Copper Range Co. v. Mich. Unemployment Comp. Comm'n

• Decision Date: 05 April 1948
• Docket Number: No. 3.,3.
• Parties: COPPER RANGE CO. v. MICHIGAN UNEMPLOYMENT COMPENSATION COMMISSION et al.
• Court: Michigan Supreme Court

320 Mich. 460

31 N.W.2d 692

COPPER RANGE CO.

v.MICHIGAN UNEMPLOYMENT COMPENSATION COMMISSION et al.

No. 3.

Supreme Court of Michigan.

April 5, 1948.

Appeal from Circuit Court, Ingham County; Paul G. Eger, judge.

Certiorari proceeding by Copper Range Company against Michigan Unemployment Compensation Commission, the Appeal Board of the Commission, and James W. Austin and others, claimants for benefits under the Michigan Unemployment Compensation Act, to review a decision of the board affirming a determination of referee finding that claimants were not disqualified for benefits. From an adverse judgment, defendants James W. Austin and others appeal.

Judgment reversed and case remanded with direction.

Before the Entire Bench, except DETHMERS, J.

Maurice Sugar, Ernest Goodman, and Morton A. Eden, all of Detroit, for defendants and appellants.

H. C. Schulte, of Houghton, and Shields, Ballard, Jennings & Bishop, of Lansing, for plaintiff and appellee.

BUSHNELL, Chief Justice.

Plaintiff Copper Range Company, a Michigan corporation, is engaged in the mining, milling and smelting of copper. Prior to September 20, 1945, it employed 596 men in its mining operations at Painesdale, Michigan, 67 in its mill at Freda, and 83 in its smelter at Coles Creek. These employees are members of the International Union of Mine, Mill and Smelter Workers, C.I.O., United Copper Workers, Local 494. Plaintiff's relations with its employees are expressed by a written working agreement dated May 10, 1945. Under this agreement, rates of pay are governed by those in effect on September 30, 1942, as modified by a directive order of the Non-Ferrous Metals Commission, and approved by the Economic Stabilization Director, and a directive order of the National War Labor Board, dated March 30, 1945. The details of these are unimportant for the purposes of this opinion.

Prior to World War II, plaintiff had ceased operation for some time because of mining conditions which made production unprofitable. The increased need for copper output due to the war caused the government to encourage plaintiff and others owning submarginal mines to resume their operations. Shortly after the declaration of war a ceiling price of 12 cents per pound was placed on copper. Recognizing that some companies could not continue operations and sell at this price, exceptions were written into the ceiling price law, known as the Premium Price Plan, which permitted some producers to be paid up to 17 cents per pound, depending upon their production cost. Dertain other producers, including plaintiff, were granted still higher prices under sales agreements with governmental agencies. For some time the output of plaintiff's mine had been purchased by Metals Reserve Company, a governmental agency, at a price fluctuating between 17 and 26 cents a pound, depending upon cost of production.

This contract was terminated on July 31, 1945, the plaintiff, however, securing an extension to August 31. Thereafter the company secured a reinstatement of the 17 cent rate and rearranged its operations, but concluded, however, that it could not continue its existing wage scale because of the lower price. Plaintiff then submitted a plan to the bargaining committee of the union for certain adjustments, and indicated its willingness to place such plan in operation for trial, reserving, however, the right to suspend operations if the plan proved unsuccessful. This proposal was rejected by the members of the union during the last week in August by a vote of 201 to 197. The bargaining committee, under authority granted to it by the union, overrode the votes of the employees and announced to the company an acceptance on behalf of the union. It was deemed advisable to resubmit the matter to the members of the union and, consequently, a notice was posted on the bulletin board containing details of the new plan and stating that it was the very best that could be offered under present circumstances, ‘and that there is no room for bargaining. In the event the plan is not accepted by the employees, the company will suspend mining operations.’

Another vote was taken on September 16, and the proposal was again rejected by a vote of 245 to 236. The executive board and the bargaining committee informed the company that it had been deprived of power to conduct further negotiations. On September 18, the company posted another notice, again explaining the situation in detail, and concluding with the following statement:

‘The Union by its vote refused the Company's offer, and inasmuch as the Company is unable to continue without either price or cost relief, it is forced to suspend operations.

‘The Company therefore regrets to advise that all production at the mine will cease at the end of the afternoon shift on Thursday, September 20, 1945, and that all operations at the mine, mill and smelter will cease as soon thereafter as clean-up work will permit.’

In accordance with this notice all production ceased at the end of the afternoon shift on September 20, although some employees were thereafter retained for maintenance and clean-up work.

On October 9th the employees took a third vote, after which the company was notified by the union that its proposal was accepted. However, by that date, according to the company's testimony, it was too late to resume operations, a number of men having left the locality, machinery having been removed from the mine, and some of the cargoes of coal coming by water having been cancelled.

The employees, as they were dismissed, then filed claims for unemployment compensation under the terms of the Michigan Unemployment Compensation Act, Act No. 1, Pub.Acts 1936, Ex.Sess., as amended, comp.Laws Supp.1945, § 8485-41 et seq., Stat.Ann. 1946 Cum.Supp. § 17.501 et seq.

The commission determined that claimants were entitled to such benefits because of ‘no work’ and the company appealed from this determination to the referee. At the hearing before the referee on November 19, 1945, it was stipulated on the record that the material facts governing the case of James W. Austin, appellant herein, are substantially identical with the facts governing the 538 other claimants, and that such cases were consolidated with the understanding that decision in the Austin case would govern all the others. It was stipulated that the matter should be considered on the sole question whether the men had voluntarily left their work without cause attributable to the employer, no labor dispute, lock-out, or strike being involved.

The referee filed an opinion on December 3, 1945, finding that Austin and others were laid off for lack of work, and that § 29 of the Unemployment Compensation Act, as amended by Act No. 246, Pub.Acts 1943, Stat.Ann. § 17.531, subsections (a)(b)(c), ‘does not operate to impose any disqualification for benefits on any one of said claimants.’ He accordingly affirmed the determination of the commission. The company then filed notice of appeal to the appeal board, which heard the matter on February 20, 1946. The decision of the board, filed March 21, 1946, affirmed the determination of the referee, with one member dissenting therefrom. A writ of certiorari was granted by the circuit court of Ingham county on April 1, 1946, and the court filed its opinion on February 25, 1947.

The trial judge held that the vote of October 9th was irrelevant and that the record amply showed why operations could not be resumed. He added that, regardless of this, the matter should be determined by the events which occurred on or before September 20. His conclusions are stated as follows:

‘When the employees rejected the company's proposal they by their vote affirmatively said not only that they would not accept the company's proposition, but that they would not abide by the terms of the contract and accept the wages of Schedule A. Under this situation, do we need to look only to the fact that the company ceased operations on September 20th? Must we shut our eyes to the cause which impelled the company to make that decision? It is true that work stopped on that date, but the initiating reason was a refusal of the members of the Union not only to accept the company's offer, but to abide by the terms of Schedule A which they by their representative had agreed would become effective upon the ending of the Government contract. They are responsible for their unemployment, it was voluntary on their part, and the company is not to blame.’

Austin and others took an appeal from a judgment entered on March 15, 1947, which reversed the determination and decision of the appeal board and that of the referee. This judgment states that:

‘This determination is based upon the disqualification imposed by Section 29(a) of the Michigan Unemployment Compensation law, and in view of this determination, this court does not find it necessary to decide the question as to whether the said claimants are disqualified under Section 29(b) of the Michigan Unemployment Compensation...