Pepper, Hamilton & Scheetz, J. Anthony Messina, Fred Speaker, James T. Giles, Kenneth L. Oliver, Jr., David L. Williams, Susan K. Hoffman, Vincent J. Pentima, Philadelphia, for appellant.
Warren J. Borish, Philadelphia, Joseph R. McFadden, Jr., Media, for appellees, Local (8)-901, etc., et al.
Eagen, C. J., and O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Packel, J., did not participate in the consideration or decision of this case.
This was an action to determine the eligibility of approximately 1700 applicants for unemployment compensation benefits covering a period in which they were out of work during a labor dispute between their union and the Sun Oil Company of Pennsylvania.
The principal issue raised in this appeal*fn1 is whether section 402(d) of Pennsylvania's Unemployment Compensation Law, 43 P.S. § 802(d) (1964), is void under the Supremacy Clause of the United States Constitution by reason of federal preemption, to the extent that section 402(d) allows
unemployment benefits to be paid to persons unemployed due to lockouts in labor disputes.*fn2
The theory advanced by appellant-employer in this case, Sun Oil, is that the payment of unemployment benefits in labor disputes constitutes subsidizing the side of the employees. While Pennsylvania's unemployment compensation law does not allow for benefits to be paid to strikers, nevertheless, Sun Oil maintains that a lockout is just as much a weapon or technique in a labor dispute as a strike and that the payment of unemployment benefits to locked out employees restricts the employer's right to use lockouts in labor disputes. Such a result allegedly interferes with the general regulatory scheme for labor disputes provided by federal labor legislation. Therefore, Sun Oil argues that the state legislation is void due to federal preemption.
Sun Oil is not the first employer to raise such arguments. In Hawaiian Telephone Co. v. Hawaii Dept. of Labor and Industrial Relations, 405 F.Supp. 275 (D.Hawaii 1976) and New York Telephone Co. v. New York Dept. of Labor, 95 L.R.R.M. 2487 (S.D.N.Y.1977), federal courts struck down state laws which allowed unemployment benefits to striking employees for reasons similar to those advanced by Sun Oil in the present case. However, we believe that recent federal court decisions are dispositive of this issue. Kimbell Inc. v. Employment Security Commission, 429 U.S. 804, 97 S.Ct. 36, 50 L.Ed.2d 64 (1976) involved a New Mexico statute providing for unemployment compensation to strikers. A state trial court held this law invalid for reasons similar to those advanced herein, but the New Mexico Supreme Court reversed. The Supreme Court of the United States dismissed the further appeal for want of a substantial federal question. About the same time that Kimbell was proceeding
through the courts, the United States Supreme Court decided the case of Super Tire Engineering Co. v. McCorkle, 416 U.S. 115, 94 S.Ct. 1694, 40 L.Ed.2d 1 (1974). In that case an employer sought a declaratory judgment that a New Jersey law according unemployment benefits to striking workers was invalid. By the time the district court's dismissal of the employer's action reached the United States Court of Appeals for the Third Circuit, the labor dispute had been settled, and the Court of Appeals dismissed the action for mootness. The United States Supreme Court considered only the issue of mootness and reversed and remanded to the Court of Appeals for further action. On remand, the Third Circuit had before it the Supreme Court's disposition in the Kimbell case, and ...