Flowers v. Director, Dept. of Indus. Relations

Decision Date12 November 1981
Citation435 So.2d 72
PartiesHaywood F. FLOWERS, Earl Leroy Jordan, Morris N. Lynch, Phillip Louis Demetropolis, James L. Ross, Sr., John G. Mayo, Billie Joe Leslie, David A. Chancellor and Clyde W. Webster v. DIRECTOR, DEPARTMENT OF INDUSTRIAL RELATIONS, State of Alabama, and Alabama Dry Dock & Shipbuilding Company. Civ. 2770, 2771, 2772, 2773, 2774, 2775, 2776, 2777 and 2778.
CourtAlabama Court of Civil Appeals

Michael J. Salmon, Gulf Shores, for appellants.

Kirk C. Shaw and Douglas L. Brown of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, for appellee Alabama Dry Dock & Shipbuilding Co.

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

PER CURIAM.

This is an unemployment compensation case.

These nine unemployment compensation "test cases" were consolidated on appeal from a judgment of the Mobile County Circuit Court denying unemployment compensation benefits to the named parties. The judgment affects the eligibility of several hundred employees of appellee Alabama Dry Dock & Shipbuilding Company.

Appellants are production and maintenance employees of Alabama Dry Dock & Shipbuilding Company (ADDSCO) who were working at the employer's shipyard in the spring of 1979. The production and maintenance employees have at all times been represented by the Industrial Union of Marine & Shipbuilding Workers of America, Local Number 18, AFL-CIO (the Union). At all relevant times the Union and ADDSCO were parties to a three year collective bargaining agreement covering the terms and conditions of employment at ADDSCO. The contract was due to expire on May 5, 1979. The terms of the agreement required that either party to the agreement give at least sixty days' notice of its intention to modify or terminate the contract. Negotiations were to begin twenty days thereafter.

Pursuant to the provisions of this agreement, the Union sent a letter of notice to ADDSCO on March 2, 1979 of its intention to modify the contract and renegotiate the terms and conditions of the agreement. Between March 22, 1979 and May 2, 1979 the Union and ADDSCO had approximately seventeen negotiating meetings. No agreement concerning wages appeared to be possible, given the Union's rejection of ADDSCO's intent to abide by the President's anti-inflation wage and price guidelines.

By late March or early April ADDSCO, in anticipation of a strike, began to refuse new work coming into the yard and to reject work for which it had previously contracted. Production on the ships currently in the yard was stepped up to insure that the work was completed before the contract expiration date. The evidence shows that in the last thirty years there had been eleven renewals of the collective bargaining contracts between ADDSCO and its employees. Seven of these renewals resulted in strikes; some negotiation was required each time the agreement expired. As for ADDSCO's rejection of incoming work, it appears that contracts for ship repair or other work frequently contain clauses providing for the shipyard to pay "demurrage" charges for each day the ship is kept in the yard past the agreed-upon completion date. These charges sometimes run into thousands of dollars daily. Further, if a ship is in the yard at the time a strike is called, the ship becomes a "hot ship," meaning that no other unionized shipyard will undertake to complete the work. Should this event occur, the shipyard is in danger of losing that customer's business.

As a result of the reduction in work coming into the yard, ADDSCO began to lay off its employees. By May 4, 1979 the total work force had been reduced by more than half.

On May 2, 1979 ADDSCO submitted its final offer to the Union. The last meeting between the parties took place on May 4; no agreement was reached. On that same day the last ship left the yard. On the morning of May 5 the Union voted to reject ADDSCO's offer, and picket lines went up thereafter. ADDSCO issued additional temporary layoff notices on May 7, after the strike had begun. The strike lasted eighty-nine days.

Appellants Ross, Webster and Mayo received temporary layoff notices on April 20, May 3, and May 4, respectively. The remaining parties received notices on May 7, after the strike had begun. The parties along with the other nearly 1,100 temporarily unemployed workers of ADDSCO, filed claims for unemployment compensation benefits with the Department of Industrial Relations. Appellants Flowers, Demetropolis, Jordan and Lynch were denied unemployment compensation benefits. On appeal within the agency both the Appeals Referee and the Board of Appeals affirmed the denials. Appellants Ross, Mayo, Leslie, Chancellor and Webster were granted unemployment compensation benefits. ADDSCO appealed the decision, which was affirmed by both the Appeals Referee and the Board of Appeals.

Appellants Flowers, Jordan, Lynch and Demetropolis filed suit for review in the Mobile County Circuit Court. Appellee ADDSCO filed suit for review in the same court on the claims of the remaining appellants. The circuit court entered a judgment on March 23, 1981, denying unemployment benefits to all parties. The court held that "the unemployment involved in these cases was directly due to a labor dispute in active progress," disqualifying all claimants from receiving compensation. This consolidated appeal followed.

Section 25-4-78(1), Code 1975, provides that 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." For a claimant to be disqualified under § 25-4-78(1), "five separate and distinct conditions must coincide, namely (1) his unemployment must be directly due, (2) to a labor dispute, (3) in active progress, (4) in the establishment, (5) in which he was last employed." Davis v. Pickett, 412 So.2d 1225 (Ala.Civ.App.1981), petition for cert. filed, S.C. 80-879 (Ala. Sept. 2, 1981).

The only issues we are called upon to decide are (1) whether there existed a "labor dispute in active progress," and (2) whether appellants' unemployment was "directly due" to a labor dispute in active progress.

Considering first the question of whether a "labor dispute in active progress" existed at the time appellants became unemployed, we note that § 25-4-78(1) defines "labor dispute" as including:

[A]ny controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. This definition shall not relate to a dispute between an individual worker and his employer.

Appellants contend that a labor dispute does not exist until negotiations have ceased to be in a "fluid state," citing Indiana cases as support. However, it is long established Alabama precedent that to establish the existence of a "labor dispute" within the meaning of the statute, it is not necessary to show that a strike or lockout has resulted. Ex parte Pesnell, 240 Ala. 457, 199 So. 726 (1940); moreover, a labor dispute may exist from the date negotiations begin....

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3 cases
  • Hilley v. General Motors Corp.
    • United States
    • Alabama Court of Civil Appeals
    • April 30, 1999
    ...labor dispute, (3) in active progress, (4) in the establishment, (5) in which he was last employed.'" Flowers v. Director, Dep't of Indus. Relations, 435 So.2d 72, 74 (Ala.Civ.App.1981), rev'd in part on other grounds, Ex parte Flowers, 435 So.2d 76 (Ala.1983), quoting Davis v. Pickett, 412......
  • Hilley v. General Motors Corp.
    • United States
    • Alabama Court of Civil Appeals
    • August 4, 2000
    ...labor dispute, (3) in active progress, (4) in the establishment, (5) in which he was last employed.'" Flowers v. Director, Dep't of Indus. Relations, 435 So.2d 72, 74 (Ala.Civ.App.1981), rev'd in part on other grounds, Ex parte Flowers, 435 So.2d 76 (Ala.1983), quoting Davis v. Pickett, 412......
  • Flowers v. Director, Dept. of Indus. Relations, State of Alabama, s. 2770
    • United States
    • Alabama Court of Civil Appeals
    • July 6, 1983
    ...Alabama Supreme Court. PER CURIAM. As ordered by the Supreme Court of Alabama, 435 So.2d 76, that aspect of the decision of this court, 435 So.2d 72, in the above styled cause holding that James L. Ross, Sr., John G. Mayo, and Clyde W. Webster were not entitled to unemployment compensation ......

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