory-retirement provision became applicable to her.

During the week preceding October 1, 1956, both claimants were informed that their employment would be terminated and that their jobs were being posted. They were further advised to apply for benefits under the pension plan. Both claimants were 67 and had worked for relator for 14 years so that they were not entitled to receive monthly pension payments but each was entitled to $200 severance pay. Both made application for the severance pay which was paid to them and they were separated from their employment. Claimant Coonce also applied for and received social security benefits; at the time of the hearing claimant Bergseth had not yet applied. Both claimants applied for unemployment benefits at the St. Paul office of the Department of Employment Security and their claims were found to be valid. Notice was mailed to relator who objected to the claimants' receipt of the benefits since that would be charged against its experience-rating account.

The claims deputy rejected relator's position and the matter was taken to an appeal tribunal in the department. The tribunal, composed of a chairman and one representative each of the employer and the employees, unanimously found in favor of relator and concluded that claimants were not entitled to unemployment benefits. This decision was appealed to the commissioner of employment security who reversed the appeal tribunal. Relator petitioned this court for a writ of certiorari to review the commissioner's decision, which we granted.

Relator contends that the separation was compulsory under the terms of the collective-bargaining agreement; that the agreement was properly negotiated and ratified; that in compliance therewith claimants left voluntarily and without good cause attributable to the employer; and that, therefore, they are not entitled to unemployment benefits. It is admitted that but for this agreement relator would not have retired these employees. They, on the other hand, claim that they desired to remain on the job; that they were not in accord with the union agreement; that they were forced to retire and thus left involuntarily and with good cause attributable to their employer; and that they are, therefore, entitled to unemployment benefits.

Disqualification from benefits is governed by M.S.A. § 268.09. So far as it is here material that section provides:

'An individual shall be disqualified for benefits:

'(1) If such individual voluntarily and without good cause attributable to the employer discontinued his employment with such employer * * *.'

All states have provisions in their unemployment insurance laws to substantially the same effect. ¹

'The voluntary leaving provision disqualifies an individual for benefits upon the concurrence of two factors: (1) the individual must discontinue his employment voluntarily; and (2) such discontinuance of employment must be without good cause attributable to the employer. * * * 'Voluntarily quitting' means the discontinuing of employment because the employee no longer desires to remain in the relationship of an employee with the employer from whom he has separated.' ² 'Good cause attributable to the employer' embraces situations where employees, through no fault of their own, leave their employment due to factors or circumstances directly connected therewith. ³

Application of the facts in particular cases to the wording of the statute as construed is complicated by the interpolation of a labor union between the employer and his employees. Our statutes provide that when the majority of the employees in an appropriate collective-bargaining unit select a union to represent them that union is the exclusive bargaining agent for all of the employees in the unit with respect to wages, hours, and other conditions of employment. ⁴ The right of the individual worker to deal with his employer regarding these matters is surrendered to the bargaining agent. 'Thus a worker is bound by the agreement made on his behalf by the bargaining agent to the same extent as though he had entered into it individually,' ⁵ and the contract is a bar to negotiations with anyone else except a successor union. ⁶

When, for one reason or another, an employer is required to dismiss his employee pursuant to the collective-bargaining agreement, questions regarding the voluntary or involuntary nature of the separation arise. By and large, if the contract contains reasonable provisions encompassing appropriate subjects for collective bargaining and is properly negotiated by the authorized agent and properly ratified by the union membership, it will be deemed to be the voluntary act of each individual member of the union, including any dissenters. The ratification forecloses any subsequent claim by an employee that actions which are incumbent upon him under the terms of the contract are involuntary and against his will. Under this rationale, dismissals for the following reasons have been held be voluntary and without good cause attributable to the employer so that unemployment benefits were not available: (1) Refusal to join a labor organization with which the employer had a closed- or union-shop agreement; ⁷ (2) refusal to pay union dues and thus remain in good standing with the union as required under the contract; ⁸ (3) refusal to retain union membership as required under the contract; ⁹ (4) marriage, after which the contract requires a discharge; ¹⁰ (5) pregnancy, at which time the contract requires a discharge; ¹¹ (6) refusal of a transfer or a downgrading which involves a lower pay scale or less favorable hours but permits retention of seniority, as provided for by a contract; ¹² (7) refusal to abide by a union-management reinstatement agreement; ¹³ (8) refusal to pay a fine levied by the union; ¹⁴ and (9) refusal to comply with union rules. ¹⁵

These separations were without good cause attributable to the employer because they resulted from circumstances about which the employer could do nothing and which were solely within the control of the employee. The separations were voluntary because they resulted from the acts of duly selected bargaining agents. 'Their acts were his (the employee's) acts.' ¹⁶

Cases involving a labor-management contract provision regarding compulsory retirement are rate. We know of only three states which have passed on the matter, ¹⁷ and in only one of these has there been a final decision by a court of last resort. The first reported determination was by the Pennsylvania Board of Review in 1951. ¹⁸ The board there found that a claimant who was compulsorily retired at 68 under a union-management pension agreement did not leave voluntarily.

The only judicial decisions in cases of this nature were in New Jersey in 1953. The appellate division of the superior court held that the retirement was voluntary and that the claimants were not entitled to unemployment benefits. ¹⁹ The court there said (Campbell Soup Co. v. Board of Review, 24 N.J.Super, 311, 319, 94 A.2d 514, 518):

'* * * the employee may not with justification take a position calling for compulsory retirement * * * in his contract and then repudiate the binding features thereof upon having attained retirement age in order to claim involuntary unemployment and reap the benefits of unemployment compensation legislation. * * * To entitle him to unemployment benefits, the employee may not disclaim his voluntary disqualification therefor. That is a fruit born of his own action, and to hold otherwise would be to alter or amend his contract without justification.'

The case was reversed by the Supreme Court of New Jersey, ²⁰ one...