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PHILCO CORPORATION v. UNEMPLOYMENT COMPENSATION BOARD REVIEW (01/09/68)

decided: January 9, 1968.

PHILCO CORPORATION
v.
UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, APPELLANT



Appeal from order of Superior Court, Oct. T., 1966, No. 151, reversing decision of Unemployment Compensation Board of Review, No. B-91755-B, in case of Clark Unemployment Compensation Case; Philco Corporation v. Unemployment Compensation Board of Review.

COUNSEL

Harry R. Kozart, with him Weissman & Kozart, for appellant.

Ronald Souser, with him Morgan, Lewis & Bockius, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Musmanno dissents. Concurring Opinion by Mr. Chief Justice Bell. Dissenting Opinion by Mr. Justice Cohen. Mr. Justice Eagen joins in this dissenting opinion.

Author: Roberts

[ 430 Pa. Page 103]

The narrow question presented by this appeal is whether a work stoppage which began on April 27, 1964 at the Philadelphia plant of appellee (Philco Corporation) was the result of a strike or a "lock-out", as the latter term is used in the Act of December 5, 1936, P. L. (1937) 2897, § 402, as amended, 43 P.S. § 802(d). Under this statute an employee is not eligible for unemployment compensation pursuant to a work stoppage flowing from a labor dispute, unless that stoppage was caused by a lock-out. Since we hold that the work stoppage here involved was the result of a strike by the employees of Philco, it follows that the Bureau, the referee and the Superior Court correctly denied benefits to the claimant.*fn1

This is but another of those troublesome areas where the legal test as distilled from previous cases is easy to verbalize, but most difficult to apply to any given set of facts. Since the purpose of our unemployment compensation system is to compensate an individual when work has been denied him through no fault of his own, logically the test of whether a work stoppage resulted from a strike or a lock-out requires us to determine which side, union or management, first refused to continue operations under the status quo after the contract had technically expired, but while negotiations were continuing. As this Court stated in Vrotney Unemployment Compensation Case, 400 Pa. 440, 444-45, 163 A.2d 91, 93-94 (1960), the question we must answer to decide on whose shoulders lay the responsibility for the work stoppage is the following:

[ 430 Pa. Page 104]

"Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of the contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the pre-existing terms and conditions of employment pending further negotiations? If the employer refuses to so extend the expiring contract and maintain the status quo, then the resulting work stoppage constitutes a 'lockout' . . . ."

Further refinements of this test reveal additional legal principles which are necessary for a proper resolution of the present controversy. As the Superior Court opinion below correctly notes, when, as here, the work stoppage takes the form of a strike, the burden is upon the union to show that it made the initial "peace" move by offering to continue the status quo. Clark Unemployment Compensation Case, 209 Pa. Superior Ct. 239, 242-43, 223 A.2d 909, 911 (1966); see Klima Unemployment Compensation Case, 205 Pa. Superior Ct. 489, 211 A.2d 23 (1965). However, since it is conceded in the present controversy that no such offer was made, the union must rely on the so-called "futility" doctrine as set out in Irvin Unemployment Compensation Case, 198 Pa. Superior Ct. 308, 181 A.2d 854 (1962), holding that the union need not offer to continue the status quo if it appears that such an offer would definitely not be accepted by management.

Into the legal framework outlined above, we must now attempt to fit the facts of this case. Initially, however, we acknowledge that our scope of review is limited not only by statute, but also by previous decisions of this Court as well as the Superior Court. The Act of December 5, 1936, P. L. (1937) 2897, § 510, as amended, 43 P.S. § 830 states: "In any appeal to the Superior Court the findings of the board or referee, as the case may be, as to the facts, if supported by the evidence

[ 430 Pa. Page 105]

    and in the absence of fraud, shall be conclusive . . . ." (Emphasis supplied.) See also, Progress Mfg. Co. v. Unemployment Compensation Bd. of Review, 406 Pa. 163, 167, 176 A.2d 632, 634 (1962); Vrotney Unemployment Compensation Case, 400 Pa. 440, 445-46, 163 A.2d 91, 94 (1960). Nevertheless, even assuming arguendo that the Board made a finding of fact, rather than law, when it said in its opinion that "the reason for the work stoppage must be assessed against the employer" because it would have been futile for the union to have asked ...


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