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QUAKER OATS COMPANY v. COMMONWEALTH PENNSYLVANIA (03/01/82)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: March 1, 1982.

THE QUAKER OATS COMPANY, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT. CEREAL WORKERS LOCAL UNION NO. 221, AFL-CIO, INTERVENOR

Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Frank D. Micelli, No. B-183655.

COUNSEL

Michael T. Welch, with him Norman I. White, of McNees, Wallace & Nurick, for petitioner.

No appearance for respondent.

Paul J. Dellasega, with him Ira H. Weinstock, for intervenor.

President Judge Crumlish and Judges Craig and MacPhail, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 65 Pa. Commw. Page 73]

The Quaker Oats Company appeals from the Unemployment Compensation Board of Review's order affirming the referee's award of benefits, for the weeks ending April 28, 1979 through May 26, 1979, to Frank D. Micelli, Charles J. Minnich and Leander D. Krist, three token claimants.*fn1 The referee concluded that the claimants' unemployment during that period, although related to a labor dispute, was the result of a lockout by the employer within the meaning of Section 402 (d) of the Unemployment Compensation Law.*fn2

The collective bargaining agreements between the company and the claimants' union had expired on April 1, 1979, after numerous unsuccessful negotiation sessions. The following day, the parties signed an interim agreement stating that the plant would remain open under the terms and conditions of the expired agreements, and that, until a new contract was negotiated, the union would not strike and the company would not institute a lockout without twenty-four hours written notice.

[ 65 Pa. Commw. Page 74]

Negotiations continued, but in late April, 1979, the company alleged that incidents of sabotage had occurred in the plant, and that the employees had begun to engage in a concerted work slowdown and a refusal to volunteer to work overtime shifts.

On April 26, 1979, the company announced its intention to shut down the plant, and rejected the union's subsequent offer to continue to work, responding that, "[a]t this time we have no reason to expect that normal operations could be resumed should the plant be reopened."

The central issue in this case is whether, before the company's lockout, the claimants were the first party to breach the terms and conditions of the prior collective bargaining agreement by engaging in acts of sabotage, participating in a production slowdown, and refusing to work overtime. Philco Corp. v. Unemployment Compensation Board of Review, 430 Pa. 101, 242 A.2d 454 (1968).

The referee's decision, which recited his conclusion that the work stoppage was caused by the company, regrettably lacks findings of fact needed to apply the legal principles which govern.

The referee made only one finding of fact dealing with the question of sabotage and work slowdown or refusal, as alleged by the company:

9. The employer contended the employees' sabotage was related to mechanical difficulties in the various machines, and that an alleged concerted refusal to work overtime contributed largely to a decline in production.

The recitation of contentions is not a finding as to the facts claimed. The referee must make a determination, based on the evidence, of the factual basis upon which the case is to be decided.

[ 65 Pa. Commw. Page 75]

The parties' stipulation of facts*fn3 addresses the issue. The parties stipulated that: (1) the production efficiency rate of the plant was 82% between July, 1978 and March, 1979 and declined to 50% between April 16, 1979 and April 26, 1979; (2) the rate of overtime refusal was 30.3% before the strike, 98% during the week of April 16, 1979, and 100% on April 26, 1979; (3) all 27 mechanics who had agreed to work on Saturday, April 21, 1979 later told their supervisors that they wished to be excused, and all unscheduled mechanics contacted by the company refused to work that Saturday; (4) all 73 employees asked by the company to work overtime on April 26, 1979 refused, and the 43 with the lowest seniority were given three-day suspensions that were later reduced to warnings.

The only approximation of a finding is located in the referee's discussion. The referee stated:

[T]here was insufficient evidence to prove the employer's charges. No arrests or specific charges were directed at any of the employees involved in the work stoppage relative to the alleged acts of sabotage on the part of the employees. Although there was a new policy instituted to discipline employees refusing to work overtime, i.e., suspension for 3 days, the suspensions imposed on 43 employees were reduced to warnings when the plant reopened.

The fact that the company made no arrests or specific charges relating to its sabotage claim could indicate only that no employee was identified. We need a clear finding as to whether the alleged acts did occur, and,

[ 65 Pa. Commw. Page 76]

    if so, whether the claimants, either individually or as a group, were responsible.*fn4

Furthermore, a discussion statement, that suspensions imposed on 43 employees for refusing to work overtime were reduced to warnings, does not constitute a finding as to whether or not the claimants, by refusing to work overtime, engaged in activity contrary to the provisions of the expired collective bargaining agreement which continued to be in effect.*fn5

Moreover, the referee, in believing that he must "ascertain final cause or responsibility for the work stoppage," may have been misled as to the appropriate standard for determining which party is responsible for a work stoppage under Section 402(d).

The general test to be applied in determining whether a work stoppage is a strike or a lockout is that which the Supreme Court articulated in Vrotney Unemployment Compensation Case, 400 Pa. 440, 444-45, 163 A.2d 91, 93-94 (1960).*fn6

[ 65 Pa. Commw. Page 77]

The test was refined by the Supreme Court in Philco, 430 Pa. at 103-04, 242 A.2d at 455, stating:

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 lockout 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.

The Philco test has been adopted by our court in numerous instances.*fn7 See, e.g., Centennial School District v. Unemployment Compensation Board of Review, 56 Pa. Commonwealth Ct. 86, 424 A.2d 569 (1981); Loftus v. Unemployment Compensation Board of Review, 54 Pa. Commonwealth Ct. 271, 420 A.2d 1351 (1980).

Thus the referee must ascertain the factual circumstances leading to the company's lockout. If the referee finds that the claimants, individually or collectively,

[ 65 Pa. Commw. Page 78]

"first refused to continue operations under the status quo after the contract had technically expired,"*fn8 he must find claimants ineligible for benefits.*fn9

[ 65 Pa. Commw. Page 79]

Accordingly, we reverse the order of the board and remand for findings of fact and application of the legal standards discussed in this opinion.

Order

Now, March 1, 1982, the order of the Unemployment Compensation Board of Review, dated April 29, 1980, is reversed and the case is remanded for findings of fact and application of the standards of law discussed in the opinion.

Disposition

Reversed and remanded.


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