Dow Chemical Co. v. Curtis

Decision Date01 December 1987
Docket NumberNo. 8,Docket No. 80516,8
Citation430 N.W.2d 645,431 Mich. 471
PartiesThe DOW CHEMICAL COMPANY, Plaintiff-Appellant, v. Irvin CURTIS, et al, and Michigan Employment Security Commission, Defendants-Appellees. Calendar,
CourtMichigan Supreme Court
OPINION

GRIFFIN, Justice.

In 1974, while on strike against the Dow Chemical Company, 486 of Dow's employees arranged with other employers to perform interim jobs which lasted, on the average, less than two days, for the purpose of qualifying for unemployment compensation. While the strike was still in progress and claims by the 486 employees for unemployment benefits were pending before the Michigan Employment Security Commission, the Legislature amended 1 Sec. 29(8), the labor dispute disqualification provision of the Michigan Employment Security Act, 2 and made clear that similarly situated claimants are ineligible. In this appeal, we are required to decide whether the statutory change is applicable to the 486 claims at issue in this case. Although reclamation of unemployment benefits awarded by the commission and already paid to these employees is now barred by limitations imposed by statute, 3 we hold that 1974 P.A. 104 operates to preclude any charge against Dow's rating account 4 for benefits paid with respect to benefit weeks after the effective date of the amendment, June 9, 1974.

I

The facts are not in dispute. In accordance with the call of their union, United Steel Workers of America, AFL-CIO-CLC, approximately 5,000 hourly workers struck Dow on March 18, 1974, in a dispute over wages and working conditions. During the strike period, which continued until September 9, 1974, none of the employees involved in this appeal resigned from their employment with Dow. Each claimant's regular work with Dow remained available to him throughout the strike, and each striker retained certain pension rights and seniority status with Dow.

Many of the striking employees, including the 486 involved in this appeal, filed claims for unemployment compensation. Initially, the MESC issued determinations disqualifying all claimants from benefits by reason of Sec. 29(8) of the act, which at that time (March, 1974) provided:

"An individual shall be disqualified for benefits for any week with respect to which his total or partial unemployment is due to a labor dispute in active progress, or to shutdown or start-up operations caused by such labor dispute, in the establishment in which he is or was last employed, or to a labor dispute (other than a lockout) in active progress, or to shutdown or start-up operations caused by such labor dispute, in any other establishment within the United States which is functionally integrated with such establishment and is operated by the same employing unit. No individual shall be disqualified under this subsection 29(8) if he is not involved in such dispute."

Thereafter, upon the advice of their union, the 486 claimants involved in this appeal obtained short-term employment from other employers, and then filed again for unemployment benefits, contending that their brief interim employment had the effect of terminating the Sec. 29(8) labor dispute disqualification.

It is undisputed that the nature and duration of the interim work performed by each of the claimants are accurately described in a summary of cases attached to Dow's brief on appeal. The summary indicates that the average time worked by the claimants prior to June 9, 1974, the effective date of the amendment of Sec. 29(8), was less than two days; in many instances, claimants worked for only a few hours. 5 Although all of the claimants received remuneration for work performed, virtually none earned an amount equivalent to their unemployment compensation rate for the week.

As indicated above, while the Dow strike was in progress, the Legislature amended Sec. 29(8) of the MESA 6 and thereby added certain criteria to be applied in determining whether subsequent employment operates to terminate the labor dispute disqualification:

"An individual's disqualification imposed or imposable under this subsection shall be terminated by his performing services in employment with an employer in at least 2 consecutive weeks falling wholly within the period of his total or partial unemployment due to the labor dispute, and in addition by earning wages in each of those weeks in an amount equal to or in excess of his actual or potential weekly benefit rate with respect to those weeks based on his employment with the employer involved in the labor dispute."

Accordingly, under the amendment the labor dispute disqualification could be avoided only by working for another employer for at least two consecutive weeks and for wages for each such week equal to or in excess of the actual or potential weekly benefit rate provided by the MESA. Not a single one of the 486 claimants in the instant case fulfilled the requirements of the 1974 amendment either before or after June 9, 1974.

Nevertheless, the MESC determined that the interim employment of the 486 claimants operated to terminate the labor dispute disqualification in each case, that each of the 486 claimants was entitled to unemployment benefits, and that corresponding charges should be placed against Dow's rating account. Dow unsuccessfully challenged each claim by appealing to the MESC Board of Review. The 486 cases were then consolidated in an appeal by Dow in the Midland Circuit Court, which affirmed the board's decision, and its decision was thereafter affirmed by the Court of Appeals sub nom Dow Chemical Co. v. Curtis, 158 Mich.App. 347, 404 N.W.2d 737 (1987).

The MESC and the courts below refused to apply the 1974 amendment retrospectively. The Court of Appeals stated:

"The June 9, 1974, amendment to the statute added a higher standard that a claimant must satisfy in order to terminate the labor dispute disqualification.... Applying 1974 PA 104 retroactively to claimants who undertook interim employment prior to June 9, 1974, and who could have shown a termination of the labor dispute disqualification under then-existing 1974 PA 11, would have the effect of diminishing their rights to unemployment benefits. Consequently, the general rule in favor of giving retroactive application to remedial statutes is not applicable. Only a clear statement of legislative intent should justify giving retroactive application to this statute." Id., at pp. 357-358, 404 N.W.2d 737.

Refusing also to apply the amendment to determine benefit eligibility for the weeks after June 9, 1974, the Court of Appeals stated:

"Finally, Dow contends that, since eligibility must be determined weekly, MESC erred as a matter of law in failing to redetermine each claimant's eligibility for the weeks commencing June 9, 1974, the effective date of the statutory amendment. Again, we disagree." Id., at p. 359, 404 N.W.2d 737.

On appeal in this Court, Dow again argues that the amendment should be applied to the 486 claims, and that the MESC and the courts below erred as a matter of law in holding to the contrary. Dow maintains that because none of the 486 claimants met the criteria set forth in the 1974 amendment, they were ineligible for any unemployment benefits. In the alternative, Dow argues that the 1974 amendment should determine benefit eligibility for the weeks following its effective date, June 9, 1974.

Unemployment benefits already paid to these claimants cannot now be reclaimed because of a statutory bar. M.C.L. Sec. 421.62(a); M.S.A. Sec. 17.566(a). However, our decision will determine whether, and to what extent, Dow's rating account should be charged, pursuant to Sec. 20(a) of the MESA, 7 with approximately $1,500,000 paid out for the 486 claims, a charge that imposes a continuing burden on Dow's account.

For reasons set forth below, we conclude that 1974 P.A. 104 governs eligibility with respect to benefit weeks after June 9, 1974, its effective date. 8

II

1974 P.A. 104 was enacted to restore the viability of the Sec. 29(8) labor dispute disqualification in the wake of this Court's interpretation of that section in the context of a 1959 strike. In Great Lakes Steel Corp. v. Employment Security Comm., 381 Mich. 249, 161 N.W.2d 14 (1968), employees of Great Lakes Steel were involved in a lengthy strike. Some of the employees obtained interim employment during the strike with other employers, from which they were laid off after having worked only "a few days to several weeks." Id., at p. 251, 161 N.W.2d 14.

The Great Lakes Court interpreted then Sec. 29 to mean that interim employment of even a very short duration was sufficient to terminate the labor dispute disqualification. The Court held that the only standard to be applied with regard to such interim employment was that the claimants be "employees" of "interim employing units." Great Lakes, supra, at p. 254, 161 N.W.2d 14. As indicated by the collection of cases annotated in 61 ALR3d 766, 9 the majority of jurisdictions, even in the absence of statutory criteria, have insisted that a labor dispute disqualification is not terminated unless the new employment is undertaken in good faith and the former employment is severed. See, e.g., Mark Hopkins, Inc. v. California Employment Comm., 24 Cal.2d 744, 748-749, 151 P.2d 229 (1944). The rationale for imposition of such standards is obvious:

"To do otherwise would open the door to unlimited abuse. It would permit a striker to obtain any sort of temporary work and when it was terminated to apply for benefits for the loss of the...

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