Budd Co. v. Mercer

• Decision Date: 10 February 1984
• Citation: 14 Ohio App.3d 269,471 N.E.2d 151,14 OBR 298
• Parties: , 14 O.B.R. 298 BUDD COMPANY, Appellee, v. MERCER et al., Appellants. *
• Court: Ohio Court of Appeals

Page 269

14 Ohio App.3d 269

471 N.E.2d 151, 14 O.B.R. 298

BUDD COMPANY, Appellee, v. MERCER et al., Appellants. ^*

Court of Appeals of Ohio, Sixth District, Wood County.

Feb. 10, 1984.

Syllabus by the Court

1. Where an employer, pursuant to a labor-management contract, allocates the vacations of his employees, a claimant who finds himself on an enforced vacation without pay is involuntarily and totally unemployed for the duration of such "vacation" and shall receive benefits provided in the Unemployment Compensation Act. (Dudley v. Morris, 10 Ohio St.2d 235, 227 N.E.2d 231 , followed.)

2. The common pleas court, in an appeal from an administrative agency, must give due deference to the agency's resolution of evidentiary conflicts and the court may not substitute its judgment for that of the agency. If, at the agency level, a preponderance of reliable, probative and substantial evidence exists, the common pleas court must affirm the agency's decision.

3. Payments by an employer to employees which are made pursuant to a labor-management collective bargaining agreement, although denominated as "vacation payments," are, in fact, bonuses where the agreement provides that employees, based on their seniority, are entitled to a certain percentage of their previous year's wages, and, further, where the agreement permits the employees, at their election, to receive these payments without taking time off from work.

Robert F. Weaver, Jr., Columbus, for appellee.

Gerald B. Lackey, Joan Torzewski and Thomas E. Willging, Toledo, for appellants.

DOUGLAS, Judge.

This is an appeal from the judgments of the Wood County Common Pleas Court entered in the above numbered cases and consolidated for purposes of this appeal. ¹

Gladys V. Mercer and the other twenty appellants are employees of appellee, the Budd Company. Appellants are members of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and its Local 1889 (hereinafter referred to as "the union"). The union and appellee are parties to a collective bargaining agreement (agreement) which was in effect at all times relevant to the instant appeal. The agreement contains the following pertinent and applicable provisions:

"Section 1. Employees in the continuous employ of the Company for one (1) year or more as of the date of hire of any one year shall be eligible to receive two per cent (2%) of their gross earnings as defined below as vacation pay. Vacation time for this increment is one (1) week.

"Section 2. Employees in the continuous employ of the Company for two (2) years or more as of the date of hire of any one year shall be eligible to receive three per cent (3%) of their gross earnings as defined below as vacation pay. Vacation time for this increment is one (1) week and three (3) days.

"Section 3. Employees in the continuous employ of the Company for three (3) years or more as of the date of hire of any one year shall be eligible to receive four per cent (4%) of their gross earnings as defined below as vacation pay. Vacation time for this increment is two (2) weeks.

"Section 4. Employees in the continuous employ of the Company for six (6) years or more as of the date of hire of any one year shall be eligible to receive five per cent (5%) of their gross earnings as defined below as vacation pay. Vacation time for this increment is two (2) weeks.

"Section 5. Employees in the continuous employ of the Company for eight (8) years or more as of the date of hire of any one year shall be eligible to receive six per cent (6%) of their gross earnings as defined below as vacation pay. Vacation time for this increment is two (2) weeks and three (3) days.

"Section 6. The vacation period shall be from January 1st through December 31st of any given year. However, vacation time off shall be allocated to Employees on the basis of seniority and the Management's production requirements.

"Section 7. Each year the Management may, if it notifies the Union not later than thirty (30) calendar days in advance of its intent to do so, schedule a vacation shutdown of either one (1) or two (2) weeks during the months of June, July, or August. Employees entitled to more vacation than the shutdown period will take their additional entitlement as scheduled by the Management with preference in scheduling such additional vacation being given to employees with the greatest seniority.

"Section 8. Vacation payment shall be made to eligible employees at the time of the employee's vacation. To receive his vacation payment, a request, in writing, must be submitted by the employee to the Management at least two (2) full calendar weeks before the vacation commences. An employee will receive all of his eligible vacation payment when he requests it. This means that an eligible employee will receive only one vacation payment per year.

"Section 9. An employee with less than two (2) weeks of vacation eligibility shall be able to schedule the number of days per vacation period and the day of commencement subject to Management approval in not more than two (2) separate periods per year. An employee with more than two (2) weeks vacation eligibility shall be able to schedule the number of days per vacation period and the day of commencement subject to Management approval in not more than three (3) separate periods per year.

"Section 10. If a holiday falls during an employee's scheduled vacation period, he may receive an additional day of vacation provided that he had indicated that such was his preference at the time his vacation was scheduled.

"Section 11. Employees eligible for more than five (5) days vacation may take up to five (5) days vacation per year, one day at a time provided that the vacation request is made twenty-four (24) hours in advance of the day requested and must be approved by the employee's Supervisor and the Employee Relations Department prior to the vacation day. All one day vacation requests will be honored on a first come-first served basis.

"Section 12. Any employee who leaves the employ of the Company will receive all unpaid vacation monies due him.

"Section 13. Gross earnings are defined as the amount of earnings indicated on an employee's W-2 statement for the year immediately preceding the current vacation year."

Pursuant to Section 7, Article XX of the agreement, appellee properly notified the union that appellee would have a "vacation shutdown" from July 12, 1982 through July 16, 1982. Although a limited number of employees worked during the shutdown period, none of the appellants worked during this time.

Each appellant had been in the continuous employ of appellee for a time period of at least one year. Accordingly, each appellant was eligible to receive a certain respective percentage of his or her gross earnings ² as "vacation pay." The payment of an employee's vacation pay, pursuant to Section 8, Article XX of the agreement is to be made to eligible employees at the time of the employee's vacation. Section 8 of the agreement also provides that when an employee submits a proper request for vacation pay to appellee, said employee would receive "all of his eligible vacation payment when he [the employee] requests it." Further, Section 8 of the agreement concludes by stating that an eligible employee "will receive only one vacation payment per year." ³

Pursuant to the terms of the agreement, each appellant was eligible for a vacation payment of some amount. The record indicates that each appellant properly requested his or her vacation payment according to the terms of the agreement. The record also indicates that appellee made these payments to appellants at various times between the one-year period from August 7, 1981, (the earliest) to August 6, 1982 (the latest). ⁴ None of the appellants received any pay, vacation or otherwise, from appellee during the week of the shutdown, July 12, 1982 through July 16, 1982.

Although some appellants received their vacation payment as early as August 1981, appellee allocated, ostensibly pursuant to R.C. 4141.31(A)(5), appellants' vacation payment to the shutdown period. Notice of appellee's allocation, however, occurred, at the earliest, on September 7, 1982, and at the latest, on October 27, 1982. The earliest notice of allocation of vacation pay received by any appellant was nearly two months after the "vacation shutdown" and almost six months after appellee notified appellants of the shutdown. ⁵

Appellants filed or reactivated previously filed applications for unemployment compensation benefits for the week of the shutdown with the Ohio Bureau of Employment Services (OBES). Appellee responded to these applications by contending that appellants' vacation pay had been allocated to the shutdown period. On this basis, the administrator denied benefits to appellants, finding that appellants had received deductible income (the allocated vacation payments) which exceeded the amount of unemployment compensation benefits to which appellants would otherwise have been eligible. Upon reconsideration, the administrator reaffirmed the denial of benefits to appellants. Appellants then appealed to the Unemployment Compensation Board of Review (board). The referee conducted hearings regarding appellants' claims and subsequently modified the administrator's decisions. This modification in the case of appellant Mercer, stated:

"Claimant was separated by The Budd Company due to a lack of work. Since the claimant did not receive vacation pay for the week ending July 17, 1982, the claim for said week is hereby allowed." ⁶

Appellee's further appeals of the referee's decision at the board level were disallowed. Appellee then filed its appeal in the Wood County Common Pleas Court. The common pleas court, in a memorandum decision and judgment entry filed September 30, 1983, reversed and vacated the decision of the board and remanded the cases to the board for further proceedings...