Clapp v. Appeal Bd. of the Mich. Unemployment Comp. Comm'n

• Decision Date: 29 June 1949
• Docket Number: No. 11.,11.
• Citation: 325 Mich. 212,38 N.W.2d 325
• Parties: CLAPP et al. v. APPEAL BOARD OF THE MICHIGAN UNEMPLOYMENT COMPENSATION COMMISSION et al.
• Court: Michigan Supreme Court

325 Mich. 212

38 N.W.2d 325

CLAPP et al.

v.APPEAL BOARD OF THE MICHIGAN UNEMPLOYMENT COMPENSATION COMMISSION et al.

No. 11.

Supreme Court of Michigan.

June 29, 1949.

OPINION TEXT STARTS HERE Appeal from Circuit Court, Genessee County; Philip Elliott, judge.

Proceedings by Donald W. Clapp and others for unemployment compensation benefits, in which the General Motors Corporation intervened. From an order reversing a finding and award of the Appeal Board of the Michigan Unemployment Compensation Commission, denying compensation for part of the period of claimants' unemployment, intervenor appeals.

Reversed and remanded with instruction.

Before the Entire Bench, except BUTZEL, JJ.

Harold A. Cranefield, A. L. Zwerdling, Detroit (Irving J. Levy, Washington, D. C., of counsel), for appellees Donald W. Clapp and others.

Edmund E. Shepherd, Solicitor General, Lansing, Laurence A. Price, and Edward Coughlin, Assistant Attorneys General, for appellee.

Henry M. Hogan, Detroit (Justin L. Schaffer, detroit, of counsel), for General Motors Corporation, intervenor-appellant.

REID, Justice.

Intervenor and appellant General Motors Corporation appeals from an order of the circuit court reversing a finding and award by the appeal board of the Michigan unemployment compensation commission. Several employees of appellant corporation filed claims (involved on this appeal) for unemployment compensation and such claimants are hereinafter for convenience referred to as plaintiffs. For convenience, the appellant corporation is referred to as General Motors.

Appellant's statement of the question involved is substantially as follows: Was the finding of fact of the appeal borad of the Michigan unemployment compensation commission that the unemployment of plaintiffs subsequent to December 18, 1945, was caused by a labor dispute in which plaintiffs were involved, contrary to the great weight of the evidence so as to be subject to reversal by the circuit court pursuant to 3 Comp.Laws 1948, § 421.38, Stat.Ann.1947 Cum.Supp. § 17.540?

General Motors functions through several unincorporated divisions, two of which are Buick Motor Division and Fisher Body Division. Buick Motor Division has its and offices at Flint, Michigan. Fisher Body Division operates its plant No. 1 at Flint. All plaintiffs are employees of General Motors in either Buick Motor Division or Fisher Body Division, plant No. 1.

All the frames for Buick automobiles are manufactured by Midland Steel Products Company, located at Cleveland, Ohio. The frames are shipped by rail to Flint, arriving in Flint the third day after shipment. When need is urgent, the frames are shipped by truck from Cleveland and arrive the following day in Flint.

Midland Steel Products Company resumed production for peacetime purposes on September 25, 1945, and shortly thereafter encountered a slowdown on its assembly line assembling Buick frames. During the period between September 25, 1945 and November 1, 1945, Midland Steel Products Company was never able to produce the number of frames ordered by Buick Motor Division.

On November 1, 1945, Midland Steel Products Company notified Buick Motor Division that because of labor difficulties, production of Buick frames would be discontinued until such labor difficulties were adjusted. On each day thereafter Buick contacted Midland Steel requesting resumption of production of Buick frames.

Because of lack of frames, Buick had to discontinue operation of its main production line after November 14, 1945, and it was necessary to discontinue or curtail operations in other departments whose functions were dependent upon the operation of Buick's main assembly line, by which the Fisher Body Division, plant No. 1, became affected. The shortage of frames was expected to be brief. The main assembly line of Buick Motor Division was left filled with frames in order that production could be resumed without delay upon resumption of supply of frames.

Because of this temporary shutdown, approximately 1,360 employees whose work was affected by the frame shortage, were sent home by Buick Motor Division, with instructions to watch for newspaper or radio announcements for a recall to work. The employees who were thus sent home were retained on the active employment rolls; they were not given a ‘K’ release by the personnel department as in the case of an ordinary layoff due to a reduction in force, and were permitted to keep their badges.

On November 12, 1945, Fisher Body Division, plant No. 1, was informed by Buick Motor Division that Buick could not continue the operation of its assembly line due to a shortage of frames. Because Buick Motor Division could not continue to receive automobile bodies unless the main assembly line was in operation, it became necessary for Fisher Body Division, plant No. 1, to shut down its assembly line at the end of the first shift on November 13, 1945. The paint, trim and final assembly departments of Fisher Body Division, plant No. 1, were shut down on November 14, 1945, and as a result, 1,660 workers out of a total of 3,879 hourly rated employees at Fisher Body Division, plant No. 1, were temporarily sent home, with instructions to watch the newspapers and listen to the radio for notice of resumption of operations. Also, notice was posted on bulletin boards of the Fisher Body plant as follows: ‘Present indications are that operations will be resumed in about one week. Notice of resumption of operations will be broadcast to employees by radio (WFDF) and local newspaper announcements.’

All employees who were thus sent home because of the temporary shutdown were retained on the active employment rolls and they were given no formal release as in the case of a layoff due to reduction in working force.

In all, approximately 3,500 employees of General Motors were affected by the inability of Buick Motor Division to obtain frames from Midland Steel.

On November 21, 1945, the UAW-CIO called a strike at the various plants of General Motors, including Buick Motor Division and Fisher Body Division, plant No. 1. This union was certified by the national labor relations board as the exclusive bargaining agent for the production and maintenance employees of both Buick Motor Division and Fisher Body Division, plant No. 1, including the claimants who were either members of the union or members of the bargaining unit represented by the UAW-CIO. The strike was called by the union when the union's demand for a 30 per cent. increase in wages was not met by General Motors. The labor dispute was terminated on or about March 13, 1946.

On December 13, 1945, Midland Steel Products Company resumed production of Buick automobile frames. At that time Midland Steel Products Company had 13 Buick frames available for shipment. On December 13, 1945, Midland Steel manufactured 125 frames for Buick and on december 14, 1945, it manufactured 165 frames for Buick. However, because of the strike above referred to and the inability of Buick Motor Division to receive the frames at that particular time, the frames were not shipped to the Buick plant at Flint. Midland Steel continued to manufacture frames for Buick with daily production in excess of the number of frames which were produced prior to November 1, 1945. By Buick's instructions, such frames were stored by Midland Steel for the account of Buick.

By January 3, 1945, Midland Steel had stored 3,000 Buick frames, which used their maximum storage capacity. They therefore on that date began to ship automobile frames to Flint for Buick, by consigning the frames to a third party designated by Buick Motor Division. These frames were stored at Flint for the account of Buick. They were not delivered at the Buick plant for the reason that the plant was strikebound and there were no employees in the plant to receive and unload the frames.

By December 17, 1945, Buick could have had 303 frames in its plant, and the frames produced by Midland Steel on December 17, 1945, could have been available at the Buick plant on December 19, 1945. Therefore, appellant claims (and the finding of the appeal board found such claim correct) that appellant would have set December 18, 1945, as the date for the resumption of production at Buick and all employees who were temporarily sent home between November 13 and November 20, 1945, would have been called to work on that day were it not for the labor dispute prevailing.

We are not concerned with the allowance of unemployment compensation between November 14, 1945, when Buick Motor Division stopped its main production lines for want of frames, and December 18, 1945, when Buick claims it was ready to resume and would have resumed except for the strike. Award for such perior, November 14 to December 18, is not questioned. The work stoppage during that period was due to a strike in progress at Midland Steel, in which strike the employees of Buick and Fisher Body Division, plant No. 1, were not involved. There is left for our consideration the matter of claimed compensation from December 18, 1945, to March 13, 1946, on which latter date the strike at the General Motors plants was ended. General Motors claims that on December 18, 1945 they were able to resume production and would have done so, had plaintiffs not been out on strike. Plaintiffs claim that, even though a strike condition did exist, there is not sufficient nor competent proof that General Motors (Buick Motor Division) would have resumed production on December 18, 1945.

General Motors on December 10, 1945, cancelled its bargaining agreement with the UAW-CIO. Plaintiffs contend that such cancellation, which was after the strike had been called on November 21, 1945, had the effect of indicating intervenor's intention not to reemploy plaintiffs. This contention cannot be sustained for the reason that a strike (which gave rise to the cancellation) was already in existence at the time of the cancellation and still in progress. Further, the cancellation in question did...