Skookum Co., Inc. v. Employment Division

• Decision Date: 30 September 1976
• Citation: 554 P.2d 520,276 Or. 303
• Parties: The SKOOKUM CO., INC., Petitioner, v. EMPLOYMENT DIVISION et al., Respondents.
• Court: Oregon Supreme Court

Page 520

554 P.2d 520

276 Or. 303

The SKOOKUM CO., INC., Petitioner, v. EMPLOYMENT DIVISION et al., Respondents.

Supreme Court of Oregon.

Argued and Submitted June 7, 1976.

Decided Sept. 30, 1976.

James B. Ruyle of Sabin, Newcomb, Sabin & Meyer, Portland, argued the cause for petitioner.

Donald S. Richardson, Portland, argued the cause for respondents. With him on the brief were James W. Kasameyer and Richardson & Murphy, Portland, for respondents Wells, Gibson, McDonald, Mandrones, Webber, Burke, Olsen, Haliski, Erceg, Peterson and Clegg. Also on the brief was Peggy Viamonte, Appellate Division Asst., Salem, for respondent Employment Division.

Before DENECKE, C.J., and McALLISTER, O'CONNELL, HOLMAN ^*, TONGUE, HOWELL and BRYSON, JJ.

HOWELL, Justice.

This is a petition for review of a decision by the Court of Appeals affirming an award of unemployment benefits to certain employees of the Skookum Company for the period of December 1, 1974, to January 10, 1975. The Court of Appeals held that these claimants were entitled to unemployment compensation following their attempt to return from a strike. 24 Or.App. 271, 545 P.2d 914 (1976). The majority concluded that as of December 2 the cause of claimants' unemployment was their employer's decision to hire permanent replacements for the striking workers and not the labor dispute. Thus, the court found that the claimants were not precluded from receiving unemployment benefits by the 'labor dispute' disqualification contained in ORS 657.200(1). We granted review in order to consider the applicability of ORS 657.200(1) when replacements are hired for employees who thereafter offer to return to work and end the dispute. ORS 657.200(1) provides as follows:

'An individual is disqualified for benefits for any week with respect to which the administrator finds that his unemployment is due to a labor dispute which is in active progress at the factory, establishment or other premises at which he is or was last employed or at which he claims employment rights by union agreement or otherwise.'

The basic facts are essentially undisputed. The claimants and other employees, who were represented by two labor unions commenced a strike against Skookum on August 2, 1974. On August 26, Skookum presented the unions with a proposal which they rejected. On September 3, 1974, employer began to hire replacement personnel for the strikers. The company treasurer testified that a letter was sent to strikers stating that 'we would have to get back into production and we would have to start hiring people.' He also stated the replacements were hired 'on a permanent basis.'

On November 20 the employer met with the unions and a federal mediator. At that time the union representatives stated that they would now accept the company's August 26 proposal, would submit it to their members for a ratification vote, and would have the strikers back to work soon thereafter. However, the company representative stated that they did not have openings for the returning strikers at that time and that they were also concerned about whether the replacement employees would have to join the union. The meeting ended without resolution of either of these problems.

On November 27 the union informed the employer that the August 26 proposal had been ratified, and that the strikers would return to work the next Monday, December 2. By that day, picket lines had been removed and about 30--35 strikers appeared for work. They were told that there was no work available for them, and their request for layoff slips was refused. The record indicates that by December 2, when the strikers reported for work, all their positions had been filled by replacement personnel.

On January 10, 1975, the employer and the unions reached a final agreement which was signed on January 31, 1975. The agreement was essentially the same as that set forth in the August proposal but contained an additional provision that employees hired before January 10 would not have to join the union, as well as a 'letter of understanding' which stated that the company would 'place the names of those employees who have not been reinstated as of January 10, 1975, on a preferential hiring list.'

The Employment Division Administrator awarded unemployment benefits to the employees as of December 1, 1974, and the employer requested a hearing. After a hearing, held on April 28, 1975, the referee made findings of fact and concluded that the labor dispute disqualification of ORS 657.200(1) did not apply after December 2, because, after the strikers attempted to return to work and removed the picket lines, their 'continued unemployment was due to another reason, which was the employer had no work available for them.' The Appeals Board affirmed, one member dissenting.

The Court of Appeals also affirmed this decision, on the grounds that as of December 2, the claimants' unemployment was not caused by the labor dispute, but by the employer's decision to permanently replace them. Schwab, C.J., dissented on the basis...