Warblow v. Kroger Co.

• Decision Date: 09 March 1987
• Docket Number: Docket No. 90455
• Citation: 401 N.W.2d 361,156 Mich.App. 316
• Parties: Jeffrey J. WARBLOW, Plaintiff-Appellant, v. The KROGER COMPANY and Michigan Employment Security Commission, Defendants-Appellees. 156 Mich.App. 316, 401 N.W.2d 361
• Court: Court of Appeal of Michigan — District of US

Page 361

401 N.W.2d 361

Jeffrey J. WARBLOW, Plaintiff-Appellant, v. The KROGER COMPANY and Michigan Employment Security Commission, Defendants-Appellees.

Docket No. 90455.

156 Mich.App. 316, 401 N.W.2d 361

Court of Appeals of Michigan.

Submitted Oct. 16, 1986.

Decided Nov. 17, 1986.

Released for Publication March 9, 1987.

[156 MICHAPP 317] Richard W. McHugh, Detroit, for plaintiff-appellant.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen. and Patricia L. Sherrod, Asst. Atty. Gen., Detroit, for the Mich. Employment Sec. Com'n.

Before GRIBBS, P.J., and HOOD and FERGUSON, ^* JJ.

PER CURIAM.

Plaintiff appeals as of right from a circuit court opinion and order which affirmed a decision of the Michigan Employment Security Commission's (MESC) Board of Review, denying plaintiff's application for unemployment benefits following termination of his employment as a night stock clerk with The Kroger Company. Plaintiff contends that the lower court erred as a matter of law in affirming his disqualification from receiving unemployment benefits after he quit his job because his labor union agreed to wage concessions. We affirm the orders of the circuit court and the MESC Board of Review.

Plaintiff worked at Kroger for approximately nine years until April, 1984, when he took a medical leave of absence. Plaintiff was a member of the United Food and Commercial Workers Union, Local 951. While he was on medical leave, the union negotiated a new contract with the employer, agreeing to various concessions including a reduction in wages. On September 10, 1984, when [156 MICHAPP 318] plaintiff was certified as being able to return to work, he notified his employer that, because of the contract concessions, he was quitting. On his application for unemployment benefits, he listed both the wage concessions and the fact that he was "tired of night shift work" as reasons for leaving the job.

MESC administratively held that plaintiff was disqualified from receiving benefits because he left his job voluntarily without good cause attributable to the employer. A referee affirmed the decision holding that, as a member of the union, plaintiff was bound by the labor agreement reached by a majority of its members. The Board of Review and the circuit court affirmed.

The circuit court's standard of review is set forth in M.C.L. Sec. 421.38(1); M.S.A. Sec. 17.540(1):

"The circuit court ... may review questions of fact and law on the record made before the referee and the board of review involved in a final order or decision of the board, and may make further orders in respect thereto as justice may require, but the court may reverse an order or decision only if it finds that the order or decision is contrary to law or is not supported by competent, material, and substantial evidence on the whole record."

It is the function of this Court to ascertain whether there exists a rational basis to support the conclusion reached by the board. Salenius v. Employment Security Comm., 33 Mich.App. 228, 189 N.W.2d 764 (1971).

M.C.L. Sec. 421.29(1)(a); M.S.A. Sec. 17.531(1)(a) provides in relevant part:

"An individual shall be disqualified for benefits in the following cases in which the individual:

[156 MICHAPP 319] "(a) Left work voluntarily without good cause attributable to the employer or employing unit."

Plaintiff in this case contends that, where the employer imposed a reduction in his wages, the employee should not be disqualified under this provision. Plaintiff correctly notes that, where the employer acts unilaterally in imposing a substantial pay cut on an employee, the employee may be found to have left work with "good cause attributable to the employer" and thus may be eligible for benefits. See Anno: Unemployment compensation: eligibility as affected by claimant's refusal to work at reduced compensation, 95 A.L.R.3d 449. However, the issue in the instant case is more difficult. Since the employer and the union agreed to wage reductions, the question presented is whether the plaintiff is bound by the action taken by his union.

The MESC referee in this case relied upon Applegate v. Palladium Publishing Co., 95 Mich.App. 299, 290 N.W.2d 128 (1980), lv. den. 409 Mich. 904 (1980), in support of his decision to disqualify plaintiff under Sec. 29(1)(a) of the act. In Applegate, this Court held that, because a mandatory retirement provision was part of the claimant's union contract, the retiring claimant had left work voluntarily even though he personally wanted to continue working and was forced out by the provision. This Court considered the relationship between the claimant and his union to be one of agency and, because the law gives the agent (the union) the right to act for its principal (the claimant), treated the retirement provision of the union contract as the "voluntary act" of the claimant. ¹ Relying upon Applegate, the referee in this case added that the majority vote of [156 MICHAPP 320] the union's members to accept the contract with its wage concessions bound the minority of disagreeing members of the union and precluded the instant plaintiff's claim for benefits.

Applegate is instructive but distinguishable from the facts of the instant case. In Applegate, the retiring claimant had no choice and was forced to retire. On the other hand, it is clear that in the case at bar the provisions of the labor contract between plaintiff's union and the employer did not force plaintiff to quit his job. While the issue is one of first impression in Michigan, other jurisdictions have held that a claimant is disqualified from receiving benefits where he chooses to terminate his employment because he is displeased with a contract negotiated on his behalf by his union.

In Stawikowski v. Collins Electric Const. Co., 289 N.W.2d 390 (Minn., 1979), electricians participating in an apprenticeship program signed a formal agreement which bound them to the terms of a collective...