International Union v. DEPT. OF EMP. SEC.

• Decision Date: 24 March 2005
• Docket Number: No. 97695.,97695.
• Citation: 215 Ill.2d 37,293 Ill.Dec. 606,828 N.E.2d 1104
• Parties: INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 148, AFL-CIO, Appellee, v. The ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY et al., Appellants.
• Court: Illinois Supreme Court

828 N.E.2d 1104

215 Ill.2d 37

293 Ill.Dec. 606

INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 148, AFL-CIO, Appellee, v. The ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY et al., Appellants.

No. 97695.

Supreme Court of Illinois.

March 24, 2005.

Rehearing Denied May 23, 2005.

Stuart I. Cohen and Mark G. Arnold, of Husch & Eppenberger, L.L.C., St. Louis, Missouri, for appellant Central Illinois Public Service Company.

Lisa Madigan, Attorney General, Springfield (Gary Feinerman, Solicitor General, and Mary Patricia Kerns, Assistant Attorney General, Chicago, of counsel), for appellant Illinois Department of Employment Security.

Janet E. Young, Janine M. Martin and Greg A. Campbell, of Diekemper, Hammond, Shinners, Turcotte & Larrew, P.C., St. Louis, Missouri, for appellee.

Justice FREEMAN delivered the opinion of the court:

At issue in this appeal is whether the members of the International Union of Operating Engineers, Local 148, AFL-CIO, are entitled to unemployment compensation benefits for the period of time between June 22, 1993, and August 28, 1993. The appellate court ruled that the members of Local 148 were eligible for benefits. 345 Ill.App.3d 382, 280 Ill.Dec. 364, 802 N.E.2d 289. The Illinois Department of Employment Security (Department), and the employer, Central Illinois Public Service Company (CIPS), filed a petition for leave to appeal. 177 Ill.2d R. 315. We granted the petition, and now reverse.

BACKGROUND

CIPS is a public utility furnishing electricity and natural gas to residential and commercial customers in portions of central and southern Illinois. CIPS operates three natural gas distribution divisions designated as the Eastern, Southern and Western divisions. CIPS also operates five electricity power generating plants known as the Newton, Coffeen, Meredosia, Hutsonville, and Grand Tower stations. Local 148 (hereinafter, Engineers' Union) represents approximately 549 production and maintenance employees at the Coffeen, Meredosia, Hutsonville, and Grand Tower facilities. The International Brotherhood of Electrical Workers, Local 702, represents approximately 950 production, maintenance and operation employees at the Newton power station and the Eastern, Southern and Western divisions. Local 702 also represents 12 workers in the production department at the Grand Tower station, with these employees included in the Southern division bargaining unit. Each power station and division is covered by a separate collective-bargaining agreement.

On June 30, 1992, the collective-bargaining agreements between CIPS and the unions expired. CIPS and the unions agreed to a series of contract extensions. In March 1993, CIPS presented "final" contract proposals to the unions, which both unions rejected. CIPS management discussed the possibility of a lockout at several meetings, the earliest being a meeting on April 15, 1993. At the expiration of the last contract extension on April 24, 1993, union members began to adhere strictly to company safety and other rules, and to refuse voluntary overtime work. Although CIPS and the unions continued to meet, holding negotiation sessions on May 14, 17, and 18, 1993, CIPS made a decision on or about May 7, 1993, to lock out its employees. At 4 a.m. on May 20, 1993, CIPS instituted a lockout of all members of the two unions.

The negotiations between CIPS and the unions continued during the lockout. On June 14, 1993, CIPS and Engineers' Union reached a tentative agreement on the terms of a new contract. The members of Engineers' Union ratified the contract on June 17 and 18, 1993, and CIPS and Engineers' Union signed the contract on June 21, 1993. CIPS ended the lockout of the members of Engineers' Union on June 22, 1993. Although eligible to return to work, the members of Engineers' Union respected the picket lines established by the members of Local 702 and stayed off the job. On August 25, 1993, CIPS announced that it was ending the lockout of the members of Local 702, even though CIPS and Local 702 had not reached agreement on new contracts. The members of both unions returned to work on August 28, 1993. Negotiations continued between CIPS and Local 702, and in January 1994, CIPS and Local 702 reached agreement on new contracts.

During the lockout, members of both unions applied for unemployment compensation benefits. On June 11, 1993, a Department claims adjudicator determined that the union members were not eligible for benefits because their total or partial unemployment was due to a stoppage of work which was in turn caused by a labor dispute at the facility at which they were last employed. The unions appealed the claims adjudicator's decision. On August 18, 1993, the Director's representative notified all union members that the unions proposed to represent them in a consolidated appeal, and allowed each member 10 days to object to consolidation and/or representation by union attorneys. Sixty-six union members chose to be represented by a nonunion attorney. Thirteen additional union members objected to both consolidation of the appeals and representation by union attorneys.

Also in August 1993, Engineers' Union moved to sever from the proceedings issues pertaining to the eligibility of its members to receive benefits starting June 21, 1993, the date CIPS and Engineers' Union entered into the new contract. Engineers' Union sought an administrative determination that its members were eligible for unemployment compensation beginning on June 21, 1993. CIPS objected to the motion to sever, arguing that the unemployment of members of Engineers' Union and Local 702 arose out of the same work stoppage caused by the same labor dispute involving the same employer. The Director's representative denied the motion to sever and consolidated the appeals because the issues to be decided involved common questions of fact and law.

On January 11 and 12 and May 3 and 4, 1994, the Director's representative conducted a hearing on the appeals from the claims adjudicator's decision. Subsequently, on January 3, 1995, the Director's representative recommended that the determination of the claims adjudicator be set aside, and that the union members be found eligible for benefits for the period from May 20, 1993, through August 28, 1993, subject to recoupment. The Director's representative based his recommendations on principles of federal preemption. The unions had filed claims with the National Labor Relations Board (NLRB), contending that CIPS had violated the National Labor Relations Act (29 U.S.C. § 151 et seq. (1988)) by implementing the lockout in retaliation for union members "working to rule." Responding that the union members had participated in a work slowdown, CIPS argued that the lockout was designed to promote an end to the labor dispute. The Director's representative noted that the NLRB could yet determine that the lockout violated the NLRA, in which case the lockout would be the cause of the work stoppage rather than a labor dispute. The union members would not be ineligible for benefits because section 604 of the Unemployment Insurance Act (820 ILCS 405/604 (West 1992)) only applies where the work stoppage is due to a labor dispute. On February 16, 1995, the Director rejected the recommended decision, finding the union members ineligible for benefits for the entire period from May 20, 1993, through August 28, 1993. According to the Director, the relevant question under section 604, whether the work stoppage was due to a labor dispute, was entirely different from the issue before the NLRB, whether CIPS acted in good faith in implementing a lockout in response to concerted union activity. Having found that federal law did not preempt a determination by the Department regarding eligibility for unemployment benefits, the Director went on to rule that the union members were unemployed due to a work stoppage that resulted from a labor dispute. Further, members of Engineers' Union had a direct interest in the ongoing labor dispute between CIPS and Local 702, and were not eligible for benefits between June 22, 1993, and August 28, 1993.

On March 22, 1995, Engineers' Union filed a complaint in the circuit court of Franklin County seeking review of the Director's decision pursuant to the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 1994)). The complaint named the Department and CIPS as defendants and necessary parties to the action. The Department and CIPS both filed motions to dismiss the complaint for lack of subject matter jurisdiction. The Department and CIPS contended that the complaint was defective because it failed to name the Director as a defendant, although the Director was a necessary party to the action. Additionally, the Department and CIPS maintained that Engineers' Union lacked standing to seek review of the Director's decision because Engineers' Union was not a party of record in the administrative proceedings and was not aggrieved by the Director's decision. On May 17, 1996, the circuit court denied the motions to dismiss and granted Engineers' Union leave to file an amended complaint naming the Director as a defendant. The circuit court also denied defendants' joint motion to reconsider.

On October 26, 2001, the circuit court set aside the Director's decision. The court found that the members of Engineers' Union did not have a direct interest in the labor dispute between CIPS and Local 702 after June 22, 1993. The court also found that the members of Engineers' Union were not of the same grade or class as the members of Local 702. The court concluded that the members of Engineers' Union were eligible for benefits after June 22, 1993, the date CIPS ended its lockout against them.

The Department and CIPS appealed. The appellate court affirmed the decision of the circuit court. 345 Ill.App.3d 382, 280 Ill.Dec. 364, 802 N.E.2d 289. The court ruled that Engineers' Union had standing to bring an action on behalf of its members. 345...