Nederhood v. Cadillac Malleable Iron Co.
| Decision Date | 31 May 1994 |
| Docket Number | Nos. 3,4,O,Nos. 94110,94299,s. 94110,s. 3 |
| Citation | 518 N.W.2d 390,445 Mich. 234 |
| Parties | Roger NEDERHOOD, Plaintiff-Appellant, v. CADILLAC MALLEABLE IRON COMPANY and Creative Risk Management Corporation, Defendants-Appellees. James ZIMMERMAN, Plaintiff-Appellant, v. CADILLAC MALLEABLE IRON COMPANY, Defendant-Appellee. ctober Term 1993. Calender |
| Court | Michigan Supreme Court |
Bott & Spencer, P.C., Timothy J. Bott, Muskegon, for plaintiff-appellant.
Russell & Carowitz, P.C., Albert J. Russell, and Fanny L. Vail, Grand Rapids, for defendants-appellees.
Before the entire bench.
We granted leave in these cases to determine whether the Worker's Compensation Appeal Board and the Court of Appeals erred in concluding that the plaintiffs-appellants were disqualified from receiving worker's compensation benefits because they left favored work to participate in a strike that resulted in the use of permanent replacements. In deciding this issue, we must determine whether the hiring of permanent replacement workers obligates an employer to renew its offer of favored work to its injured employees, or whether the employee must take action to reinstate benefits. In the case of plaintiff-appellant James Zimmerman, who became fully disabled after the strike had begun, we must determine whether such total disability operates to revive his right to benefits.
We conclude that where a striking favored worker has voluntarily ceased performance of favored work, benefits should be restored once the favored worker expresses a good-faith willingness to return to favored work, provided this willingness is communicated to the employer within a reasonable time after the cessation of favored work. Such benefits should not automatically be restored upon the hiring of permanent replacement workers by the employer. Additionally, we would hold that plaintiff Zimmerman's supervening heart attack, which rendered him totally disabled, revived his right to benefits.
This dispute arose out of a labor strike between defendant-appellee Cadillac Malleable Iron Company and Local 784 of the UAW, of which plaintiffs-appellants, James Zimmerman and Roger Nederhood, were members. On September 30, 1981, the collective bargaining agreement between Cadillac and the union expired, and the union struck on October 1, 1981, when it became apparent that a new agreement was not forthcoming. At this time, approximately thirty-five proposals for a new contract were unresolved. Cadillac was demanding twenty-four additional language changes in the contract and the union was demanding a $2 per month increase in the employer's pension contribution for current retirees.
On October 7, 1981, Cadillac modified its September 30 proposal and submitted it to the union. These modifications included an extension of seniority retention during layoff to thirty-six months. 1 This offer was rejected by the union and was withdrawn by Cadillac by October 22, 1981.
On January 12, 1982, Cadillac officially informed the union that it would be hiring permanent replacement workers. At a January 18, 1982, bargaining session, the union attempted to accept the October 7, 1981, proposal, and offered to accept a dollar an hour cut in wages. Cadillac informed the union representative that the October 7 proposal had been withdrawn, and insisted on limiting wages to $6 per hour with no cost-of-living adjustment, and on limiting the number of plant classifications. The union representative terminated this meeting.
As of March, 1983, forty-one or forty-two replacement workers had been hired. At the time of the strike, approximately eighty workers had been employed by Cadillac. The record is silent with regard to whether plaintiffs' favored work positions had been given to permanent replacements.
A hearing referee found both Zimmerman and Nederhood to have been partially disabled at the commencement of the strike, but determined that plaintiffs were not entitled to wage loss benefits for the period between October 1, 1981, and January 18, 1982, because of their participation in a strike. 2 The referee found, however, that wage loss benefits recommenced on January 18, 1982, determining that the union's "offer to return" to work on this date terminated any unreasonable refusal by plaintiffs to perform favored work.
Additionally, the hearing referee found that on February 4, 1982, plaintiff Zimmerman became totally disabled as a result of his supervening, non-work-related heart condition.
The WCAB affirmed the hearing referee's findings with respect to injury dates and the cessation of benefits during the strike, but reversed the referee's determination that plaintiffs were entitled to restoration of wage loss benefits as of January 18, 1982, finding instead that there was no showing that plaintiffs themselves had offered to return to work at any time before the WCAB hearing. 3
Plaintiffs' applications for leave to appeal to the Court of Appeals were denied for lack of merit, and we remanded for consideration as on leave granted. The Court of Appeals affirmed the decisions of the WCAB. In Zimmerman, it held that the WCAB had not applied erroneous legal reasoning in determining that plaintiff's individual refusal to perform favored work while his union was on strike, and not the actions of the union in striking, provided a basis for denying benefits, and that such forfeiture continued for the duration of plaintiff's unwillingness to return to work. In Nederhood, it held that the WCAB had correctly applied the law in determining that Nederhood's participation in the strike precluded him from collecting wage loss benefits during the pendency of the strike. The Court of Appeals also found that the record adequately supported the board's holding that plaintiffs had not personally offered to return to favored work, and that the union's January 18, 1982, "offer" was merely another proposal in a series of negotiations.
Additionally, in Zimmerman, it found that plaintiff's supervening heart attack did not render him eligible for benefits because he had failed to communicate his willingness to return to work before his supervening heart attack, thus failing to meet his burden of establishing his entitlement to benefits.
On March 16, 1993, we granted leave to appeal, ordering that Zimmerman and Nederhood be submitted and argued together. 442 Mich. 867, 500 N.W.2d 469, 470.
As a preliminary matter, we note that the parties do not dispute that the plaintiffs were performing favored work at the time of the strike. 4
Additionally, the parties do not contest that before the union's offer to return to work on December 4, 1981, under a contract incorporating prestrike terms, plaintiffs were disqualified from receiving benefits on the basis of their voluntary cessation of favored work stemming from their participation in a strike. 5 We must now decide the duration of this disqualification.
The general rule is that a refusal of suitable work suspends benefits for the duration of the refusal. 6 Although this Court has never expressly decided the question, 7 in Bower v. Whitehall Leather Co., 412 Mich. 172, 312 N.W.2d 640 (1981), we utilized a case that supports this rule, and our decision in Pigue v. General Motors Corp., 317 Mich. 311, 26 N.W.2d 900 (1947), seems also to imply a suspension of benefits instead of a permanent forfeiture.
The Bower Court's citation, with apparent approval, of P.P.G. Industries, Inc. v. Aites, 7 Pa.Commw.Ct. 588, 300 A.2d 902 (1973), supports the conclusion that Bower envisioned only a temporary loss of benefits. In P.P.G. Industries, Inc., the employee left his favored work to become a minister. Once it became evident that he was unable to earn a living as a minister, he attempted to find other light work. The court held that he had not permanently forfeited his benefits by leaving favored work. The combination of the claimant's attempt to find employment other than as a minister and the unavailability of his old favored position triggered his eligibility for benefits.
The Pigue Court did not expressly address this issue because the claimant had returned to favored work upon settlement of the strike. In framing the issue, however, the Court stated that the pivotal question was whether the plaintiff was entitled to compensation "during the period of a strike...." Id., 317 Mich. at 315, 26 N.W.2d 900. While the weight to be accorded this is minimal, it lends credence to the view that suspension is the sanction implicit in Pigue. Noteworthy, also, is that the Pigue Court neither stated nor intimated that a permanent forfeiture results.
Larson, in his treatise on worker's compensation, opines that a temporary forfeiture of benefits is the preferred sanction. Although discussed within the context of employee misconduct, the reasons underlying his conclusions apply with equal force to the striking employee. Larson states that an injured employee discharged for misconduct should not suffer a permanent loss of benefits. He draws an analogy to the unemployment context, in which misconduct-based discharges and voluntary quitting are handled by imposing a penalty of a limited number of weeks. Likewise, he concludes that in the worker's compensation arena, the penalty for a voluntary cessation of favored work should also be limited to a loss of benefits for a period of weeks. 8
The Minnesota Supreme Court has grappled with this issue and determined that only a temporary forfeiture of benefits should result. Marsolek v. George A. Hormel Co., 438 N.W.2d 922, 923 (Minn., 1989). In this case, a partially disabled employee, Marsolek, was terminated for misconduct during a strike against the employer. Marsolek had threatened to damage cars and injure employees attempting to cross the picket line. When the plant was reopened five months after the strike began, Marsolek was not invited to return. Except for a...
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