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05/29/96 EDWARD GOLAB v. ILLINOIS DEPARTMENT

May 29, 1996

EDWARD GOLAB, JOHN D. HOHIMER, LONNIE SCOTT, ROBERT STULTS, AND JOHN ZIBUTIS, PLAINTIFFS-APPELLEES,
v.
ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY AND LYNN QUIGLEY DOHERTY, ACTING DIRECTOR OF THE ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, DEFENDANTS-APPELLANTS, AND HENNESSEY-FORRESTAL ILLINOIS, INC., DEFENDANT.



Appeal from Circuit Court of Sangamon County. No. 94MR125. Honorable Donald M. Cadigan, Judge Presiding.

As Corrected August 29, 1996.

The Honorable Justice Steigmann delivered the opinion of the court: Honorable Robert J. Steigmann, J., Honorable Robert W. Cook, P.j., Honorable James A. Knecht, J. Concurring.

The opinion of the court was delivered by: Steigmann

The Honorable Justice STEIGMANN delivered the opinion of the court:

In March 1994, defendant, the Acting Director Lynn Quigley Doherty (Director) of the Department of Employment Security (Department), issued a final decision in favor of defendant, Hennessey-Forrestal, Illinois, Inc. (the company), finding plaintiffs, Edward Golab, John D. Hohimer, Lonnie Scott, Robert Stults, and John Zibutis, ineligible to receive unemployment insurance benefits, pursuant to section 604 of the Unemployment Insurance Act (Act) (820 ILCS 405/604 (West 1992)). In April 1994, plaintiffs filed a complaint seeking administrative review of the Director's decision. In May 1995, the circuit court reversed.

The Director and the Department appeal, arguing that plaintiffs were ineligible for unemployment insurance benefits because their unemployment was due to a work stoppage caused by a labor dispute. We reverse.

I. BACKGROUND

The company sells and leases construction equipment. Plaintiffs work for the company as mechanics, servicing construction equipment and performing other types of mechanical work as needed. Plaintiffs comprise the entire membership of their local union, Local 965 of the Operating Engineers (Local).

On Friday, April 30, 1993, the Local's contract with the company expired. On Monday, May 3, 1993, Hugo Zahn, the Local's business manager, presented the company's proposed new contract to the Local's members. The members voted to reject the contract and then voted to continue working under the old contract while negotiations continued.

Zahn then informed Tom Hennessey, the company's president, that the Local had rejected the company's offer, but that plaintiffs were willing to continue working under the old contract. Hennessey responded that the Local's members could not work if there was no agreement; when plaintiffs arrived at work on May 3, 1993, management told them to "pack up their tools" and leave.

From April 28, 1993, until June 19, 1993, the company and plaintiffs continued to negotiate a new contract. During this period, the company did not hire replacement workers to fill plaintiffs' positions, and most of the work plaintiffs normally would have performed was not done. Also during this period, picketers from the Local stood outside the company's premises. On June 19, 1993, the parties reached agreement on a new contract.

Plaintiffs filed for unemployment insurance benefits for the time period from May 3 through June 19, 1993, when they did not work at the company. After a Department claims adjudicator determined that they were ineligible for benefits pursuant to section 604 of the Act, plaintiffs requested a hearing before the Director's representative. After a hearing, the representative recommended that the previous determination of ineligibility be set aside and that plaintiffs be deemed eligible for benefits.

In March 1994, the Director issued a decision stating that plaintiffs' unemployment was due to a work stoppage that had occurred as a result of a labor dispute; thus, plaintiffs were ineligible for benefits under section 604 of the Act. 820 ILCS 405/604 (West 1992). Regarding the issue of work stoppage, the Director stated as follows:

"While there is little evidence regarding the extent of the stoppage of work, Mr. Hennessey testified that his was a small company and during the labor dispute[,] 'we could not perform how we normally would have.' He also testified that 'what work we could get done, we did with anybody that was available.' *** In this case there is no question that a labor dispute existed, that none of the heavy equipment mechanics worked during the relevant period and that all returned to work after the labor dispute ended. *** The fact that there were no heavy equipment mechanics to perform services, that the work had to be done by other people, and that all the ...


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