Oriti v. Board of Review, Ohio Bureau of Employment Services, s. 44918

• Decision Date: 31 March 1983
• Docket Number: 44923,44920,44953,44922,44921,44924,44919,Nos. 44918,s. 44918
• Parties: , 101 Lab.Cas. P 55,469, 7 O.B.R. 394 ORITI et al., Appellees, v. BOARD OF REVIEW, OHIO BUREAU OF EMPLOYMENT SERVICES et al., Appellants.
• Court: Ohio Court of Appeals

Page 311

7 Ohio App.3d 311

455 N.E.2d 720, 101 Lab.Cas. P 55,469, 7 O.B.R. 394

ORITI et al., Appellees, v. BOARD OF REVIEW, OHIO BUREAU OF EMPLOYMENT SERVICES et al., Appellants.

Nos. 44918, 44919, 44920, 44921, 44922, 44923, 44924, 44953.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

March 31, 1983.

Syllabus by the Court

Where employees offer to continue working under the terms of a pre-existing collective bargaining agreement pending final settlement of a labor dispute, the failure of the employer to accept such an offer constitutes a "lockout" within the meaning of R.C. 4141.29(D)(1)(a) unless it is demonstrated that the employer has a compelling reason for failing to agree to the extension.

Thurlow Smoot, Cleveland, for appellees.

Jones, Day, Reavis & Pogue, Stuart O.H. Merz and John R. McCulloh, Cleveland, for appellants.

PARRINO, Judge.

This appeal is taken from a decision of the court of common pleas holding that claimants-appellees, present and former employees of Eaton Corporation, were eligible to receive unemployment compensation benefits because they were locked out in the course of a labor dispute with Eaton.

Union officials representing claimants bargained with Eaton management personnel through the latter months of 1979 for the purpose of negotiating a new contract to succeed the existing one which was to expire on October 31, 1979.

On October 30, 1979, union representatives withdrew all sixty of their demands involving non-economic issues.

On October 31, management presented its final offer with respect to economic issues.

Alfred Smith, chief union negotiator, testified that management also required that the union accept all of management's demands dealing with non-economic issues before agreement could be reached. The union rejected management's contract proposals.

Smith testified that he endeavored to get a contract extension from Malcolm Daisley, chief management negotiator, on October 31, but that Daisley refused to agree to an extension. When Smith asked what the wages and working conditions would be in the interim, Daisley did not respond.

The old contract expired without a new one having been agreed upon. At that point the employees ceased to work. Negotiations were later resumed and continued through November and December. A new agreement was negotiated on December 21, 1979 and the employees returned to work on January 2, 1980.

Daisley admitted that Smith offered to extend the contract and that he refused to accept the offer. Although Daisley stated that there was no intention on his part to cut pay rates, he admitted that he did not tell this to Smith. Furthermore, Daisley at no point testified that he had communicated to the employees that they could continue working at the existing pay rates or under the other terms and conditions of the expired contract.

Smith also testified that no strike meeting was called and that no authorization to picket was given by the union.

A letter from Daisley to Smith, dated November 7, 1979, which was introduced into evidence as Claimant's Exhibit No. 9, includes the following paragraphs:

"The former Agreement has expired. As we indicated in our discussions during negotiations, we are not willing to continue operations under the terms and conditions of that Agreement.

"Please be advised that the plant is open and that we are willing to resume our discussions provided that there is an intention to make those discussions meaningful."

James Jochum, a tool design employee, testified that in prior years when the contract had been extended the company had put up notices indicating that there had been an extension and that the employees were to return to work. He observed no such notices on this occasion.

There was conflicting evidence as to whether the plant grounds were in fact open to the employees, whether employees carried strike signs, whether employees "picketed" the plant grounds or were merely "milling around" and whether employees were turned away by plant personnel or were told by plant personnel that the plant was open.

The Board of Review determined that the employees were unemployed due to a labor dispute other than a lockout and were therefore not entitled to benefits.

The court of common pleas reversed the decision of the board and concluded that the manifest weight of the evidence indicated that the employer caused the claimants' unemployment by requesting that the claimants work without any knowledge of their wages or working conditions, which terms the claimants could not reasonably be expected to accept.

Three assignments of error are set forth on appeal. We address appellants' first and second assignments of error together since they raise similar issues.

"I. The court of common pleas must be reversed because its finding that the decision of the Board of Review was 'unreasonable and against the manifest weight of the evidence' is not supported by the evidence and consequently the court has impermissibly substituted its judgment for that of the Board of Review.

"II. Eaton's refusal to extend the previous employment contract did not constitute a lockout."

These assignments of error are without merit.

R.C. 4141.29 provides in pertinent part:

"(D) Notwithstanding division (A) of this section, no individual may serve a waiting period or be paid benefits under the following conditions:

"(1) For any week with respect to which the administrator finds that:

"(a) His unemployment was due to a labor dispute other than a lockout * * *."

"A lockout has been defined as a cessation of the furnishing of work to employees or a withholding of work from them in an effort to get for the employer more desirable terms." Zanesville Rapid Transit v. Bailey (1958), 168 Ohio St. 351, 354, 155 N.E.2d 202 .

Under the facts of this case it is clear that, contrary to the request of union officials, the employer refused to extend the terms of the expired collective bargaining agreement while negotiations continued. In fact, the employer admits on appeal that it was unwilling to extend the contract.

To decide whether this situation may be considered a lockout, we turn to the reasoning of the Pennsylvania Supreme Court as set forth in Vrotney Unemployment Compensation Case (1960), 400 Pa. 440, 443-445, 163 A.2d 91:

"In the very delicate and sensitive negotiations which are involved in the development of a new collective bargaining agreement to replace one that is nearing its expiration, all parties must be sincere in their desire to maintain the continued operation of the employer's enterprise. The law contemplates that collective bargaining will be conducted in good faith, with a sincere purpose to find a basis for agreement. Neither an adamant attitude of 'no contract, no work' on the part of the employees, nor an ultimatum laid down by the employer that work will be available only on his (employer's) terms, are serious manifestations of a desire to continue the operation of the enterprise. While either or both of these positions may legitimately be taken by the parties during the bargaining negotiations prior to the expiration of the existing contract, when the contract has in fact expired and a new agreement has not yet been negotiated, the sole test * * * of whether the work stoppage is the responsibility of the employer or the employees is reduced to the following: Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of the contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the pre-existing terms and conditions of employment pending further negotiations? If the employer refuses to so extend the expiring contract and maintain the status quo, then the resulting work stoppage constitutes a 'lockout' and the disqualification for unemployment compensation benefits in the case of a 'stoppage of work because of a labor dispute' does not apply."

The rationale set forth in Vrotney has been followed in subsequent decisions by the courts of Pennsylvania. See School Dist. of the City of Erie v. Unemployment Compensation Bd. of Review (1980), 48 Pa.Commw. 460, 409 A.2d 982; McKeesport Area School Dist. v. Unemployment Compensation Bd. of Review (1979), 40 Pa.Commw. 334, 397 A.2d 458; Woodford v. Unemployment Compensation Bd. of Review (1979), 47 Pa.Commw. 232, 407 A.2d 916; Philco Corp. v. Unemployment Compensation Bd. of Review (1968), 430 Pa. 101, 242 A.2d 454; Toma v. Unemployment Compensation Bd. of Review (1971), 4 Pa.Commw. 38, 285 A.2d 201.

The Supreme Court of New Hampshire in McIntire v. State (1976), 116 N.H. 361, 359 A.2d 619, appears to have adopted this rationale as well.

As a further clarification of the rationale set forth in Vrotney, it has been held that where the employer claims at some point in the course of the negotiations that it is not reasonable to continue to maintain the status quo, i.e., that the plant must be closed or that work could continue only under modified conditions, it must be demonstrated that the employer's refusal is essential to the continued operation of the business. Unemployment Compensation Bd. of Review v. Sun Oil Co. (1975), 19 Pa.Commw. 447, 338 A.2d 710, affirmed (1978), 476 Pa. 589, 383 A.2d 519.

We believe that the reasoning of the Pennsylvania courts is sound and is consistent with Ohio cases bearing upon this issue. See Baker v. Powhatan Mining Co. (1946), 146 Ohio...