Opinion
No. 73-173 No. 73-211 No. 73-212 No. 73-213 No. 73-214 No. 73-215 No. 73-216
Decided February 13, 1974. Rehearing denied March 5, 1974. Certiorari granted June 3, 1974.
Following strike by carpenters, employers instituted a lockout at all of their construction projects. As a result, a number of employees sought and were awarded unemployment benefits. Employers appealed.
Affirmed
1. UNEMPLOYMENT COMPENSATION — Labor Dispute — Cause — Unemployment — Disqualify Claimant — Eligible — Not Participant — Not Member — Grade or Class — Direct Interest. Under provisions of the Colorado Employment Security Act that disqualify from unemployment benefits a claimant whose unemployment is due to a labor dispute, in order to confine the effect of the disqualification imposed to its intended purpose, such a claimant is eligible for benefits if he can show (1) that he did not participate in the labor dispute, and (2) that he does not belong to a grade or class of persons which has a direct interest in the dispute.
2. Labor Dispute — Claimant — May Obtain Benefits — Determine Application — "Grade or Class" Provision — Consider — Degree of Integration — Community of Interest. Since under the Colorado Employment Security Act an unemployment compensation claimant whose unemployment is due to a labor dispute may obtain benefits if he can show that he did not participate in the dispute and that he did not belong to a "grade or class" of persons which has a direct interest in the dispute, to determine the application of that "grade or class" provision of the statute, two essential guidelines must be considered, namely: (1) the degree of integration of the work performed by the various groups of striking and non-striking employees, and (2) the presence of a community of interest between the striking and non-striking employees.
3. Labor Dispute — Claimants — Non-Striking Employees — Not — Community of Interest — Striking Employees — Not Disqualified — Benefits. Where, in regard to unemployment compensation claims of employees whose unemployment was due to a labor dispute, it was undisputed that the non-striking unions had already arrived at new agreements with the employers involved, and the only relationship between the striking and non-striking employees revealed by the record is general sympathy with the strike activities of the striking union, such a relationship is inherent in all labor relations and is insufficient to establish "a community of interest" that would preclude the award of unemployment benefits to non-striking employees; thus, the findings of the Industrial Commission that neither the claimants nor any member of their "class" would have benefited or been affected by resolution of the labor dispute were findings supported in the record and claimants therefore were not disqualified from receiving benefits.
Review of Orders from the Industrial Commission of the State of Colorado
Kenneth R. Stettner, for petitioners.
John P. Moore, Attorney General, John E. Bush, Deputy Attorney General, Robert L. Harris, Assistant Attorney General, for respondent Industrial Commission of Colorado.
Edward J. Scheunemann, for individual respondents.
This is a review of full awards of unemployment compensation benefits granted by the Industrial Commission to thirty-eight employees of seven construction companies. The cases were reviewed by the Commission in separate proceedings for each employer, and are consolidated for appeal to this court since each case arises out of a labor dispute involving all of the employers and presents the same legal issues for review.
The seven employers are all construction companies, and are members of the Associated General Contractors of Colorado, Building Chapter, Inc. (AGC). The claimants are construction workers belonging to various craft unions which are affiliated with either the Northern Colorado or the Southern Colorado Building and Construction Trades Council.
In May of 1972, the Carpenters District Council of Southern Colorado and the Carpenters District Council of Denver and Vicinity commenced a strike against all of the members of the AGC including the seven employers involved in this case. The carpenters set up picket lines at selected construction projects of the employers. In response to the selective picketing of the carpenters, the AGC members instituted a lockout, shutting down all of their operations, including sites which had not been picketed by the carpenters. Apparently, at some sites it was not feasible to continue work without the carpenters, due to the interrelation of the various job operations. In other cases, there would have been work for some of the crafts, at least for a short time until they caught up with the carpenters' work.
Each of the claimants applied for unemployment compensation benefits following the lockout action by the employers. In each case an initial decision was rendered by the Division of Employment denying benefits on the grounds that the claimants were ineligible under C.R.S. 1963, 82-4-9(1). That section of the Colorado Employment Security Act declares that claimants are ineligible for benefits when their unemployment "is due to a strike or labor dispute." However, a claimant may not be disqualified if he can show that he neither participated in the dispute nor belonged to a "grade or class" of employees which participated in the dispute.
Each claimant was ruled ineligible by the deputy, either because his refusal to cross the picket line was participation in the labor dispute, or because he belonged to a "grade or class" of employees, a member of which was "participating" in the labor dispute. These decisions were based on responses given by the claimants in labor dispute separation information forms filed with the Division. The forms asked whether or not the claimant had refused to cross a picket line, and in the majority of cases, the response was in the affirmative.
Each of the claimants requested and received a hearing before a referee. In all but three cases, where the claimants appeared for the hearing, the referee reversed the decision of the deputy based on testimony from the claimant that he had not in fact, refused to cross a carpenters' picket line. In several instances, where claimants did not appear at the referee's hearing, the no award decision was affirmed by the referee based solely upon the claimant's response to the labor dispute separation information form.
Each of the seven employers filed appeals with the Commission in those cases where the referees had granted full awards to the claimants. Those claimants who were denied benefits did not file appeals to the Commission. The Commission, prior to July 1, 1973, affirmed the findings and conclusions of the referees and made additional findings and conclusions to support the awards of benefits.
C.R.S. 1963, 82-4-9, declares that claimants shall be ineligible for benefits for any week with respect to which his unemployment is "due to a strike or labor dispute in the factory, establishment, or other premises in which he was employed . . . ." In addition, the section states that a lockout by any member of a multi-employer bargaining unit constitutes a labor dispute where the lockout is initiated in response to a strike involving any member of the bargaining unit. Subsection (2) of this provision, however, states that the first subsection shall not apply "if it is shown to the satisfaction of the department" that the claimant is not "participating in or financing or directly interested in the strike or labor dispute" (C.R.S. 1963, 82-4-9(2)(b)), and that the claimant does not
"belong to a grade or class of workers of which, immediately before the commencement of the strike or labor dispute, there were members employed at the premises at which the strike or labor dispute occurs, any of whom are participating in or financing or directly interested in the strike or labor dispute." C.R.S. 1963, 82-4-9(2)(c) (hereinafter referred to as subsection (2)(c)).
The focus of the appeal before us is on this subsection. Claimants argue and the Commission concluded, that subsection (2)(c) was not intended to apply to the facts in these consolidated cases. We agree.
The purpose of the "grade or class" section in the statute is to preclude the possibility of unemployment compensation funds being used to finance, at least in part, certain types of labor disputes such as "key man" strikes in which a very small proportion of an employer's labor force can cause a shutdown of an entire operation by withdrawing their services. If non-striking employees in such a situation have any direct interest in the outcome of the dispute, their drawing of unemployment benefits would be serving as a strike fund for employees who may stand to gain from the actions of the striking employees. See McKinley v. California Employment Stabilization Commission, 34 Cal. 2d 239, 209 P.2d 602. This would, of course, violate the principle of neutrality of government with respect to labor negotiations. See Kania v. Shaffer, 31 Colo. App. 438, 506 P.2d 384; Haggart, Unemployment Compensation During Labor Disputes, 37 Neb. L. Rev. 668; Comment, Labor Controversies and Unemployment Compensation, 36 Albany L. Rev. 95.
[1] It is axiomatic that the Colorado Employment Security Act is to be construed liberally in favor of the claimant. Industrial Commission v. Rowe, 162 Colo. 248, 425 P.2d 274. Therefore, the provisions of the Act which disqualify claimants from receiving benefits must be strictly construed to accomplish their purpose without excluding legitimate claims for benefits. In adopting subsection (2)(c) the legislature recognized that a blanket disqualification of all claimants who are in any way connected with a labor dispute would be patently inequitable. Thus, it provided a means by which a claimant may obtain benefits even though his unemployment is "due to" a labor dispute, i.e., by showing that his relationship to the dispute is insufficient to merit his disqualification. In order to confine the effect of the disqualification imposed by this section to its intended purpose, we conclude that a claimant is eligible for benefits if he can show (1) that he did not participate, and (2) that he did not belong to a grade or class of persons which has a direct interest in the dispute.
[2] In reaching this conclusion, we adopt the view set forth in Cameron v. DeBoard, 230 Ore. 411, 370 P.2d 709, where the court was faced with a substantially similar fact situation. There, the court established two essential guidelines for the application of a "grade or class" provision: (1) The degree of integration of the work performed by the various groups of employees, and (2) the presence of a community of interest between the striking and non-striking employees.
As the court in Cameron pointed out, the degree of integration of work is important because it is the integration of the crafts which supplies the economic leverage needed to carry off a successful "key man" strike, and there is a tendency for advances made by one group of employees in an integrated operation to carry over into simultaneous negotiations between the employer and other craft unions. However, integration of work, alone, is not sufficient to preclude a claimant from establishing his eligibility. There must also be a "community of interest" between the claimants, as a class, and the striking employees. Such a "community of interest" would be evident if the claimants' wages, working conditions, fringe benefits, etc., would be affected by the outcome of the labor dispute. See Burak v. American Smelting Refining Co., 134 Colo. 255, 302 P.2d 182.
[3] In the cases before us, it was undisputed that the non-striking unions had already arrived at new agreements with the employers involved. The only relationship between the striking and non-striking employees revealed by the record is general sympathy with the strike activities of the striking union. Such a relationship is inherent in all labor relations and is insufficient to establish the requisite community of interest. Cameron v. DeBoard, supra.
In each of the seven decisions by the Industrial Commission, it found "the claimants have established by their testimony at the hearing that neither they nor any member of their 'class' working on this job would have benefited or been affected by resolution of a carpenters' labor dispute." These findings are supported in the record. Subsection (2)(c) has no applicability under the facts of these consolidated cases.
Orders affirmed.
JUDGE ENOCH and JUDGE RULAND concur.