United Steelworkers of America AFL-CIO-CLC v. Johnson

• Decision Date: 28 October 1986
• Docket Number: AFL-CIO-CLC,A,No. 7044,No. 85-5101,7044,85-5101
• Citation: 799 F.2d 402
• Parties: 123 L.R.R.M. (BNA) 2065, 55 USLW 2145, 105 Lab.Cas. P 12,036, Unempl.Ins.Rep. CCH 21,799 The UNITED STEELWORKERS OF AMERICA, and United Steelworkers of America, Local Unionppellees, v. Julie M. JOHNSON, in her capacity as Secretary of the South Dakota Department of Labor, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 402

799 F.2d 402

123 L.R.R.M. (BNA) 2065, 55 USLW 2145,

105 Lab.Cas. P 12,036,

Unempl.Ins.Rep. CCH 21,799

The UNITED STEELWORKERS OF AMERICA AFL-CIO-CLC, and United Steelworkers of America, Local Union No. 7044, Appellees, v. Julie M. JOHNSON, in her capacity as Secretary of the South Dakota Department of Labor, Appellant.

No. 85-5101.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 12, 1985.

Decided Aug. 22, 1986.

Rehearing Granted Oct. 28, 1986. ^*

Wayne F. Gilbert, Rapid City, S.D., for appellant.

John G. Engberg, Minneapolis, Minn., for appellees.

Before LAY, Chief Judge, FAGG, Circuit Judge, and ROSENBAUM ^*, District Judge.

ROSENBAUM, District Judge.

In this case we are called upon to consider the application of certain portions of the State of South Dakota's unemployment compensation scheme, specifically the provisions of S.D. Codified Laws, Section 61-6-19. ¹ By this statute South Dakota denies unemployment compensation benefits to individuals when their unemployment is the result of a labor dispute. The statute then restores these benefits to the out-of-work employee if it is shown to the satisfaction of the South Dakota Department of Labor that the unemployment results from a lockout by the employer. The United States District Court, ² upon consideration of this statute, found Section 61-6-19 to be pre-empted by Section 7 of the National Labor Relations Act ("NLRA"), 29 U.S.C. 157. ³ We affirm.

Facts

This is the second of two cases, dealing with issues of benefit allocation to unemployed workers, arising out of a labor dispute at the Homestake Mining Company of Lead, South Dakota ("Homestake" or "Mine"). ⁴ On June 1, 1982, by vote of a majority of its members, plaintiff United Steelworkers of America ("Steelworkers" or "Union") struck the Homestake Mine. Some of the employees, both union and non-union, attempted to go to work on that day. All those attempting to work were refused entry by Homestake. Management, thus, declared a lockout. The mine remained closed under this union-strike/management-lockout formulation until September 26, 1982, when a new employment contract was accepted.

From June 1 to September 26, 1982, during the period of shutdown, many of Homestake's miners sought unemployment benefits. These benefits were principally of two types: Federal Food Stamp assistance and State unemployment compensation. Each type of benefit gave rise to one of the two lawsuits which grew out of this employment dispute.

1. The food stamp decision

Acting under the guidance of the United States Department of Agriculture's interpretation of 7 U.S.C. 2015(d)(4) and 7 C.F.R. 273.1(b)(1), the South Dakota Department of Social Services provided food stamps to non-union members, determining them to be locked out and therefore eligible. Conversely, union members were denied food stamp benefits.

The plaintiff Union challenged the Department of Social Services' allocation of food stamps to the non-union members and the denial of those stamps to the strikers. This was asserted in an action heard prior to the present case. The District Court, Bogue, J., concluded that the Union lacked standing to assert its claims. It made this finding on the basis of the Union's failure to establish that it, as a party, had suffered an injury in fact. The District Court held that:

[T]he Union failed to establish that it lost a single member, present or prospective, on account of defendants' application of section 2015(d)(4) to the strike at the Mine. * * * Accordingly, the Court finds and concludes that the Union has no standing....

United Steelworkers of America v. Block, 578 F.Supp. 1417, 1421 (D.S.D.1982). The District Court in Block, having disposed of the case, then discussed its views of the Union's constitutional and preemption claims. Id. at 1421-24. Because the case was decided upon the Union's lack of standing, those views remain dicta and cannot be the law of that case, or this.

2. The unemployment compensation case

Upon the initiation of the labor dispute, all of Homestake's employees were denied unemployment compensation, regardless of their union membership. This position changed in August, 1982. At that time, acting under the rubric of Section 61-6-19, the South Dakota Department of Labor awarded unemployment compensation benefits to non-union members. The Department of Labor reached this conclusion by applying Section 61-6-19 to the circumstances of the Homestake strike. On this analysis, the Department director found the non-union members to be locked out and eligible for unemployment compensation. The Department held that the union members, on the other hand, were out of work due to their participation in a labor dispute; they were therefore ineligible under the provisions of Section 61-6-19(3).

The distinction between union and non-union employees meant non-union members were entitled to unemployment benefits of approximately $129 per week. In contrast, union members received no food stamps, but did get union-contributed strike benefits which began at $40 per week and eventually rose to $67 per week.

Steelworkers' challenge to the Department of Labor's allocation of unemployment compensation was properly before the lower court. Unlike the factually-related food stamp case, the Union, here, is able to point to tangible injury in the form of attempts at resignation by its union members in order to establish eligibility for unemployment compensation. ⁵ The members were unable to resign immediately because the Union's by-laws required membership until the month of November in each year. The Union also produced evidence of additional resignations after the conclusion of the strike, motivated by a fear of lost unemployment benefits in the event the membership would strike in the future. Based on this demonstrated connection between the allocation of unemployment benefits and attempted and actual resignations, the trial court made a factual determination that the plaintiffs had standing to raise their claims.

The District Court proceeded to hold that the pattern of benefit allocation followed by the Department of Labor:

create[s] a visible and continuing obstacle to the future exercise of the employee right, guaranteed under 29 U.S.C. [section] 157, to decide whether to belong to a union.... Thus, the South Dakota statute is "inherently destructive" of, and in direct conflict with, the right to unionize under 29 U.S.C. [section] 157.... Accordingly, the court [held] that the South Dakota statute is preempted by 29 U.S.C. [section] 157.

Steelworkers v. Meierhenry, 608 F.Supp. at 208-09. As a consequence, the District Court enjoined the defendant Secretary of Labor from construing Section 61-6-19 so as to allow the payment of unemployment benefits to non-union employees and to deny those same benefits to union employees when each group of workers was idled by the same strike. Id. at 209.

Analysis

This Court affirms the decision of the District Court based upon alternate reasoning. The trial court focused its preemption analysis on a series of cases which dealt with management acts found to be contrary to rights protected by the NLRA. The decisions in NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 87 S.Ct. 1792, 18 L.Ed.2d 1027 (1967), and Inter-Collegiate Press v. NLRB, 486 F.2d 837 (8th Cir.1973), were cited. These decisions analyzed employer conduct by assessing whether these management acts were "inherently destructive" of protected employee rights. Great Dane, 388 U.S. at 34, 87 S.Ct. at 1798; Inter-Collegiate, 486 F.2d at 844-45.

The District Court proceeded from this employer-focused precedent to this present case involving State action by analyzing the United States Supreme Court's decision in Nash v. Florida Industrial Comm., 389 U.S. 235, 88 S.Ct. 362, 19 L.Ed.2d 438 (1967). The Supreme Court in Nash considered the Florida State Industrial Commission's denial of unemployment compensation benefits to an individual solely because she filed an unfair labor practice charge with the NLRB. In finding the Commission's activities to be preempted because they frustrated the NLRA's enforcement, the Supreme Court stated that:

We have no doubt that coercive actions which the [National Labor Relations] Act forbids employers and unions to take against persons making charges are likewise prohibited from being taken by the States.

Nash, 389 U.S. at 239, 88 S.Ct. at 366.

The District Court combined these decisions to reach the conclusion that, under Nash, States are prohibited from doing anything inherently destructive of employee rights. Steelworkers v. Meierhenry, 608 F.Supp. 201, 208-09. Finding the South Dakota unemployment statute, Section 61-6-19, to be inherently destructive of the right to unionize, the District Court held it to be preempted by Section 7. Id.

This Court declines to adopt the District Court's analysis. First, factual differences make the relevance of the Nash holding questionable. The Court in Nash considered actions taken by a State administrative agency against a single individual. This case, in contrast, involves a State's legislatively-enacted distinction between union and non-union employees in the distribution of public support benefits. More importantly, we find the well established body of orthodox preemption analysis to be sufficient for the present task. The multi-step analysis relied upon by the District Court, however valid, is simply unnecessary here.

1. Preemption analysis

The preclusive effect of Congress' enactments was established in 1819, when Chief Justice Marshall declared that "the States have no power ... to retard, impede, burden, or in any manner control, the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the general government." McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 436, 4 L.Ed.2d 579 (1819). The Supreme Court struck down a State law which "frustrates the purpose...