Goodyear Tire & Rubber Co. v. Employment Sec. Bd. of Review

• Decision Date: 09 May 1970
• Docket Number: No. 45627,45627
• Citation: Goodyear Tire & Rubber Co. v. Employment Sec. Bd. of Review, 469 P.2d 263, 205 Kan. 279 (Kan. 1970)
• Parties: The GOODYEAR TIRE & RUBBER COMPANY, Appellant, v. EMPLOYMENT SECURITY BOARD OF REVIEW of the State of Kansas and William C. Smith, Appellees. The GOODYEAR TIRE & RUBBER COMPANY, Appellant, v. EMPLOYMENT SECURITY BOARD OF REVIEW of the State of Kansas and John J. Bauer, Appellees. The GOODYEAR TIRE & RUBBER COMPANY, Appellant, v. EMPLOYMENT SECURITY BOARD OF REVIEW of the State of Kansas. et al., Appellees.
• Court: Kansas Supreme Court

Page 263

469 P.2d 263

205 Kan. 279

The GOODYEAR TIRE & RUBBER COMPANY, Appellant, v. EMPLOYMENT SECURITY BOARD OF REVIEW of the State of Kansas and William C. Smith, Appellees.

The GOODYEAR TIRE & RUBBER COMPANY, Appellant, v. EMPLOYMENT SECURITY BOARD OF REVIEW of the State of Kansas and John J. Bauer, Appellees.

The GOODYEAR TIRE & RUBBER COMPANY, Appellant,

v.

EMPLOYMENT SECURITY BOARD OF REVIEW of the State of Kansas.

et al., Appellees.

No. 45627.

Supreme Court of Kansas.

May 9, 1970.

Rehearing Denied June 17, 1970.

Syllabus by the Court

1. The declared public policy stated in the employment security law (K.S.A. 44-701 et seq.) is to provide protection against involuntary unemployment.

2. Under a collective bargaining agreement which authorized the employer to shut down all or part of its plant for two weeks for vacation purposes, and those employees eligible to a vacation were required to take their vacations during the shutdown period, unless they elected to defer all or part of their vacation to the following year, or had scheduled their vacation for some other time during the vacation year, in which case they were considered on a 'leave of absence,' it is held, that employees who elected to take their vacations at some other time than during the shutdown period were voluntarily unemployed and, thus, were not eligible for unemployment compensation benefits under the law.

William G. Haynes, of Lillard, Eidson, Lewis & Porter, Topeka, argued the cause, and Charles S. Fisher, Jr., and Peter F. Caldwell, Topeka, were with him on the brief for appellant.

Marvin A. White, attorney for the Employment Security Board of Review, argued the cause and was on the brief for the appellee-board of review.

Robert B. Wareheim, of McCullough, Parker, Wareheim, LaBunker & Rose, Topeka, argued the cause and was on the brief for the appellees-employees.

O'CONNOR, Justice:

These three consolidated cases involve the question of claimants' eligibility for benefits under the employment security law (K.S.A. 44-701 et seq.). The Goodyear Tire & Rubber Company (employer) has appealed from a decision of the Shawnee county district court affirming orders by the Employment Security Board of Review the claimants (employees) were eligible for benefits for one or both weeks ending August 19 and 26, 1967, during which time the Goodyear plant was partially shut down.

Under the provisions of a collective bargaining agreement between the company and claimants' union, Goodyear had effected a partial shutdown of its plant for vacation purposes for the two weeks' period in question. During the period work was available for certain employees of high seniority, but not for the claimants herein.

The pertinent portion of the bargaining agreement relating to vacations are as follows:

'Section 1. Eligibility

'(a) Employees will be entitled to one week's vacation with pay after completing one year of continuous service. Employees will be entitled to two weeks' vacation with pay after completing three years' service. * * *

'(b) The vacation period shall be on a calendar basis from January 1 to December 31st inclusive. * * *

'(h) An employee may defer his vacation until the following vacation period but no longer, by making arrangements with the Employer.

'The Employer will make a reasonable effort consistent with production requirements to schedule vacation at times suitable to the employees and to give those employees entitled to two or more weeks vacation the two or more weeks consecutively if they so desire.

'(h)(1) If the Employer anticipates a vacation shutdown or shutdowns a notice of intent will be posted no later than March 1.

'(2) The Employer will contact employees for vacation scheduling by May 1st.

'(3) The Employer may shut down all or a part of the plant for the specific purpose of scheduling vacations during June, July and August. When total or partial shutdowns for vacations are scheduled such shutdowns will be for two consecutive weeks. Full plant shutdown for vacation shall be limited to one per year or partial plant shutdowns for vacations shall be limited to two per year.

'(4) Employees eligible for vacations prior to the shutdown period or periods shall be required to take two weeks of the vacation to which they are eligible during one of the shutdown periods. An exception to this will be employees who elect to defer all or part of their vacation to the next year or have scheduled their vacations some other time during the vacation period defined in paragraph (b) of this section. In these events, such employees will be considered on a leave of absence during one shutdown period if no work is made available to them. During the other shutdown period if no work is made available to them, such employees will be considered on layoff.

'(5) Employees who may have taken their vacations earlier in the year due to emergency of for exceptional valid reasons and employees who are ineligible for vacations during the shutdown periods will be considered on layoff if no work is made available to them.

'Section 2. Pay for Vacations

'(a) Vacations will be paid at the rate of 2% of the previous calendar year's earnings for each week of vacation to which the employee is entitled.' (Emphasis added.)

In a separate article of the agreement entitled 'SENIORITY,' provision is made that a laid-off employee will be eligible for recall. In respect to leaves of absence, the provision states that those of a short duration may be negotiated on a 'local basis,' and may also be granted for personal reasons, when justified, for a period not to exceed ninety days. In any case, seniority continues to accumulate for the duration of approved leaves of absence.

The parties agree that under the terms of the collective bargaining agreement employees were not compelled to take their vacations during the shutdown period but could take them at other times during the year, or could deter them until the following year, at the employee's option.

The facts are not in controversy. The claimant in each of the first two cases was entitled to at least two weeks' vacation with pay under the terms of the agreement. They chose to take only one week of their paid vacation during the shutdown (the week ending August 19, 1967). As to each of these claimants, the examiner, referee, board of review, and district court concluded that for the week ending August 19 claimants were on vacation and receiving vacation pay and, therefore, were ineligible for unemployment benefits; but they were unemployed and eligible for benefits for the last week of the shutdown period ending August 26.

The thirty-eight claimants in the third case, some of whom were entitled to one week's vacation with pay, and some to two or more weeks, elected not to take any portion of their vacations during the two-week shutdown period, but rather to take them at some other time during the year, or defer them until the following year. As to these claimants, the administrative authorities, including the board of review, and the district court concluded they were eligible for unemployment benefits for both weeks of the shutdown period.

Pursuant to K.S.A. 44-709(c) (Am.L.1970), the referee conducted a hearing in each of the cases, after which he filed a lengthy memorandum opinion setting forth his finding of fact (about which there is no dispute) and decision. The various contentions of both the claimants and Goodyear were examined in light of the terms of the bargaining agreement and the employment security law. As the referee viewed the agreement, there was nothing in it which prevented an employee from requesting such vacation as he was entitled to for any period during the year, and if approved by the employer, to be a binding election. The referee, in effect, concluded that in applying the law, he mut look to the actual status of the claimant when he claims eligibility for benefits, irrespective of the terms 'leave of absence' and so forth used in the agreement; and that each of the claimants was 'unemployed' within the meaning of K.S.A. 44-703(m) (Am.L.1970) for those weeks during the shutdown period when he did not receive vacation pay. Upon appeal by the employer (K.S.A. 44-709(e) (Am.L.1970)) the Employment Security Board of Review adopted the referee's findings and conclusions, just as did the district court when Goodyear unsuccessfully sought judicial review (K.S.A. 44-709(h) (Am.L.1970)) of the board's decision. The appeal to this court by Goodyear followed.

The question for determination is whether the claimants are eligible for unemployment nebefits for the week(s) during the two-week shutdown period, when they elected to take at some other period of time all or part of their paid vacations to which they were entitled under the bargaining agreement.

Goodyear contends that since the claimants, by their own choice, elected to take their paid vacations at a time other than during the vacation shutdown period, they were to be considered on a 'leave of absence' status according to the labor-management contract and, therefore, were not eligible for benefits under the employment security law. At the same time they acknowledge that employees, if on a 'layoff' status, such as those who were ineligible for vacation during the shutdown (subparagraph (h)(5) of the contract), would be eligible for benefits.

Claimants and the board of review take a contrary position and contend that no work was available or wages payable to claimants during the period of shutdown, and thus, they were 'unemployed,' as defined by K.S.A. 44-703(m), and eligible for benefits. The pertinent terms of that statute are:

'* * * An individual shall be deemed 'unemployed' with respect to any week during which he performs no services and with respect to which no wages are payable to him * * *.'

The collective bargaining agreement between Goodyear and the union constituted the employment contract between the company and its...