Teichler v. Curtiss-Wright Corp.

CourtUnited States State Supreme Court (New Jersey)
Citation133 A.2d 320,24 N.J. 585
Docket NumberNo. A--121,CURTISS-WRIGHT,A--121
PartiesAlice J. TEICHLER et al., and Board of Review Division of Employment Security, New Jersey Department of Labor and Industry, Respondents-Appellants, v.CORPORATION, Appellant-Respondent.
Decision Date24 June 1957

Clarence F. McGovern, Trenton, for appellant Board of Review, Division of Employment Security.

Sidney Reitman, Newark, for appellants Haussman, Baig and Cocco (Kapelsohn, Lerner, Leuchter & Reitman, Newark, attorneys).

Robert P. Knapp, Jr., New York City, for respondent Curtiss-Wright Corp. (Smith, James & Mathias, Jersey City, attorneys; Allen C. Mathias, Jersey City, Breed, Abbott & Morgan, New York City, of counsel).

The opinion of the court was delivered by


The Appellate Division reversed decisions of the Board of Review which found generally that the claimants were eligible for unemployment benefits during a vacation shutdown of the Curtiss-Wright Corporation's plant. We granted certification under R.R. 1:10--2.

During the summer of 1955 the Curtiss-Wright plant had collective bargaining agreements with Local 669 representing production and maintenance employees and Local 300 representing office and clerical employees. The agreements provided that employees with six months' service or more would receive paid vacations; that insofar as possible, vacations would be granted during the summer months; that the employer would endeavor to give the employees a month's advance notice of the period or periods selected for vacations; and that 'the final right to the allotment of vacation and the giving of one month advance notice is reserved to the Employer.' The agreements contained no provisions for plant shutdowns. In 1950 and 1951 there were no plant shutdowns and vacations were allotted on a staggered basis throughout the summer months. However, in 1952 and in the ensuing years the company followed the practice of shutting down for two weeks during which those entitled to vacations with pay received them and those not entitled to vacations with pay were, in effect, temporarily laid off without remuneration. Mr. Froelich, assistant to the vice-president in charge of industrial relations at Curtiss-Wright, testified that the company had found through experience that staggered vacations involved a 'greater hindrance to production' than did a plant shutdown. Mr. Froelich also testified that 'around about February' 1955 the company's administrative committee met and decided upon 'a two week plant shutdown for vacation purposes'; it fixed the shutdown period as July 2o to August 7 and so advised the appropriate personnel throughout the plant.

In the instant matter the claimants, 17 in all, were not members of unions having collective bargaining agreements with Curtiss-Wright. Ten were not eligible for union membership and were not covered by any bargaining unit; six were eligible for union membership but had not become members; and one was a member of an independent union which had no contract with the employer. They were relatively recent employees who did not qualify for any vacation with pay (except three who did receive a week's pay and were held eligible by the Board during the second week for which they received no pay). The Board found generally that the claimants were 'ready and willing to work and did not want a vacation' but were unable to obtain work with their employer because of the shutdown. It also found that when the claimants accepted employment with Curtiss-Wright they 'knew in advance there would be a shut-down' but concluded that they were nevertheless 'not ineligible for benefits from July 25, through August 7, 1955, because of the shut-down.' The Appellate Division disagreed with the Board's conclusion; it found that the employees' advance knowledge 'that there would be a vacation shut-down, during which time they would not be paid' was the 'crucial point' and that they were ineligible for benefits under Glover v. Simmons Co., 17 N.J. 313, 111 A.2d 404 (1955). In Glover a majority of the court found (with three Justices dissenting) that an employee who was without work or pay for two weeks because of a plant shutdown for vacation was not eligible for unemployment benefits; the employee there involved was a member of the labor union which had entered into a collective bargaining agreement providing for vacations during the first two weeks of July, thereby evidently contemplating a plant shutdown. After Glover was decided the Legislature enacted L.1956, c. 65, which amended the statutory definition of 'unemployed' to include expressly the instance where the individual employee is on vacation without pay, provided such vacation is not the result of the 'individual's voluntary action.' R.S. 43:21--19, N.J.S.A. In O'Rourke v. Board of Review, 24 N.J. 607, 133 A.2d 333 (1957), we have set forth the reasons underlying our view that L.1956, c. 65, was intended to and did express legislative disapproval and rejection of the statutory interpretation in Glover; however, the case now before us arose before the amendment took effect and is not governed by it.

Many courts in other states have been called upon to determine whether an employee who is not entitled to a vacation with pay and who is ready, willing and able to work but is unable to do so because of a vacation shutdown at his employer's plant, is entitled to benefits under the state's unemployment compensation law. Some of the decisions have been adverse to the employee's claim for benefits. See e.g., Moen v. Director of Division of Employment Security, 324 Mass. 246, 85 N.E.2d 779, 8 A.L.R.2d 429 (1949); Mattey v. Unemployment Compensation Board of Review, 164 Pa.Super. 36, 63 A.2d 429 (1949); Jackson v. Minneapolis-Honeywell Regulator Co., 234 Minn. 52, 47 N.W.2d 449 (1951); I.M. Dach Underwear Co. v. Michigan Employ. Sec. Comm., 347 Mich. 465, 80 N.W.2d 193 (1956). Other decisions have favored the employee's claim. See e.g., Schettino v. Administrator, Unemployment Compensation Act, 138 Conn. 253, 83 A.2d 217 (1951); American Bridge Co. v. Review Board of Indiana Employment Security Division, 121 Ind.App. 576, 98 N.E.2d 193 (1951); Golubski v. Unemployment Compensation Board of Review, 171 Pa.Super. 634, 91 A.2d 315, 30 A.L.R.2d 362 (1952); Adams v. Review Board of Indiana, Ind.App., 139 N.E.2d 577 (1957). Distinctions may be drawn between the seemingly conflicting lines of decisions on the basis of particular variations in statutory provisions and collective bargaining terms; the editor of the note in 30 A.L.R.2d 366, 367 (1953) has summarized them with these comments:

'Another situation considered in this annotation arises where there is a general shutdown so that all eligible employees may take their vacations simultaneously. Where such a shutdown occurs, there usually are some employees who, because of the shortness of their service, are not eligible for vacation pay. The question thus arises whether employees in this category are entitled to unemployment compensation for the period covered by the shutdown.

'On this question the courts have been divided, some by a process of legalistic hairsplitting concluding that such workers are voluntarily unemployed and therefore not eligible for unemployment compensation, and others taking the more realistic view that such employees are out of work through no fault of their own and therefore are entitled to benefits.'

In Schettino v. Administrator, Unemployment Compensation Act, supra, the Connecticut Supreme Court of Errors sustained the plaintiff employee's claim for unemployment benefits during a vacation shutdown. The employee was entitled to vacation pay for the first week of the shutdown but not for the second week. Justice Baldwin pointed out that the purpose of the statute was to 'provide some income for the worker earning nothing because he is out of work through no fault or act of his own'; that although the plaintiff was on vacation during the first week he was 'unemployed' during the second week; and that his unemployment was not 'voluntary and self-imposed,' though he was a member of the union which had entered into a collective bargaining contract giving the employer 'the right to determine the vacation period and to grant certain specific vacation privileges.' (138 Conn. 253, 83 A.2d 219.) He distinguished cases such as Moen v. Director of Division of Employment Security, supra; Jackson v. Minneapolis-Honeywell Regulator Co., supra, and Mattey v. Unemployment Compensation Board of Review, supra, as having arisen under statutes which disqualified employees who 'voluntarily' left their employment, whereas the Connecticut disqualification was confined to employees who voluntarily left their employment 'without sufficient cause' relating to their employment; and he pointed to the fact that the ruling in Moen v. Director of Division of Employment Security, supra, was quickly superseded by amendatory legislation. He voiced full approval of American Bridge Co. v. Review Board of Indiana Employment Security Division, supra (121 Ind.App. 576, 98 N.E.2d 194), where the Appellate Court of Indiana sustained the plaintiff employee's claim for benefits during a two week shutdown 'for the purpose of taking inventory and granting vacations to those who were eligible.' There the plaintiff did not have sufficient seniority to be eligible for vacation with pay and during the shutdown he received no pay and was unable to obtain work, though he was ready, willing and able to work. One of the contentions advanced by the employer was that the statute was not intended to apply to vacation without pay periods; in response, Presiding Judge Bowen had this to say:

'Appellant advances the further argument that since the express purpose of the Employment Security Act is to avoid the serious menace of economic insecurity, that a vacation without pay is not economic...

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