Chrysler Corp. v. California Unemployment Insurance Appeals Board
Chrysler Corp. v. California Unemployment Insurance Appeals Board
Opinion of the Court
This proceeding in mandamus to compel removal of charges against an employer’s unemployment reserve fund is before us on appeal by the California Unemployment Insurance Appeals Board from a judgment of the superior court declaring claimants to be ineligible for unemployment compensation benefits. The judgment set aside a decision of the board upholding their eligibility, and ordered any charges against respondent’s account as the result of payment of
The superior court reviewed the administrative record and made and filed its independent findings and conclusions of law (Chrysler Corp. v. California Emp. Stab. Com., 116 Cal.App.2d 8 [253 P.2d 68]); they are at complete variance with the administrative findings and determination, but the basic material facts are undisputed and the question is primarily one at law. The claimants, 81 in all, are employed as office and clerical workers and engineers in the Los Angeles plant of respondent, Chrysler Corporation. Union workers at this plant are divided into three separate and distinct bargaining units—the 1. office and clerical workers, 2. engineers and 3. production and maintenance workers, all of which comprise Local 230. The International Union, United Automobile, Aircraft and Agricultural Implement Workers of America (hereinafter referred to as UAW), an affiliate of the Congress of Industrial Organizations (CIO), organized Local 230 as an “amalgamated local” consisting of the three separate bargaining units above named; the bulk of its membership consists of production and maintenance workers since there are relatively few office and clerical workers and engineers. In other areas of the country where there are enough to warrant it, the office and clerical workers have their own local, as do the engineers. Each unit of Local 230 had entered into a separate bargaining agreement with Chrysler; thus, during the period in question, three separate agreements covering labor relations of its 1. engineers, 2. office and clerical workers, and, 3. production and maintenance workers, existed with Chrysler.
The “engineers’ ” contract and the “office and clerical workers’ ” contract each contained a specific provision (§5), in effect, prohibiting them from striking against Chrysler; thus, under their contracts neither the engineers nor office and clerical workers had any right to strike. The “production and maintenance workers’ ” contract, however, made an exception (§31(2)) permitting them to strike in connection with rates of production (§§46-48); thus, thereunder, the production and maintenance workers had the right to strike over this limited matter. The contracts of the office and eler
A dispute arose between Chrysler and the production and maintenance workers over the “Bates of Production” provisions of their contract. In March 1957, on recommendation of the executive board of Local 230 consisting primarily of officers of the union, a strike vote was taken by the production and maintenance workers; none of the office and clerical workers or engineers were entitled to vote in this connection and none did so, although as a group they did voice their disapproval of the strike and voted not to participate therein. They had no economic or other grievance with Chrysler. On March 15, pursuant to approval of the International Union, union officials called a strike of the production and maintenance workers; they immediately left their jobs. The strike ended April 21, 1957, after a settlement, the terms of which related to matters affecting only the production and maintenance workers. The office and clerical workers and engineers did not strike at any time, nor did they in any way participate in the strike or picket line; on the contrary, on March 15, when the strike commenced, they crossed the union picket line, remained at their jobs and continued to perform all work available to them. However, the strike forced Chrysler to shut down its production line, soon after ending the flow of work for its office and clerical workers and engineers. They continued to work until around March 22, when thereafter, to April 15, at various times they were laid off by Chrysler because it had no work for them. During the course of the strike, the production and maintenance workers received strike benefits from the union’s general strike fund; the office and clerical workers and engineers received nothing from the strike fund but applied for and received unemployment compensation benefits, the subject of the within litigation.
The basic question is whether Chrysler’s unemployment reserve account should be charged as the result of benefits paid to the office and clerical workers and engineers—the issue turns on whether they are eligible therefor under section 1262, Unemployment Insurance Code. Appellant contends that they did not voluntarily leave their work because of a trade dispute; respondent argues that they left voluntarily in that their unemployment was caused by a trade dispute initiated by their own union.
Section 1262 provides that “An individual is not eligible
To carry out the intent of the Legislature, the courts in a given case inquire into the economic realities of the circumstances resulting in unemployment to determine whether there was any personal responsibility on the part of the claimant for his unemployment, or whether he was compelled to leave his work because of the acts of others. (Bodinson Mfg. Co. v. California Emp. Com., 17 Cal.2d 321 [109 P.2d 935]; Bunny's Waffle Shop, Inc. v. California Emp. Com., 24 Cal.2d 735 [151 P.2d 234]; Matson Terminals, Inc. v. California Emp. Com., 24 Cal.2d 695 [151 P.2d 202]; Chrysler Corp. v. California Emp. Stab. Com., 116 Cal.App.2d 8 [253 P.2d 68].) “The volitional test itself is based upon a just analysis of a substantial subjective element and it cannot properly be extended or perverted by insistence upon mere form.” (McKinley v. California Emp. Stab. Com., 34 Cal.2d 239, 245 [209 P.2d 602].)
Certain compelling factors leading to the unemployment of the office and clerical workers and engineers point
In the light of the established principle that innocent victims of a trade dispute should not suffer loss of their unemployment insurance rights, and the prevailing unusual factual situation, we believe there must be something more than mere membership in the union authorizing the strike against their common employer, to make the nonstriking members personally responsible for the same, such as—their voluntary joint activity, concert of action of the strikers and nonstrikers, an identity of interest in the dispute or strike, or union strategy ultimately resulting in the unemployment of nonstriking members.
It is true, as urged by respondent that each office and clerical worker and engineer, exercising his fundamental right to work, did voluntarily seek and accept employment with Chrysler. However, unlike the employee, who of his own volition enters into membership in a union because he feels that his best financial interests will be served thereby, the office and clerical workers and engineers had no free choice in the
What occurred leading up to and during the strike discloses a complete absence of any act or conduct on the part of the office and clerical workers and engineers in connection with, or in furtherance of, the strike; a complete lack of any grievance between them and Chrysler or any interest in the dispute between Chrysler and the production and maintenance workers; and a protest against union action calling the strike reflected in their disapproval of the same, their decision not to participate therein, and in their conduct of crossing picket lines and reporting for and remaining at their work. They at no time left their jobs, nor did their unemployment result from any freely exercised choice in the course of the dispute; they neither shared in the strike vote nor performed any overt acts that would place them in league with the strikers. Their loss of work was due solely to factors over which they had neither control nor influence. The dispute resulting in the strike was one between Chrysler and the production and maintenance workers relating solely to the “rates of production” provisions of their contract; the dispute in no way affected the office and clerical workers and engineers and they them
In defending the lower court judgment, respondent first contends that the union called a strike of only the production and maintenance workers, and not of the office and clerical workers and engineers, as a matter of strategy; and that the “lay-off” was an exertion by the union against Chrysler of severe economic pressure in order to settle the dispute, attempting to bring the case within the holding of McKinley v. California Emp. Stab. Com., 34 Cal.2d 239 [209 P.2d 602]; Gardner v. State, 53 Cal.2d 23 [346 P.2d 193], and Chrysler Corp. v. California Emp. Stab. Com., 116 Cal.App.2d 8 [253 P.2d 68], which limits the “volitional” test of Bodinson Mfg. Co. v. California Emp. Com., 17 Cal.2d 321 [109 P.2d 935], by refusing to extend qualification for unemployment benefits to nonstriking members who became unemployed by virtue of a strike called for the benefit of all members in which strategy or economic pressure was utilized. We find no evidence of subterfuge or union strike strategy, nor has respondent pointed out any technical move. The reason for the union’s not calling a strike of the office and clerical workers and engineers was far removed from strategy or union maneuver—it had no control of the situation for under their contracts with Chrysler, the office and clerical workers and engineers had
However, respondent’s last contention—that inasmuch as the union, which the office and clerical workers and engineers voluntarily joined, was designated under the by-laws as their general agent for all purposes, the action of union officials in calling the strike of the production and maintenance workers was, in fact, the act of each member of the union—deserves serious consideration. It argues that mere membership in a union striking against a common employer imposes an equal liability on all members, under the broad principles of the law of agency, citing as controlling a Pennsylvania ease, Prentice v. Unemployment Comp. Board of Review, 161 Pa. Super. 630 [56 A.2d 295]. Respondent’s argument is predicated mainly on the fact the office and clerical workers and engineers voluntarily joined the union and had an equal part in electing their union officials who, under the by-laws, were authorized to act for them as their agents. It is a fact that the union became their collective bargaining agent simply by virtue of their membership in the union, but it is pure fiction that they chose or could, or did, exert any influence or control over their union officials, for their voting strength was nil compared to the great majority of membership. Prentice v. Unemployment Comp. Board of Review, 161 Pa. Super. 630 [56 A.2d 295], interprets a Pennsylvania statute similar to the California Act. Approximately 50,000 rank and file miners of the United Mine Workers of America (UMW) became unemployed as the result of an industry-wide strike called against their common employers by the supervisory workers of the United Clerical, Technical and Supervisory Employees’ Union (UCT), a separate division of UMW. The purpose of the strike was to force the coal operators to recognize the UCT as the bargaining agent of its members. The strike of the UCT was authorized by the International officers of the UMW. When the strike was settled the rank and file miners returned to work upon orders of the president of the
In some respects, the Prentice case is similar to the one at bar, but there are also certain distinguishing features rendering it less than controlling authority here. In the Prentice case, the nonstriking members, through their union officials, could have prevented their fellow members from striking but took no action even to express disapproval of the strike, whereas here, the office and clerical workers and engineers could not have prevented the strike, having had no vote thereon and little or no influence in the election of union officials, and protested in the only way they could—by voting, among themselves, disapproval of the strike and no participation therein, and executing their choice by crossing union picket lines and reporting for work. In the former case, an industry-wide strike, directly affecting the status and power of the UMW as a whole, was involved and the suspension of work was by their union representatives “obviously approved for their [rank and file miners’] ultimate benefit” (p. 300 [56 A.2d]); in the case before us, only one unit of one local struck and there was no strike benefit to the office and clerical workers and engineers nor did union officials ever pretend there to be. Although the court in the Prentice case held that whether the miners would benefit by the outcome of the strike was beside the point, it acknowledged that “their international officers considered it of distinct advantage to the UMW” (p. 300 [56 A.2d]). In the Prentice ease, the rank and file miners of the UMW were ordered back to work, not by their employers, the coal operators, but by the president of the
But without regard to these factors, the broad application of the rule of agency found in Prentice v. Unemployment Comp. Board of Review, 161 Pa. Super. 630 [56 A.2d 295], holding that mere membership in a union authorizing a strike against an employer imposes equal liability for such strike action on all members of the union, including the nonstrikers, appears to he wholly incompatible with the “personal responsibility” view taken by courts in this jurisdiction. The Supreme Court in Bodinson Mfg. Co. v. California Emp. Stab. Com., 17 Cal.2d 321 [109 P.2d 935], establishing the “volitional” test, speaks of qualification for unemployment benefits of one prevented from working through “no act of his own” (p. 327), and relates personal responsibility for his unemployment to an act he himself committed—one over which he had a free choice. In Bunny's Waffle Shop, Inc. v. California Emp. Com., 24 Cal.2d 735 [151 P.2d 234], the court held it proper to relate responsibility for work stoppage to the party who created its actual impelling cause. McKinley v. California Emp. Stab. Com., 34 Cal.2d 239 [209 P.2d 602], held that the “unemployment of the bakery workers was caused by their own action taken with full knowledge of its consequences” (p. 244); and in Chrysler Corp. v. California Emp. Stab. Com., 116 Cal.App.2d 8 [253 P.2d 68], the court, discussing the “volitional” test, stated that the “criteria for denial or awarding of benefits being [was] the personal responsibility of the claimant for his unemployment in the former ease” (p. 15). These cases hold generally that a claimant is not disqualified under the act as having voluntarily left his work unless he bears some personal responsibility for his unemployment ; and in each, the act or conduct or interest in the dispute placing claimant in league with the strikers was one directly related to the impelling cause of the unemployment. No importance was laid on the fact of membership in the union; personal responsibility was contemplated as the criteria. This principle appears to eliminate mere union membership as either the “impelling cause of the unemployment” (the strike), or sufficient to make a nonstriking member responsible
If, under their approach to the California Unemployment Compensation Act, mere membership in the union had alone been sufficient to render nonstrikers personally responsible for the act of their union officials in sanctioning a strike of other members, there would have been no necessity for the courts to go into the vital matters of strike strategy, voluntary concerted action, identity of interest, joint activity, or subterfuge which violates the substance of the act, or to analyze the impelling cause of work stoppage. Dictum in Barber v. California Emp. Stab. Com., 130 Cal.App.2d 7 [278 P.2d 762], would indicate that membership in the union alone is not sufficient to disqualify a claimant under the act. In any event we find nothing in any California authority pointing to such an interpretation of justifying such a holding.
Nor is the argument that having theretofore accepted the advantages and benefits of union membership the office and clerical workers and engineers must now accept its disadvantages, a compelling one, for it was not their membership in the union that was the impelling cause of their unemployment
We realize the significance of certain social or economic problems relative to the maintenance of the fund by the employer but consider them not a matter for the court (Bodinson Mfg. Co. v. California Emp. Com., 17 Cal.2d 321 [109 P.2d 935]); proper resort to the Legislature might well result in changes similar to those placed in the Pennsylvania statute after the decision in the Rrentice case.
For the foregoing reasons the judgment is reversed.
Wood, P. J., concurred.
Dissenting Opinion
I dissent.
It is my opinion that the trial judge in this case properly disposed of the matter.
It is to be remembered that all of those who were em
The executive board of the local union recommended that a strike vote be taken by the production workers unit. The board was made up principally of the officers of the union who had been elected by all of the members of the union. After approval was secured from the International Union the strike was called and as an inevitable result of the strike which was called, the applicants in this case (office and clerical workers) were laid off.
The by-laws and the constitution of the union provide in effect that the union is the exclusive collective bargaining representative of all of the members. The union acts irrevocably as the agent of each member and has the sole power to bind such members in the prosecution of all disputes with reference to the relationship between the members and the company.
The trial judge found in part as follows: (1) claimants were laid off as a direct consequence of the strike, (2) the resultant lay-off was reasonably foreseeable, (3) the claimants were directly interested in the trade dispute which gave rise to the strike, (4) the members of the union, including the applicants, acquiesced in all acts of the union in connection with the trade dispute, (5) the members, including the applicants, acceded to and were bound by the actions of their representatives in the union, (6) the claimants were voluntarily unemployed, and (7) that all of the allegations of the respondents’ amended petition were true.
As I view it no one of the three groups of the union was insulated from the other. They worked together, each received the same benefits from the union and I believe each should share the responsibilities of the union. In other words, a member of the union, under the circumstances of this case,
If the officers of a union call a strike, by the very nature of events all of the members of the union are affected thereby in some way, whether they actually participate in picket lines or do otherwise. It was inevitable that all of the members of the union in question would ultimately be laid off if those who produced the product were out on strike. Each member of the union contributed to the strike fund and each had a vital interest in the strike and the outcome thereof. The contributions were made to the strike fund by the applicants in part with the hope or expectation that the company would ultimately be compelled in the case of a strike to comply with the demands of the union.
It would seem a fact of life that where, as here, there is a single union in a single plant of a company, and the union is successful in one division of its activities, ordinarily it becomes easier for the union to settle and dispose of some other or similar problem or problems in another division of its activity in the same plant. The success or failure of a union is not necessarily based upon an immediate acceptance of all of its demands upon all fronts simultaneously.
There was nothing to stop the claimants in this case from participating in the moves of the union preliminary to the calling of the strike. Indeed they were very active in such endeavors.
It is clear that it was a part of the union strategy in its dealings with the company to proceed as it did. The union undoubtedly felt that if it could deal with one segment of the company’s business and get all that it demanded, it would be simple to apply the same procedure regarding other matters such as wages, to other segments of the same business.
In this case the claimants were part and parcel of the union which called the strike. The union deliberately maneuvered the situation to the point where the work had to stop. The act of the union shut down the plant. It was the union which wanted to and did change the status quo. Can it reasonably be said that the applicants here were unemployed through no fault of their ownt
The applicants knew when they joined the union that the union would thereafter speak for them in any contract negotiations and otherwise—they knew that the union could and might call the very strike which it did call and that if such a
Section 1262 of the Unemployment Insurance Code reads as follows:
“§ 1262. [Strike; ineligibility.] An individual is not eligible for unemployment compensation benefits, and no such benefit shall be payable to him,, if he left his work because of a trade dispute. Such individual shall remain ineligible for the period during which he continues out of work by reason of the fact that the trade dispute is still in active progress in the establishment in which he was employed.”
A literal reading of the statute in question presents little if any problem. What has created a very serious problem, however, is the interpretation put upon the words of the statute by courts which have determined in effect to make or establish social policy. Courts little by little have added to or subtracted from the definitions of the words contained in the statute until now it is difficult to recognize the plain simple language of the statute from the decisions.
The applicants in this case are not in any sense the innocent victims of a trade dispute between a union and an employer. The applicants and each of them had a free choice in their determination as to whether or not they would go to work for Chrysler—they (each) also had the right in the first instance to decide their own fate but they transferred that right to the union, and the union called the strike.
I cannot attribute to the Legislature that it intended to adopt a statute which in effect (as interpreted by the majority of this court) would provide that strikes should in any part be financed out of unemployment insurance compensation funds —particularly so when the real reason for the statute in the first instance was to alleviate economic insecurity resulting from involuntary employment. (See 28 A.L.R.2d 287.)
My reading of the history of the unemployment insurance statute leads me to believe that it was never contemplated that industry and the public would be required to finance large numbers of workers who were out of work because their union
In short this court now holds that a company can be compelled to finance in part a strike against itself. The company has incurred a further loss through added payroll taxes as its rating falls and the fund itself is reduced for those who are honestly entitled to participate in benefits.
The majority opinion completely disregards the evidence in this ease and the rule of law to the effect that if there is substantial evidence to support the findings of fact of the trial court an appellate court will not interfere.
It is easily apparent from the facts of this case that the union determined the entire strategy for the whole strike in this case far in advance of the calling of such strike. The officers who made the determination to strike were in the position of power in part because of the applicants. The officers in their action were acting for and in behalf of the members, the applicants.
It has been argued from time to time that the labor dispute disqualification provisions of the statute should be abolished. If the argument is sound then it should be done by the Legislature and not by court decisions.
The majority opinion opens the doors wide for the “key man” strike and for all other employees of a plant so struck to receive unemployment insurance.
A thorough reading of Prentice v. Unemployment Comp. Board of Review, 161 Pa. Super. 630 [56 A.2d 295], will disclose that the court interpreted a Pennsylvania statute very similar to the statute in question. The result in the Pennsylvania case was exactly the opposite to the result reached by the majority here.
I would affirm the judgment.
A petition for a rehearing was denied February 21, 1962. Fourt, J., was of the opinion that the petition should be granted. Respondent’s petition for a hearing by the Supreme Court was denied March 28, 1962. MeComb, J., was of the opinion that the petition should be granted.
Reference
- Full Case Name
- CHRYSLER CORPORATION, Plaintiff and Respondent, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD Et Al., Defendants and Appellants
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