Smittle v. Gatson

• Decision Date: 08 December 1995
• Docket Number: No. 22912,22912
• Parties: Cecil SMITTLE, Carl Yentser, Donald L. Henry, James E. Hoffman, James M. Birch, John Keller, Johnnie L. Smith, Joseph W. Dawson, Robert W. Aston and Thomas E. Gump, Petitioners Below, Petitioners, v. Cathy S. GATSON, Clerk of the Circuit Court of Kanawha County; The Board of Review of the West Virginia Department of Employment Security; and Contractors Supply, Inc., Respondents Below, Respondents.
• Court: West Virginia Supreme Court

Page 873

465 S.E.2d 873

195 W.Va. 416

Cecil SMITTLE, Carl Yentser, Donald L. Henry, James E Hoffman, James M. Birch, John Keller, Johnnie L Smith, Joseph W. Dawson, Robert W. Aston and Thomas E. Gump Petitioners Below, Petitioners, v. Cathy S. GATSON, Clerk of the Circuit Court of Kanawha County; The Board of Review of the West Virginia Department of Employment Security; and Contractors Supply, Inc. Respondents Below, Respondents.

No. 22912.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 12, 1995.

Decided Dec. 8, 1995.

Syllabus by the Court

1. "W.Va.Code, 21A-6-3(4) (1984), disqualifies employees from receiving unemployment compensation benefits if they are involved in 'a work stoppage incident to a labor dispute,' unless they can satisfy one of three statutory exceptions: (1) the employees are 'required to accept wages, hours or conditions of employment substantially less favorable than those prevailing for similar work in the locality'; (2) the employees 'are denied the right of collective bargaining under generally prevailing conditions'; or (3) 'an employer shuts down his plant or operation or dismisses his employees in order to force wage reduction, changes in hours or working conditions.' " Syl. pt. 1, Roberts v. Gatson, 182 W.Va. 764, 392 S.E.2d 204 (1990).

2. "Unemployment compensation statutes, being remedial in nature, should be liberally construed to achieve the benign purposes intended to the full extent thereof." Syllabus, Mercer County Bd. of Education v. Gatson, 186 W.Va. 251, 412 S.E.2d 249 (1991).

3. "The findings of fact of the Board of Review of the West Virginia Department of Employment Security are entitled to substantial deference unless a reviewing court believes the findings are clearly wrong. If the question on review is one purely of law, no deference is given and the standard of judicial review by the court is de novo." Syl. pt. 3, Adkins v. Gatson, 192 W.Va. 561, 453 S.E.2d 395 (1994).

4. W.Va.Code, 21A-6-3(4) [1990] allows the payment of unemployment benefits when "an employer shuts down his plant or operation or dismisses his employees in order to force wage reduction, changes in hours or working conditions." In order to qualify for benefits under the employer shutdown exception of W.Va.Code, 21A-6-3(4) [1990], an employee must show, first, that the employer acted to shut down the work site, and second, that the shutdown was "to force" a change detrimental to the employee.

5. "W.Va.Code, 21A-6-3(4) was not intended to disqualify workers who were locked out during contract negotiations if they are willing to work on a day-to-day basis." Syl. pt. 2, Lee-Norse Co. v. Rutledge, 170 W.Va. 162, 291 S.E.2d 477 (1982).

6. The determination of when an employer is trying "to force wage reduction" or other changes in benefits under W.Va.Code, 21-6-3(4) [1990], is made by comparing the employer's proposed change(s) to the status quo as shown by the expiring contract. If the employer's proposed change(s) would result in detrimental terms for the employee, then the employer is considered to be seeking "to force wage reduction, changes in hours or working conditions."

7. Under W.Va.Code, 21A-6-3(4) [1990], employees are entitled to unemployment benefits when an employer rejects continuing the expiring contract for a reasonable time "to force wage reduction, change in hours or working conditions."

Timothy F. Cogan, Cassidy, Myers, Cogan and Voegelin, LC, Wheeling, for Petitioners.

James F. Companion, Yolanda G. Lambert, Schrader, Byrd, Companion & Gurley, Wheeling, for Contractors Supply, Inc.

McHUGH, Chief Justice:

This unemployment security appeal concerns the denial of benefits to certain employees ¹ of Contractors Supply, Inc. ("Contractors") based on a finding that "a stoppage of work ... exists because of a labor dispute" and that none of the statutory exceptions applies. ² The employees maintain that they are entitled to benefits because Contractors locked them out by refusing to operate under the expiring contract in an attempt to force a wage reduction. After the Circuit Court of Kanawha County upheld the decision of the Board of Review of the West Virginia Department of Employment Security denying benefits, the employees appealed to this Court. Because W.Va.Code, 21A-6-3(4) [1990] permits the award of unemployment benefits when an "employer shuts down his plant or operation or dismisses his employees in order to force [a] wage reduction," we find the employees are entitled to benefits and reverse the decision of the circuit court.

I. Facts and Background

The employees are represented by United Brotherhood of Teamsters, Local 697, and between May 1, 1989 and March 31, 1992, a collective bargaining agreement specified the terms and conditions of their employment. Before the expiration of the 1989-92 agreement, attempts by the employees and Contractors to reach an agreement were unsuccessful, and on April 1, 1992, work at Contractors' ready-mix concrete unit stopped. Both parties maintain that the other is responsible for the stoppage. The employees, emphasizing their willingness to continue working under the expiring agreement, characterize the stoppage as a lockout. The employer, claiming that wage reductions are necessary because the employees' union granted wage concessions to a competitor, characterizes the stoppage as a strike.

Upon evidence presented at two hearings, the Board of Review found Contractors' wage package was "substantially equal to or better than the wages and fringe benefits which were paid by the employer's primary competitors, some of which also had collective bargaining agreements with the union." Although one local company's employees did receive wages and fringe benefits substantially higher than those offered by Contractors, the Board weighed that evidence against the evidence that the employees of other local employers "earn no more than or less than the claimants here." The Board also found that the employees presented no evidence in support of their claim that they were "denied the right of collective bargaining under generally prevailing conditions." Based on these determinations, the Board denied the employees benefits.

Although the petitioners, who were not represented by counsel until their appeal to the circuit court, did not specifically argue before the Board that a employer shutdown caused the work stoppage, they presented evidence showing their offer to continue working under the expiring contract, the employer's refusal to allow work to continue under the expiring contract and the employer's counter-offer of reduced wages. Contractors agrees and stated in its brief that "Contractors does not dispute that its employees were willing to work under the old contract until a new agreement was reached, but the old contract was the problem." During the hearings before the Board of Review, the employer agreed that in the company's offer, "the hourly wage was less" than the expiring contract. However, the Board of Review concluded that no evidence was presented on the employer shutdown issue, and the Board's denial of benefits was upheld by the circuit court, which found the work stoppage to be a strike and did not specifically address the employer shutdown issue.

II. Discussion

The parties agree that W.Va.Code, 21A-6-3(4) [1990] controls the determination of unemployment benefits in this case. W.Va.Code, 21A-6-3(4) [1990] states, in pertinent part:

For a week in which his total or partial unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment or other premises at which he was last employed, unless the commissioner is satisfied that he (1) was not participating, financing, or directly interested in such dispute, and (2) did not belong to a grade or class of workers who were participating, financing or directly interested in the labor dispute which resulted in the stoppage of work. No disqualification under this subdivision shall be imposed if the employees are required to accept wages, hours or conditions of employment substantially less favorable than those prevailing for similar work in the locality, or if employees are denied the right of collective bargaining under generally prevailing conditions, or if any employer shuts down his plant or operation or dismisses his employees in order to force wage reduction, changes in hours or working conditions.

Roberts v. Gatson, 182 W.Va. 764, 392 S.E.2d 204 (1990), our most recent examination of W.Va.Code, 21A-6-3(4), began by examining disqualification provisions and the three exceptions thereto, which provide for the payment of benefits in certain circumstances. Syl. pt. 1 of Roberts v. Gatson states:

W.Va.Code, 21A-6-3(4) (1984), disqualifies employees from receiving unemployment compensation benefits if they are involved in 'a work stoppage incident to a labor dispute,' unless they can satisfy one of three statutory exceptions: (1) the employees are 'required to accept wages, hours or conditions of employment substantially less favorable than those prevailing for similar work in the locality'; (2) the employees 'are denied the right of collective bargaining under generally prevailing conditions'; or (3) 'an employer shuts down his plant or operation or dismisses his employees in order to force wage reduction, changes in hours or working conditions.'

For ease of reference in this case, we will refer to the first exception noted in W.Va Code, 21A-6-3(4) [1990] as the "less than prevailing wages" exception; the second, as the "denial of the right of collective bargaining" exception; and, the third, as the "employer shutdown" exception. ³ The focus in Roberts v. Gatson was on the less than prevailing wages and the denial of the right of collective bargaining exceptions. Except for noting the statute provided a third exception, namely the employer shutdown exception, Roberts v. Gatson did not deal with the...