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Dunaway v. Department of Labor





Appeal from the Circuit Court of Saline County; the Hon. Michael J. Henshaw, Judge, presiding.


Rehearing denied September 21, 1982.

The instant appeal arises out of the decision of the circuit court of Saline County in an administrative review proceeding. The general issue is whether the claimants, who are employees of defendant Sahara Coal Company (Sahara) and members of the Progressive Mine Workers of America (PMWA), are disqualified from receiving unemployment insurance benefits under section 604 of the Illinois Unemployment Insurance Act (Ill. Rev. Stat. 1979, ch. 48, par. 434) (hereinafter referred to as the Act). Claimants were denied benefits for a period of time during which they refused to cross United Mine Workers of America (UMWA) picket lines at Sahara's strip mine, repair shop, and two underground mines.

Section 604 provides in pertinent part as follows:

"Labor dispute. 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 a 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. * * * This Section shall not apply if it is shown that (A) the individual is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work and (B) he does not belong to a grade or class of workers of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute; provided, that a lockout by the employer or an individual's failure to cross a picket line at such factory, establishment, or other premises shall not, in itself, be deemed to be participation by him in the labor dispute." Ill. Rev. Stat. 1979, ch. 48, par. 434.

Although Sahara employs no UMWA members, a total stoppage of production was effected from December 6, 1977, through March 6, 1978, except as hereinafter noted. An Illinois Department of Labor claims adjudicator determined that plaintiffs were eligible for benefits; however, upon Sahara's appeal to the Labor Disputes Unit of the Division of Unemployment Insurance, the representative of the Illinois Director of Labor recommended that claimants be held ineligible under section 604. The representative of the Illinois Department of Labor based his recommendation upon his conclusion that the contract between PMWA and the Coal Producers' Association of Illinois (CPAI), of which Sahara is a member, gave claimants a "direct financial interest" in the UMWA dispute regardless of the fact that UMWA's dispute was with the Bituminous Coal Operators' Association (BCOA), of which Sahara is not a member. The Director of Labor adopted the representative's recommendation. Claimants sought administrative review in the circuit court of Saline County. No new evidence was adduced before that court; the circuit court reversed, determining that plaintiffs were not "directly interested' in the UMWA-BCOA dispute. Sahara and the Department of Labor have perfected the instant appeal.

At the outset we note that section 604 of the Act makes an employee ineligible for benefits for any week in which it is found that his unemployment is due to a work stoppage which exists because of a "labor dispute at the * * * premises at which he is or was last employed" unless the two specified exceptions are found to exist. Although it may be argued under this provision that claimants may not be deprived of benefits because no labor dispute existed at the premises where they worked, the parties have not relied upon such an interpretation of the Act. Consequently, we shall not consider such interpretation of the Act.

Testimony at the hearing before the Director's representative was in pertinent part as follows: Walter Lucas, vice-president of Sahara, testified that UMWA members started picketing on December 6, 1977, at all four Sahara facilities. Lucas testified that he was aware of no acts of violence at any of Sahara's four facilities during the UMWA strike although he had read newspaper accounts of strike-related threats and violence at other locations. Several such newspaper articles were admitted in evidence at the hearing. Lucas testified that when the picketing began, he instituted security procedures, including security patrols and surveillance and identification of pickets and their vehicles. According to Lucas, all four Sahara facilities were marked "to work," as opposed to "idle," throughout most of the period during which the facilities were picketed. However, the mines were marked idle between December 27, 1977, and January 2, 1978, which Lucas described as "our normal shut down period." According to Lucas, under the PMWA-CPAI contract, qualifying PMWA members were paid during this shutdown period if they worked the day before it and the day afterward. Lucas testified that no pickets were present the day before or the day after the shutdown period and that an unspecified number of Sahara employees did in fact work on these two days. Lucas testified that picketing by the UMWA Construction local stopped work on March 26 and 27, 1978.

Several PMWA members employed at Sahara also testified at the hearing. Their testimony indicated that most of them did not work on December 6, 1977, the first day of picketing. One employee mentioned seeing a picket swinging a "tire thumper," the only testimony concerning what might be considered a weapon. Some employees stated that they were asked not to work. None testified to being threatened on December 6; however, one employee, who worked on December 8 because he had seen no pickets, came home to discover that his family has been threatened by telephone. Two other employees testified concerning similar threats. One Sahara employee testified that when he first returned to work in March, he was assigned to patrol the belt line because "the mine had received phone calls." Several pickets were described as being intoxicated. There was testimony that the employees returned to work on the day following President Carter's March 6, 1978, announcement that he was ordering the miners back to work under the Taft-Hartley Act. UMWA pickets were removed from the four Sahara facilities beginning March 7, 1978. A settlement between UMWA and BCOA ending the strike was reached March 27, 1978.

Included in the PMWA-CPAI contract in effect at the time of the UMWA strike was a "most favored nations" clause which provided:

"During the term of this contract should any competitive field make a contract covering wages or working conditions more favorable to either the Association or the Union * * *, then this contract shall be modified so that both sides may receive all the benefits of such more favorable contract * * *."

Mr. Lucas testified that there was considerable difference between UMWA and PMWA wage scales under their respective contracts, the PMWA receiving the higher wages. He testified that in the two unions' most recent contracts each had received the same pay increases; thus, PMWA members continued to be better paid than UMWA members.

The new PMWA-CPAI contract, entered into on April 6, 1978, included pay raises retroactive to March 27, the date of the new UMWA-BCOA contract. Eugene Hughes, PMWA district and international president, testified that these raises and their effective dates were negotiated and that PMWA "always" negotiated for raises retroactive to the date UMWA received raises. One Sahara employee testified that he received his first pay increase in his April 20, 1978, paycheck. Attorney Horsley, counsel for claimants, stated: "That would be correct, a ten day hold back." Horsley also stated that these raises were negotiated during negotiations resulting in the April 6 contract. "There was nothing automatic about it." During the hearing, the Director's representative expressly invited the parties to supply more evidence tending to show whether the PMWA raises were negotiated or were received as of right.

The Director's representative held that claimants were "directly interested" in the UMWA-BCOA dispute. In so concluding, the Director's representative expressly rejected claimants' contention that the pay raises provided for in the new PMWA-CPAI contract were negotiated. "[T]he claimants were entitled to the raise retroactively as a matter of right — and an enforceable right, at that. This then, was not a ...

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