Nordling v. Ford Motor Co.

• Decision Date: 28 April 1950
• Docket Number: No. 35101,35101
• Citation: 42 N.W.2d 576,28 A.L.R.2d 272,231 Minn. 68
• Parties: , 28 A.L.R.2d 272 NORDLING et al. v. FORD MOTOR CO.
• Court: Minnesota Supreme Court

Page 576

42 N.W.2d 576

231 Minn. 68, 28 A.L.R.2d 272

NORDLING et al. v. FORD MOTOR CO.

No. 35101.

Supreme Court of Minnesota.

April 28, 1950.

Syllabus by the Court.

1. In order for a labor dispute to disqualify an employe for unemployment benefits under our employment and security law, such labor dispute must be in progress at the Establishment at which the claimant was or is employed.

2. Unemployment compensation statutes were enacted during a period of distress, having for their purpose the relief of hardship caused by unemployment due to no fault of the employe.

3. A liberal construction is generally to be accorded to statutes regarded as humanitarian or grounded on a humane public policy.

4. Disqualifying provisions of such statutes must be narrowly construed.

5. Determination of whether a unit of employment is a separate 'establishment' within the meaning of the disqualifying provisions of our employment and security law must be based on all the facts relating to the relationship of the employe to the unit of employment rather than on a determination of whether an entire enterprise or industry is highly integrated or unified for the purpose of efficient management or production.

J. A. A. Burnquist, Atty. Gen., K. D. Stalland, Asst. Atty. Gen., George W. Olson, St. Paul, for Director of Division of Employment and Security.

Doherty, Rumble, Butler & Mitchell, St. Paul, for relator.

Douglas Hall, Minneapolis, for respondents.

KNUTSON, Justice.

Certiorari to review a decision of the director of the division of employment and security.

The Ford Motor Company is a Delaware corporation having its principal office and manufacturing plants at Dearborn, Michigan. Its so-called Rouge plant, in which many of the parts of its Ford, Mercury, and Lincoln automobiles are manufactured, is located at Dearborn. One of the buildings located at the Rouge plant is known as B building, which is used and operated solely for assembling Ford and Mercury automobiles. Another assembly plant is located in St. Paul, and several others are scattered throughout the United States. The St. Paul plant is conducted primarily to assemble Ford automobiles and trucks. In addition, it produces power at its hydroelectric station, selling what it does not use to the Northern States Power Company. It operates a glass factory in which plate glass is manufactured, which is then shipped to Dearborn for lamination into safety glass commonly used in automobiles. It also operates a service or parts division, which furnishes parts and accessories to dealers in Minnesota, North Dakota, South Dakota, and parts of Montana, Wisconsin, and Iowa.

All assembly plants of the Ford Motor Company operate by a continuous conveyor or assembly system. Between the 10th and 15th of each month, the control department at Dearborn determines the production schedule for the St. Paul plant, which includes the total number of vehicles by types which are to be produced during the month and also the number to be produced daily. Between 3,800 and 4,000 separate items are required to assemble a Ford passenger car or truck. Of these, about 900 parts come from the Rouge plant, and the balance of the items come from outside vendors, including units of the Ford Motor Company other than the Rouge plant. All parts are either purchased or manufactured by or at the direction of the production department at Dearborn. The only purchases made by the St. Paul plant are gasoline, oils, and greases. Included within the list of parts produced at the Rouge plant are most of the major component parts necessary to assemble an automobile or truck, such as parts of the body, motors, axles, drive shafts, chassis, etc. No parts are manufactured at the St. Paul plant, and without parts from the Rouge plant the St. Paul plant could not continue to operate longer than such period of time as to exhaust all parts then on hand. Many of the parts manufactured at the Rouge plant could not be obtained from outside vendors without the expenditure of large sums of money for tools, dies, jigs, and fixtures, which it would take months or years to acquire.

Parts produced at the Rouge plant are shipped to St. Paul by freight, truck, mail, and occasionally by air. The normal transit time between Dearborn and St. Paul is four days. The St. Paul plant attempts to keep on hand enough parts to operate four or five days. The production department at Dearborn keeps in constant touch with the St. Paul plant by telephone, teletype, and wire.

All money received from the sale of assembled vehicles is deposited by the St. Paul comptroller in the Northwestern National Bank of Minneapolis to 'Treasurer's Account Ford Motor Company.' The St. Paul branch has no control over withdrawals from this account. Operating expenses are sent weekly by the Dearborn office to the First National Bank of St. Paul, and the resident comptroller draws on this account to pay local wages and other operating expenses. The employment representative at St. Paul has charge of hiring and placement, as well as termination and separation of employes at that branch. After the production schedule for the month has been determined at Dearborn, the St. Paul branch determines how many employes it needs for that period. Layoffs and recalls are based on seniority rights, and questions relating to seniority are determined by conference between Local 879 and the St. Paul office.

The employes of the St. Paul branch are members of Local 879. The employes at the Rouge plant working on Ford automobiles and trucks are members of Local 600, and Lincoln-Mercury employes at the Rouge plant and at Detroit are members of Local 900. All three are locals of International Union, Unied Automobile, Aircraft, and Agricultural Implement Workers of America, hereinafter called UAW, which is a member of the Congress of Industrial Workers, hereinafter called CIO.

All employes of the various branches and plants of the Ford Motor Company operate under one master union contract. This contract provides for a union shop under which membership in the union is a prerequisite to employment. Loss of membership results in discharge. Under the contract, the company recognizes UAW-CIO as the exclusive collective bargaining agent of employes of the company in the United States.

During the early part of May 1949, a dispute arose between the company and the union regarding an alleged speed-up of the conveyor system in B building at the Rouge plant. The company and the union failed to agree on a settlement. At noon on May 5, 1949, all employes at the rouge and Lincoln plants in Dearborn went on strike. They were all members of either Local 600 or Local 900, UAW-CIO. Following the strike, the St. Paul branch continued to operate as long as it had parts, but on May 10, 1949, it was forced to close down because of lack of parts produced by the Rouge plant. The strike continued until May 29, on which date a settlement was reached, and the Rouge plant began operating on May 31. The St. Paul plant remained closed until June 8, 1949, because it lacked essential parts, which could not be supplied until that date.

It is conceded that no dispute existed between the union and the company so far as operations at the St. Paul plant were concerned. The entire dispute was confined to operations at B building of the Rouge plant. Had the strike been confined to B building, there would have been no shutdown at St. Paul. After the commencement of the strike, the company offered to permit all plants to continue to operate, except that affected by the strike, until the dispute could be settled, but the union refused to accept this offer.

The strike was called by virtue of an affirmative vote of Local 600 and Local 900. A strike must be authorized by UAW, but the decision to strike is made by the Local. Local 879 at St. Paul had no voice in determining whether or not to strike. Nothing that Local 879 could do would have averted the strike.

During the entire strike the glass lant at St. Paul continued to operate. So did the parts division and some of the maintenance crew. Under the contract between the union and the company, employes having greater seniority rights have a right to 'bump' others having less rights in case of layoffs. May of those employed in divisions which were affected by the shutdown did 'bump' others having less rights in the departments which continued to operate. Questions relating to seniority and replacements were settled by conference with union representatives.

Subsequent to the shutdown at the St. Paul plant, respondents and other employes filed claims for unemployment compensation benefits. In view of the large number of claims involved, the director of the division of employment and security referred the claims directly to an appeal tribunal for hearing and determination in accordance with M.S.A. § 268.10, subd. 2. The appeal tribunal allowed the claims. On appeal to the director, the decision was affirmed. The matter comes here on certiorari to review the decision of the director.

Determination of the issues involved requires an interpretation of § 268.09, subd. 1(6).

Our original unemployment compensation statute, which came into existence by virtue of Ex.Sess.L.1936, c. 2, was based on a draft proposed by the federal Social Security Board for adoption by the states. ¹ Section 7(2)(d) of our act, disqualifying employes on account of unemployment due to a stoppage of work which exists because of a labor dispute, read as follows:

'An individual shall be disqualified for benefits--

'(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 at the factory, establishment, or other premises at which he is or was last employed: Provided that this subsection shall not apply if it is shown to the satisfaction of the commission that--

'(1) He is not...