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701 N.E.2d 1163

October 16, 1998

IN THE APPELLATE COURT OF ILLINOIS SECOND DISTRICT


The opinion of the court was delivered by: Justice Rapp

No. 96--MR--32

Appeal from the Circuit Court of Kendall County.

CATERPILLAR, INC., Plaintiff-Appellant, LYNN DOHERTY, Director of the Department of Employment Security; THE BOARD OF REVIEW OF THE DEPARTMENT OF EMPLOYMENT SECURITY; and BRUCE HARTZELL, Defendants-Appellees.

Honorable Thomas E. Hogan, Judge, Presiding.

Defendant-Claimant, Bruce Hartzell (Hartzell), filed a claim for unemployment benefits with The Department of Employment Security (Department). Plaintiff-employer, Caterpillar, Inc. (Caterpillar), protested the claim. A claims adjudicator determined Hartzell was eligible for unemployment benefits. Caterpillar appealed the claims adjudicator's determination. A Department referee conducted a hearing and determined Hartzell was eligible for unemployment benefits. Caterpillar appealed the referee's decision to the Board of Review of The Department of Employment Security (Board of Review). The Board of Review affirmed the decision of the hearing referee. Caterpillar sought administrative review. The circuit court of Kendall County affirmed the decision of the Board of Review. Caterpillar appealed. We affirm.

Caterpillar discharged Hartzell from employment on September 27, 1994, alleging he violated the rules of conduct for striking employees by threatening a nonstriking worker. Hartzell denied the allegations but admitted a brief name-calling match with the nonstriking worker. At the time of his discharge, Hartzell, a member of the International Union of United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), was participating in a strike against Caterpillar. The strike began on June 20, 1994, and continued to December 1995.

Hartzell filed a claim for unemployment benefits with the Department on September 3, 1995. Caterpillar protested the claim in a letter to the Department dated September 14, 1995, claiming Hartzell was ineligible for benefits because he was "on strike." A Department claims adjudicator rejected Caterpillar's protest and determined Hartzell was eligible for benefits commencing on September 3, 1995. Caterpillar appealed the claims adjudicator's determination.

On May 2, 1996, a Department referee conducted a hearing on Caterpillar's appeal. Caterpillar argued that the hearing referee lacked jurisdiction and that the appeal should have been considered instead by the Director of the Department of Employment Security (Director) because Hartzell's unemployment resulted from a labor dispute. Caterpillar also argued that Hartzell's claim for unemployment benefits was untimely because it was filed almost a year after his discharge. Caterpillar's primary witness, Stephen Fuller (Fuller), and Hartzell offered conflicting testimony regarding the September 19, 1994, incident.

Fuller testified that as he, his wife, his son, and a co-worker were leaving the Caterpillar plant, Hartzell followed them in a truck. Fuller further testified that Hartzell called him a "scab," cursed at him, made threats, and tried to run him off the road.

Hartzell testified that Fuller was in a car next to his truck while they were stopped at a red light. Hartzell testified that Fuller initiated a verbal exchange by inviting Hartzell to call him a "scab." Hartzell admitted calling Fuller a "f---ing scab." Hartzell denied threatening Fuller or any of his passengers, and denied trying to run Fuller off the road.

On May 7, 1996, the hearing referee issued a decision affirming the claims adjudicator's determination that Hartzell was eligible for unemployment benefits. The referee held that he had the authority to consider Caterpillar's appeal and that section 604 of the Unemployment Insurance Act (Act) (820 ILCS 405/604 (West 1992)), which disqualifies participants in a labor dispute from receiving benefits, did not apply.

The referee found that Hartzell was not discharged for misconduct as defined in section 602 of the Act (820 ILCS 405/602 (West 1992)). Specifically, the referee found that Caterpillar failed to demonstrate "by a fair preponderance of the evidence that the claimant engaged in 'intimidation, coercion, physical violence or a threat thereof' as proscribed in the rules." The referee found that Caterpillar failed to establish that it or any of its employees had suffered any harm. The referee further found that Caterpillar did not issue prior warning or explicit instruction regarding the conduct to Hartzell.

Caterpillar appealed the referee's decision to the Board of Review. Caterpillar stated it was appealing (1) the referee's ruling that Hartzell was not discharged for misconduct as defined in section 602 of the Act; and (2) the referee's ruling that section 604 of the Act was inapplicable. Caterpillar also argued that the referee lacked jurisdiction because a claim involving eligibility under section 604 of the Act should have been considered by the Director or her representative.

However, in its two briefs filed with the Board of Review, Caterpillar did not argue that the referee lacked jurisdiction or that Hartzell filed his claim for benefits untimely. On October 30, 1996, after reviewing the record, including the transcript of testimony submitted at the hearing ...


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