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PENFLEX v. KENNETH BRYSON ET AL. AND COMMONWEALTH PENNSYLVANIA UNEMPLOYMENT COMPENSATION BOARD REVIEW (12/07/84)

decided: December 7, 1984.

PENFLEX, INC., APPELLEE,
v.
KENNETH BRYSON ET AL. AND COMMONWEALTH OF PENNSYLVANIA UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, APPELLANTS



NO. 70 EASTERN DISTRICT APPEAL DOCKET, 1983, Appeal from Order Dated March 24, 1983 of the Commonwealth Court in Nos. 1875 and 2714 C.D. 1981 Reversing Orders of the Commonwealth of Pennsylvania Unemployment Compensation Board of Review, Decision Nos. B-197119 through and including B-197147, all Dated July 13, 1981 and Decision No. B-200 263 Dated October 15, 1981, 73 Pa. Commonwealth Ct. 111, Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Larsen, J., files a Concurring Opinion. Zappala, J., files a Concurring and Dissenting Opinion. Nix, C.j., files a Dissenting Opinion.

Author: Hutchinson

[ 506 Pa. Page 281]

OPINION OF THE COURT

Appellants, former employees of the appellee, Penflex, Inc., appeal by allowance a Commonwealth Court order reversing orders entered by the Unemployment Compensation Board of Review.*fn1 The Board, in turn, had affirmed decisions of the Referee and the Office of Employment Security awarding unemployment compensation benefits to the appellants. We now reverse Commonwealth Court and reinstate the orders of the Review Board.

The factual circumstances surrounding the instant controversy are undisputed. The appellants were members of a collective bargaining unit represented by Plumbers Union Local 690. The Union and appellee Penflex, Inc., appellants' employer, entered into a collective bargaining agreement which expired on June 30, 1980. The parties engaged in continuing negotiations but failed to agree on the terms of a new contract before July 1, 1980.

The Union advised its members not to engage in a work stoppage. Nevertheless, the membership disregarded that advice and failed to report to work, establishing picket lines at the employer's plant beginning on July 1, 1980. The Union had not notified the Federal Mediation and Conciliation Service of the contract dispute before the work stoppage as required by Section 8(d) of the Labor Relations Management Act (Taft-Hartley Act), 61 Stat. 136 (1947), 29 U.S.C.A. § 158(d) (1976) (hereafter "LRMA").*fn2 [The record

[ 506 Pa. Page 282]

    does not show, however, that any notice provision was written into the collective bargaining agreement itself, nor does it show any provision in that agreement extending its term in the absence of such statutory notice.] Consequently, the employer terminated the appellants' employment on July 1, 1980 for participating in what it considered an illegal strike.*fn3 On July 3, 1980, appellants offered to return to work. However, appellee did not accept their offer.

Out of work because of this termination, appellants subsequently applied for unemployment compensation benefits pursuant to the Unemployment Compensation Law, Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 751 et seq. (1964 & Supp.1983-84). The Office of Employment Security initially determined that appellants' unemployment was caused by a "lockout" instituted by appellee (hereafter "employer") and that, therefore, under Sections 401 and 4(u) of the Compensation Law,*fn4 appellants (hereafter "employees") were eligible for compensation benefits beginning the week ending July 5, 1980.

The employer appealed to the Unemployment Compensation Board of Review arguing that, by engaging in a strike,

[ 506 Pa. Page 283]

    its former employees were ineligible for initial benefits by virtue of Section 402(d) of the Unemployment Compensation Law which denies compensation to an employee for any week "[i]n which his unemployment is due to a stoppage of work, which exists because of a labor dispute (other than a lockout) at a factory, establishment or other premises at which he is or was last employed . . . ." 43 P.S. § 802(d). The employer argued further that its employees' participation in a work stoppage in violation of Section 8(d) of the LRMA constitutes willful misconduct, that the employees were terminated on account of that willful misconduct and that, consequently, they remain ineligible for benefits under Section 402(e).*fn5

Following a hearing, the Referee initially observed that, since the parties' bargaining agreement had already expired, the July 1, 1980 work stoppage was not the usual "wild-cat" strike, i.e., a work stoppage which occurs in spite of a "no strike -- no lockout" provision in an extant collective bargaining agreement. He therefore concluded that the strike did not constitute a breach of contract and was not illegal for that reason.

The Referee further determined that participation in a strike in violation of the federal labor statute did not establish willful misconduct within the meaning of Section 402(e) of Pennsylvania's Unemployment Compensation Law. The Referee reasoned that an employee's failure to comply with the thirty-day notice requirements of Section 8(d) results in his loss of employee status only for purposes of his LRMA-conferred right to contest his dismissal before the

[ 506 Pa. Page 284]

NLRB as an unfair labor practice.*fn6 Therefore, the Referee refused to rule that, in effect, any employee who has engaged in a work stoppage not protected by the LRMA automatically forfeits his right to benefits pursuant to Section 402(e) of Pennsylvania's Unemployment Compensation Law.

In addition, the Referee noted that if the employees' strike were the only factual circumstance presented for his consideration, they would be ineligible for benefits under Section 402(d). However, the Referee further noted that the employer terminated the employees on the same day the work stoppage began. Accordingly, he ruled that the cause of the employees' unemployment was not a work stoppage resulting from a labor dispute, but, instead, their discharge from employment. Therefore, he affirmed the Office of Employment Security's compensation award.

The Review Board agreed with the Referee's reasoning and affirmed his determination. In short, the compensation authorities determined that the failure to comply with the notice provision of the LRMA, Section 8(d) before terminating the contract did not, on these facts, constitute willful misconduct under Section 402(e) of our Unemployment Compensation Law. The employer then appealed the Board's decision to Commonwealth Court.*fn7 Commonwealth Court held that the work stoppage initiated by the employees did constitute willful misconduct and concluded, therefore, that they were ineligible for compensation benefits under Section 402(e).

[ 506 Pa. Page 285]

Commonwealth Court acknowledged that it was not confronted with a wildcat strike and that only such strikes had been held to be illegal work stoppages amounting to willful misconduct under prior decisional law. However the court, citing Houck v. Com., Unemployment Compensation Board of Review, 45 Pa. Commonwealth Ct. 587, 589, 405 A.2d 1062, 1064 (1979), stated that, under the law, willful misconduct includes "a disregard of standards [of behavior] which the employer has a right to expect of his employee" and that, by striking in violation of Section 8(d), the employees here demonstrated such disregard. See Weimer v. Unemployment Compensation Board of Review, 176 Pa. Superior Ct. 348, 354, 107 A.2d 607, 610 (1954).

Commonwealth Court reasoned that:

[W]here, as here, Employer and Union have undertaken to engage in collective bargaining under the aegis of the NLRA, then the Employer has a right to expect that the notice provisions of Section 8(d) will be complied with prior to an employee strike.

Furthermore, . . . if we were to accept the Claimants' and Board's arguments, then a striker, ineligible under the provisions of Section 402(d) of the Law, would become eligible for benefits upon the exercise by the employer of its right to discharge the striker for violations by the striker of Section 8(d) of the NLRA. We therefore would be encouraging strikers to violate Section 8(d). Such a result would, we believe, so inhibit the exercise by an employer of its federal rights that a serious question of invalidity under the Supremacy Clause of the United States Constitution would be raised.

73 Pa. Commonwealth Ct. 111, 116-17, 457 A.2d 234, 236 (1983) (citations and footnote omitted) (emphasis in original).

We disagree with Commonwealth Court's determination that the employees here exhibited a disregard of behavioral standards which their employer could reasonably expect of them and now hold that their participation in a work stoppage in violation of Section 8(d) of the LRMA does

[ 506 Pa. Page 286]

    not constitute willful misconduct within the meaning of Section 402(e) of our Unemployment Compensation Law. In reaching our decision, we are mindful of the circumscribed scope of appellate review.

It is now axiomatic in an unemployment compensation case, that the findings of fact made by the Board, or by the referee as the case may be, are conclusive on appeal so long as the record, taken as a whole, contains substantial evidence to support those findings. (citations omitted) The appellate court's duty is to examine the testimony in the light most favorable to the party in whose favor the Board has found, giving that party the benefit of all inferences that can logically and reasonably be drawn from the testimony, to see if substantial evidence for the Board's conclusion exists.

LeGare v. Com., Unemployment Compensation Board of Review, 498 Pa. 72, 76, 444 A.2d 1151, 1152-53 (1982) (quoting Taylor v. Unemployment Compensation Board of Review, 474 Pa. 351, 355, 378 A.2d 829, 831 [1977]). Our review is further constrained by policy considerations underpinning the Unemployment Compensation Law. "This Act was designed to alleviate the rigors of unemployment and most specifically to assuage the distress of the individual unemployed worker." Gladieux Food Services, Inc. v. Unemployment Compensation Board of Review, 479 Pa. 324, 330, 388 A.2d 678 (1978). For this reason, the eligibility sections of the law must be liberally interpreted to provide the maximum amount of benefits allowable under the statute to a claimant who has experienced involuntary unemployment. Renne v. Unemployment Compensation Board of Review, 499 Pa. 299, 305 n. 4, 453 A.2d 318, 321 n. 4 (1982). Conversely, disqualification provisions, such as Section 402(e), should be narrowly construed and a claimant must not be denied compensation unless he is unequivocally excluded by the plain language of these provisions. See Penn Hills School District v. Unemployment Compensation Board of Review, 496 Pa. 620, 625, 437 A.2d 1213, 1215 (1981); Gladieux, 479 Pa. at 331, 388 A.2d at 682.

[ 506 Pa. Page 287]

Given the limited range of our inquiry, we turn to the matter before us. This case involves the interrelationship between Sections 402(d) and 402(e) of the Pennsylvania Unemployment Compensation Law, 43 P.S. § 802(d) and 802(e), respectively. Ordinarily, where a claimant is temporarily "unemployed" as a result of his involvement in a labor-related activity, only Section 402(d) governs the determination as to whether he is disqualified from receiving compensation benefits. However, that provision applies only in the context of an ongoing employer-employee relationship. A striking employee, strictly speaking, never leaves his employment.

A striker continues as an employee during the strike and only removes himself from actual labor. He retains his status at all times and again becomes a working employee when the strike is terminated.

Pramco v. Unemployment Compensation Board of Review, 396 Pa. 560, 564, 154 A.2d 875, 876-77 (1959). See Sprague & Henwood, Inc. v. Unemployment Compensation Board of Review, 207 Pa. ...


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