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decided: May 1, 1989.


Appeal from the Order of the Unemployment Compensation Board of Review, in the cases of In Re: Claims of Jerome E. Lynn, No. B-266212; Dean S. Litzenberger, No. B-266213; Marvin S. Sacks, No. B-266214; Eric S. Kester, No. B-266215; Julius P. Molnar, No. B-266216; James R. Sherer, No. B-266217; Gregory Zettlemoyer, No. B-266218; Eugene J. Dougherty, No. B-266219; John R. Raub, No. B-266220; Gregory Zettlemoyer, No. B-266221; Clarence Dixon, No. B-266222; Ronald A. Krupa, No. B-266223; Louis J. Benn, No. B-266224; Robert W. Lobb, No. B-266225; Kevin J. Schratt, No. B-266226; David L. Warner, No. B-266227; Jeffrey W. Welty, No. B-266228; Thomas F. Ahearn, No. B-266229; Dale Williams, No. B-266230; Howard R. Fritzinger, No. B-266231; Jerry M. Nothstein, No. B-266232; Jeff S. Feller, No. B-266233; William C. Montz, No. B-266234, and Norman C. Schratt, No. B-266235, dated June 6, 1988.


Bruce J. Kaston, with him, Edward H. Feege and Carl H. Shuman, Duane, Morris & Heckscher, for petitioner.

John E. Herzog, Assistant Counsel, with him, Clifford F. Blaze, Deputy Chief Counsel, for respondent.

Judges Colins and Smith, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Senior Judge Barbieri.

Author: Barbieri

[ 125 Pa. Commw. Page 507]

Effort Foundry, Inc. (Petitioner) petitions for review of the order of the Unemployment Compensation Board of Review (Board) which affirmed a referee's decision awarding benefits to Jerome E. Lynn (Claimant) and 23 other employees because they had been constructively "locked out" of their place of employment during a labor dispute pursuant to Section 402(d) of the Unemployment Compensation Law (Law), Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. ยง 802(d). We affirm the Board.

Claimant was a member of Local 14797 of the United Steel Workers of America (Union) which represented employees at Petitioner's plant. The labor management agreement between the Union and Petitioner was set to expire by its own terms on December 14, 1987. Prior to this date, the parties held a series of negotiating sessions during which Petitioner represented it was seeking economic concessions from the Union in order to remain competitive. The Union rejected Petitioner's position and asked for and received financial information about the company to verify Petitioner's claim of economic distress.

On December 14, 1987, Petitioner presented the Union its final offer which demanded wage and benefit cuts. The Union's representative stated this proposal was unacceptable but offered to take back to its membership a proposal to extend the present contract for a three month, six month or one year period. Petitioner replied that it could not hang on that long and that work would only be available on December 15, 1986, under the terms of its final wage offer. The Union then held a membership meeting and unanimously rejected Petitioner's final offer.

[ 125 Pa. Commw. Page 508]

The Union struck Petitioner's plant at midnight on December 14, 1987.

On January 12, 1988, while the strike was continuing, the parties held another negotiating session before a federal mediator. Petitioner offered to allow the employees to return to work at substantially the same wage rate as before, but with a different recall and employee discipline policy. The Union rejected this proposal and the strike continued.

The referee awarded benefits to Claimant, who is the test employee in this case, because he found that the Union attempted to maintain the status quo between the parties by offering to extend the existing contract, which offer Petitioner rejected, thereby converting this labor dispute into a constructive lockout under the holding of Vrotney Unemployment Compensation Case, 400 Pa. 440, 163 A.2d 91 (1960). The Board made its own findings of fact and affirmed.

Petitioner presents several related arguments. First, Petitioner notes the Union did not formally offer to extend the contract, it merely offered to take a proposal for an extension back to its membership. Second, Petitioner argues that the Union's offer to extend the contract did not contemplate that negotiations would continue, but was instead a proposal for a contract of limited duration and therefore not an attempt to maintain the status quo between the parties. See Jehn v. Unemployment Compensation Board of Review, 110 Pa. Commonwealth Ct. 209, 532 A.2d 57 (1987). Third, Petitioner asserts that if a lockout did occur on December 14, 1987, its offer to take the employees back at the previous wage rate on January 12, 1988 converted any lockout ...

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