Appeal from the Appellate Court for the First District; heard
in that court on appeal from the Circuit Court of Cook County,
the Hon. James C. Murray, Judge, presiding.
JUSTICE GOLDENHERSH DELIVERED THE OPINION OF THE COURT:
Plaintiff, Owens-Illinois, Inc., filed an action in the circuit court of Cook County for administrative review of the decision of the defendant Director of Labor. The circuit court affirmed the Director's decision and plaintiff appealed. The appellate court affirmed in part, reversed in part and remanded with directions (99 Ill. App.3d 1117), and both plaintiff and defendant petitioned for leave to appeal. We allowed both petitions and consolidated the cases for briefing, argument and opinion.
The opinion of the appellate court contains an adequate review of the relevant facts and the prior proceedings, and they will be stated here only to the extent necessary to discuss the issues. Employees at three of plaintiff's plants, represented by the American Flint Glass Blowers Union (AFGWU), were on strike between September 16, 1977, and October 15, 1977. They maintained picket lines at each of the plants. The AFGWU strike involved directly only a relatively small number of plaintiff's employees, but many employees represented by other unions declined to cross the AFGWU's picket lines. It appears from the record that plaintiff requested that they comply with the "no strike" clauses contained in their collective-bargaining agreements and return to work, and that work was available.
The question presented in this litigation is whether certain of plaintiff's employees were entitled to payments of unemployment compensation for the period from September 16, 1977, through October 15, 1977. In three separate hearings certain groups of employees were held to be "not ineligible for unemployment insurance benefits for the period from September 16, 1977, through October 15, 1977, under the provisions of section 604 of the Illinois Unemployment Insurance Act." It cannot be determined from the record how many individuals filed claims, but it is indicated that they numbered approximately 2,800. The Director's orders describe the three groups of claimants as "employee-members of Locals 3 and 140 of the Glass Bottle Blowers Association"; "employee-members of Local 109 of American Flint Glass Workers, and of Local 7432 of United Steel Workers Union"; and "employee-members of Locals 24, 40, 135 and 95 of the Glass Bottle Blowers Association."
Section 604 of the Unemployment Insurance Act (Ill. Rev. Stat. 1977, ch. 48, par. 434) in pertinent part provided:
"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. * * *
Whenever any claim involves the provisions of this Section, the claims adjudicator referred to in Section 702 shall make a separate determination as to the eligibility or ineligibility of the claimant with respect to the provisions of this Section. This separate determination may be appealed to the Director in the manner prescribed by Section 800."
Plaintiff contends that the circuit and appellate courts> erred in affirming the Director's determination that the claimants were not involved in a labor dispute. Plaintiff states that it does not contend that because they refused to cross their picket lines the claimants participated, or were directly involved, in the AFGWU employees' strike. Citing Jacksonville Bulk Terminals, Inc. v. International Longshoremen's Association (1982), 457 U.S. 702, 73 L.Ed.2d 327, 102 S.Ct. 2673, plaintiff contends that by refusing to work during the AFGWU strike, in violation of the "no strike" clauses in their collective-bargaining agreements, these claimants were involved in their own labor dispute. Plaintiff states and we agree that the "relieving proviso" of section 604 (see General Motors Corp. v. Bowling (1981), 85 Ill.2d 539, 542) was added by the General Assembly to overturn Sangamo Electric Co. v. Donnelly (1962), 26 Ill.2d 348, Local Union No. 11 v. Gordon (1947), 396 Ill. 293, and American Brake Shoe Co. v. Annunzio (1950), 405 Ill. 44, which held that the failure of a claimant to cross the picket line of another striking group of employees amounted to "participation" by that claimant in the labor dispute of those striking employees. Plaintiff argues that while failure to cross a picket line does not "in itself" constitute participation in the labor dispute of those who maintain the picket line, the refusal to abide by their no-strike clauses resulted in a labor dispute and a work stoppage in which all the employees participated.
We do not agree. Nor need we here decide whether the alleged failure to abide by the no-strike clause constituted a labor dispute. Assuming arguendo that it did, on this record it is clear that it was not the labor dispute between claimants and plaintiff that caused the work stoppage. On the contrary, the record shows clearly that the stoppage of work caused the dispute over the contract. (See Jacksonville Bulk Terminals, Inc. v. International Longshoremen's Association (1982), 457 U.S. 702, 722, 73 L.Ed.2d 327, 343, 102 S.Ct. 2673, 2685-86.) We agree with the appellate court that "claimants were properly determined to be `not ineligible' for benefits under section 604." 99 Ill. App.3d 1117, 1128.
Several issues presented in this appeal arise from the procedures followed in the administrative hearings. It is the position of the defendant Director that the question of ineligibility for benefits under section 604 is to be determined in a hearing separate from that required to determine eligibility for benefits under section 500(C). The relevant portions of section 500(C) (Ill. Rev. Stat. 1977, ch. 48, par. 420) provided:
"An unemployed individual shall be eligible to receive benefits with respect to any week only if the Director finds that:
C. He is able to work, and is available for work; provided that during the period in question he was actively seeking work."
Simply stated, his contention is that a hearing must be held to determine that under section 604 a claimant is not ineligible for benefits and that the hearing on the section 500(C) issue is to determine whether he is eligible. He points out that appeals from a claims adjudicator concerning findings under section 500(C) are taken to a referee and to a board of review whereas section 800 provides that "Whenever a `determination' of a claims adjudicator involves a decision as to eligibility under Section 604, appeals shall be taken to the Director or his representative designated for such purpose." Ill. Rev. Stat. 1977, ch. 48, par. 470.
Plaintiff contends that no findings of eligibility were made under section 500(C) and that the circuit court erred in affirming the Director's decision. The Director argues that such findings were in fact made, but that no notice was given plaintiff because of its ...