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Dienes v. Holland





Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Arthur L. Dunne, Judge, presiding.


This appeal is from a judgment of the appellate court reversing a decision of the circuit court of Cook County which upheld a finding by Kenneth W. Holland, Director of Labor. (64 Ill. App.3d 109.) The Director had denied claims for unemployment compensation filed by John Dienes, Alfred Cavozos and Reuben Rodriguez (Ill. Rev. Stat. 1971, ch. 48, par. 434). We granted the Director's petition for leave to appeal.

The claimants were employed by the Continental Grain Company (Continental), which operated a grain elevator in the Chicago area. On September 1, 1971, they, as members of Local 418, Flour and Feedmill Workers, were engaged in a lawful strike against Continental and other operators of grain elevators in Cook County. The strike was interrupted in October of 1971 by a Federal court order requiring a return to work but was renewed when the order was withdrawn. Continental and Local 418 reached an agreement on February 19, 1972, ending the strike.

In November of 1971, while they were on strike, the claimants obtained employment with the Carey Grain Corporation (Carey), another grain elevator operator, which had already reached a bargaining agreement with the union. They worked on a full-time basis for Carey until they were laid off due to a lack of work. Cavozos was laid off on December 25, 1971, and Dienes and Rodriquez on January 8, 1972. Though the testimony of Rodriquez is somewhat ambiguous, it appears that each thought he had obtained a permanent position with Carey. The claimants resumed their employment at Continental in February of 1972 after the bargaining agreement had been reached.

The claimants applied for unemployment benefits to cover the period between their layoff at Carey and their return to work. After a hearing, the Director of Labor held that they were disqualified from receiving benefits because of section 604 of the Unemployment Compensation Act. That section provides:

"An individual shall be ineligible for benefits for any week with respect to which it is found that his total or partial unemployment is due to stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed * * *." (Emphasis added.) Ill. Rev. Stat. 1971, ch. 48, par. 434.

Relying primarily on the holding in Mark Hopkins, Inc. v. California Employment Com. (1944), 24 Cal.2d 744, 151 P.2d 229, the Director concluded that since the "claimants never notified the employer of their intention to quit and returned to it at the end of the strike * * * we must infer that their employment with Carey was not entered into with the intent that it be permanent * * *."

Our Unemployment Compensation Act was enacted in 1937. (Ill. Rev. Stat. 1937, ch. 48, par. 217 et seq.) The public policy announced in section 1 of the Act was to lessen the severe economic insecurity due to involuntary unemployment, which was described as a "menace to the health, safety, morals and welfare of the people of the State of Illinois." (Ill. Rev. Stat. 1937, ch. 48, par. 217.) The courts> have given a liberal construction to the Act. Ross v. Cummins (1956), 7 Ill.2d 595; Commonwealth Life & Accident Insurance Co. v. Board of Review (1953), 414 Ill. 475; Central Foundry Division of General Motors Corp. v. Holland (1976), 36 Ill. App.3d 998.

The Director states that section 604, the labor dispute provision of the Act under which the claimants were declared ineligible, was designed to maintain neutrality in the collective bargaining process so as not to provide the employer or labor with any economic advantage. (See Buchholz v. Cummins (1955), 6 Ill.2d 382.) The Director argues that in viewing the circumstances the claimant should be considered "last employed" at Continental and not at Carey. He points out that their unemployment resulted from a labor dispute with Continental and that, while they did work at Carey for a short period, that relationship was at best a temporary or a stop-gap measure. This, it is argued, is shown by the claimants' return to their jobs at Continental upon settlement of the labor dispute, by their enjoyment of benefits secured in the settlement, and further by their maintaining seniority status at Continental. Evidencing that the employer-employee relationship still existed between Continental and the claimants, the Director says that at no time did they attempt to sever their relationship before going to work with Carey. Since the relationship was not broken by their employment with Carey they should be considered, the Director argues, "last employed" by Continental and thus within the disqualifying labor dispute provision of the Act. Another contention of the Director is that "last employed" should be interpreted as last "regularly or permanently" employed.

Labor dispute provisions affecting eligibility are found in the unemployment benefit statutes of a majority of the States. The statutory provision involved in Mark Hopkins, Inc. v. California Employment Com. (1944), 24 Cal. 744, 151 P.2d 229, on which the Director relied in concluding the claimants here were disqualified, was quite different from the provision of our statute. We consider the Director's reliance on the California holding was erroneous. The statute involved there provided:

"An individual is not eligible for benefits for unemployment, and no such benefit shall be payable to him * * * (a) If he left his work because of a trade dispute and for the period during which he continues out of work by reason of the fact that the trade dispute is still in active progress in the establishment in which he was employed." Deering's Gen. Laws, Act 8780d, sec. 56(a) (Supp. 1939) (now Cal. Unemp. Ins. Code sec. 1262 (1971)).

The term "last employed" is found in the labor dispute provisions of a number of unemployment benefit statutes, including, of course, our statute. "Last employed" has been variously interpreted. It has been held that the term imposes an affirmative duty upon a claimant to show a complete severance of the employment relationship in order to avoid disqualification. (In re Hatch (1972), 130 Vt. 248, 290 A.2d 180; Scott v. Smith (1962), 141 Mont. 230, 376 P.2d 733.) In other holdings courts> have said that the determining standard is whether the striking employee was intending in good faith to obtain permanent employment when he took the later job (Labinsky v. Florida Industrial Com. (Fla. App. 1964), 167 So.2d 620; Bruley v. Florida Industrial Com. (Fla. App. 1958), 101 So.2d 22; Gentile v. Director of Division of Employment Security (1952), 329 Mass. 500, 109 N.E.2d 140) with no intent to return to the first employer when the strike ended (In re Hatch (1972), 130 Vt. 248, 290 A.2d 180; Bergen Point Iron Works v. Board of Review (1948), 137 N.J.L. 685, 61 A.2d 267). Courts> in two jurisdictions have judged that "last employed" is to be read as last "regularly or permanently" employed. E.I. DuPont de Nemours & Co. v. Dale (Del. 1970), 271 A.2d 35; Alin v. Alaska Employment Security Com. (1958), 17 Alaska 607.

Our appellate court here, in reversing the trial court, considered the term "last employed" in our statute to mean "last in time." This was also the meaning given the term in Great Lakes Steel Corp. v. Employment Security Com. (1967), 6 Mich. App. 656, 150 N.W.2d 547. There, 75 striking employees of Great Lakes obtained interim jobs among a number of different employers. They were later laid off but, when the strike was concluded, returned to their employment at Great Lakes. The appellate court reversed the trial court's decision that the claimants were disqualified under the labor dispute provision and held that the claimants' unemployment for which they had filed claims for compensation did not result from the labor dispute at Great Lakes but from the layoffs at their later employments. The court said that while an employer-employee relationship might continue to exist between Great Lakes and the claimants, "the interim employer became the `establishment in which he is or was last employed,' when employment with such employer had been obtained." 6 Mich. App. 656, 665, 150 N.W.2d 547, 551. The Supreme Court of Michigan affirmed. Great Lakes Steel Corp. v. Employment Security Com. (1968), 381 Mich. 249, 161 N.W.2d 14.

We consider that the appellate court was correct in reading the statute just as it was enacted, that is, in saying that section 604 disqualifies an employee who becomes unemployed as a result of a labor dispute only at the "factory, establishment, or other premises at which he is or was last employed * * *." (Ill. Rev. Stat. 1971, ch. 48, par. 434.) We cannot perceive any legislative ...

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