Smith v. Michigan Employment Sec. Commission

• Decision Date: 20 March 1979
• Docket Number: 78-2093,Docket Nos. 78-1351
• Citation: 280 N.W.2d 489,89 Mich.App. 212
• Parties: Gary SMITH et al., Michael Sliter et al., Plaintiffs-Appellants, v. MICHIGAN EMPLOYMENT SECURITY COMMISSION and Imerman Screw Products Co., Defendants-Appellees. 89 Mich.App. 212, 280 N.W.2d 489
• Court: Court of Appeal of Michigan — District of US

Page 489

280 N.W.2d 489

Gary SMITH et al., Michael Sliter et al Plaintiffs-Appellants, v. MICHIGAN EMPLOYMENT SECURITY COMMISSION and Imerman Screw Products Co., Defendants-Appellees.

Docket Nos. 78-1351, 78-2093.

89 Mich.App. 212, 280 N.W.2d 489

Court of Appeals of Michigan.

March 20, 1979.

Released for Publication July 12, 1979.

[89 MICHAPP 214] Rothe, Mazey & Mazey, P.C., William Mazey, Detroit, for plaintiffs-appellants.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., George M. Blaty, Asst. Atty. Gen., for Michigan Employment Sec. Commission.

Cox & Hooth by Dan T. Ryan and Gilbert C. Cox, Troy, for Imerman Screw Products Co.

Before BEASLEY, P. J., and BRONSON and KAUFMAN, JJ.

KAUFMAN, Judge.

This case involves the application of the "labor dispute" disqualification of the Employment Security Act, M.C.L. § 421.29(8); M.S.A. § 17.531(8), to locked-out employees. From a circuit court affirmance of an adverse determination by the Michigan Employment Security Commission (MESC), plaintiffs appeal as of right. We reverse.

In May and June of 1975, plaintiffs, employees of Imerman Screw Products Company and members of UAW Local 212, were engaged in bargaining with the employer regarding a new contract to replace the old contract, which was to expire at 12:01 a. m. on June 22, 1975. Negotiations broke down in the evening of June 22, 1975. The company then informed the union that it was not willing to work without a contract and that the employees would be locked out the next day. Testimony[89 MICHAPP 215] was undisputed that the union members, unlike the employer, were willing to work without a formal contract and to continue bargaining.

The lockout began on June 23, 1975, and continued until July 28, 1975, when a new contract was ratified and became effective. During the lockout there had been no picketing by union members, and the union had made overtures to the company to have its members return to work pending ratification of a new contract. Also during this time period, some work had been carried out in the factory by supervisory and management personnel. Defendant's general manager denied that the lockout was a layoff due to lack of work; he stated that there had been a possibility, but "nothing planned", regarding a plant shutdown around the Fourth of July holiday, when such a shutdown had occurred the previous year.

Based on these facts, the MESC denied plaintiffs' applications for unemployment compensation benefits. The referee made a finding that plaintiffs' unemployment from June 23-July 28 had been due to a labor dispute in active progress in which plaintiffs were directly involved. On appeal to the Michigan Employment Security Appeal Board, the referee's determination was upheld, and this ruling was then affirmed by the circuit courts.

The dispositive issue in this appeal is whether plaintiffs' unemployment resulted from a "labor dispute in active progress". The statute, M.C.L. § 421.29(8); M.S.A. § 17.531(8), provides in pertinent part:

"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 that labor dispute, in the establishment in which he is [89 MICHAPP 216] or was last employed, or to a labor dispute, other than a lockout, in active progress, or to shutdown or start-up operations caused by that labor dispute, in any other establishment within the United States which is functionally integrated with the establishment and is operated by the same employing unit."

In order for claimants to be disqualified from receiving unemployment compensation because of a labor dispute, a causal connection between the dispute and the unemployment must be established. Scott v. Budd Co., 380 Mich. 29, 155 N.W.2d 161 (1968). The employer bears the burden of proving that it is entitled to the labor dispute exception. Salenius v. Employment Security Comm., 33 Mich.App. 228, 237, 189 N.W.2d 764 (1971). The trend is to construe narrowly the disqualification provisions of § 29 and to limit the definition of "labor dispute", Salenius, supra, p. 238, 189 N.W.2d 764, in light of the Act's remedial purpose to provide temporary assistance to workers who become unemployed through no fault of their own. M.C.L. § 421.2; M.S.A. § 17.502, Park v. Employment Security Comm, 355 Mich. 103, 123, 94 N.W.2d 407 (1959), I. M. Dach Underwear Co. v. Employment Security Comm., 347 Mich. 465, 472, 80 N.W.2d 193 (1956).

A number of other jurisdictions, in construing language similar to that in the Michigan Employment Security Act, have found "labor dispute" to include a...