Warner Press, Inc. v. Review Bd. of Indiana Employment Sec. Division

Decision Date29 December 1980
Docket NumberNo. 2-1278A439,2-1278A439
Citation413 N.E.2d 1003
PartiesWARNER PRESS, INC., Appellant, v. REVIEW BOARD OF the INDIANA EMPLOYMENT SECURITY DIVISION and Mark E. Mock et al., Appellees.
CourtIndiana Appellate Court

Jack H. Rogers, John T. Neighbours, Roberts, Ryder, Rogers & Neighbours, Indianapolis, for appellant.

Theodore L. Sendak, Atty. Gen., Gordon E. White, Jr., Deputy Atty. Gen., Indianapolis, for Review Board of the Indiana Employment Security Division.

William R. Groth, Fillenwarth & Fillenwarth, Indianapolis, for amicus curiae.

STATON, Judge.

After striking Warner Press, Inc., Mark Mock and Lydia Wilkinson (hereinafter collectively referred to as "the claimants") filed claims for compensation under the Indiana Employment Security Act. 1 The claims were referred to the Review Board which held that the claimants were entitled to receive unemployment benefits. Warner Press appeals. We are called upon to determine: (1) whether there was a "stoppage of work" within the meaning of the Act so as to disqualify the claimants from receiving benefits; (2) the effect of the Review Board's failure to enter a finding concerning the claimants' availability for work; and (3) the extent of the Review Board's authority to award benefits in the light of the federal labor laws.

We affirm in part and remand in part.

I.

"Stoppage of Work"

Warner Press has presented public policy considerations which argue against the awarding of unemployment compensation to strikers. Whatever the merits of that portion of its argument may be, it is one which more properly should be presented to and considered by the elected officials whose function it is to draft or amend the appropriate legislation. Our function is simply to point out which route the legislature has chosen to travel.

The provision of the Act upon which Warner Press predicates its appeal is IC 1971, 22-4-15-3 (Burns Code Ed., Supp.1977), particularly subsection (a) thereof, which reads in pertinent part as follows:

"An individual shall be ineligible for waiting period or benefit rights: for any week with respect to which ... his ... unemployment is due to a stoppage of work which exists because of a labor dispute...."

Warner Press contends that the phrase "stoppage of work" refers to the labors of the individual employees and that, because the claimants stopped working, that section operates to disqualify them from receiving benefits. The claimants contend that "stoppage of work" refers to the employer's operations as a whole. The Review Board applied the claimants' interpretation and, after finding that Warner Press' business "continued as usual and production was not affected" by the strike, concluded that 22-4-15-3 did not disqualify the claimants.

All fifty states have adopted unemployment compensation laws and most of them contain a provision similar to Indiana's denying benefits if the claimant's unemployment is due to a "stoppage of work which exists because of a labor dispute." See Note, Eligibility for Unemployment Benefits of Persons Involuntarily Unemployed Because of Labor Disputes, 49 Columbia L.Rev. 550 (1949). The disqualification language and provision were taken by the various legislatures from a "model" bill prepared by the Committee on Economic Security which, in turn, had borrowed them from the British Unemployment Insurance Acts. Shadur, Unemployment Benefits and the "Labor Dispute" Disqualification, 17 U.Chi.L.Rev. 294 (1950). Prior to the enactment of the statutes in this country, the British courts had interpreted the phrase "stoppage of work" to mean a cessation or substantial curtailment of the employer's business. The overwhelming majority of states, including Indiana, have followed the British lead. Annot., 61 A.L.R.3d 693 (1975).

In Carnegie-Illinois Steel Corp. v. The Review Board, Etc. (1947), 117 Ind.App. 379, 72 N.E.2d 662, the court discussed the "stoppage of work" disqualification provision. The court noted that:

"Stoppage of work has been held to mean since the passage of the Indiana Employment Security Act a curtailment of production affecting unemployment... A stoppage of work commences "at the plant of the employer when a definite check in production operations occurs...."

A similar interpretation was approved in Jackson v. Review Board of Indiana Employ. Sec. Div. (1966), 138 Ind.App. 528, 215 N.E.2d 355.

The interpretation adopted in Carnegie-Illinois and Jackson is consistent with the rule of construction that the provisions of the Act are to be liberally construed in favor of the employee. Bowen v. Review Bd. of Ind. Emp. Sec. Div. (1977), Ind.App., 362 N.E.2d 1178. Furthermore, if, as Warner Press contends, the phrase "stoppage of work" referred to the employee's labors, it would be redundant in the sentence "his ... unemployment is due to a stoppage of work which exists because of a labor dispute." Such a construction would thus violate the rule that no part of a statute should be treated as surplusage if it can be given a meaning reasonably consistent with the other parts of the statute. Combs v. Cook (1958), 238 Ind. 392, 151 N.E.2d 144. Additionally, an application of the interpretation urged by Warner Press would disqualify from the collection of benefits every employee who went on strike. That result would be inconsistent with an application of IC 1971, 22-4-15-3(e) (Burns Code Ed., Supp.1977), which extends eligibility to workers who were originally laid off but who have refused a recall to work because of a labor dispute. Bowen, supra.

The Review Board applied the correct interpretation of the phrase "stoppage of work."

II. Availability for Work

As a prerequisite for the receipt of benefits, a claimant must be available for work. IC 1971, 22-4-14-3 (Burns Code Ed., Supp.1977). Whether a claimant has met the availability requirement is a question of fact to be determined by the Review Board. Because the Review Board has a duty to make those findings which are essential to support its award, 2 it is incumbent upon the Board to make a finding concerning a claimant's availability for work. Here, however, the Review Board failed to make such a finding. The case is therefore remanded to the Review Board for a determination as to whether the claimants were available for work.

III. Pre-emption

Finally, Warner Press contends that the Review Board's authority to award unemployment compensation to strikers has been pre-empted by federal labor laws. That contention is predicated on the proposition that such payments significantly interfere with the collective bargaining procedures protected by the National Labor Relations Act. That argument was recently rejected by the United States Supreme Court in New York Telephone Co. v. New York Department of Labor (1979), 440 U.S. 519, 99 S.Ct. 1328, 59 L.Ed.2d 553 wherein the court held that payments to striking workers neither impermissibly infringe upon activities that are subject to regulation by the National Labor Relations Board nor involve any attempt by the state to regulate private conduct in the labor-management field.

The case is remanded to the Review Board for a determination of the claimants' availability for work; in all other respects the judgment of the Review Board is affirmed.

HOFFMAN, J., concurs with opinion.

GARRARD, P. J., dissents with opinion.

HOFFMAN, Judge, concurring.

I concur in the result reached by the majority in Issue I, concerning the labor dispute section of the Act, IC 1971, 22-4-15-3(a) (1979 Burns Supp.). I would, however, premise the conclusion that the work stoppage section is inapplicable to the facts at bar upon the existing precedent of Jackson et al. v. Rev. Bd., etc. (1966), 138 Ind.App. 528, 215 N.E.2d 355. Jackson involved a factual situation closely parallel to the instant case. Within that context the court sought to carry forth the purpose of the Employment Security Act by ruling that the statutory disallowance of benefits to claimants resulting from "stoppage of work which exists because of a labor dispute" must be interpreted to mean a cessation of the employer's business, rather than the curtailment of an individual employee's labors. The Jackson court found that because the evidence failed to disclose any work stoppage or any interruption of output, the section would not operate to disqualify the claimants for benefits.

Further, in Jackson it was determined that where permanent replacements had been hired to supplant strikers the employment relationship would be sufficiently severed so as to render this section inapplicable. Such an interpretation of the statute appears to carry out the design of the Legislature in providing for unemployment benefits, and I would therefore reaffirm the precept of Jackson, supra.

GARRARD, Presiding Judge, dissenting.

The facts in this case are undisputed and simply stated. The difficulty arises in the proper application of the Employment Security Act (the Act) in view of the expressed dual intent of the legislature in providing unemployment compensation benefits. The legislative purpose is declared "... to provide for payment of benefits to persons unemployed through no fault of their own ...." 1 IC 22-4-1-1.

A representation election was conducted at the employer's plant at Anderson, Indiana and a union was certified as collective bargaining agent. 2 Collective bargaining occurred during 1976 but no contract was agreed upon. On May 2, 1977, the union called a strike and some 60 of the employer's approximately 240 employees left work. The strike terminated October 24, 1977.

During the strike the employer continued operating. It quickly replaced the striking employees. At the hearing an employer representative testified that there was virtually no interruption of production occasioned by the strike.

Both claimants participated in the strike. 3 Their claims for benefits were for a period prior to the termination of the strike. However, neither had been...

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