Lee-Norse Co. v. Rutledge

• Decision Date: 18 May 1982
• Docket Number: No. 15007,LEE-NORSE,15007
• Citation: 170 W.Va. 162,291 S.E.2d 477
• Court: West Virginia Supreme Court
• Parties: COMPANY v. Phyllis J. RUTLEDGE, Clerk, etc., Billy D. Carter, et al., Board of Review of the W. Va. Dept. of Employment Security, et al.

Page 477

291 S.E.2d 477

170 W.Va. 162

LEE-NORSE COMPANY v. Phyllis J. RUTLEDGE, Clerk, etc., Billy D. Carter, et al. Board of Review of the W. Va. Dept. of Employment Security, et al.

No. 15007.

Supreme Court of Appeals of West Virginia.

May 18, 1982.

Syllabus by the Court

1. "Unemployment compensation statutes, being remedial in nature, should be liberally construed to achieve the benign purposes intended to the full extent thereof." Davis v. Hix, 140 W.Va. 398, 84 S.E.2d 404 (1954), Syllabus Point 6.

2. W.Va.Code, 21A-6-3(4) was not intended to disqualify workers who were locked out during contract negotiations if they were willing to work on a day-to-day basis.

3. We overrule Syllabus Point 1 of Cumberland and Allegheny Gas Company v. Hatcher, 147 W.Va. 630, 130 S.E.2d 115 (1963), and Syllabus Point 2 of Miners In General Group v. Hix, 123 W.Va. 637, 17 S.E.2d 810 (1941).

Huddleston, Bolen, Beatty, Porter & Copen, William C. Beatty and Thomas J. Murray, Huntington, for petitioner.

McIntyre, Haviland & Jordan, James B. McIntyre and James M. Haviland, Charleston, for respondents.

HARSHBARGER, Justice:

Billy Carter and the other appellees are members of Teamsters Local 175 and employees of Lee-Norse Company, a Raleigh County manufacturer of underground mining equipment. In January, 1979, their contract expired, and while collective bargaining for a new contract was proceeding but before agreement had been reached, Lee-Norse locked its gates to union members. The employer asserted that it was a protective lockout, that its business could not continue while there was uncertainty about whether a strike was coming. There was no strike, and the union members had offered to work.

Workers applied for unemployment compensation but were held to be disqualified from getting it: W.Va.Code, 21A-6-3(4) denies benefits when "unemployment is due to a stoppage of work which exists because of a labor dispute." The Board of Review of the West Virginia Department of Employment Security affirmed, but Kanawha County Circuit Judge Robert Smith reversed the Board.

Both parties agree that there was a work stoppage within the meaning of Code, 21A- 6-3(4) ¹ and Cumberland and Allegheny Gas Company v. Hatcher, 147 W.Va. 630, 130 S.E.2d 115 (1963). The question is whether it was "caused by" or "because of" a labor dispute. See Davis v. Hix, 140 W.Va. 398, 84 S.E.2d 404 (1954), Syllabus Point 12.

In Hill v. Board of Review, 166 W.Va. 648, 276 S.E.2d 805(1981), we recognized that the cause of a work stoppage was important in deciding whether employees were disqualified from benefits. There was a fire at the mine while Hill claimants were on strike. Work could not proceed until damages were repaired, and during that time there was no picketing. We found that the work stoppage was a result of fire damage, not a labor dispute.

Other states have analyzed work stoppages during labor disputes, interpreting their unemployment compensation statutes. ² In Sweeney v. Board of Review, Division of Employment Security, Department of Labor and Industry, 43 N.J. 535, 206 A.2d 345, 348 (1965), the New Jersey Supreme Court wrote:

If the employer refuses to provide work for an employee upon any terms, then, although a strike or lockout may ensue, it cannot be said as to that employee that his unemployment or the work stoppage is attributable to the dispute. (Emphasis added.)

Stoppages caused by management-perceived adverse economic conditions, fears of strikes and consequent reduced orders during contract negotiations have not justified findings that lockouts were "because of" labor disputes. ³ See generally Department of Industrial Relations v. Nix, Ala.Civ.App., 381 So.2d 651 (1980); Gulf Atlantic Warehouse Co. v. Bennett, 36 Ala.App. 33, 51 So.2d 544 (1951); Brechu v. Rapid Transit Co., 20 Conn.Sup. 209, 131 A.2d 211 (1957); Gorecki v. State, 115 N.H. 120, 335 A.2d 647 (1975); Zura v. Marblehead Stone Division, Standard Slag Corporation, 13 Ohio Misc. 317, 42 Ohio Ops.2d 15, 224 N.E.2d 176 (1965); Gladieux Food Services, Inc. v. Unemployment Compensation Board of Review, 479 Pa. 324, 388 A.2d 678 (1978); Kansas City Star Co., Flambeau Paper Co. Div. v. Department of Industry, Labor and Human Relations, 60 Wis.2d 591, 211 N.W.2d 488 (1973), reh. denied, 62 Wis.2d 783, 217 N.W.2d 666, cert. denied, 419 U.S. 870, 95 S.Ct. 129, 42 L.Ed.2d 105. But see Department of Industrial Relations v. Walker, 268 Ala. 507, 109 So.2d 135 (1959); Doerr v. Universal Engineering Division, Houdaille Industries, Inc., 410 Mich. 231, 301 N.W.2d 285 (1981); Mortensen v. Board of Review, Division of Employment Security, New Jersey Department of Labor and Industry, 21 N.J. 242, 121 A.2d 539 (1956).

Lee-Norse's Personnel and Industrial Relations Manager testified:

A. We decided that the only thing that we could do after presenting this offer and learning of this rejection, would be that we would have to institute a protective lock out.

Q. Alright, now why did you decide that you would need a protective lock out?

A. Under the proposal that the union had given us, there was no guarantee that they would work for any specific length of time, due to the requirements of our business that is, we would not be able to accept a customers [sic] order for example and say to him we will deliver your order on such and such a date, we would be unable to do that if we didn't know that we were going to have a work force there to build that product. Uh ... another reason would be the fact that so many of our parts that we use to build our machinery has to be ordered sometimes 240 to 280 days in advance, and unless we knew that we were going to have a work force there in our plant capable of assembling these parts and filling our customers orders, there is no way we could accept that kind of a proposal from the union.

This proves a purely business, economic motivation for Lee-Norse's decision: it locked its gates because of uncertainty about employer-customer relations should negotiations at some future point reach an impasse.

This Court has previously decided:

"A stoppage of work" which exists because of a labor dispute, within the meaning of the unemployment compensation statutes of this state, may result either from a strike on the part of the employees or from a lockout on the part of the employer. Cumberland and Allegheny Gas Company v. Hatcher, supra 130 S.E.2d, Syllabus Point 1.

We conclude that this Syllabus Point is wrong and inconsistent with the statutory purpose. In addition, we find that Syllabus Point 2 of Miners In General Group v. Hix, 123 W.Va. 637, 17 S.E.2d 810 (1941), which was distinguished in Davis v. Hix, supra, at Syllabus Point 4, does not accurately state the law:

Where there is an existing contract between a group of employers and their employees, covering wages, terms, and conditions of employment, which is about to expire, negotiations in respect to entering into a new contract, or the continuance or modification of the old, in which differences of opinion arise, and there is a failure to agree thereon, from which disagreement unemployment results, a labor dispute is thereby created, within the meaning of subsection 4 of Section 4, Article 6, of Chapter 1, Acts of the Legislature, Second Extraordinary Session, 1936, and employees involved in such dispute, under the terms of said act, and unemployed by reason thereof, are not entitled to receive unemployment benefits thereunder. Miners In General Group v. Hix, supra, at Syllabus Point 2.

The point of law above was too broadly worded and overinclusive. Rather than clarify matters, it only complicated analysis. We cite Judge Lovins' articulate dissent in that case, 123 W.Va. at 658-666, 17 S.E.2d at pp. 821-824. He concluded that a work stoppage due to failure to reach an agreement, when parties are negotiating, is not due to a labor dispute.

We find that when a contract has expired, and there has been no new agreement, there is not created thereby a disqualifying "dispute" per Code, 21A-6-3(4).

Our interpretation is aided by rules of statutory construction and by our Legislature's announced purposes of our unemployment compensation act:

[T]o provide reasonable and effective means for the promotion of social and economic security by reducing as far as practicable the hazards of unemployment. In the furtherance of this objective, the legislature establishes a complusory system of unemployment reserves in order to:

(1) Provide a measure of security to the families of unemployed persons.

(2) Guard against the menace to health, morals and welfare arising from unemployment.

(3) Maintain as great purchasing power as possible, with a view to sustaining the economic system during periods of economic depression.

(4) Stimulate stability of employment as a requisite of social and economic security.

(5) Allay and prevent the debilitating consequences of poor relief assistance. W.Va.Code, 21A-1-1.

"The primary purpose of the Unemployment Compensation Law is not to regulate or control the relationship of employer and employee, but to provide reasonable and effective means for the promotion of social and economic security by reducing as far as practicable the hazards of unemployment ...." Homer Laughlin China Co. v. Hix, 128 W.Va. 613, 37 S.E.2d 649, 655-656 (1946).

We are instructed to give proper weight and consideration to these benign purposes promoting public good and the general welfare. Davis v. Hix, supra, 140 W.Va. at 420, 84 S.E.2d, at 417. "Compensation Acts, being highly remedial in character, though in derogation of the common law, should be liberally and broadly construed to effect their beneficient purpose." Sole v. Kindelberger, 91 W.Va. 603, 114 S.E. 151, 153 (1922). We consistently apply a liberality rule in workmen's compensation cases. Zackery v. State Workmen's Compensation Commission, 162 W.Va. 932, 253 S.E.2d 532 (1979); Johnson v. State Workmen's Compensation Commission...