Frank Foundries Corp. v. Review Bd. of Ind. Employment Sec. Division

• Decision Date: 21 October 1949
• Docket Number: 17883.
• Citation: 88 N.E.2d 160,119 Ind.App. 693
• Parties: FRANK FOUNDRIES CORPORATION v. REVIEW BOARD OF INDIANA EMPLOYMENT SECURITY DIVISION et al.
• Court: Indiana Appellate Court

88 N.E.2d 160

119 Ind.App. 693

FRANK FOUNDRIES CORPORATION v. REVIEW BOARD OF INDIANA EMPLOYMENT SECURITY DIVISION et al.

No. 17883.

Appellate Court of Indiana, in Banc.

October 21, 1949

Cyrus Churchill, Moline, Ill. Oakleaf & Churchill, Moline, Ill. Bracken, Gray, DeFur & Voran, Muncie Earl G. Defur, Muncie, for appellant.

George S Koons, Muncie, Earl G. Manor, Muncie, for Anderson et al.

Glen F Kline, Chief Counsel, Employment Security Division Indianapolis, J. Emmett McManamon, Atty. Gen. James A. Watson, Deputy Atty. Gen., for Review Board.

ROYSE, Judge.

This case involves the construction of § 52-1539c, Burns' 1933 (1947 Supp.) of the Indiana Employment Security Act. The petinent portion of this section is as follows: 'An individual shall be ineligible for waiting period or benefit rights: For any week with respect to which the board finds that his total or partial or part-total unemployment is due to a stoppage of work which exists because of a labor dispute at the factory establishment, or other premises at which he was last employed; Provided, That this section shall not apply if it is shown to the satisfaction of the board that: He is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work; and he does not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute; and he has not voluntarily stopped working, other than at the direction of his employer, in sympathy with employees in some other establishment or factory in which a labor dispute is in progress.'

At all times referred to herein the appellant was the employer of the individual appellees. (Hereinafter, the appellant will be referred to as the employer, the individual appellees as the employees, and the appellee The Review Board of the Indiana Employment Security Division as the Board. The facts out of which this controversy arose may be summarized as follows:

The employer operates an iron foundry employing about one hundred fifty people. A collective bargaining agreement had been entered into between the employer and Local Union 242-U.A.W.-C.I.O. as agent for the employees. For several months prior to May 27, 1948, because of a shortage of materials, the employer's plant worked only an average of about three days a week. Among the employees were Joe Kendrick and Elbert Hibbard who ground gates off the castings. On the standard fixed for this work, for several days prior to May 25, 1948 these men had earned from $1.50 to $1.97 per hour. The base rate for this work was $1.01 per hour and required making 60 units per hour. On May 26th the employer's assistant superintendent and their foreman observed these men were idling on the job. On the morning of May 27th, at a meeting of the employer's foremen, the time tickets of these two employees disclosed they had made only 36 or 37 units per hour. Their foreman was instructed to discharge them, which he did about 9 a.m. May 27th. The discharged employees went through the plant telling the other employees they had been fired. One John Higgins, an employee who is Chairman of the Union Bargaining Committee, demanded an immediate meeting with the plant manager. He rounded up his committee and most of the other employees, and they met with the plant manager and other representatives of the employer. They demanded the immediate reinstatement of the discharged employees. The plant manager refused and told them to take the regular procedure for a grievance and asked them to go back to work. This meeting was held about 10 a.m.

Section 1.A. of Article III, of the Bargaining Agreement between the employer and employee, provides as follows: 'Any employee or group of employees having a grievance or complaint shall not participate or cause any work stoppage or slow down.'

The men did not return to work. Shortly before 11 a.m. another meeting was held. At this meeting the plant manager told them that unless they returned to work by 11 a.m. the metal in the cupola would freeze over and the bottom would have to be dropped. They refused to return to work unless the two discharged employees were put back to work. At 11:03 the plant manager gave the orders to pull the bottom of the cupola. This was done and the foundry closed down. It has not since reopened. It is undisputed that at the time the employees quit work the employer had sufficient material to furnish employment for at least May 27th and 28th. The record discloses that on the morning of May 27th, about 8 a.m., and prior to the discharge of the two employees, orders were issued to lay off the core room employees at 9 a.m. This order was cancelled when the superintendent learned another car of pig iron was enroute to the plant. On June 1st the employer had sufficient material for a week's work.

Subsequently, about June 8th, at a meeting between the employer and a committee representing the employees, the latter again demanded the re-instatement of the discharged employees. This was again refused by the employer. The employees filed their respective applications for benefits under the Act.

In due course the claims were heard by a Referee who made the following findings and conclusions:

'The Referee finds that a controversy existed between the employer and the union representing the production employees of this employer, concerning the reinstatement of two workers, who had been discharged by the employer on May 27, 1948. This controversy involved working conditions of the employees, and thus constituted a labor dispute, within the meaning of the Indiana Employment Security Act. A stoppage of work began at the Muncie plant of the employer at about 11 o'clock on the morning of May 27, 1948. At the time the plant was shut down on the last mentioned date, the employer had but one day's supply of pig iron on hand, and the supply of other materials necessary for continued operation was extremely limited. The aforesaid stoppage of work was not caused by the labor dispute, but resulted from a lack of available work for the employees at the employer's plant. While the strained labor relations of the employer may have been a contributing factor in the plant shut-down, the effective cause of the stoppage was the shortage of materials necessary for continued operations. Neither of the two discharged workers were parties to this action, and no finding is made as to their eligibility for benefits.

'Decision: If otherwise eligible, the claimants herein are entitled to waiting period and benefit rights after May 27, 1948.'

Subsequently the employer filed a request for appeal to the Board and application for leave to introduce additional evidence. A hearing was held before the Board and the employer offered additional evidence, some of which was received and some refused. A majority of the Board, one member dissenting, affirmed the award of the referee.

The principal question before us is: Is there any substantial evidence to support the finding that the work stoppage on May 27th was caused by a shortage of material and not by the labor dispute?

We recognize but do not deem it necessary to cite authority of support the firmly established rule that if there is any substantial evidence to support the award of the Board it must be affirmed.

The precise question presented here has not heretofore been presented to this court. Insofar as we have been able to ascertain the only appellate tribunal which has passed on it is the Supreme Court of Utah. That was in the case of Employees of Utah Fuel Co. at Clear Creek v. Industrial Commission, 1940, 99 Utah 88, 104 P.2d 197. Before considering that case we deem it expedient to briefly reiterate the purpose and intent of the Indiana Employment Security Act.

The purpose of the Act is to provide benefits for those who are involuntarily out of employment. In other words it is intended to benefit those who are out of employment because the employer is unable, for reasons beyond the employees' control, to provide work, or the proffered work endangers the health, safety and morals of the employee, or the working conditions or wages are below the standards prevailing in the community for the same type of work. It is not intended to finance those who are willingly refusing to work, when work is available, because of a labor dispute. Walter Bledsoe Coal Co. et al. v. Review Board, 1943, 221 Ind. 16, 21, 46 N.E.2d 477; White v. Review Board of Indiana Employment Security Division, 1944, 114 Ind.App. 383, 52 N.E.2d 500. See also: In Re Sadowski, 1939, 257 A.D. 529, 13 N.Y.S. 553; Department of Industrial Relations v. Pesnell, 1940, 29 Ala.App. 528, 199 So. 720, writ of certiorari denied 1941, 313 U.S. 590, 61 S.Ct. 1113, 85 L.Ed. 1545; and notes 135 A.L.R. 922, 927.

It is undisputed in the record and the Referee and Board found that at the time there was a labor dispute between the employer and the employees. As heretofore indicated, the important question here is: Did that labor dispute cause the work stoppage?

In the case of Employees of Utah Fuel Co. at Clear Creek v. Industrial Commission, supra [99 Utah 88, 104 P.2d 199], the facts as stated in the opinion were as follows:

'Petitioners are 'contract' miners working for the Utah Fuel Company in its Clear Creek coal mine. They are all members of the United Mine Workers of America Labor Union. Prior to March 31, 1939, petitioners and the Utah Fuel Company were parties to an agreement between the Union and the Utah Coal operators, which agreement set out hours of work, wage scale conditions of employment, etc. Said agreement,...