Boguszewski v. Commissioner of Dept. of Employment and Training

• Decision Date: 05 June 1991
• Parties: Michael S. BOGUSZEWSKI et al. 1 v. COMMISSIONER OF the DEPARTMENT OF EMPLOYMENT AND TRAINING et al. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 554

572 N.E.2d 554

410 Mass. 337

Michael S. BOGUSZEWSKI et al. ¹ v. COMMISSIONER OF the DEPARTMENT OF EMPLOYMENT AND TRAINING et

al. ²

Supreme Judicial Court of Massachusetts,

Suffolk.

Argued April 3, 1991.

Decided June 5, 1991.

Deborah S. Steenland, Boston, for Boston Edison. Co.

Burton E. Rosenthal, Boston (Joanne F. Goldstein, Newton Center, with him), for employee.

Robert J. Cordy, Sp. Asst. Atty. Gen., and Kenneth B. Grooms, Sp. Asst. Atty. Gen., for the Com'r of the Dept. of Employment and Training, joined in a brief.

Scott Harshbarger, Atty. Gen., and Maria Galvagna, Asst. Atty. Gen., for the Atty. Gen., amicus curiae, submitted a brief.

Before LIACOS, C.J., and ABRAMS, LYNCH and GREANEY, JJ.

GREANEY, Justice.

The board of review of the Division of Employment Security ³ (board) concluded that a "stoppage of work" had occurred when two-thirds of the employees of Boston Edison Company (employer), ceased to work during a four-week strike. The board determined, therefore, that the striking employees were not entitled to unemployment benefits under G.L. c. 151A, § 25(b ) (1988 ed.), the Employment Security Law. A judge of the Boston Municipal Court reviewed the board's decision under G.L. c. 30A, § 14 (1988 ed.), determined that the decision was wrong, and concluded that the claimants were entitled to benefits. The judge reported the questions raised by the appeal and the correctness of his decision to the Appeals Court. We allowed an application for direct appellate review. We conclude that the board's decision that there was a "stoppage of work" under the statute, even though the employer continued full production and lost no revenues as a result of the strike, was consistent with the law and was supported by substantial evidence. Consequently, we direct the entry of a judgment affirming the board's decision denying benefits. ⁴

The employer is an operating public utility engaged principally in the generation, purchase, transmission, distribution, and sale of electricity. As of May, 1986, the employer had 4,397 full-time employees. Approximately 2,950 of the employees, the claimants, were represented by locals of the Utility Workers Union of America. Collective bargaining agreements between the unions and the employer expired on May 15, 1986. The parties failed to reach new agreements by that date, and the claimants initiated a strike, which commenced on May 16, 1986. All of the approximately 1,450 management and nonunion employees continued working, with substantially extended hours. The strike ended four weeks later, on June 13, 1986, when new agreements were reached and the claimants returned to work.

During the strike, many of the company's operations were halted, or performed at a level substantially below normal. The board described the state of the operations in extensive and detailed findings regarding the disruption that occurred in each of the employer's many divisions. For example, in the overhead transmission system division, where 130 nonunion workers did the work of 423 striking workers, no routine maintenance, inspection, street light fixture replacement, and system development were performed. In addition, other important functions of the division, such as lamp inspection, pole installation and replacement, transformer installation, overhead service installation, and wire installation, were performed at rates ranging from 3% to 41% of normal performance.

The board summarized the disruption caused by the strike as follows:

"[A]mong other things, major portions of the Transmission & Distribution function were curtailed, and much of the vital reliability, safety and sales work was disrupted to a level substantially below normal; and ... much of the customary maintenance of premises and equipment, the inspection, testing, installation, replacement of equipment, and clerical and administrative functions normally performed in most of the [employer's] departments either were not accomplished during the dispute or were accomplished at levels ranging from about 3% to 50% of normal."

In two of the employer's divisions--the transportation division and the data input and control division--work was placed out on contract to outside vendors.

While this disruption was occurring, however, the employer was able to maintain 100% of its generation and distribution of electricity to customers.

In addition, with management and nonunion employees working fifty to eighty hours per week, the employer was able to answer service calls and perform emergency repair work on electrical lines and associated equipment. The employer was also able to process customer billings and payments for the electricity. As a result, the employer's revenues did not suffer during the strike, and the value of its common stock actually increased.

The claimants applied for unemployment benefits with the Division of Employment Security (DES) for the four weeks of the strike. The Director of DES awarded benefits, and the employer requested review before the board. After six days of hearings, a majority of the board found that the claimants were not entitled to benefits, as their unemployment was due to a "substantial work stoppage" because of a labor dispute. The claimants sought review in the Boston Municipal Court pursuant to G.L. c. 30A, § 14. The judge decided that there had been no "stoppage of work" because the administrative record did not support a conclusion that the employer "suffered any immediate or long-term adverse consequence, financial or otherwise," and because "the employer's primary business function, the for profit generation and distribution of electricity, proceeded without interruption."

The Employment Security Law provides that no unemployment benefits may be paid to an individual for "[a]ny week with respect to which the director finds that his unemployment is due to a stoppage of work which exists because of a labor dispute [at his place of employment]." G.L. c. 151A, § 25(b ). The central question presented by this appeal is whether the term "stoppage of work" refers exclusively to an employer's output and revenues, or may also refer to operations which are not immediately tied to output and revenues, such as maintenance, inspection, testing, installation, and administrative operations. Neither party disputes the board's finding that only the latter were disrupted by the claimants' strike, while output, emergency service, and customer billing were maintained at normal levels.

The original version of the statute was restrictive toward striking employees, providing that no benefits could be paid to any employee whose unemployment was "directly due to a strike, lockout or other trade dispute still in active progress." St.1935, c. 479, § 5. The statute was amended in 1937 to include the current language, which narrowed the disqualification provision. ⁵ St.1937, c. 421, § 1. Whereas the original version of the statute disqualified all striking employees from receiving benefits, the new version only disqualifies striking employees when the strike causes a "stoppage of work" at the place of employment. See generally Westinghouse Broadcasting Co., Inc. v. Director of the Div. of Employment Sec., 378 Mass. 51, 53-54, 389 N.E.2d 410 (1979). ⁶

Past cases have attempted no precise definition of the term "stoppage of work," but have instead adopted a general definition which requires a "substantial curtailment" of the employer's "operations." See Reed Nat'l Corp. v. Director of the Div. of Employment Sec., 388 Mass. 336, 338, 446 N.E.2d 398 (1983), S.C., 393 Mass. 721, 473 N.E.2d 190 (1985); Westinghouse, supra 378 Mass. at 55, 389 N.E.2d 410. The claimants rely principally on the Westinghouse case to argue that the board is required by law to find a substantial curtailment of the employer's production of electricity in order to make a determination that a labor dispute caused a "stoppage of work." Our holding in Westinghouse, however, was based principally on deference to a supported administrative finding, and did not establish any required elements of a "stoppage of work." ⁷

The claimants' argument is refuted by an earlier case, General Elec. Co. v. Director of the Div. of Employment Sec., 349 Mass. 358, 208 N.E.2d 234 (1965), which illustrates that there may be a "stoppage of work" even when "production continue[s] at the same rate at which it existed prior to the strike." Id. at 360, 208 N.E.2d 234. ⁸ Cases construing G.L. c. 151A, § 25(b ), have focused on the totality of the employer's operations, and have never made curtailment of production or revenues a necessary element for invoking the labor dispute disqualification. As stated generally in an early case, "where a labor dispute blocks a substantial amount of work which would otherwise be done it has stopped that much of the work and is therefore a 'stoppage of work.' " Adomaitis v. Director of the Div. of Employment Sec., 334 Mass. 520, 524, 136 N.E.2d 259 (1956).

The approach in most States with similar labor dispute disqualifications is in accord with the Adomaitis case. Decisions in these States treat the question of whether a "stoppage of work" exists as a determination to be based on the facts involved in each particular case. See Annotation, Construction of Phrase "Stoppage of Work" in Statutory Provision Denying Unemployment Compensation Benefits During Stoppage Resulting from Labor Dispute, 61 A.L.R.3d 693 (1975). Several courts have declined to treat a curtailment of production as a necessary element of a "stoppage of work." See, e.g., Travis v. Grabiec, 52 Ill.2d 175, 287 N.E.2d 468 (1972); Boone v. Department of Labor, 144 Ill.App.3d 306, 99 Ill.Dec. 1, 495 N.E.2d 66 (1986); Aaron v. Review Bd. of Indiana Employment Sec. Div., 440 N.E.2d 1 (Ind.Ct.App.1982); ⁹ Laclede Gas Co. v. Labor & Indus. Relations Comm'n of Missouri, 657 S.W.2d 644 (Mo.App.1983); ¹⁰ Pfenning v. Department of Employment & Training, 151 Vt. 50, 557...