Smith v. Michigan Employment Sec. Commission

Decision Date03 February 1981
Docket NumberDocket Nos. 62991,5,Nos. 4,63372,s. 4
Citation410 Mich. 231,301 N.W.2d 285
PartiesGary SMITH et al., Plaintiffs-Appellees, v. MICHIGAN EMPLOYMENT SECURITY COMMISSION, Defendant-Appellee, and Imerman Screw Products Company, Defendant-Appellant. Carl DOERR, George Kays, John Stafford, Richard Fabbro, Arthur Huffman, Okay Kean, Eugene Krascell, John Peariso, John Ratza, Marcus Rumel, William Scott, Oscar Sears and Ida Wenzell, Plaintiffs-Appellees, v. UNIVERSAL ENGINEERING DIVISION, HOUDAILLE INDUSTRIES, INC., Defendant- Appellant, and Michigan Employment Security Commission, Defendant. Calendar410 Mich. 231, 301 N.W.2d 285
CourtMichigan Supreme Court

William Mazey, Rothe, Mazey, Mazey & Hamburger, P. C., Southfield, for plaintiffs-appellees Gary Smith et al.

Cox & Hooth by Gilbert C. Cox, Jr., John L. Cerretani, Troy, for defendant-appellant Imerman Screw Products.

James D. Dreyer, Michael K. Cooper, Dreyer & DuBois, Gaylord, for U. S. Plywood, Champion Building Products, amicus curiae.

Dickinson, Wright, McKean, Cudlip & Moon by Lawrence G. Campbell, Richard M. Bolton, Michael B. W. Sinclair, Detroit, for amicus curiae Borden, Inc.

Marston, Sachs, Nunn, Kates, Kadushin & O'Hare, P. C., by Theodore Sachs, Charles Looman, Flint, for amicus curiae Michigan State AFL-CIO.

Marston, Sachs, Nunn, Kates, Kadushin & O'Hare, Charles Looman, Flint, John A. Fillion, Jordan Rossen, M. Jay Whitman by Jordan Rossen, Detroit, International Union, UAW, for plaintiffs-appellees Carl Doerr et al.

Dykema, Gossett, Spencer, Goodnow & Trigg, James D. Tracy, Cameron H. Piggott, Detroit, for defendant-appellant Universal.

Clark, Klein & Beaumont, Dwight H. Vincent, J. Walker Henry, Detroit, for amicus curiae.

FITZGERALD, Justice.

In both of these cases, the employer locked out its employees upon the expiration of their collective bargaining agreement after negotiations to arrive at a new agreement had been unsuccessful. We granted leave to appeal to decide whether the employees are entitled to unemployment compensation where they were locked out in spite of their willingness to continue working during contract negotiations. In both cases, the Michigan Employment Security Commission (MESC) Referee, the MESC Appeal Board and the circuit court found for the employer and the Court of Appeals reversed, finding for the employees. Smith v. Michigan Employment Security Commission, 89 Mich.App. 212, 280 N.W.2d 489 (1979); Doerr v. Universal Engineering Division, Houdaille Industries, Inc., 90 Mich.App. 455, 282 N.W.2d 352 (1979).

I

These cases require us to examine the labor dispute disqualification provision of the Employment Security Act (ESA), M.C.L. § 421.29(8); M.S.A. § 17.531(8), as it applies to the lockout situation. The statute 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 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."

A finding of disqualification under the above provision is not the end of the inquiry. The statute further provides that an individual shall not be disqualified unless he is "directly involved" in the dispute. Section 29(8) (a) sets forth four criteria by which the requisite involvement is determined. It is only after both of these findings have been made that a claimant may be disqualified from receiving unemployment benefits under this provision. 1 Thus, in order for appellees in the present cases to be disqualified, it must be shown that their unemployment was due to a labor dispute in which they were directly involved.

II

Appellees and amicus AFL-CIO argue that the type of lockout 2 involved here is not intended to be included within the terms of the statutory labor dispute disqualification. They rely on the general purpose of the statute expressed in M.C.L. § 421.2; M.S.A. § 17.502, to provide benefits to workers who are involuntarily unemployed. Because appellees were willing to continue working during contract negotiations, appellees claim that they were involuntarily unemployed. Appellees and amicus AFL-CIO, as well as the Smith panel in the Court of Appeals, rely heavily on National Gypsum Co. v. Administrator, Louisiana Dep't of Employment Security, 313 So.2d 230 (La.1975). Finally, appellee Smith argues that the commission, the trial court and appellants have misread § 29(8) by "contending that a disqualification results from their reading of the phrases, 'or to a labor dispute, other than a lockout, in active progress, or to shutdown or start-up operations caused by that dispute * * * ' as if the (italicized) 'or' was 'and' ".

At the outset, we reject plaintiff Smith's construction of the statute. Such a construction would render the labor dispute clauses redundant. This violates the basic rule of statutory construction that, if at all possible, no word should be treated as mere surplusage or rendered nugatory. Scott v. Budd Co., 380 Mich. 29, 37, 155 N.W.2d 161 (1968); Stowers v. Wolodzko, 386 Mich. 119, 133, 191 N.W.2d 355 (1971).

A plain reading of the first sentence of § 29(8) indicates that it is composed of two clauses in which the Legislature sets forth two discrete types of disqualification. The first disqualification applies to labor disputes in the establishment in which a claimant is or was last employed. The second disqualification applies when the labor dispute (other than a lockout) occurs in a functionally integrated establishment operated by the same employing unit. 3 In the instant cases we are concerned only with the first disqualification clause.

It is significant that the Legislature chose to qualify the labor dispute disqualification in the second clause by excepting lockouts while it left intact the labor dispute disqualification in the first clause without similar qualification. First, it indicates that the Legislature understood that a lockout is one form of a labor dispute since it would have been unnecessary to include the lockout exception in the second clause had it been otherwise. Second, it leads us to conclude that the Legislature intended to exempt lockouts from the labor dispute disqualification for claimants who are unemployed due to a labor dispute at a functionally integrated establishment, while it did not intend to so exempt claimants who are unemployed due to a labor dispute at an establishment in which they are or were last employed. If the Legislature had intended to exclude lockouts in the first clause, it could have explicitly done so as it did in the second clause. 4

Further support for our conclusion is provided by § 29(7)(a) of the act which states that an individual shall not be disqualified for benefits for refusing to accept work, "(i)f the position offered is vacant due directly to a strike, lockout, or other labor dispute ". (Emphasis added.) Numerous other jurisdictions have considered similar provisions in their unemployment statutes to be a legislative recognition that the lockout constitutes one form of labor dispute. 5

"Nearly all of the 51 statutes employ the term 'labor dispute' or its equivalent, but only a few attempt any definition or limitation of those words. However, one clue as to meaning has been inserted in every statute in order to satisfy the minimum requirements of the Federal Social Security Act. The state statutes provide without exception that benefits shall not be denied to an otherwise eligible employee if he refuses to accept new work when the position offered is vacant due to a 'strike, lockout, or other labor dispute,' such a job not constituting 'suitable work.' This phrase indicates not only that 'strikes' and 'lockouts' are species within the genus 'labor dispute' but also that a statutory 'labor dispute' may exist in the absence of the strike or lockout manifestations." (Footnotes omitted.) 6

We agree that the inclusion of such language in our own statute is probative of the Legislature's intention to include lockouts within the labor dispute disqualification.

In response to the argument that we should adhere to the general purpose of the statute, i. e., to provide benefits to individuals involuntarily unemployed, in construing § 29(8) to exclude lockouts because individuals who are locked out are involuntarily unemployed, we refer to Noblit v. Marmon Group, 386 Mich. 652, 654-655, 194 N.W.2d 324 (1972):

"The Employment Security Act is intended to provide relief from the hardship caused by involuntary unemployment. That is the broad legislative purpose. It deserves liberal application by the courts.

"But equally deserving of judicial cognizance and respect are the specifics of the Employment Security Act.

"It would have been simple enough for the legislature to provide unemployment benefits for all persons involuntarily unemployed.

"The legislative process is more complex than merely a forum in which broad goals are agreed upon. The Employment Security Act is a detailed legislative enactment, embodying the ultimate agreement of the representatives and senators upon a scheme of unemployment compensation, and reflecting their compromise of various policy considerations affecting the circumstances under which other policy considerations warranted the conclusion that no benefits should be paid at all.

"The legislature has declared that benefits shall not be paid when

" ' * * * 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.' MCL 421.29(8)(a)(IV); MSA 17.531(8)(a)(IV).

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