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09/16/94 EX PARTE DOUGLAS WILLIAMS AND FRED SAVELL

September 16, 1994

EX PARTE DOUGLAS WILLIAMS AND FRED SAVELL, JR., ET AL. (RE: DOUGLAS WILLIAMS, ET AL.
v.
TELEDYNE CONTINENTAL MOTORS AIRCRAFT PRODUCTS, A DIVISION OF TELEDYNE INDUSTRIES, INC., AND STATE DEPARTMENT OF INDUSTRIAL RELATIONS AND FRED SAVELL, JR., ET AL. V. TELEDYNE CONTINENTAL MOTORS AIRCRAFT PRODUCTS, A DIVISION OF TELEDYNE INDUSTRIES, INC., AND STATE DEPARTMENT OF INDUSTRIAL RELATIONS)



PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS. (Mobile Circuit Court, CV-91-1360, Baldwin Circuit Court, CV-91-305, Court of Civil Appeals, AV92000129 and AV92000133). Robert L. Byrd, Jr. (Mobile Circuit Court) and James H. Reid (Baldwin Circuit Court).

Released for Publication December 7, 1994.

Maddox, Shores, Houston, Steagall, and Ingram, JJ., concur.

The opinion of the court was delivered by: Maddox

MADDOX, JUSTICE.

This certiorari review involves two class actions for unemployment compensation. The classes consist of employees of Teledyne Continental Motors Aircraft Products (TCM), a division of Teledyne Industries, Inc. Douglas Williams and Fred Savell are the class representatives. The issue presented is whether the Court of Civil Appeals correctly held that the hiring of permanent employees to replace striking workers does not end the statutory disqualifi-cation for unemployment benefits found at § 25-4-78(1), Ala. Code 1975, when the unemployment is directly due to a labor dispute.

The facts are undisputed. The members of the class were actively employed at TCM and were covered by a collective bargaining agreement between TCM and United Auto Workers Union (UAW); that agreement expired in June 1989. TCM and UAW engaged in negotiations for a new contract, but reached no agreement. On February 15, 1990, UAW began a strike, and all of the class members participated in the strike. In early April 1990, TCM notified UAW that permanent replacements would be hired to replace the striking workers. When TCM hired the permanent replacements in April and May, the class members filed claims for unemployment compensation. The claims were denied.

The strike and picket lines continued until November 30, 1990, when UAW made an unconditional offer to return to work. The class members returned to their former jobs on February 4, 1991. They applied for and received unemployment compensation benefits from November 30, 1990, until February 4, 1991. The Alabama Department of Industrial Relations, Unemployment Compensation Division, denied their applications for unemployment compensation from April 1990 through November 29, 1990, on the ground that they were disqualified from receiving benefits under § 25-4-78(1), Ala. Code 1975. The class members appealed the denial of benefits, and an appeals referee upheld the disqualification. The class members then appealed to the Department of Industrial Relations Board of Appeals, which also upheld the disqualification. The Court of Civil Appeals affirmed the Board's decision, holding that the class members were disqualified for unemployment benefits between April and November 1990 under § 25-4-78(1), Ala. Code 1975. *fn1

The class members contend that they were improperly denied unemployment compensation benefits from April 1990 through November 1990. They claim that the statutory disqualification for unemployment compensation for unemployment arising out of a labor dispute ended when TCM permanently replaced the striking employees. TCM argues that the Court of Civil Appeals correctly denied the class plaintiffs unemployment benefits. TCM asserts that the class members were actively engaged in a labor dispute as defined by § 25-4-78(1) until November 30, 1990, that the employees received strike benefits during their strike, and that the class members applied for and received unemployment compensation after ending their strike on November 30 and received compensation until TCM reinstated them on February 4, 1991. Thus, TCM argues, the class members are attempting to obtain unemployment benefits for a period while they were on strike.

The issue in this case, whether the hiring of permanent replacement employees for striking workers ends the statutory disqualification for unemployment benefits where the unemployment is directly due to a labor dispute, has never been squarely addressed by the courts of this state. Although there are no Alabama cases holding precisely that Alabama's labor dispute disqualification statute disqualifies workers who have been replaced by replacement workers and are continuing a strike against their employer, at least one case impliedly holds that the workers are still disqualified while the strike is continuing. In T. R. Miller Mill Co. v. Johns, 37 Ala. App. 477, 479-80, 75 So. 2d 670, 671, cert. denied, 261 Ala. 615, 75 So. 2d 675 (1954), employees of the mill went on strike on March 18, 1952, and continued on strike until June 2, 1952, when they tried to return to work but were advised that their positions had been filled by replacements. The mill operated with replacements during the entire strike. The Court of Appeals upheld the trial court's order denying unemployment benefits from March 18 through June 2 but not denying them after June 2, when the workers tried to return work. The result reached by the Court of Civil Appeals in the instant case is consistent with that reached in the T.R. Miller Mill Co. case.

The interpretations given other states' labor dispute disqualification statutes by their respective courts can be divided into two general categories: interpretations of "stoppage of work" statutes and interpretations of "labor dispute in active progress" statutes. In states with "stoppage of work" statutes, the mere hiring of permanent replacement workers lifts the labor dispute disqualification. States with such statutes include Michigan, Indiana, Ohio, Colorado, and California. In states with "labor dispute in active progress" statutes, a striking employee who has been replaced usually must show that he has abandoned the strike and has unconditionally offered to return to work before the labor dispute disqualification can be lifted. States with such statutes include Wisconsin, Minnesota, Tennessee, Oregon, and Arizona. The Court of Civil Appeals held that Alabama's statute soundly falls within the "labor dispute in active progress" category. We agree.

We recognize that there is usually no special language in a state's labor dispute disqualification statute that clearly places it in one of the two categories. States with substantially the same language in their statutes may give their statutes entirely different interpretations. For example, Tennessee's statute has essentially the same language as Indiana's, yet Tennessee's is interpreted as a "labor dispute in active progress" statute while Indiana's is interpreted as a "stoppage of work" statute. See Bailey v. Tennessee Dep't of Employment Sec., 212 Tenn. 422, 370 S.W.2d 492, 496 (Tenn. 1963) (holding that notices of discharge did not terminate the labor dispute disqualification); Arvin N. Am. Automotive v. Review Bd. of the Indiana Dep't of Employment & Training Services, 598 N.E.2d 532, 537 (Ind. Ct. App. 1992) (holding that an employer's act of permanently replacing striking workers severs the employer-employee relationship and thereby removes the statutory labor dispute disqualification). Compare Tenn. Code Ann. § 50-7-303(a)(4) (1993 Supp.) (declaring a person ineligible for unemployment benefits "for any week with respect to which the commissioner finds that the claimant's total or partial unemployment is due to a labor dispute, other than a lockout, which is in active progress at the factory, establishment or other premises at which the claimant is or was last employed"), with, Ind. Code Ann. § 22-4-15-3 (Burns 1992) ("An individual shall be ineligible for waiting period or benefit rights for any week with respect to which his total or partial or part-total unemployment is due to a labor dispute at the factory, establishment, or other premises at which he was last employed."). The courts of other states have not taken the phrase "labor dispute in active progress" or similar language in the statute as dispositive in determining whether their statutes are "labor dispute in active progress" statutes or "stoppage of work" statutes. See Mich. Comp. Laws § 421.29(8) (1979) ("An individual shall be disqualified for benefits for a week in which the individual's total or partial unemployment is due to a labor dispute in active progress . . . ."); Knight-Morley Corp. v. Michigan Unemployment Sec. Comm'n, 352 Mich. 331, 89 N.W.2d 541 (1958) (applying a "stoppage of work" interpretation to the labor dispute disqualification statute). This does not mean, however, that we should disregard the language of the statute.

The Alabama labor dispute disqualification statute states that a labor dispute may exist "regardless of whether the disputants stand in the proximate relation of employer and employee." § 25-4-78(1), Ala. Code 1975. The states that apply a "stoppage of work" interpretation to their statutes reason that the employer's replacement of striking workers terminates their status as employees and that an employer-employee relationship is an essential element of a labor dispute. See Arvin N. Am. Automotive v. Review Bd. of the Indiana Dep't of Employment & Training Services, 598 N.E.2d 532, 537 (Ind. Ct. App. 1992) ("An employer's act of permanently replacing striking workers severs the employer-employee relationship thereby removing the statutory labor dispute disqualification."); Federico v. Brannan Sand & Gravel Co., 788 P.2d 1268, 1273 (Colo. 1990) ("We conclude that an employee involved in a labor dispute is entitled to unemployment compensation benefits when the employer-employee relation has been terminated with respect to that employee. The employer-employee relationship can be terminated by the permanent replacement of the employee."); Baugh v. United Telephone Co., 54 Ohio St.2d 419, 377 N.E.2d 766, 769 (1978) ("Thus, pivotal to the resolution of the instant cause is a determination of whether the employer terminated the appellants' status as employees."); Ruberoid Co. v. California Unemployment Ins. Appeals Bd., 59 Cal. 2d 73, 27 Cal. Rptr. 878, 378 P.2d 102, 107 (1963) ("By the replacement the employer completely terminated any relationship with the worker."); Thomas J. Goger, Annotation, Comment Note.--General Principles Pertaining to Statutory Disqualification for Unemployment Compensation Benefits Because of Strike or Labor Dispute, 63 A.L.R.3d 88, 113-15 (1975) (discussing cases holding the view that an employment relationship is essential to disqualification).

Those states that apply a "labor dispute in active progress" interpretation do not hold that replacement of striking workers terminates their status as employees or that an employee-employer relationship is essential to a labor dispute. See Rice Lake Creamery Co. v. Industrial Comm'n, 15 Wis. 2d 177, 112 N.W.2d 202, 205 (1962) ("We hold that replacing striking employees during the progress of a strike with permanent employees is not in and of itself, as a matter of law, a termination of the employment status or a discharge of the striking employees."); Bailey v. Tennessee Dep't of Employment Sec., 212 Tenn. 422, 370 S.W.2d 492, 494 (Tenn. 1963) ("the relationship of employer-employee is not a prerequisite to the existence of a labor dispute"); Milne Chair Co. v. Hake, 190 Tenn. 395, 230 S.W.2d 393, 395 (Tenn. 1950) ("The Board was of the opinion that a labor dispute could not exist in the absence of an employer-employee relationship. . . . However, the relationship of employer-employee is not a prerequisite to the existence of a labor dispute in the application of our Employment Security Act."); Johnson v. Wilson & Co., 266 Minn. 500, 124 N.W.2d 496, 503 (Minn. 1963) ("If the striking employee does not accept the attempted discharge, the employer's conduct may be insufficient to destroy the status of the worker, in which event the disqualification persists."); Adams v. Employment Division, 78 Ore. App. 570, 717 P.2d 1199, 1201 (1986) ("permanent replacement is irrelevant during the active pendency of the labor dispute"); Thomas J. Goger, Annotation, (supra) , 63 A.L.R.3d at 115-17 (discussing cases holding that an employment relationship is not essential to disqualification). The "regardless of whether the disputants stand in the proximate relation of employer and employee" language enacted by Alabama's legislature, § 25-4-78(1), Ala. Code 1975, could have no intent other than to make replacement of striking workers irrelevant to whether a labor dispute is in progress. Thus, this language makes Alabama's labor dispute disqualification statute a "labor dispute in active progress" type of statute.

Minnesota is the only state other than Alabama that includes in its disqualification statute a phrase similar to "regardless of whether the disputants stand in the proximate relation of employer and employee" in its definition of "labor dispute." *fn2 See Minn. Stat. § 268.09 subd. 3(c) (1992) ("For the purpose of this subdivision the term 'labor dispute' shall have the same definition as provided in the Minnesota labor relations act."); Minn. Stat. § 179.01 subd. 7 (1992) ("'Labor dispute' includes any controversy concerning employment, tenure or conditions or terms of employment or concerning the association or right of representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms, tenure, or other conditions of employment, regardless of whether or not the relationship of employer and employee exists as to the disputants " (emphasis added).). The Supreme Court of Minnesota cited this definition when it interpreted Minnesota's labor dispute disqualification statute to be a "labor dispute in active progress" type of statute. Johnson v. Wilson & Co., 266 Minn. 500, 124 N.W.2d 496, 502-03 (Minn. 1963). We are persuaded that Alabama's statute falls in the "labor dispute in active progress" category. We are so persuaded because of 1) the reasoning of the courts of "labor dispute in ...


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