Salenius v. Michigan Employment Sec. Commission

• Citation: 189 N.W.2d 764,33 Mich.App. 228
• Decision Date: 27 April 1971
• Docket Number: Docket No. 8676,No. 3,3
• Parties: Robert A. SALENIUS et al., Claimants-Appellants, v. MICHIGAN EMPLOYMENT SECURITY COMMISSION and Jim Cullen, Inc., Appellees
• Court: Court of Appeal of Michigan (US)

Page 764

189 N.W.2d 764

33 Mich.App. 228

Robert A. SALENIUS et al., Claimants-Appellants, v. MICHIGAN EMPLOYMENT SECURITY COMMISSION and Jim Cullen, Inc., Appellees.

Docket No. 8676.

Court of Appeals of Michigan, Division No. 3.

April 27, 1971.

Released for Publication Sept. 23, 1971.

Waldo A. McCrea, Marquette, for appellant.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., E. J. Setlock, Asst. Atty. Gen., for M.E.S.C.

George E. Dombrowski, Kalamazoo, for Cullen.

Before HOLBROOK, P.J., and R. B. BURNS and KELLEY, ^* JJ.

PER CURIAM.

Jim Cullen, Inc., the employer, hereinafter sometimes referred to as Cullen, is a Wisconsin corporation with its principal offices at Janesville, Wisconsin. It is not a member of the Michigan Chapter of the Associated General Contractors of America, hereinafter referred to as MAGC, which is the bargaining agent for its member contractor-employers with various Unions. Cullen had only one job in the Marquette area, which was that of a prime contractor in connection with the construction of the Learning Resources Center at Northern Michigan University. It had contracts with the Bricklayers, Carpenters, and Laborers Unions, in addition to other trades which are not here involved, all of which expired on April 30, 1968. These contracts adopted the terms then in existence between the Unions and MAGC. While the expiration date of these contracts was April 30, 1968, they were to continue 'thereafter from year to year until superseded or terminated at the end of April 30, 1968, upon not less than 60 days' notice.' On February 23, 1968, the business agent of the Laborers' Union gave written notice to Cullen that the Union chose to terminate the then existing contract which was about to expire on April 30, 1968. The written notice further stated as follows:

'We would like to know if you will go along with whatever new wage adjustments and other conditions negotiated by and between the Michigan Chapter, Associated General Contractors of America, Inc., and the Construction and General Laborers' Union, Local 1329, A.F.L.-C.I.O. Please advise.'

To this communication, Cullen replied as follows:

'Please be advised that Jim Cullen, Inc. will agree to any new terms of contract negotiated between the Union and the Michigan Chapter A.G.C.'

The Laborers' business agent did not answer this note. Although MAGC and the Laborers Union continued negotiation meetings, Cullen was not involved in these and there was no bargaining between Cullen and any of the locals employed by it on that project. There were no interconnecting agreements between the Wisconsin Association and the Michigan Association and none between Cullen and MAGC or any other contractors. No one from Cullen attended any of the negotiation meetings between MAGC and the locals, and MAGC did not act as Cullen's bargaining agent.

All employees of Cullen, including laborers, continued working on Cullen's project by agreement with Cullen, even after picket lines were put up by the employees of other contractors. There was no strike on Cullen's project and no picket lines were established on Cullen's project. There was no bargaining between Cullen and any of the Unions employed by it directly on its project. There was no dispute between Cullen and the laborers other than the negotiations between members of the MAGC and the Laborers' Union, although after May 1, 1968, Cullen's laborers were working without a contract. None of the other employees, including bricklayers and carpenters, were involved in any strike, labor dispute, or even contract negotiations on or prior to May 20, 1968, and there was no dispute among them. None of Cullen's employees refused to work as a result of any such negotiations in progress.

No agreement was reached between the Laborers' Union and MAGC as to a new contract by April 30, 1968. On May 17, 1968, by telegram, Cullen notified the business manager of the Laborers' Union as follows:

'Please be advised that effective May 20, 1968, we are locking out labor employees on the Learning Resources Center Project Northern Michigan University, Marquette, Michigan. Pending the settlement of your strike against the Michigan Chapter Associated General Contractors of America, Inc.'

Dated May 17, 1968, and effective May 20, 1968, Cullen gave all of its employees a written notice reading as follows:

'NOTICE. We regret to inform you that you are locked out pending the settlement of the strike of Construction and General Laborers' Union Local 1329 against the Michigan Chapter Associated General Contractors of America, Inc.'

Mr. Irvin Hartman, an officer of Cullen, testified as to the reason for defendant having locked out plaintiffs:

'I think we made this decision to protect our own interests and in an effort to help get an agreement in our hopes it would not be too inflationary and to know what we were going to arrive at. I think we did it for our own interests as well as assistance to negotiating body.'

The claimants, all members of the Bricklayers' Union with the exception of George Mattila, who was a carpenter, were laid off on May 20, 1968, because there was no work available to them due to the lockout by Cullen against the laborers.

Thereafter the Laborers' Union and MAGC continued to negotiate a new contract and they came to an agreement on June 22, 1968. Claimants returned to work on June 24, 1968. Cullen and the Laborers' Union adopted this contract which was embodied in a new contract signed between them.

Appellants applied for unemployment compensation for the period from May 20 to June 22, 1968, and their claims were denied by the Commission for the reason that they were unemployed due to a labor dispute in active progress in the establishment in which they were employed and they were therefore disqualified under subsection 29(8)(a) IV of the Michigan Employment Security Act. The decision of the Commission was affirmed by the Referee and his decision was affirmed by the Michigan Employment Security Appeal Board. On appeal, the circuit court also affirmed.

The issue is whether the claimants are disqualified from receiving unemployment compensation for the period of the lockout.

Appellants maintain that there was no labor dispute in active progress in the establishment in which they were employed because: (a) the laborers employed by Cullen had not engaged in a slowdown, gone on strike, set up picket lines, or otherwise interfered with their employer's operations; (b) the laborers and Cullen had agreed to accept the results of the negotiations between the Laborers' Union and the MAGC; (c) the lockout was in violation of the Michigan Labor Mediation Act (M.C.L.A. § 423.9 (Stat.Ann.1968 Rev. § 17.454(9))), and therefore was illegal and void; and (d) there was no dispute of any sort between Cullen and the bricklayers and carpenters employed by him.

Appellee employer claims that it was effectively involved in a labor dispute because the various unions treated it as an affiliate of the MAGC before, during, and after the negotiations. It also claims that the lockout was a labor dispute.

Appellee Michigan Employment Security Commission also claims that the lockout was a labor dispute and further claims that the claimants were directly interested in the labor dispute.

Portions of subsection 29(8) of the Michigan Employment Security Act ¹ provide:

'(8) An individual shall be disqualified for benefits for any week with respect to which his total or partial unemployment is due to a labor dispute in active progress, or to shutdown or start-up operations caused by such labor dispute, in the establishment in which he is or was last employed, or to a labor dispute (other than a lockout) in active progress, or to a shutdown or start-up operations caused by such labor dispute, in any other establishment within the United States which is functionally integrated with such establishment and is operated by the same employing unit. No individual shall be disqualified under this subsection 29(8) if he is not directly involved in such dispute.

'(a) For the purposes of this subsection 29(8), no individual shall be deemed to be directly involved in a labor dispute unless it is established that:

'II. He is participating in or financing or directly interested in the labor dispute which causes his total or partial unemployment. The payment of regular union dues (in amounts and for purposes established prior to the inception of such labor dispute) shall not be construed as financing a labor dispute within the meaning of this subparagraph, or

'IV. His total or partial unemployment is due to a labor dispute which was or is in progress in any department or unit or group of workers in the same establishment.

'(b) The term 'directly interested' as used in this subsection 29(8) shall be construed and applied so as not to disqualify individuals unemployed as a result of a labor dispute the resolution of which may not reasonably be expected to affect their wages, hours or other conditions of employment, and to disqualify individuals whose wages, hours or other conditions of employment may reasonably be expected to be affected by the resolution of such labor dispute. A 'reasonable expectation' of an effect on an individual's wages, hours or other conditions of employment shall be deemed to exist, in the absence of substantial and preponderating evidence to the contrary:

'(I) If it is established that there is in the particular establishment or employing unit a practice or custom or contractual obligation to extend within a reasonable period to members of the individual's grade or class of workers in the establishment in which the individual is or was last employed changes in terms and conditions of employment which are substantially similar or related to some or all of the changes in terms and conditions of employment which are made for the workers among whom there exists the labor dispute which has caused the...