Appeal from the Order of the Commonwealth Court dated December 17, 1985, docketed at 2246 C.D. of 1982, affirming the Order dated August 13, 1982 of the Unemployment Compensation Board of Review at Decision No. B-183655-B.
Nix, C.j., and Larsen, Flaherty, McDermott, Zappala Papadakos and Stout, JJ. Papadakos and Stout, JJ., join in this majority opinion. Flaherty, J., joins in this majority opinion and files a concurring opinion. Nix, C.j., and McDermott, JJ., file concurring opinions. Zappala, J., file concurring opinion in which McDermott, J., joins.
Frank D. Miceli, Charles Minnich and Leander Krist, token claimants, appeal from a Commonwealth Court order affirming a decision of the Unemployment Compensation Board of Review (Board) that denied them, and all other similarly situated employees of Intervenor, Quaker Oats Company (Quaker Oats), unemployment compensation benefits. At stake in this appeal is the eligibility of the union employees of Quaker Oats for unemployment compensation
benefits for the weeks ending April 28, 1979 through May 26, 1979. During that time a labor dispute existed between Quaker Oats and the employee's bargaining representative, the Cereal Workers Directly Affiliated Local Union No. 221, AFL-CIO (Union). The Board concluded that the claimants were ineligible for benefits because their unemployment for the relevant period was due to a strike rather than a lockout within the meaning of section 402(d) of the Pennsylvania Unemployment Compensation Law, Act of December 5, 1936, P.L. 2897, as amended, 43 P.S. § 802(d) (1964). The Commonwealth Court reached the same conclusion and affirmed the Board's decision. Thus, we are faced with the question of whether the work stoppage during the period for which benefits are sought was the result of a strike or a lockout. After reviewing the record, we conclude that the work stoppage resulted from a lockout by Quaker Oats leaving the claimants eligible for benefits. We therefore reverse.
In February, 1979, Quaker Oats and the Union were parties to two collective bargaining agreements. Together these agreements covered approximately 375 hourly production, maintenance, shipping and laboratory employees at the Quaker Oats production and distribution facilities in Shiremanstown, Pennsylvania. One of these agreements was due to expire on March 31, 1979 and the other on April 1, 1979. Negotiations for a new collective bargaining agreement to replace the two agreements began in late February, 1979. Although the parties met at various times in February and March, they were unable to reach a new agreement before the existing ones expired.
On April 2, 1979, the Union and Quaker Oats signed a memorandum of agreement providing that the plant would remain open and the parties would continue to work under the terms and conditions of the expired agreements while negotiations continued. The memorandum of agreement provided further that the Union would not strike and Quaker
Oats would not lock out the employees without 24 hours prior written notice to the other side. Quaker Oats and the Union continued negotiations and met in negotiating sessions on April 5, 9 and 17. No progress toward a new agreement was made at these sessions. On April 20 the parties met and Quaker Oats informed the Union that many of the employees were refusing to work overtime and if the refusals continued it would cause severe production problems in the plant. The Union indicated that it was unaware of any such problem and agreed to actively urge its members to accept overtime work. The Union carried out its promise in this regard. On April 25, 1979, Quaker Oats and the Union held another bargaining session. At this meeting Quaker Oats raised questions concerning, (1) the employees refusal to work overtime, (2) an alleged concerted work slowdown by the employees and (3) incidents of alleged sabotage of equipment in the plant. On April 26, 1979, Quaker Oats delivered written notice to the Union that all employees represented by the Union would be locked out effective 7:00 o'clock a.m., April 28, 1979. Quaker Oats rejected the Union's unconditional offer to continue to work and, in so doing, stated: "At this time we have no reason to expect that normal operations could be resumed should the plant be reopened." (R.R. p. 253a.)
The claimants, idled by the work stoppage, sought unemployment compensation benefits. Their applications were approved by the Office of Employment Security. Quaker Oats appealed and obtained a hearing. On August 23, 1979, the appeal was heard by a referee. In a decision handed down November 20, 1979, the referee affirmed the determination of the Office of Employment Security allowing benefits. On appeal to the Board the referee's decision was affirmed. On further appeal, the Commonwealth Court found that the referee's decision lacked findings of fact needed to support its conclusion. The Commonwealth Court therefore reversed and remanded for additional findings of fact. Quaker Oats Co. v. Unemployment Compensation Board of Review, 65 Pa. Commw. 72, 442 A.2d 369 (1982).
Pursuant to the remand the Board vacated its previous order that approved benefits for the claimants and went on to find: "The claimants first altered the status quo by refusing to perform overtime work and by causing instances of sabotage to the employer's equipment." The Board concluded that the work stoppage was a strike rather than a lockout. Accordingly, the Board reversed the decision of the referee and denied unemployment benefits. The claimants appealed the Board's decision to the Commonwealth Court which affirmed. Miceli v. Unemployment Compensation Board of Review, 93 Pa. Commw. 505, 502 A.2d 297 (1985). We granted the claimants' petition for allowance of appeal.
The scope of review in an appeal from an adjudication of a Commonwealth agency is that we must affirm unless the adjudication violates the constitutional rights of the appellant, or is contrary to law, or that agency procedure was violated, or a finding of fact necessary to back the decision is not supported by substantial evidence. 2 Pa.C.S.A. § 704. See: Estate of McGovern v. State Employees' Retirement Board, 512 Pa. 377, 517 A.2d 523 (1986). See also, Taylor v. Unemployment Compensation Review Board, 40 Pa. Commw. 577, 398 A.2d 231 (1979).
The claimants make no claim that their constitutional rights were violated nor do they raise any question concerning the procedure before the Board. Our review therefore will be limited to whether there was an error of law and/or whether the Board's findings are supported by substantial evidence.
Section 402(d) of the Pennsylvania Unemployment Compensation Law provides in relevant part as follows:
An employe shall be ineligible for compensation for any week --
(d) In which his unemployment is due to a stoppage of work, which exists because of a labor dispute (other than a lockout) at the factory, establishment or other premises at which he is or was last employed: . . . .
The claimants' eligibility for benefits is dependent upon a determination of whether the work stoppage was caused by a lockout or a strike. If the work stoppage was caused by a lockout, as initially found by the referee and affirmed by the Board, the claimants are eligible for benefits. If, however, the work stoppage was the result of a strike, as was later found by the Board ...