Continental Oil Co. v. Board of Labor Appeals

• Decision Date: 09 August 1978
• Docket Number: No. 13967,13967
• Parties: CONTINENTAL OIL CO., a corporation, Plaintiff and Appellant, v. BOARD OF LABOR APPEALS et al., Defendants and Respondents.
• Court: Montana Supreme Court

Page 1236

582 P.2d 1236

178 Mont. 143

CONTINENTAL OIL CO., a corporation, Plaintiff and Appellant, v. BOARD OF LABOR APPEALS et al., Defendants and Respondents.

No. 13967.

Supreme Court of Montana.

Submitted June 6, 1978.

Decided Aug. 9, 1978.

Crowley, Haughey, Hanson, Toole & Dietrich, Billings, Gerald F. Krieg argued, Billings, for plaintiff and appellant.

Moody Brickett argued, Helena, McKittrick & Duffy, Great Falls (Joseph W. Duffy argued, Great Falls, for defendants and respondents.

DALY, Justice.

This is an appeal from the judgment of the District Court, Yellowstone County, affirming an order of the Board of Labor Appeals awarding unemployment compensation to striking employees of the Continental Oil Refinery at Billings, Montana.

There is little dispute in the facts concerning these compensation claims. In January 1975, negotiations broke down between the Continental Oil Company (appellant) and Local No. 2-470 of the Oil, Chemical & Atomic Workers International Union for a new contract covering production and maintenance employees at the Conoco Refinery in Billings. On January 18, 1975 the Union called a strike which commenced at about 8:00 p. m. that day. Before the strike approximately 90 employees, including trainees, worked in production operations and approximately 43 employees normally worked in plant maintenance.

Appellant imported approximately 65 supervisors and engineers to replace the personnel on strike. Throughout the strike these employees conducted all operations normally conducted by the employees represented by the Union although certain nonproduction activities at the refinery, such as training, engineering and budget planning, and capital improvement, were not performed during the strike. It was the finding of both the appeals referee and the Board of Labor Appeals that these functions were not production or operation functions of the employer's business.

Appellant's records show that during the time the strike was in progress, there was no decrease in production of petroleum products. Testimony before the appeals referee indicated that day-to-day maintenance was performed and that the refinery was operated in a safe and satisfactory manner.

On and after January 19, 1975, the claimants herein filed either initial or additional claims for unemployment compensation benefits. The Employment Security Division notified appellant that the claimants had filed claims and provided appellant an opportunity to submit any reasons it might have as to why the claimants had left their employment. The record shows that the employer responded to each claim but did not indicate any desire to attend a predetermination interview. The Billings employment office collected the necessary facts which were then submitted to a claims deputy, who made an initial determination of eligibility. This initial determination was upheld successively by the appeals referee of the Employment Security Division and the Board of Labor Appeals. On appeal, the District Court likewise sustained the findings of the lower administrative agencies.

The issues presented by these facts relate to the construction and application of section 87-106(d), R.C.M.1947, of Montana's Unemployment Compensation Act. Specifically, the issues we are asked to decide are:

1. Did the District Court, in affirming the action of the lower administrative agencies, err in concluding that a "stoppage of work" as used in section 87-106(d) refers, not to the labor of the individual employee, but to the plant operations of the employer, meaning a "definite and substantial curtailment of the normal production operation?"

2. Did the District Court err in finding that functions not performed during the strike were not production or operation functions of the employer's business and therefore the employer's production did not decrease, so there was no stoppage of work at the appellant's refinery?

3. Did the Unemployment Security Division deputy lack jurisdiction to make a determination on employment claims because of the alleged failure to follow statutory notice requirements?

We shall address each issue in turn.

Title 87, Chapter 100, 1947 Revised Codes of Montana, governs the granting of unemployment compensation to employees in this state who are out of work. Section 87-106 provides certain instances and situations in which individuals shall be disqualified for benefits. Section 87-106(d) provides in pertinent part:

"An individual shall be disqualified for benefits * * *

" * * *vid

"(d) For any week with respect to which the division finds that his total unemployment is due to a Stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed * * *." (Emphasis added.)

Appellant claims the term "stoppage of work" refers to the labor of the individual employee, while respondents contend that "stoppage of work" refers to a cessation or substantial curtailment of the employer's business. The crux of this case is the interpretation of this term.

Although this Court has not been called upon previously to interpret this term, several other state supreme courts have been confronted with this question. Those courts which have had to construe the phrase "stoppage of work" as contained in the labor dispute disqualification provision of an unemployment compensation statute have almost unanimously agreed that the phrase refers to the employer's operations rather than to the individual efforts of a particular claimant for benefits. Anno. 61 A.L.R.3d 693, 697. We agree with the majority of states and conclude that "stoppage of work" as used in section 87-106(d) refers to the employer's operations rather than the individual employee's work. See, Albuquerque-Phoenix Express, Inc. v. Employment Security Commission (1975), 88 N.M. 596, 544 P.2d 1161, 1165.

The interpretation we have adopted is consistent with the historical construction given by British courts to this phrase as used in the British Unemployment Insurance Act, from which our section 87-106(d) derives. As explained in Shadur, Unemployment Benefits and the "Labor Dispute" Disqualification, (1950), 17 U.Chi.L.Rev. 294, 308:

"When this country's fifty-one statutes were adopted, the phrase had long since acquired a settled construction from the British Umpires as referring 'not to the cessation of the workman's labour, but to a stoppage of the work carried on in the factory, workshop or other premises at which the workman is employed.' "

See also, Ahnne v. Department of Labor and Industrial Relations (1971), 53 Haw. 185, 489 P.2d 1397, 1400.

Under the well established rule that a state adopting a statute from another jurisdiction likewise adopts the interpretation given that statute by the courts of the other jurisdiction, In re Estate of Roberts (1959), 135 Mont. 149, 154, 338 P.2d 719, 721, this historical interpretation is persuasive, although admittedly not binding. Cahill-Mooney Construction Co. v. Ayres, (1962), 140 Mont. 464, 467, 373 P.2d 703, 705.

Beyond the vast weight of English and American precedents for our position, we are logically convinced that the interpretation asserted by respondents is the correct one. If the phrase "stoppage of work" were to be given the interpretation urged by appellant, it would be both a redundant and clumsy way to express the idea appellant contends it expresses. If the statute instead read simply "his unemployment is due to a labor dispute", we would not hesitate to agree with appellant that the legislature intended to disqualify from receiving benefits those employees who stop work because of a labor dispute. The legislature, however, has added a requirement that there be a "stoppage of work". This added requirement would be meaningless unless it referred to work stoppage at the plant; after all, work stoppage by the employee is taken care of by the phrase in section 87-106(d) "his unemployment". Inter-Island Resorts, Ltd. v. Akahane (1962), 46 Haw. 140, 377 P.2d 715, 720; Monsanto Chemical Co. v. Thornbrough (1958), 229 Ark. 362, 314 S.W.2d 493, 495; Sakrison v. Pierce (1947), 66 Ariz. 162, 185 P.2d 528, 532.

Section 93-401-15, R.C.M.1947, requires that in the construction of a statute, the duty of a court is " * * * simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or To omit what has been inserted; and where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all." (Emphasis added.) See also, State ex rel. Cashmore v. Anderson (1972), 160 Mont. 175, 184, 500 P.2d 921, 926. Appellant's interpretation would require we ignore this directive by ignoring "stoppage of work". This we cannot do.

During oral argument, appellant stressed the declaration of state public policy contained in section 87-102, R.C.M.1947, and set forth below, to support its contention that it was never the purpose of the Unemployment Compensation Law to compensate people who lost their jobs because they went on strike that such unemployment was not "involuntary unemployment" within the contemplation of this law.

Section 87-102 provides:

"As a guide to the interpretation and application of this act, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state. Involuntary unemployment is therefore a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker and his family. The achievement of social security requires protection against this greatest hazard of our economic life. This can be provided by encouraging employers to provide more stable employment and by the systematic...