Jackson v. Minneapolis-Honeywell Regulator Co., MINNEAPOLIS-HONEYWELL

• Decision Date: 20 April 1951
• Docket Number: MINNEAPOLIS-HONEYWELL,No. 35364,35364
• Citation: 234 Minn. 52,47 N.W.2d 449
• Parties: JACKSON v.REGULATOR CO.
• Court: Minnesota Supreme Court

Page 449

47 N.W.2d 449

234 Minn. 52

JACKSON v. MINNEAPOLIS-HONEYWELL REGULATOR CO.

No. 35364.

Supreme Court of Minnesota.

April 20, 1951.

Syllabus by the Court.

Where an employer's plant was closed down for two weeks primarily for vacation purposes pursuant to a union contract with employer, and an employe, who was a member of the union but not entitled to vacation pay because of lack of necessary length of service, filed a claim for benefits under the Minnesota employment and security law for the vacation period, such unemployment Held to be voluntary, precluding employe from right to unemployment compensation benefits.

Dorsey, Colman, Barker, Scott & Barber, John W. Windhorst and Horace Hitch, all of Minneapolis, for relator.

Douglas Hall, Hall, Smith & Hedlund all of Minneapolis, for respondent.

J. A. A. Burnquist, Atty. Gen., K. D. Stalland, Asst. Atty. Gen. (George W. Olson, St. Paul, of counsel), for Division of Employment and Security.

MAGNEY, Justice.

Certiorari to review a decision of the division of employment and security awarding unemployment benefits.

By stipulation, decisions to be made by a claims deputy and an appeal tribunal were waived. The director of the division of employment and security thereupon withdrew the case from the appeal tribunal and heard the matter in the first instance as provided by M.S.A. § 268.10, subd. 5.

Minneapolis-Honeywell Regulator Company is a large manufacturing concern. It has several thousand employes. Early in February 1950 it posted a notice as follows: 'The factory will close for inventory and vacation at the end of the second shift Friday night, June 23, 1950, and reopen at the start of the third shift Sunday night, July 9, 1950.' The plant was shut down and reopened at the dates specified in the notice. The taking of inventory was a purpose in the shutting down of the plant, but as such activity would take only three working days, the primary purpose of the shutdown was to enable the employes to take their vacations at the same time during the two weeks. Howard J. Jackson, an inspector, had been in the employ of the company since October 1949. Employes who had been with the company for a year were entitled to vacation with pay, pursuant to the provisions of the union contract. Since Jackson had been in its employ less than a year, he was not entitled to vacation pay. Out of the company's 7,050 hourly paid production employes, as of June 23, 1950, about 3,500 were ineligible for vacation pay in 1950 for the same reason as Jackson. Shortly prior to the shutdown, the union requested the company to give such employes work during the shutdown period. It refused this request because of the shortness of the time and because it would have been impossible to operate so as to give such employes work during the shutdown. The union then posted a notice encouraging members not entitled to vacations with pay to file claims for unemployment compensation benefits. The shutdown commenced on June 24. On that day Jackson filed such a claim for unemployment compensation. So did about 1,050 other employes. Three to four hundred of the less-than-a-year employes were given an opportunity to work on inventory during the vacation period shutdown. In 1949, 3,450 out of 3,700 employes covered by the contract received their vacation with pay. Jackson performed no work for anyone else from June 23, 1950, to July 9, 1950. On July 10, 1950, he returned to work, as he and the company at all times expected he would do.

Jackson was a member of Local 1145, C.I.O., which union had been certified by the National Labor Relations Board as the bargaining agent for all the employes covered by the contract. The contract between the union and the company provided that employes who had been employed by the company for a specified period of time should be entitled to vacations with pay. It also contained the following provision: 'Section 2. The Company shall have the option to establish a vacation shutdown between June 1st and August 30th of the then current year. All employees shall take time off equal to the established take time off equall tot he established length of the vacation shutdown, except those employees the Company may require to work during the vacation shutdown.' (Italics supplied.)

This provision of the contract uses mandatory language and covers all employes, except those employes the company may require to work during the vacation shutdown. The abnormal number of employes on the payroll less than a year when the vacation period of 1950 arrived made it impractical to close down the plant and at the same time permit them to work during the vacation shutdown. It is true that the union did not negotiate a set vacation period, but it did agree that the company could within certain dates shut down its plant for a two weeks' vacation period for all the employes.

On the facts above set out, the director decided that on June 24, 1950, claimant became unemployed; that on June 24, 1950, he filed a valid claim; that during the period from June 24 through July 9, 1950, he was unemployed, able, and available for work, and eligible to establish and did establish his waiting week from June 24 to midnight June 30, and a compensable week from July 1 to midnight July 7.

Any unemployment compensation benefits paid to employes of the company are charged against its account by the division of employment and security, and the company finds it to its advantage to remove these charges from its account by making payment of an amount equal thereto to the Minnesota unemployment compensation fund. Nevertheless, this fund is considered a fund derived from taxation. In the recent case of N.L.R.B. v. Gullett Gin Co., Inc., 340 U.S. 361, 364, 71 S.Ct. 337, 340, 95 L.Ed. ---, the court made this statement: '* * * Payments of unemployment compensation were not made to the employees by respondent but by the state out of state funds derived from taxation. True, these taxes were paid by employers, and thus to some extent respondent helped to create the fund. However, the payments to the employees were not made to discharge any liability or obligation of respondent, but to carry out a policy of social betterment for the benefit of the entire state. * * * In re Cassaretakis, 289 N.Y. 119, 126, 44 N.E.2d 391, 394--395, affirmed sub nom. Standard Dredging Corp. v. Murphy, 319 U.S. 306, 63 S.Ct. 1067, 87 L.Ed. 1416; Unemployment Compensation Commission v. Collins, 182 Va. 426, 438, 29 S.E.2d 388, 393.'

The nature of the tax is set out in State v. Industrial Tool & Die Works, Inc., 220 Minn. 591, 607, 21 N.W.2d 31, 40.

The Minnesota employment and security act, M.S.A. c. 268, provides a measure of security against the hazards of unemployment in our economic life. The preamble of the act, § 268.03, states the public policy and the general purposes of the act as follows: 'As a guide to the interpretation and application of sections 268.03 to 268.24, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state. Involuntary unemployment is therefore a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burdens. This can be provided by encouraging employers to provide more stable employment and by the systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment, thus maintaining purchasing power and limiting the serious social consequences of poor relief assistance. The legislature, therefor, declares that in its considered judgment the public good and the general welfare of the citizens of this state will be promoted by providing, under the police powers of the state for the compulsory setting aside of unemployment reserves to be used for the benefit of persons Unemployed through no fault of their own.' (Italics supplied.)

It is important to know what is meant by the word 'unemployment' as used in the act. Section 268.04, subd. 23, defines it as follows: 'An individual shall be deemed 'unemployed' in any week during which he performs no service and with respect to which no wages are payable to him, or in any week of less than full time work if the wages payable to him with respect to such week are less than his weekly benefit amount.'

The meaning of the word 'unemployment' must, of course, be considered with reference to its use. Since Jackson did not lose his job because of the vacation shutdown, it cannot be said that he was unemployed under the ordinary meaning given the word. The provision of the act itself as set out above defines the meaning of the word 'unemployment' as used in the act and with reference to the act. It states that 'An individual shall be Deemed 'unemployed" under the facts set out. (Italics supplied.) During the two weeks of the vacation shutdown, Jackson performed no services and received no wages. The wording of the act and the existing facts place him squarely within the class defined by the act during those two weeks. If nothing further appeared, it is evidence that he would be entitled to unemployment benefits. He and his family were exposed to a 'menace to * * * health, morals, and welfare,' and there was a loss of the purchasing power which the act seeks to maintain. Thus, to that extent the facts meet all the specifications for qualification for receipt of unemployment compensation benefits. But those specifications indicating qualification for benefits would also have been met if Jackson had asked for a two-week layoff and the company had granted his request.

The act was designed to meet only the evils which follow 'involuntary unemployment,' with benefits to be paid to 'persons unemployed through no fault of their own.' It was not designed to take care of the same evils which might flow from voluntary unemployment.

...