Nicholas v. Director, Ohio Dept. of Job & Family Services, 2005 Ohio 2635 (OH 5/26/2005)
| Decision Date | 26 May 2005 |
| Docket Number | Case No. 04AP-771. |
| Citation | 2005 Ohio 2635 |
| Parties | Jean L. Nicolas et al., Appellants-Appellants, v. Director, Ohio Department of Job & Family Services et al., Appellees-Appellees. |
| Court | Ohio Supreme Court |
APPEAL from the Franklin County Court of Common Pleas, C.P.C. No. 03CVF-01-367.
Cloppert, Latanick, Sauter & Washburn, Frederick G. Cloppert, Jr., William J. Steele, and Rory P. Callahan, for appellants.
Jim Petro, Attorney General, and Charlett Bundy, for appellee, Director, Ohio Department of Job & Family Services.
Jones Day, Barbara J. Leukart, and Laura R. Anderson, for appellee General Motors Corporation.
OPINION
{¶1} This is an appeal by appellants, Jean L. Nicolas et al (collectively "appellants"), from a judgment of the Franklin County Court of Common Pleas, affirming a decision of the Ohio Unemployment Compensation Review Commission ("review commission"), in which it affirmed a determination by the Director of the Ohio Bureau of Employment Services, disallowing appellants' claims for unemployment compensation benefits for the week ending July 4, 1998.
{¶2} The following background facts are taken from stipulated facts, the review commission's decision, mailed December 12, 2002, as well as the trial court's decision, filed June 22, 2004. General Motors Corporation ("GM") owns and operates several manufacturing facilities in Ohio, including plants in Mansfield, Parma, Lordstown and Defiance. Delphi Corporation ("Delphi") owns and operates several facilities in Ohio formerly owned by GM, including plants in Dayton/Moraine, Columbus and Sandusky. Appellants in the instant case are residents of Franklin County and/or were last employed as production and maintenance employees at a facility in Franklin County, and are represented by the United Auto Workers Union ("UAW").
{¶3} GM facilities in Ohio receive parts from, or ship parts to, other GM plants. On June 5, 1998, employees represented by the UAW went on strike at the Flint Metal Center in Flint, Michigan. Six days later, union workers at the Delphi Flint East Plant also went on strike. Both of these plants were owned and operated by GM at the time of the strikes. Because the facilities on strike produced parts for other GM plants, parts shortages occurred at other facilities, including the Columbus plant, and appellants were on layoff status at various times during the strikes, from approximately June 5, 1998 through August 3, 1998; further, all claimants in this appeal were laid off during the week ending July 4, 1998.
{¶4} In 1998, GM and members of the UAW were operating under a National Agreement ("national agreement") dated November 2, 1996. The national agreement designated the period from Monday, June 29, 1998, through Thursday, July 2, 1998, as "Independence Week Shutdown Period," and further designated the date of Friday, July 3, 1998, as "Independence Day holiday." Under the collective bargaining agreement, GM's UAW employees received 32 hours of pay for the Independence Week shutdown and eight hours of pay for the Independence Day holiday.
{¶5} The national agreement contained several requirements for employees to receive payments for these two periods, including seniority and payroll status as of the date of the holiday. Employees were also required to have worked the last scheduled workday prior to and the next scheduled workday following the shutdown period and holiday in order to be entitled to compensation for these days. All claimants were laid off prior to the week ending July 4, 1998, and, therefore, did not work the days prior to and following the holiday and shutdown period.
{¶6} The two strikes in Flint Michigan were settled on July 29, 1998; GM's Ohio workers were not involved in approving the settlement. As part of the negotiations to settle the strike, GM and the UAW entered into a "Memorandum of Understanding" ("MOU") on July 28, 1998. Under the terms of the MOU, appellants received a one-time special payment, in addition to their regular pay, for the payroll period ending August 9, 1998. The UAW initially asked GM to take union dues out of the one-time special payment, but, on August 17, 1998, GM and the union agreed to waive the dues payment. Payroll taxes were withheld from the one-time payments.
{¶7} The MOU provided as follows:
As a result of these negotiations and without prejudice to the position taken by either party, and without setting any precedent in the disposition of any other case involving similar circumstances, the parties agree to the following:
Employees who were on strike or layoff status at General Motors locations due to the labor dispute at the Flint Metal Center and Delphi E Flint East and who did not receive Independence Week Shutdown and Holiday Pay as a result of being on said layoff or strike and were otherwise entitled to these pay provisions as stipulated in the GM — UAW National Agreement, shall receive a one time special payment in the amount they would have been entitled to had they not been on strike or layoff.
This payment will be made in an expeditious manner and taxed as a regular wage payment in accordance with Document No. 81 of the GM — UAW National Agreement.
This payment shall initially be made by General Motors. Thereafter, payments otherwise required by Paragraph III A of the Memorandum of Understanding Joint Activities, 1996 GM — UAW National Agreement, shall be waived until General Motors is reimbursed for the total amount paid to employees as a result of this Memorandum.
Further, the parties recognize that these payments may result in employees being ineligible for unemployment compensation already received. Employees impacted by such overpayment of unemployment compensation will be responsible to repay the State that provided the unemployment compensation.
{¶8} Payments for the shutdown period were made to employees on August 13, 1998, or August 14, 1998, in the amount of 32 hours at an individual employee's regular rate of pay. Payment for the holiday was made at the same time, and represented eight hours at the regular rate of pay. GM made all normal deductions, including union dues, and the dues were later refunded to most claimants because they had not worked the minimum number of hours for union dues deductions under the agreement. All claimants were credited this week for seniority purposes.
{¶9} GM provided a special designation for data processing purposes; specifically, the eight-hour payment was designated "MISCHOSP," while the 32-hour payment was designated "MISCIWSP." On employee paycheck stubs, those payments were combined and designated "MISC-ALLOTHER" for both payments. All claimants involved in the appeal received monies under the above designations in excess of their weekly benefit amounts.
{¶10} Cheryl Ollia, GM's assistant director of labor relations, drafted the MOU and testified that it was "our intent that employees who received unemployment insurance compensation would not get a double payment for the same period." On August 5, 1998, Edward Jones, the supervisor of labor relations at GM's Lordstown assembly plant, received a one-page flyer at the plant's main entrance. The flyer contained the heading "INDEPENDENCE WEEK HOLIDAY PAY," and stated in part: "The International Union and Corporation have agreed to pay the negotiated settlement concerning the Independence Week Shutdown Week."
{¶11} Appellants made claims for unemployment compensation benefits for the entire layoff period. GM challenged the payment of benefits for the week of June 28, through July 4, 1998, contending that the one-time special payment was holiday pay remuneration. On May 17, 1999, the Director of the Ohio Bureau of Employment Services (now part of the Ohio Department of Job & Family Services, and, hereafter, referred to as "ODJFS") issued a determination of benefits, denying appellants' request for benefits for the week ending July 4, 1998, finding that appellants had received deductible income with respect to that period.
{¶12} On April 10, 2001, the matter came for hearing before the review commission. On December 12, 2002, the review commission mailed its decision affirming the determination of ODJFS. The review commission's decision stated in pertinent part:
The question to be determined by the Review Commission is whether the monies received by claimants are deductible as remuneration in the form of holiday pay. This special payment was negotiated by General Motors Corporation and the United Auto Workers. The weight of the evidence before the Review Commission is that the purpose of this payment was to replace the lost Independence Week Shutdown Period pay and Independence Holiday pay. Certain prerequisites for receiving this pay could not be met by employees because of the strikes and layoff situations existing at the time. In the negotiation process, it appears that the parties agreed to waive these impossible prerequisites and pay the unemployed workers a special payment calculated to make them whole for loss of the holiday payments. Deductions were made by the employer in the same manner as regular holiday payments would have been handled and employees received credit, including additional vacation entitlement, under the National Agreement for these monies. The circumstances which allowed the employer to recoup these monies via reduced contributions to another fund does not alter the nature of the payments.
That the parties believed and intended these payments to replace the Independence Week Holiday pay is evidenced by Employer Exhibit #1, Shop Committee—Informational Flyer, issued August 5, 1998, wherein the following statement was made:
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