Gold Bond Bldg. Products Division Nat. Gypsum Co., Shoals Plant v. Review Bd. of Indiana Employment Sec. Division

Decision Date22 June 1976
Docket NumberNo. 2--874A192,2--874A192
Citation349 N.E.2d 258,169 Ind.App. 478
CourtIndiana Appellate Court

William S. Hall, Edward E. Ferguson, Hall & Render, Indianapolis, Charles J. Griffin, Jr., Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for appellant.

Theodore L. Sendak, Atty. Gen., Robert S. Spear, Deputy Atty. Gen., Indianapolis, for Review Board of Indiana.

Edward J., Fillenwarth, Jr., Fillenwarth & Fillenwarth, Indianapolis, for appellee Abel.


The Review Board of the Indiana Employment Security Division (Board) awarded unemployment compensation benefits to Harvey W. Abel and his fellow employee-claimants (hereinafter Claimants), for a period commencing April 26, 1973, the date when Claimants were 'locked out' of the Shoals Plant of their employer, appellant Gold Bond Building Products Division, National Gypsum Co. (Gold Bond). Pursuant to Ind.Ann.Stat. 22--4--17--11 and 22--4--17--12 (Burns Code Ed. 1974), Gold Bond seeks judicial review of the Board's decision, asserting that the decision is 'contrary to law' and contrary to the evidence because Ind.Ann.Stat. 22--4--15--3 (Burns Code Ed. 1974), disqualifies Claimants from receiving benefits in that their unemployment 'is due to a stoppage of work which exists because of a labor dispute . . ..' Finding no error, we affirm the Board's decision.

The Board's detailed 'Statement of Facts' may be summarized as follows:

Claimants were members of, and represented in bargaining sessions by, Local 354 of the United Cement, Lime and Gypsum Workers Upion, which is affiliated with the AFL-CIO as a part of the Federation's Industrial Union Department (IUD). The International Union represented workers at most of Gold Bond's other plants around the United States but, prior to 1973, each Local had a separate and independent contract with Gold Bond at the particular plant. Throughout this controversy Gold Bond has accused the International Union of attempting to coalesce its various local negotiations into one nationwide contract with the Company, thereby increasing the Union's bargaining power. The Union has denied this accusation.

On March 19, 1973, representatives of Local 354 and the International Union met for the first time with Gold Bond's national and local negotiators to begin bargaining for a new two-year contract at the Shoals Plant. The existing contract was due to expire on April 15, 1973, and both sides had been put on notice that the other would regard the contract as terminated on that date. Additional bargaining sessions involving the International Union's negotiators and representatives of Gold Bond's home office in New York were held on April 2, 3, 12, 13 and 14. Negotiations on the last of these dates were conducted with the aid of a federal mediator. During these early meetings there was a certain amount of negotiative maneuvering by each side, particularly with respect to items 1, 18 and 30 of the Union's proposal and Gold Bond's attempt to 'buy off' the Union on those three items by increased insurance and pension benefits.

Items 1, 18 and 30 were considered by Gold Bond to be 'IUD items', that is, items promoted by the Industrial Union Department of the AFL-CIO as a part of the International Union's asserted attempt to negotiate a nationwide contract for employees of all Gold Bond plants. The Company's view of these three items cannot be said to be wholly unjustified. For example, item 18 provided for a new contract expiration date which would require termination of Local 354's now contract to coincide with termination of many of the Union's contracts at Gold Bond's other plants. Because the Company feared the Union's power were a national contract to be negotiated, Gold Bond's resistance to the 'IUD items' was adamant. Thus, shortly before the existing contract was due to expire at midnight on April 14, Gold Bond proposed increased pension benefits and medical insurance written by Connecticut General Insurance Company, the Company paying the entire cost of the insurance, 1 in return for the Union's withdrawal of the IUD items.

The Union membership at Shoals rejected the Company's 'buy-off' plan shortly before the contract expired, but it is important to note that the negotiators for both sides, local representatives as well as those from Gold Bond's home office and the International Union, agreed to continue negotiations beyond April 14 until a settlement was reached. Production at the Shoals Plant did not cease when the old contract expired. Claimants honored their representatives' agreement with the Company to continue working without a contract. It is also significant that, relevant to the parties' positions as of April 14, Gold Bond had yet to propose a 'complete economic package' despite Union requests to do so, and had rejected such proposals by the Union as either premature or 'too high'.

After meetings terminated on April 14, negotiators from the International Union and Gold Bond's home office left the Shoals area and subsequent meetings involved only the local representatives of labor and management. There was testimony that the local negotiators made progress at meetings held on April 18 and 19. Throughout this period operations at the Shoals Plant continued at normal levels. By the end of the April 19 session, the local representatives concluded that they had gone as far as they could towards a final settlement without their superiors from the national offices and agreed to set up a session on April 26 at which both sides could be fully represented.

However, communications somehow went awry and the April 26 meeting convened without the presence of the International Union's representatives or the negotiators from Gold Bond's home office, despite the local representatives' consensus on April 19 that a settlement required national representation. Nevertheless, shortly before the first session of April 26 began, the Shoals Plant Manager, who was acting as the leader of the local management negotiating team, received a telephone call from his superiors at the home office in New York to the effect that he was to deliver an ultimatum to the Local's leadership. The ultimatum was that the Local's membership must pre-ratify a contract 'in the range of the Phoenix settlement' 2 by 6:00 P.M. or the Company would 'lock out' claimants. The admitted purpose of this move by the Company was to intensify pressure on the Local to reach agreement on a contract.

Prior to any negotiating sessions on April 26, the Shoals Plant Manager drafted a letter to be read to Claimants which indicated that the Company's decision to lock out the employees was premised upon the International Union's supposed adamant refusal to withdraw items 1, 18 and 30 from its proposal. Copies were made of this letter but it was withheld pending the outcome of the day's negotiating sessions.

Bargaining sessions between teams headed by the Shoals Plant Manager and Local 354's president were long and intense on April 26. The negotiating centered on crucial economic issues such as those represented by the International Union's contract with Gold Bond at the latter's Phoenix, Arizona plant, and did not concern the IUD items. After lengthy bickering over the total dollar amount of a new contract, the sessions ended shortly before 4:00 P.M. when the Local's membership met to vote on Gold Bond's newly proposed 'complete economic package.' This 'package' was the Company's first complete economic offer tailored to the Shoals Plant and represented a figure somewhere between the Union's most recent proposal and what the negotiators figured was the 'Phoenix settlement.' Claimants rejected the Company's offer but voted to continue working and negotiating for a better contract. At this point the plant manager read his prepared letter informing the Union of the Company's decision to lock them out. Production at the Shoals Plant was then stopped. However, even after the letter was read, the local negotiators continued to negotiate into the night, the meeting finally ending as a result of exhaustion on the part of the participants.

The central question in this case is whether Claimants are rendered ineligible for benefits by the opening clauses of Ind.Ann.Stat. 22--4--15--3, supra, which, as it existed at the time of this dispute, stated:

'22--4--15--3 (52--1539c). Work stoppage because of labor dispute--Individual not participating--Separate units of work--Exception.--An individual shall be ineligible for waiting period or benefit rights: for any week with respect to which an employee of the division, designated by the director and hereinafter referred to as the deputy, 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: . . ..' (Emphasis added).

Gold Bond asserts that Claimants' unemployment beginning April 26, 1973, was 'due to a stoppage of work which exists because of a labor dispute . . .' and that the Board erred in not so concluding.

Claimants argue that the Board correctly found 22--4--15--3 inapplicable. Their argument is based upon the rule of law first articulated by this court in Bootz Mfg. Co. v. Review Board (1968), 143 Ind.App. 17, 237 N.E.2d 597, and followed in International Steel Co. v. Review Board (1969), 146 Ind.App. 137, 252 N.E.2d 848, and City Pattern & Foundry Co. v. Review Board (1970), 147 Ind.App. 636, 263 N.E.2d 218. The rule of Bootz is that:

'. . . good faith negotiations between representatives of management and labor, where the facts show that the bargaining is in a fluid state and no impasse has occurred, gives neither party the right to declare a labor dispute.' Bootz Mfg....

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