City Pattern & Foundry Co. v. Review Bd. of Indiana Employment Sec. Division, 1269A258

Decision Date27 October 1970
Docket NumberNo. 1269A258,No. 2,1269A258,2
Citation263 N.E.2d 218,147 Ind.App. 636
PartiesCITY PATTERN AND FOUNDRY CO., Inc., Garvey Pattern & Mfg. Co., Inc., Peerless Pattern Works, and Woodward Pattern Works, Inc., Appellants, v. REVIEW BOARD OF the INDIANA EMPLOYMENT SECURITY DIVISION, William H. Skinner, John E. Bushart and Betty S. Barteau, as Members of and as constituting the Review Board of the Indiana Employment Security Division, and Jay S. Allison et al., Appellees
CourtIndiana Appellate Court

F. Gerard Feeney, James W. Oberfell, South Bend, for appellants.

Theodore L. Sendak, Atty. Gen. of Ind., William S. McMaster, Deputy Atty. Gen., Irving J. Smith, South Bend, for appellees.

Edward J. Fillenwarth, Edward J. Fillenwarth, Jr., Fillenwarth & Fillenwarth, Indianapolis, for amicus curiae, Indiana Conference of Teamsters.

Lloyd L. DeWester, Jr., DeWester, Raftery, Andrews & Hall, Indianapolis, for amicus curiae, The Indiana State AFLCIO.

WHITE, Judge.

This is an original action, pursuant to the 'appeal' provisions of the Employment Security Act, 1 for a judicial review of a decision of the Review Board of the Indiana Employment Security Division affirming a referee's decision which held that employee-claimants, otherwise eligible, are eligible for benefits 2 during a period when their places of employment were closed by a so-called 'lockout.'

The relevant evidentiary facts are not in dispute, although the validity of inferences drawn therefrom by the referee and by the Review Board is vigorously disputed. The board's 'Statement of Facts', in so far as it merely summarizes the evidentiary facts and states undisputed ultimate facts, seems to be a fair statement of the genesis of the eligibility question now before us. We have drawn a line through those sentences which the employer-appellants consider unfounded inferences.

'STATEMENT OF FACTS: The evidence is in agreement that the employers are engaged in pattern making; that the Pattern Makers League of North America, South Bend Association, is the authorized bargaining agent for the claimants herein; that there was a collective bargaining agreement in effect between the employers herein and said association from June 1, 1965, to May 1, 1968; that the employers were notified by letter in February, 1968, that the Pattern Makers Association of South Bend desired certain changes to take effect at the expiration of the existing agreement on April 30, 1968, at midnight; that the first meeting on negotiations was held April 8, 1968, and seven (7) meetings were held thereafter, including one at night on April 30, 1968.

'The record is in agreement that negotiations continued in good faith; that numerous issues were resolved; that during the meeting on April 30, 1968, counter contractual proposals were made by representatives of the employers and employees and rejected; that the employees, through their representatives, offered to continue working under the existing contract, or without a contract, for an indefinite 3 time while negotiations continued for a new one. At approximately 11:30 P.M., April 30, 1968, the employers rejected this proposal and advised the employees' representatives that the plants of the employers herein would not be open for business beginning May 1, 1968, giving the reason as: no contract, no work. (When the employees reported for work on May 1, 1968, they found notices posted which stated that the plants of the employers herein were closed.)

'At the time the employers decided to close their plants, there had been no work stoppage by employees, no overt actions by employees to curtail production by slowdown tactics, and no irregular attendance by employees during the weeks prior thereto. The record is conclusive in that the facts show that work was available, the employees had continued working regularly, and they were ready and available for work.

'The employers contended that their plants were closed because they had contracts with various companies and were concerned about meeting their commitments without having a definite contract in effect.

Subsequent to ratification of new contracts, claimants returned to work for their respective employers on July 22 and 26, 1968.'

The employers contend that claimants are ineligible for benefits by reason of section 1504 of the act 4 which states that '(a)n individual shall be ineligible * * * (if) his * * * unemployment is due to a stoppage of work which exists because of a labor dispute at the * * * premises at which he was last employed * * *.'

The General Assembly has directed us to follow the guidance of its public policy statement in section 101 of the Employment Security Act (Burns Ind.Stat.Ann. (1964 Repl.) § 52--1525) in 'the interpretation and application of this act.' As a part of that statement of public policy, the legislature has said that the act was passed 'to provide for the payment of benefits to persons unemployed through no fault of their own' and that such purpose is 'essential to public welfare'. 5 One may (if he wishes) question the wisdom of the philosophy which underlies this means of promoting the public welfare, but one can hardly question the fairness of seeking to avoid any interpretation of the act which would result in arbitrarily denying benefits to workers unemployed 'through no fault of their own'. The practical difficulty of interpreting the 'labor dispute' ineligibility provisions of section 1504 of the act (Burns Ind.Stat.Ann. (1964 Repl.) § 52--1539c) 6 in harmony with that purpose has plagued both the administrators of the act and the courts for years, perhaps since the 'labor dispute' clauses were first inserted into the predecessor act, the 'Unemployment Compensation Law' of 1936, by a 1937 amendment. 7 Application of the 'labor dispute' disqualification in 'lockout' cases seems to have been particularly troublesome and a workable rule which gives due regard to the 'no fault' concept of the public policy clause does not seem to have evolved until 1968 when we decided Bootz Manufacturing Co. v. Review Board (1968), Ind.App., 237 N.E.2d 597, 14 Ind.Dec. 469, Rehearing Den., 238 N.E.2d 472, 14 Ind.Dec. 703. We followed the Bootz rule in 1969 in International Steel Co. v. Review Board (1969), Ind.App., 252 N.E.2d 848, 19 Ind.Dec. 618, and now consider the rule well settled. Appellant-employers concede as much and correctly state the Bootz rule in the following quotation from their brief:

'In the Bootz case, supra, this Court has held, and properly so, that good faith negotiations in and of themselves do not constitute a labor dispute, and that where negotiations are in a fluid state and no impasse exists that an employer may not unilaterally close his doors to his employees.'

The employers also recognize another rule which was reiterated in Bootz, as follows:

'It is the law of this state that any decision of the Board shall be conclusive and binding as to all questions of fact. We are not at liberty to weigh the evidence and must accept the facts as found by the Board. These facts cannot be disregarded by us unless they are not sustained by any evidence of probative value. White v. Review Board of Indiana, etc. (1944), 114 Ind.App. 383, 52 N.E.2d 500; News Publishing Co. v. Verweire (1943), 113 Ind.App. 451, 49 N.E.2d 161; Craddock Furniture Corp. v. Nation (1944), 115 Ind.App. 62, 54 N.E.2d 295, 55 N.E.2d 121; Youngstown Sheet & Tube Company v. Review Board of Indiana Employment Security Division (1954) 124 Ind.App. 273, 277, 278, 116 N.E.2d 650; Ross, et al. v. Review Board of Indiana Employment Security Division (1962) 243 Ind. 61, 182 N.E.2d 585.' (237 N.E.2d at 601, 14 Ind.Dec. at 473.)

Reduced to its essence, their argument is that on the evidence before the board (which, except as we have indicated, they do not charge the board unfairly summarized in the recital above quoted) reasonable men could not have found that an impasse did not exist at the time the employers closed their plants. Appellant-employers stress the testimony of Mr. Fred Baer, an attorney who was their negotiating representative, to the effect that the union would accept nothing less than the Chicago contract while the employers would not go beyond their offer of a few cents less than the Milwaukee contract. This is somewhat at variance with the testimony of Mr. James Niedermeyer, the union president, summarized in appellant's brief in pertinent part as follows:

'We called Chicago and found that a settlement had been made, and we gave the employers the Chicago settlement. It was a one sixty-five package, and this was less than demanded earlier. Mr. Baer declined this, and wanted to discuss the Milwaukee package, which we understood to be one sixty-three, or two cents lower than Chicago's. The only difference was the holiday pay, and we did not know the formula. We told Mr. Baer we wanted to look the formula over and discuss it further, but we did not that evening as it was close to midnight.

We discussed with Mr. Baer about the men going to work the next day, and we told Mr. Baer we would continue to negotiate and continue on the old contract, and he declined this. We told him we would work out the contract but he declined and the meeting broke up at that point.'

If the board inferred from Mr. Neidermeyer's account of what happened that night was that the union negotiators had made no flat rejection of the Milwaukee package offer but had merely requested time to investigate the holiday pay formula before discussing it further and offered to continue working in the interim, one could hardly say that reasonable men might not have drawn the same inference. That evidence fully sustains the finding that 'negotiations were in a fluid state and had not reached an impasse'.

The employers also attempt to distinguish the evidentiary facts here from those in Bootz by pointing out that in Bootz there had never been a contract, while in the instant case there was a...

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