Mountain States Tel. & Tel. Co. v. Sakrison

• Citation: 225 P.2d 707,71 Ariz. 219
• Decision Date: 29 December 1950
• Docket Number: No. 5236,5236
• Parties: MOUNTAIN STATES TEL. & TEL. CO. v. SAKRISON et al.
• Court: Supreme Court of Arizona

Page 707

225 P.2d 707

71 Ariz. 219

MOUNTAIN STATES TEL. & TEL. CO. v. SAKRISON et al.

No. 5236.

Supreme Court of Arizona.

Dec. 29, 1950.

Fennemore, Craig, Allen & Bledsoe, Phoenix, for appellant.

D. Kelly Turner, Phoenix, for appellee, Employment Security Commission.

UDALL, Justice.

Due to a failure in wage negotiations, a nationwide strike by the employees of affiliated telephone and telegraph companies in the United States occurred on April 7, 1947. In the state of Arizona this strike was directed against three companies operating herein, viz.: the American Telephone and Telegraph Co. (parent company of the Bell System) and its subsidiaries, the Western Electric Co. and the Mountain States Telephone and Telegraph Co., the latter two having their business offices in the same building in the city of Phoenix. Upon applications being made, decisions were rendered by a Special Deputy and the Employment Security Commission of Arizona disallowing unemployment compensation benefits to employees of the American Telephone and Telegraph and Western Electric companies, and no appeal having been taken therefrom, these decisions became final. The present controversy, which is solely with the Mountain States Co., arises under the 'Employment Security Act of Arizona', hereinafter called the Act, Ch. 56, art. 10, as amended. See Cumulative Pocket Supplement, A.C.A.1939.

Appellee R. L. Moore and 245 others filed application for unemployment compensation with the Employment Security Commission of the State of Arizona, for loss of employment during the period April 7 to May 20, 1947. All claimants were employees of appellant, Mountain States Telephone and Telegraph Co., a corporation doing business in the states of Idaho, Montana, Wyoming, Utah, Colorado, New Mexico, and El Paso County, Texas, as well as in Arizona. The parties will hereinafter be referred to as the commission, claimants or employees, and the company.

Special Deputy D. Kelly Turner, who made the initial investigation regarding the claims under the provisions of Sec. 56-1006a, conducted extensive hearings and rendered separate decisions covering claimants from four geographical areas of the state. Deputy Turner did not consider the company's statewide operations as a single 'establishment' under the Act, but in his view the company's four departments were to be treated separately and independently. He held that some claimants were qualified and some disqualified to receive benefits. The company, as well as the claimants who were denied compensation benefits, appealed to the commission. The latter considered the record made before the deputy, and after conducting additional hearings found that the very nature of the company's business and its operations required the conclusion that the statewide system constituted a 'single establishment' for the application of the Act. The commission's decision (Chairman John M. Sakrison dissenting) was to the effect that in the light of the statewide picture the strike did not cause a curtailment of operations sufficient to constitute a work stoppage, and hence the 246 claimants here involved were not disqualified under Sec. 56-1005(d) from receiving the benefits provided for in the Act.

The company, deeming itself aggrieved by the final decision of the commission, petitioned the superior court for a review of the record made before the inferior tribunals as provided for under Sec. 56-1011n. From a judgment of the Superior Court of Maricopa County rendered March 17, 1949, affirming in all respects the decision of the commission, the company prosecutes this appeal.

It should be noted that under the Act, Sec. 56-1006a, when the superior court affirmed the decision of the commission the claimants were paid their unemployment benefits, hence in reality, from a financial standpoint at least, the only thing that abides the final decision of this court is whether the payments already made to claimants shall be charged on the commission's books against the account of the appellant company. There are, of course, grave questions of law to be determined.

There is no dispute as to the facts. The evidence, in the main, came from the company's books and records, which both sides have for the purpose of this appeal accepted as being true. Hence the differences that have arisen stem from the legal conclusions drawn by the commission and the trial court from those facts. In this situation we are not bound by the conclusions of either the commission or the trial court, but are at liberty to draw our own legal conclusions from the admitted facts. Maricopa County Municipal Water Conservation Dist. v. Southwest Cotton Co., 39 Ariz. 65, 4 P.2d 369; Wilkinson v. Takesuye, 66 Ariz. 205, 185 P.2d 778.

The gist of the company's first ten assignments of error is that the trial court erred in affirming the action of the commission in the premises by decreeing that the 246 claimants were entitled to unemployment compensation benefits, and in finding that they were not disqualified under the provisions of Sec. 56-1005(d). The company asserts that such decision and judgment are unsupported by competent, material, and substantial evidence, and that the action of the court in affirming the commission decision was arbitrary and capricious. Sec. 56-1011n(a), (7), (E) and (F).

The primary issues determinative of this appeal, therefore, involve two questions arising from the meaning to be given to certain terms in Sec. 56-1005(d) of the Act. These questions are: (1) What is meant by the words 'establishment or other premises'? and (2) What degree of curtailment of operations at an 'establishment or other premises' constitutes a 'stoppage of work'? Stated another way, did the Employment Security Commission (and the trial court) err in its findings of fact and its conclusions of law drawn therefrom in deciding that there was not a 'stoppage of work' at the establishment of the Mountain States Telephone and Telegraph Company?

Establishment or other premises.

The Act, Sec. 56-1005, in prescribing disqualification for benefits, states:

'An individual shall be disqualified for benefits:

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'(d) For any week with respect to which the commission finds that his total or partial unemployment is due to a stoppage of work which exists because of a labor dispute, strike or lock-out at the factory establishment, or other premises at which he is or was last employed. This provision shall not apply if it is shown to the satisfaction of the commission that: (1) he is not participating in, financing, or directly interested in the labor dispute, strike or lock-out which has caused the stoppage of work; and (2) 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, strike or lock-out. In the case of separate branches of work which are commonly conducted as separate businesses in separate premises, each such department shall, for the purposes of this subsection, be deemed to be a separate factory, establishment or other premises.' (Emphasis supplied.)

There is no question here as to the exceptions, i. e., as to the claimants participating in, financing, or being directly interested in the labor dispute or belonging to a grade or class, members of which participated in, financed, or were directly interested in the strike in question. Hence such claimants can qualify only for benefits if there was no work stoppage.

The first issue with which we are concerned is the meaning of 'establishment, or other premises', and we submit that no simple definition can be found that will be all-inclusive or meet the varying situations that are bound to arise in the administration of this Act.

The company operates 39 exchanges in Arizona. The decision of the deputy appointed by the commission segregated the employees of the company into four departments--traffic, plant, commercial and accounting--for each exchange, upon the theory that each department in each exchange constituted a 'separate establishment' within the purview of the statute.

This separation was contested at the appeal hearing and the commission found that while the departments in each exchange were separable on a functional, personnel, accounting, and direct supervisory basis, they were interdependent to such an extent that continued operation of the exchange would be impossible if the functions of any one department were eliminated. Furthermore, it found: (a) that all departments were generally housed within the single building of a community exchange; (b) that billings for local service were handled by the accounting department at the central office in Phoenix; (c) that each exchange was interdependent for its long distance service upon other exchanges, both within and without the state; (d) that company operations are conducted on the basis of a statewide organization and that all exchanges are subject to central (state) supervision and control; and (e) that for rate-making purposes and taxing purposes the operations within the state are treated as a single unit. Considering all of these factors the commission decided that the nature of the company's business and operations required the conclusion that the statewide system constituted a 'single establishment' for the application of the statute.

No decisions from appellate courts involving the telephone and telegraph industry in unemployment compensation cases were cited to us by counsel. There are, however, opinions concerning other businesses that by analogy are very persuasive. See the two companion cases from the Supreme Court of California, American-Hawaiian S. S. Co. v. California Employment Commission, Cal.App., 128 P.2d 627, affirmed 24 Cal.2d 716, 720, 151 P.2d 213, and ...