Davis v. Aluminum Co. of America

• Decision Date: 03 October 1958
• Citation: 204 Tenn. 135,8 McCanless 135,316 S.W.2d 24
• Parties: , 204 Tenn. 135 Walter J. DAVIS et al. v. ALUMINUM COMPANY OF AMERICA et al.
• Court: Tennessee Supreme Court

Page 24

316 S.W.2d 24

8 McCanless 135, 204 Tenn. 135

Walter J. DAVIS et al. v. ALUMINUM COMPANY OF AMERICA et al.

Supreme Court of Tennessee.

Oct. 3, 1958.

Williams, Harwell, Howser & Thomas, Nashville, Cooper, Mitch & Black, Birmingham, Ala., for appellants.

Harvey Broome, E. H. Rayson and R. R. Kramer, Kramer, Dye, McNabb & Greenwood, Knoxville, of counsel, for appellees.

TOMLINSON, Justice.

This is a suit by 498 employees, appellants here, of the Aluminum Company of America for payment of unemployment compensation for which The Tennessee Security Law provides. Section 50-1301 T.C.A., et. seq.

As a result of a labor dispute within the meaning of this statute, employees at the Alcoa Plant of this Company went out on strike. This necessitated cessation of operations. An agreement on all matters in dispute was reached in about two weeks and operations, in so far as possible, were immediately resumed.

However, the cessation of operations had unavoidably damaged eleven lines of 'electrolytic cells', called pots, in which aluminum is melted. These lines could not be put back into operation until they were repaired. This was done as rapidly as could be expected. Appellants were employees on these lines. So, they were necessarily unemployed pending the completion of such repairs. It is for the period during which these repairs were being made that they claim unemployment compensation.

The contention of the Aluminum Company is that they are disqualified for unemployment benefits by Code, Section 50-1324, subd. D reading as follows:

'Disqualification for benefits.--An individual shall be disqualified for benefits:

* * *

* * *

'D. For any week with respect to which the commissioner finds that his total or partial unemployment is due to a labor dispute which is in active progress at the factory, establishment, or other premises at which he is or was last employed, * * *.' (Emphasis supplied.)

The Tennessee Commissioner of Employment Security approved the claims. They were disallowed by the Board of Review with the statement that 'We are of the opinion that 'active progress' would include all the time between the period wherein the claimant necessarily left his employment because of a labor dispute and continues through that period of time that it is necessary to ready the plant for operation after an agreement has been reached.'

The Chancellor, acting on the petition for certiorari, sustained the Board on the ground that:

'There is material and substantial evidence in this record to support the findings of the Board of Review as to the facts and that there is ample basis in law for the conclusions reached by the Board of Review.'

The case is here upon the appeal of the employees.

The damage to the pots was due to the labor dispute. The question for decision, therefore, is whether, within the meaning of Code, Section 50-1324, subd. D above quoted, after all matters in controversy had been settled the dispute can, nevertheless, reasonably be regarded as continuing in active progress during the repairing of damages physically caused by the dispute. If the answer is yes, as the Board held, then these appellants are disqualified for receipt of the benefits they are claiming.

Appellees' contention is that the Board's conclusion must not be disturbed if it has 'warrant in the record' and a 'reasonable basis in the law', and that the Board's conclusion has these qualifications. In support of its insistence it cites and quotes from 'Unemployment Compensation Commission of Territory of Alaska v. Aragon, 329 U.S. 143, 67 S.Ct. 245, 91 L.Ed. 136'.

The statute disqualifying the workmen from benefits in the Aragon case did, as in the case at bar, provide for disqualification when the unemployment 'is due to a labor dispute which is in active progress'. The business carried on in that case was seasonal. In consequence of failure of bargaining negotiations to settle the dispute prior to the beginning of the season it was decided by the employers not to conduct this business that season. Nevertheless, negotiations continued for a period of time after such decision seems to have been made. It was in that period that the employees were held disqualified on the theory that it was a labor dispute in active progress. Or, to express the holding in the Aragon case in the language of the text of 81 C.J.S. Social Security and Public Welfare § 194, page 289, in its analysis of the holding in that case:

'If negotiations between the employer and employee continue, a dispute may be found to be in active progress, even though a point is reached where all possibility of settlement of the dispute has disappeared.'

So, the case at bar differs in substance from the Aragon case in that in the case at bar compensation is sought for a period after all negotiations had ceased and all matters in dispute had been settled. In the Aragon case, to the contrary, the matters in dispute had not been settled and the dispute did continue during the period for which compensation was claimed.

As affirmatively declared by Code, Section 50-1302, the Employment Security Law was enacted for the purpose of alleviating economic insecurity to the individual and his family due to unemployment. Therefore, as observed in the Alabama case of Gulf Atlantic Warehouse Company v. Bennett, 36 Ala.App. 33, 51 So.2d 544, 546, 'disqualification from the benefits of the statute are exceptions and should be narrowly construed'.

As this Court views the matter, it would be a violation of this uniformly applied rule immediately above stated to hold that there is in active progress a labor dispute, when as a matter of fact, all matters in dispute had been settled and negotiations, therefore, terminated. The repair of the pots was not an item of dispute. It was concededly the duty of the employer to make those repairs, and it was diligently performing that duty in a manner and time satisfactory to employees. To borrow the language of the Pennsylvania case of MacFarland v. Unemployment Compensation Board of Review, 158 Pa.Super. 418, 45 A.2d 423, 425:

'We cannot approve an administrative construction which denies compensation to an employed worker unless the plain language of the statute clearly excludes him from its benefits.'

This Code, Section 50-1302 also declares that the Employment Security Law is intended 'for the benefit of persons unemployed through no fault of their own.' (Emphasis supplied) Appellee calls attention to the expression 'through no fault of their own'. It then states the fact that it was fully understood by the bargaining agents and these claimants that the cessation of operation resulting from the strike would cause this damage to these pots and thereby result in the unemployment of these claimants after the termination of the strike until the pots could be repaired. Predicated upon this fact, it is insisted by appellees that such 'unemployment is not the unemployment of persons 'unemployed through no fault of their own", within the intent of the statute.

If the Court should approve the insistence just stated it would amount by necessary implication to a finding by this Court that the labor dispute was caused by the fault of the employees. Counsel probably overlooked this fact. At any rate, the decisions, without exception, in so far as we have been able to find, are that in the determination of whether employees are entitled to the unemployment benefits provided by the Employment Security Law, it, the Court, never goes into the question of whether the labor dispute was the fault of the employer or the employees and their bargaining agent.

In rejecting that insistence the Michigan Court in Lawrence Baking Company v. Michigan Unemployment Compensation Commission, 308 Mich. 198, 13 N.W.2d 260, 154 A.L.R. 660, 666, said this:

'Plaintiff's argument is based upon the assumptions that the claimants were wrongfully on strike; were not justified in striking; that the strike was their own fault; and that they were unemployed because of their own fault. As stated in said section 2, the basic purpose of the unemployment compensation law is to afford protection against the hazard of unemployment. The payment of unemployment benefits is not dependent upon the merits of a labor controversy----.'

It was noted in Ablondi v. Board of Review, 8 N.J.Super. 71, 73 A.2d 262, 264, in discussing the function of the Court in construing the Unemployment Compensation Law, that:

'It has been said to place the State in a completely neutral position without regard to the rightness or reasonableness of the positions or demands of the employer of the employees.'

In determining the meaning of a statute it is permissible for the Court to consider its background, the historical facts preceding, or connected with, the enactment thereof.

Generally stated, the Employment Security Law was 'a sort of uniform statute' 'enacted in most of the states'. Queener v. Magnet Mills, Inc., 179 Tenn. 416, 426, 167 S.W.2d 1, 5. According to Volume 49, page 461 of the Yale Law Journal at the time of its publication forty-one of fifty-one of our states...