Ex parte Flowers

• Decision Date: 08 April 1983
• Parties: Ex parte Haywood F. FLOWERS, et al. (Re: Haywood F. FLOWERS, et al. v. DIRECTOR, DEPARTMENT OF INDUSTRIAL RELATIONS, State of Alabama, and Alabama Dry Dock and Shipbuilding Company). 81-308.
• Court: Alabama Supreme Court

Page 76

435 So.2d 76

Ex parte Haywood F. FLOWERS, et al.

(Re: Haywood F. FLOWERS, et al. v. DIRECTOR, DEPARTMENT OF INDUSTRIAL RELATIONS, State of Alabama, and Alabama Dry Dock and Shipbuilding Company).

81-308.

Supreme Court of Alabama.

April 8, 1983.

Rehearing Denied June 3, 1983.

Michael J. Salmon, Gulf Shores, for petitioners.

Kirk C. Shaw and Douglas L. Brown of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, for respondents.

John C. Falkenberry and Joe R. Whatley, Jr. of Stewart, Falkenberry & Whatley, Birmingham, for amicus curiae Alabama Labor Council, AFL-CIO.

EMBRY, Justice.

These are unemployment compensation cases which come to this court by writ of certiorari from the Court of Civil Appeals. The primary issue revolves around § 25-4-78(1), Code of Alabama, 1975. Under this statute an employee is disqualified from receiving unemployment compensation benefits when his unemployment is "directly due to a labor dispute still in active progress in the establishment in which he is or was last employed."

The record, in pertinent part, reveals the following: Appellants are employees of Alabama Dry Dock and Shipbuilding Company (ADDSCO) and members of Local 18 of the Industrial Union of Marine and Shipbuilding Workers of America, AFL-CIO ("the Union"). The Union and ADDSCO were parties to a three-year collective bargaining agreement covering the terms and conditions of employment of ADDSCO's Mobile shipyard.

As required by the terms of the agreement, the Union gave notice to ADDSCO on 2 March 1979 of its desire to reopen and renegotiate the terms and conditions of the contract. On that date, approximately 1,329 persons were employed by ADDSCO; all except 300 of those employees were members of the collective bargaining unit represented by the Union.

Soon after notice was given by the Union of its intention to renegotiate the contract, ADDSCO began to refuse to take new work into the yard and to reject work for which it had already contracted. In addition, customers declined to put their ships in the yard because they feared the ships would remain there after a strike had begun and would not be handled by members of other unions. Because of lack of work, occasioned by these circumstances, ADDSCO began to lay off employees. By 4 May 1979, approximately 700 employees had been given temporary layoff notices.

Between 22 March and 2 May 1979 the Union and ADDSCO had sixteen negotiating meetings. The Union and employer made substantial progress toward agreements in working conditions, but little or no progress as far as wages.

ADDSCO gave the Union its final offer on 2 May 1979, and a final bargaining session was held on 4 May 1979. On the same day the last ship, S/S Gulf Pride, left the yard, leaving no work for bargaining unit employees. The Union took a strike vote at 9:00 A.M. on 5 May, and picket lines went up sometime thereafter.

Temporary layoff notices were issued to the remaining employees on 7 May 1979, after the strike had begun. No employees were called back to work by ADDSCO until the strike ended some 89 days later.

Appellants Ross, Webster, and Mayo received temporary layoff notices on 20 April, 3 May, and 4 May respectively. The remaining parties received notices on 7 May, after the strike had begun. All parties filed claims for unemployment compensation benefits with the Department of Industrial Relations.

Appellants Flowers, Jordan, Lynch, and Demetropolis were denied unemployment compensation benefits. They filed suit for review in the Mobile County Circuit Court. Appellants Ross, Mayo, Leslie, Chancellor, and Webster were granted unemployment compensation benefits. ADDSCO filed suit for review of the latter's claim in the Mobile County Circuit Court. That court entered judgment on 23 March 1981, denying unemployment benefits to all claimants. The Court of Civil Appeals affirmed, stating:

"At the time of the first layoff on April 20, the facts of this case justify the trial court's conclusion that there was a labor dispute in active progress. The union and ADDSCO had met at the bargaining table several times without success....

"....

"We find that appellants' unemployment was 'directly due to a labor dispute in active progress' under § 25-4-78(1), Code 1975, thus disqualifying all appellants from receiving unemployment compensation benefits."

This review by certiorari followed:

The issue on review, stated as succinctly as possible, is whether a labor dispute existed and was actively in progress between the employer and the employees represented by the Union when appellants were given layoff notices; and, whether the unemployment of appellants was due to the labor dispute so as to mandate their disqualification pursuant to § 25-4-78(1), Code of Alabama, 1975.

The ore tenus rule usually applies in unemployment compensation cases, but that rule has little application in this case because the material facts are substantially undisputed. See Steele v. Carter, 390 So.2d 299 (Ala.Civ.App.1980). Also relevant, is the rule in Holmes v. Cook, 45 Ala.App. 688, 236 So.2d 352 (1970), that the "provisions of disqualification from benefits [in the Unemployment Act] should be narrowly construed." A further guideline for our consideration of these claims is the procedural rule which provides that the employer has the burden of proving any disqualification under this subdivision of the Unemployment Compensation Act. See United States Steel Corp. v. Glasgow, 40 Ala.App. 424, 114 So.2d 565 (1958), rev'd on other grounds, sub nom. United States Steel Corp. v. Curry, 269 Ala. 8, 114 So.2d 532 (1959).

As noted, both the trial court and the Court of Civil Appeals held each of the appellants' claims to be barred by § 25-4-78(1). The trial court's holding was based on Department of Industrial Relations v. Pesnell, 29 Ala.App. 528, 199 So. 720 (1940), aff'd sub nom. Ex parte Pesnell, 240 Ala. 457, 199 So. 726 (1940), cert. denied 313 U.S. 590, 61 S.Ct. 1113, 85 L.Ed. 1545 (1941). In the excellent brief submitted by the Alabama Labor Council, as amicus curiae, Pesnell was correctly distinguished from the present case:

"... In Pesnell, negotiations were continuing between the union and the employer but the employees, coal miners who historically followed the principle of refusing to work without a contract, did not work despite the fact that no strike had been called and the employer had not engaged in a lockout. The Court of Appeals explained that the Legislature never intended for a member of a union to draw unemployment benefits while his bargaining agents were discussing a proposed contract where the union had itself directed that all work cease until its bargaining terms were met. The Court said:

" '... Voluntary idleness during discussion, by appellee's agents (the Union), of a proposed contract, can hardly be termed unemployed. Negotiation itself may be a form of dispute....' " [Department of Industrial Relations v. Pesnell, 29 Ala.App. 528, 199 So. 720].

"Thus, Pesnell involved a case where the actual unemployment was due either to the union's direction that its members not work or due to the philosophical refusal of the employees themselves to work in the absence of a contract. Work was available and simply was not performed and Pesnell has no applicability here."

The appeals court relied on the cases of Department of Industrial Relations v. Walker, 40 Ala.App. 1, 109 So.2d 131 (1956), and Department of Industrial Relations v. Savage, 38 Ala.App. 277, 82 So.2d 435 (1955), to support its holding that a labor dispute was in progress at the time of the first layoffs. These cases are correctly distinguished in the amicus brief:

"In Walker, the unemployment was caused when the union refused to allow its members to cool down an expensive, complicated oven in the event a strike was called. The employer shut down the oven and laid off employees some four days before the expiration date of the collective bargaining agreement. The Court held that the employer had a right to protect its property and that the layoffs were directly due to the labor dispute surrounding the cooling of the ovens.

"Similarly, Savage involved a situation where although the contract had expired, employees were working without a contract. When the union insisted that no employees would stay on to 'burn off' kilns that had not completed the burning cycle if a contract was not signed by a particular date, the employer laid off employees as soon as cycles were completed. Again, the Court found this unemployment was directly due to a labor dispute.

"Significantly, in both cases work was available for employees to perform."

The controlling law of the cases sub judice is set forth by the Alabama Court of Civil Appeals in Gulf Atlantic Warehouse Co. v. Bennett, 36 Ala.App. 33, 51 So.2d 544 (1951), and Department of Industrial Relations and Alabama...