Local 7-641, Oil, Chemical & Atomic Workers, Intern. Union, AFL-CIO v. Department of Labor

• Decision Date: 22 April 1983
• Docket Number: No. 56775,AFL-CIO,56775
• Citation: Local 7-641, Oil, Chemical & Atomic Workers, Intern. Union, AFL-CIO v. Department of Labor, 449 N.E.2d 134, 96 Ill.2d 94, 70 Ill.Dec. 260 (Ill. 1983)
• Parties: , 70 Ill.Dec. 260 LOCAL 7-641, OIL, CHEMICAL & ATOMIC WORKERS INTERNATIONAL UNION,, et al., Appellants, v. The DEPARTMENT OF LABOR et al., Appellees.
• Court: Illinois Supreme Court

Page 134

449 N.E.2d 134

96 Ill.2d 94, 70 Ill.Dec. 260

LOCAL 7-641, OIL, CHEMICAL & ATOMIC WORKERS INTERNATIONAL UNION, AFL-CIO, et al., Appellants, v. The DEPARTMENT OF LABOR et al., Appellees.

No. 56775.

Supreme Court of Illinois.

April 22, 1983.

Rehearing Denied May 27, 1983.

Tyrone C. Fahner, Atty. Gen., State of Ill., Chicago, for the Dept. of Labor; Michael T. Prousis, Asst. Atty. Gen., Chicago, of counsel.

Barbara J. Hillman, Cornfield & Feldman, Chicago, for appellees.

Lawrence I. Kipperman, David F. Johnson, Sidley & Austin, Chicago, for Velsicol Chemical Corp.

Stephen A. Yokich, Barbara J. Hillman, Cornfield & Feldman, Chicago, for appellants.

UNDERWOOD, Justice:

The question presented is whether the employees in this case, who claim that they were "constructively" locked-out by their employer as a result of a labor dispute between the parties, are entitled to unemployment compensation benefits by virtue of the 1975 amendment to section 604 of the Unemployment Insurance Act (Ill.Rev.Stat.1975, ch. 48, par. 434). A claims adjudicator of the Division of Unemployment Insurance determined that the employees were ineligible for benefits, and the Director of Labor, adopting the report and recommendation of his representative, denied benefits. The circuit court of Cook County affirmed the Director's decision, and the appellate court affirmed (106 Ill.App.3d 476, 62 Ill.Dec. 220, 435 N.E.2d 1192). We allowed the plaintiffs' petition for leave to appeal.

Approximately 140 production, maintenance and laboratory workers who belonged to the Oil, Chemical and Atomic Workers International Union, Locals 7-641 and 7-641A, were employees of defendant Velsicol Chemical Corporation on December 6, 1977, just prior to the work stoppage. A collective-bargaining agreement between the parties expired at midnight on that date. Prior thereto, there had been some 13 bargaining sessions, and although the parties were able to resolve some of their differences, they failed to negotiate a new collective-bargaining agreement. There were apparently several offers and counteroffers rejected by both sides during the negotiations. On December 6, each side rejected the other's latest proposed interim offer. After the existing contract expired, the employees did not report to work and pickets appeared at the plant entrance with signs stating that the workers were on strike. Non-union salaried personnel crossed the picket line each day and sometime thereafter restored normal production. A new collective-bargaining agreement was reached on April 8, 1978, and the union employees returned to work. It is these employees who seek unemployment compensation benefits for the period of December 7, 1977, through April 8, 1978.

Although there are certain factual disputes between the parties concerning the merits of the labor dispute and the parties' respective proposals, there is no disagreement regarding those facts which we deem necessary for resolution of this case under the applicable statutory provision. Section 604 of the Unemployment Insurance Act, in relevant part, provides:

"Labor dispute. An individual shall be ineligible for benefits for any week with respect to which it is found that his total or partial 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 is or was last employed. The term 'labor dispute' does not include an individual's refusal to work because of his employer's failure to pay accrued earned wages within 10 working days from the date due, or to pay any other uncontested accrued obligation arising out of his employment within 10 working days from the date due. This Section shall not apply if it is shown that (A) the individual is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work and (B) he does not belong to a grade or class of workers of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute; provided, that a lockout by the employer or an individual's failure to cross a picket line at such factory, establishment, or other premises shall not, in itself, be deemed to be participation by him in the labor dispute." (Emphasis added.) Ill.Rev.Stat.1975, ch. 48, par. 434.

There is no question that the employees, during the period for which they claim benefits, were unemployed due to a stoppage of work at Velsicol which existed because of a labor dispute at that company. Similarly, it is clear that the individual employees were directly interested in the labor dispute which caused the stoppage of work, and no argument to the contrary is made. Plaintiffs do argue, however, that the terms under which they would have been required to work pending continued negotiations--Velsicol's interim offer--were materially and significantly worse than the status quo and they were therefore constructively locked out. Thus, they conclude that regardless of their participation or interest in the labor dispute, since they were locked out, they are entitled to benefits under the Act. We do not agree. We need not and do not decide the factual dispute between the parties concerning whether the terms of Velsicol's final or interim offer were onerous or significantly worse than the terms of the existing contract. Regardless of whether the individual plaintiffs and other members of the plaintiff union involved in the labor dispute were strikers or constructively locked out employees, we hold that they are ineligible for benefits under the Act because they were directly interested in the labor dispute which caused the stoppage of work.

The term "labor dispute" has been defined in previous decisions as "any controversy concerning wages, hours, working conditions or terms of employment" (Buchholz v. Cummins (1955), 6 Ill.2d 382, 387, 128 N.E.2d 900, citing Local Union No. 222 v. Gordon (1950), 406 Ill. 145, 150, 92 N.E.2d 739; Fash v. Gordon (1947), 398 Ill. 210, 216, 75 N.E.2d 294; Local Union No. 11 v. Gordon (1947), 396 Ill. 293, 299, 71 N.E.2d 637), and under our act a labor dispute includes a lockout as well as a strike (Buchholz v. Cummins (1955), 6 Ill.2d 382, 387-88, 128 N.E.2d 900). The labor-dispute disqualification contained in our act, which is not uncommon (Dienes v. Holland (1979), 78 Ill.2d 8, 12, 34 Ill.Dec. 292, 397 N.E.2d 1358), evinces the legislative determination that the State is to remain neutral in labor disputes and collective bargaining, rendering assistance to neither the...