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LOCAL 730 v. COMMONWEALTH PENNSYLVANIA (12/15/81)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: December 15, 1981.

LOCAL 730, UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND PIPE-FITTING INDUSTRY ET AL., PETITIONERS
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT. TRANE COMPANY, INTERVENOR

Appeal from the Order of the Unemployment Compensation Board of Review in the case of In Re: Claim of Local 730, United Association of Journeymen and Apprentices of the Plumbing and Pipe-Fitting Industry, on behalf of its Members and All Others Similarly Situated; Appeal of Robert Semian et al.; Appeals, Nos. 79-3-F-877 through 996; 79-3-D-134 through 190; B-79-3-A-190 to B-79-3-A-210 v. Commonwealth of Pennsylvania, Unemployment Compensation Board of Review and the Trane Company.

COUNSEL

Robert D. Mariani, Mariani and Greco, for petitioners.

No appearance for respondent.

Sheldon Rosenberg, with him Nancy Abrams, Rosenberg & Ufberg, for intervenor.

Judges Blatt, Craig and MacPhail, sitting as a panel of three. Opinion by Judge Blatt. Dissenting Opinion by Judge MacPhail.

Author: Blatt

[ 63 Pa. Commw. Page 197]

The petitioner, Local 730 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe-Fitting Industry (Union), appeals, on behalf of 120 of its members, a decision of the Unemployment Compensation Board of Review (Board). This decision adopted a Referee's order denying the claims on the basis that the claimants had engaged in a work stoppage other than a lockout and therefore were ineligible for such benefits under Section 402(d) of the Unemployment Compensation Law.*fn1

After a careful examination of the record, we find that the following summary of the Referee's findings of fact was made without a capricious disregard of competent evidence.*fn2 The claimants were last employed

[ 63 Pa. Commw. Page 198]

    by the Trane Company (Employer) as production and maintenance employees and the terms and conditions of their employment were governed by a collective bargaining agreement entered into between the Employer and the Union which was effective from June 26, 1976 until the expiration date of April 1, 1979. Beginning on February 27, 1979, and up until March 29, 1979, approximately 12 negotiation meetings were conducted between the Union and the Employer but the parties were unable to agree to a new collective bargaining agreement although they reached a tentative agreement as to non-economic issues. At a meeting on March 30, 1979, the chief negotiator for the Union presented a letter to the Employer which formally offered, effective when the existing agreement expired, to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending final settlement of the contract negotiations. The Employer's negotiator responded to the Union's letter by indicating that the Employer did not agree to the offer to continue working; however, the maintenance and production employees did report for work on April 2, 1979, and they continued to work under the terms and conditions of the expired agreement until June 15, 1979. At a June 15, 1979 negotiation meeting held by the parties, the Employer presented a list of changes to become effective June 18, 1979, which would increase (i.e., improve) the economic terms and conditions of employment for the employees, and also lists of other changes to become effective March 31, 1980 and March 30, 1981. The Employer then requested that the negotiators for the Union present these changes to the Union members for

[ 63 Pa. Commw. Page 199]

    a vote, but the Union's negotiators declined to do so. On June 18, 1979, the Employer unilaterally implemented its proposed changes in economic terms and conditions of employment and the claimants worked under those terms and conditions until July 20, 1979. On July 21, 1979, the Union decided to honor the Employer's request to submit the proposed changes to the membership for a vote and the membership voted to reject the changes and to strike. A work stoppage then ensued. The parties held a few unproductive negotiation meetings up until October 9, 1979, at which time an agreement was reached and work resumed the following day.

In an unemployment case, the issue of whether a work stoppage results from a strike or from a lockout is a mixed question of law and fact, and the Board's conclusion is, therefore, subject to review by this Court. Aluminum Company of America v. Unemployment Compensation Board of Review, 9 Pa. Commonwealth Ct. 368, 305 A.2d 389 (1973). The test to be applied in determining whether a work stoppage was due to a lockout or a strike was enunciated by our Supreme Court in the Vrotney Unemployment Compensation Case, 400 Pa. 440, 444-45, 163 A.2d 91, 93-4 (1960) as follows:

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'. . . .

[ 63 Pa. Commw. Page 200]

    claimants therein were eligible for benefits because the employer by its actions, refused to further extend the expiring contract and to maintain the status quo.

The Employer, here, however, contends that Sun Oil is not controlling because: (1) the Employer in the instant situation, unlike the employer in Sun Oil, has improved the economic terms and conditions of employment for the employees and therefore the element of coercion prohibited by Vrotney and Philco Corp. is not present; and (2) the claimants, by working for approximately 33 days under the implemented proposals ratified such proposals or acquiesced in their existence thereby creating a new status quo. We reject the Employer's first argument on the basis that neither our Sun Oil opinion*fn4 nor the Supreme Court's opinion explicitly mentions the employer therein as implementing proposals materially worsening the economic terms or conditions of employment for the employees. Rather, our opinion in Sun Oil merely states that the employer "may well have believed that the implemented changes were of a minor nature and were for the employees' benefit". Id. 19 Pa. Commonwealth Ct. at 453, 338 A.2d at 713; similarly, our Supreme Court noted that "Sun Oil points out that . . . refinery workers at its Toledo, Ohio plant went out on strike, having rejected a wage offer which the union in the present case considered far superior to any offer that had been made to it." Id. 476 Pa. at 594, 383 A.2d at 522. Consequently, on the basis of these inferences which we believe suggest an "increase" as opposed to a "decrease" as urged by the Employer here, we cannot say that the Employer has established that the employer in Sun Oil had decreased benefits, or, if so, in any material way or without improving other economic terms

[ 63 Pa. Commw. Page 202]

    and conditions of employment for the employees. Additionally, we would note that the rule in Vrotney and Philco "tends to encourage employers and employees alike to maintain the status quo*fn5 while negotiating a new agreement," Sun Oil, 476 Pa. at 595, 383 A.2d at 522, and we recognized here that a seemingly innocuous unilateral improvement in the economic terms and conditions of employment by an Employer may very well have a coercive effect on the collective bargaining process which these cases sought to preclude.

As to the Employer's second contention, we note that the claimants in Sun Oil continued to work for approximately 28 days after the employer there unilaterally implemented its proposals and our Supreme Court declined*fn6 to find a ratification or acquiescence by the claimants thereby establishing a new status quo. Here, the claimants continued to work for approximately 33 days after the Employer's unilateral implementation, and we must similarly decline to find a ratification or existence of a new status quo in view of Sun Oil.

The Employer further argues that the Union ratified the implementations through the actions of its chief negotiator, who allegedly commented that he was not opposed to them. We have held, however, that proposed alterations tentatively agreed to, when made in the context of incomplete negotiations of a full

[ 63 Pa. Commw. Page 203]

    agreement, do not create a new status quo for the purposes of the Vrotney test, and our review of the record here discloses that such comment was at most a tentative agreement. Elizabeth Forward School District v. Unemployment Compensation Board of Review, 54 Pa. Commonwealth Ct. 194, 420 A.2d 785 (1980).

Finally, even if, arguendo, the implementations were approved by the Union, an employer who "alter[s] the balance [of the status quo] even after aiding in its maintenance for a considerable time, must still demonstrate that such action is essential to the continued operation of the company." Sun Oil, 19 Pa. Commonwealth Ct. at 453, 338 A.2d at 713. The Employer here failed in this respect.

We believe, therefore, that this Employer's unilateral implementation of its proposed economic terms and conditions of employment constituted a refusal to further extend the expiring contract and maintain the status quo and we will accordingly reverse the Board's order denying the claimants herein benefits.

Order

And Now, this 15th day of December, 1981, the order of the Unemployment Compensation Board of Review denying the claimants herein benefits is reversed and this matter is hereby remanded to the Board for the computation of benefits.

Disposition

Reversed and remanded.

Dissenting Opinion by Judge MacPhail:

Where employees offer to continue to work under an existing contract and the employer refuses*fn1 but employees, after the expiration date of that contract, continue

[ 63 Pa. Commw. Page 204]

    to work under the terms of the expired contract and receive increased benefits under the employer's unilateral implementation of its own offer, can the employer be held to have locked out the employees when the sole reason for the cessation of work is their vote to strike 33 days after the contract expired? The majority answers this question in the affirmative. I cannot, in good conscience, agree.

Accordingly, I respectfully dissent.


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