Park v. Appeal Bd. of Mich. Employment Sec. Commission, s. 43

• Decision Date: 01 April 1958
• Docket Number: Nos. 43,44,s. 43
• Citation: 94 N.W.2d 407,355 Mich. 103
• Parties: Alexander PARK et al., Plaintiffs and Appellees, Thomas M. Kavanagh, Intervenor and Appellant, v. The APPEAL BOARD OF MICHIGAN EMPLOYMENT SECURITY COMMISSION, Michigan Employment Security Commission, Ford Motor Company, Defendants and Appellees. John L. DORSEY et al., Plaintiffs and Appellants, v. The APPEAL BOARD OF MICHIGAN EMPLOYMENT SECURITY COMMISSION, Michigan Employment Security Commission, Ford Motor Company, Defendants and Appellees. ,
• Court: Michigan Supreme Court

Page 407

94 N.W.2d 407

355 Mich. 103

Alexander PARK et al., Plaintiffs and Appellees, Thomas M. Kavanagh, Intervenor and Appellant, v. The APPEAL BOARD OF MICHIGAN EMPLOYMENT SECURITY COMMISSION,

Michigan Employment Security Commission, Ford

Motor Company, Defendants and Appellees.

John L. DORSEY et al., Plaintiffs and Appellants, v. The APPEAL BOARD OF MICHIGAN EMPLOYMENT SECURITY COMMISSION,

Michigan Employment Security Commission, Ford

Motor Company, Defendants and Appellees.

Nos. 43, 44, April Term, 1958.

Supreme Court of Michigan.

Jan. 12, 1959.

Zwerdling & Zwerdling, Detroit, for John L. Dorsey, et al., plaintiffs and appellants, and Alexander Park, et al., plaintiffs and appellees, A. L. Zwerdling, Detroit, of counsel.

Thomas M. Kavanagh, Atty. Gen., Edmund E. Shepherd, Solicitor Gen., Lansing, Stanton S. Faville, Chief Asst. Atty. Gen., Florence N. Clement, Asst. Atty. Gen., for intervenor-appellant.

George M. Bourgon, Asst. Atty. Gen., for Michigan Employment Security Commission, defendant and appellee.

William T. Gossett, Dearborn, for Ford Motor Co., Richard B. Darragh, Joseph A. O'Reilly, Richard A. Fellrath, Dearborn, of counsel.

Frank E. Cooper, Beaumont, Smith & Harris, Detroit, for Michigan Employers' Unemployment Compensation Bureau, amicus curiae.

Before the Entire Bench, except KAVANAGH, J.

EDWARDS, Justice.

These cases are of great financial importance to the litigants. Yet, after a careful review of over 1,600 printed pages of records and briefs, we conclude that they turn upon the answer to a relatively simple legal question--Does the term 'the establishment,' as used in the Michigan employment security act, encompass both Ford plants in the vicinity of Detroit, Michigan, and the Ford forge plant at Canton, Ohio, for the reason that the former cannot operate long without the latter?

The question is by no means new. In very similar form, it has, previously been submitted to the judicial systems of 9 States, each of which had at the time statutory language of like import to that of our State to construe.

The appellate courts in Massachusetts, New Jersey, Minnesota, Kentucky, New York, Virginia, and Pennsylvania answered the question in the negative. Georgia's supreme court alone answered affirmatively. In the 9th State, Texas, where compensation claims were allowed under a similar situation and somewhat similar statutory language, the present defendant stipulated to dismissal of its appeal--perhaps in anticipation of a legislative amendment favorable to its position, which did indeed follow.

For reasons which we detail hereafter, we arrive at the same conclusion reached by the great majority of the court which have considered the problem. Although, as we will not, much more is in dispute between these parties, in the end this decides the principal question in these cases.

We have before us 2 cases involving separate groups of claimants of unemployment compensation, totaling approximately 11,000 such claims in all. The claimants in these cases, ¹ in May of 1953, were employed at 3 plants of the Ford Motor Company in the vicinity of Detroit, Michigan. The 3 plants involved were the Mound Road plant, the Highland Park plant, and the Ford Rouge plant at Dearborn. The employees who are claimants in these appeals were laid off from the 3 plants just referred to as a result of the failure of foregings, essential to the operation of their particular departments, to arrive at the plant concerned as a result of the stoppage of manufacture of such forgings at the Canton forge plant due to a strike called by the UAW-CIO on April 20, 1953, at the Canton plant. In the lengthy record which contains much hotly-disputed testimony, 2 facts appear to be clear and beyond dispute: 1) that the employees concerned were laid off either as a direct or indirect result of the failure of forgings previously manufactured at the Canton forge plant to arrive at departments or plants where they would customarily be incorporated into subassemblies and assemblies of Ford products; 2) that no strike vote, call, walkout, or picketing occurred in any of the 3 plants under consideration, and that all employees concerned continued work until laid off by the company (indeed some of them returned to work on call during the period of the Canton forge plant strike), and that other union employees, whose operations were not affected by the lack of forgings, continued work in each of the 3 plants through most or all of the entire Canton strike period.

The Ford Motor Company is a Delaware corporation, with its principal office and principal manufacturing plants located in Michigan. It has extensive manufacturing assembly plants in many other States, and this record indicates that all of the plants are integrated in operation with its Michigan plants.

The union with which we are concerned in these cases is the International Union UAW-CIO which, during the period in question, was the exclusive collective bargaining agent of all of the hourly-production and maintenance employees of the Ford Motor Company in all of its plants throughout the United States. The contract between the UAW workers and the Ford Motor Company was for a 5-year period expiring June 1, 1955.

It appears that during the spring of 1953 the local disputes which resulted in the Canton forge plant strike occurred, and ultimately were resolved, at the same time as a union-company dispute over modification of the so-called master agreement. The briefs of claimants in these cases argue that the Canton forge plant strike was over purely local issues, and was unrelated to the negotiations for reopening and modification of the master agreement. It is the company's position that the Canton forge plant strike was a device employed by the union for the purpose of forcing modification of the master agreement. In either event, it appears that the settlement of the Canton forge plant strike, and the modification of the master agreement, both occurred on May 25, 1953, following by 3 days a similar modification of a national agreement between the UAW and the General Motors Corporation signed on May 22, 1953.

The claims of the respective parties were thus phrased by agreement of respective counsel, and by certification of the circuit court judge who heard this matter, in the statement of proceedings and facts accompanying application for leave to appeal addressed to this Court:

'The claimants contend that they were laid off due to a lack of work, being involuntarily unemployed and in no way involved in a labor dispute; that a labor dispute did not occur in the establishment in which they were employed; that the Michigan act does not include within either the definition of establishment or employing unit the Ohio plant of Ford Motor Company, whether for purposes of taxation or of disqualification; that, regardless of any other factor, there can be no disqualification of claimants in this case because the fundamental prerequisite for disqualification under section 29(1)(b) is the existence of a labor dispute in the establishment in which he is or was last employed, and that the establishment here does not include within its scope the plant in another State in which the labor dispute occurred; that the modification of the national agreement between the Ford Motor Company and UAW, May 25, 1953, was occasioned by the similar modification of the national agreement between UAW and General Motors Corporation 3 days earlier (May 22, 1953), and that the unemployment of claimants was in no way occasioned by this reopening of the Ford contract to conform with the action taken by General Motors; and that the labor dispute in the Canton, Ohio plant was over issues involving that plant only, and did not in any way involve a dispute in which these Michigan claimants were directly involved in any event.

'The employer, on the other hand, contends that a disqualification of the claimants does not involve an extra territorial application of the Michigan employment security act; that the Canton plant was and is a part of the Ford establishment within the meaning of section 29(1)(b) of the act; that there was close functional integration and synchronization between the Canton plant and its other automotive manufacturing and assembly units, departments and plants in the Detroit area and elsewhere; that its plants in the Detroit area depended upon a continuous flow of parts and material produced at the Canton plant in the manufacture of its product, namely, cars, trucks, and tractors; that in September 1952, just 2 years after signing a 5-year collective bargaining agreement which by its terms was not openable until 1955, the International Union, UAW, enunciated its so-called 'Living Document' theory and as the exclusive collective bargaining agent of all employees covered by such master or national agreement including these claimants, demanded substantial changes in such master agreement; that in support of these demands the union embarked upon a course of conduct, from the early fall of 1952 to the time of the settlement of the Canton strike, directed toward bringing about more liberal pensions, adjustments in the cost of living allowances, vacations for retiring employees, increased wages and other matters applicable under the master agreement to all Ford UAW members including these claimants; that the Canton strike was a part of a broad program of harassment of the a broad pany on the part of the union and was used as a lever to pay concessions from the company with respect to the master agreement; that the issues in the Canton dispute became inseparably intertwined with the controversy over master contract changes; that the dispute the master agreement changes brought about the Canton strike, or at the very least prolonged it to the point where the employer's plants in the Detroit area and elsewhere were shut down with the resultant unemployment of the claimants; that the...