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Employment Development Department
Employment Development Department

Trade Dispute TD 280

Trade Disputes and Separation Issues, Suspensions, and Suitable Work

A. Trade Disputes and Voluntary Quits

  1. General

    There are, basically, three points at which the issue of a voluntary quit may arise in relation to trade disputes:

    • At the beginning of a dispute, where there may be a question on whether or not the leaving was under section 1256 or 1262. This question commonly occurs under the following circumstances.
    • Leaving of work due to employer’s implementation of reduction in wages and fringe benefits.
    • Leaving of work due to respecting an informational picket line.
    • Leaving of work by a group of employees due to dissatisfaction with working conditions when no union is involved.
    • During the trade dispute, when the employee may decide to voluntarily quit the job after initially leaving the job due to a trade dispute. E.g., a claimant who took strike action may later decide to voluntarily quit the job and move to another location on a permanent basis. If it is determined the claimant has voluntarily quit the job, then the claimant would have purged the trade dispute disqualification.

    See TD 370 for a discussion of purges of a trade dispute disqualification by a voluntary quit.

    • At the end of a trade dispute, when the claimant may decide to voluntarily quit the job instead of returning to work for the employer.

    In all of the above categories, once it is determined that the leaving constitutes a voluntary quit under Section 1256, then the usual standards for resolving the voluntary quit issue apply. If it is determined the claimant left due to a trade dispute or continued to remain unemployed due to a trade dispute, then the disqualifying provisions of Section 1262 apply.

  2. Voluntary Quit/Trade Dispute Leaving at Beginning of Dispute
    1. Leaving Due to New and Onerous Working Conditions.

      In the Bunny’s Waffle Shop court case, a number of San Francisco restaurants in May 1941 formed an employer association to bargain with the union for a single contract covering all the restaurants. The union refused to bargain with the employer association. It wanted to bargain with each restaurant individually. In July 1941 the members of the employer association, in trying to compel the union to accede to their demands, reduced wages 25 percent, increased the workweek from five to six days, and instituted split shifts. The court held as follows:

      "Although wages and conditions of work are normally subjects of labor disputes, the facts in the present case. . .clearly show that those changes were not the subject of a trade dispute in this case. A bonafide labor dispute between the employers and the unions existed for several months before these changes were announced. In the course of that dispute, the unions were demanding more favorable terms and conditions of employment and individual contracts with the employers, while the employers were demanding that the old terms and conditions be continued and that the unions bargain collectively with their representative. There was no suggestion during this entire period that wages be reduced or more onerous conditions of work be imposed, or even that the employers wished such changes. Consequently, there was no dispute concerning these matters. When the new conditions of work were finally announced by the employers, they were not offered as bona fide proposals for the continued operation of the employers’ places of business, but were imposed for the sole purpose of coercing the unions into bargaining collectively with the employers’ representative and were to continue only until the unions agreed to do so. Admittedly they were an economic weapon designed to compel compliance with the employers’ demands, and when claimants left their work, they left because of this economic weapon and not because of the trade dispute then in existence. The fact that the trade dispute was unquestionably the motivating cause of the employers’ acts does not establish any direct causal relation between the dispute and the employees’ leaving of work."

      The claimants were considered to have voluntarily left their jobs for compelling reasons under Section 1256.

      The significant points of this case are that:

      • The trade dispute was considered to have begun prior to the actual leaving of work.
      • The claimants were considered to have left their jobs during the course of the trade dispute.
      • The implemented conditions of work were new conditions. They were not part of the prior bargaining.
      • The new conditions of work were imposed for the sole purpose of coercing the union to bargain with the employer association. They were not offered as bona fide proposals for the continued operations of the employers’ businesses.

      The court in the Acuff case distinguished its findings from the Bunny’s case. In the Acuff case, approximately 800 Greyhound employees, members of the Amalgamated Transit Union, went on strike against Greyhound Lines from November 3, 1983, through December 19,1983. They struck because their union could not reach a new agreement with the employer, and the employer then implemented new working conditions including a 17 percent reduction in wages and benefits. The claimants argued that they went on strike for "good cause" because of the wage and benefit reduction within the meaning of the Bunny’s case. They further argued that the wage reduction constituted a "constructive lockout" and thus their leaving was involuntary. Finally, they argued the disqualification unconstitutionally discriminated against them since if they had left work individually rather than in a group, there would have been "good cause" for leaving, under Section 1256.

      The court held that "unlike the wage reductions in Bunny’s Waffle, these (reductions) were presented . . . as essential to the continued operation of Greyhound’s business. Unlike the employees in Bunny’s Waffle Shop, petitioners left work because of an ongoing, unresolved dispute over the terms of the agreement under negotiation, not because of conduct by Greyhound unrelated to an ongoing dispute or negotiations to resolve it."

      In another wage reduction court case, the Martinez case, the court again held the claimants left due to the trade dispute within the meaning of Section 1262, and not during the course of the dispute, under Section 1256. In this case, the collective bargaining agreement between the United Farm Workers of America and Egg City expired on September 1, 1985. In August 1985 negotiations began for a new contract, and the employer’s proposals included a reduction in wages. According to the employer, the wage cuts were a critical part of the employer’s bargaining position due to its unfavorable competitive position. No new agreement was reached and in April 1986 the employer began implementing changes in working conditions which included wage cuts of 27 to 33 percent; the wage cuts in combination with the reduced benefits comprised a 34 to 41 percent earnings reduction. The claimants took strike action on June 24. The claimants contended they left work because of the wage cuts and thus were not subject to disqualification, under Section 1262. They argued they were victims of a "constructive lockout" and voluntarily left their work with good cause, within the meaning of the Bunny’s case

      The Court of Appeal held the claimants disqualified under Section 1262. The court concluded that this case was different than Bunny’s because in Bunny’s, the new working conditions and wages which were implemented were not bona fide proposals. In Martinez, the reduction in wages were an integral part of the employer’s bargaining position and not a ploy or weapon to force the union to accede to its demands.

    2. Leaving of Work Due to Respecting an Informational Picket Line:

      There may be instances when a claimant respects a picket line and the issue to be resolved would be under Section 1256. This is true if the picket line is an informational picket line. An informational picket line is established for the purpose of informing the public of the union’s general position regarding a particular issue, e.g., the employer may be paying less than union wages. There are no negotiations between the employer and the union. The union has not presented demands to the employer. An informational picket line, by itself, would be an insufficient basis to conclude there is a trade dispute. Accordingly, the leaving under these circumstances must be considered a voluntary leaving under Section 1256.

      To illustrate, the Carpenters’ union decides to picket a job site where nonunion carpenters are employed by a subcontractor. Upon reporting to work, a member of the Plumbers’ union, who is employed by another subcontractor, notices the picket line and decides to honor the picket line. The Department’s investigation indicates the Carpenters’ union is not attempting to organize the nonunion carpenters. It has not presented demands to the employer. It has established an informational picket line to notify the public that the employer is not paying union wages.

      Accordingly, it is concluded, there is no trade dispute within the meaning of Section 1262, and therefore, there can be no issue under Section 1262. The claimant’s leaving must be resolved under the voluntary quit provisions of Section 1256. The claimant states he did not cross the picket line because, as a union member, he does not believe in crossing a picket line. The claimant would be considered disqualified under Section 1256 since the claimant was free to cross the picket line, since there was no trade dispute at the job site.

    3. No Union Disputes and Section 1256

      A group of employees, who are not represented by a union, may be unhappy with their working conditions. They approach their employer with their demands. The employer rejects their demands and asks that they return to work. The employees then decide to leave their work.

      As indicated in TD 120, the fact that no union is involved does not preclude the conclusion that there may be a trade dispute. If the employees left work with the intent of pursuing their demands and with the hope of returning to work when their demands were resolved, their leaving would be considered a leaving due to a trade dispute under Section 1262. Circumstances which would indicate the employees were interested in pursuing their demands would include subsequent meetings or attempting to meet with the employer to settle the issues.

      On the other hand, if the employees’ intent at the time they left work was to abandon their hope of resolving their problem and to discontinue the employer-employee relationship, then the issue to be resolved would be under Section 1256. The usual standards on whether or not there was good cause for voluntarily quitting, due to alleged unsatisfactory working conditions, should be applied.

    4. Leaving Due to Employer’s Change to Nonunion Status

      An employer and union may be unable to reach an agreement in their efforts to renew their contract. At the expiration of the contract, the employer indicates it will go nonunion. Some employees may then voluntarily quit their jobs because they do not wish to continue working for a nonunion employer.

      If it can be shown that the claimant has severed his/her relationship with the employer, e.g., submitted a resignation, seeking full-time work permanent work, etc., then the issue to be resolved would be under Section 1256. Refer to Section 1256-21(1) and (2) of Title 22.

      If an individual leaves work because the employer changes wages or hours of work to conditions not meeting union standards and the union has no collective bargaining agreement with the employer, the individual has left work without good cause unless any of the reasons specified in Title 22, Section 1256-22(b) exist.

  3. Voluntary Quit During Course of Trade Dispute

    An employee may initially decide to leave work due to a trade dispute and, at some later date, decide to abandon the trade dispute and voluntarily quit the job. Since the individual initially left work due to the trade dispute, he/she would be subject to disqualification under Section 1262; however, the subsequent leaving of work raises two issues: l) Purge of the trade dispute disqualification - Did the claimant actually abandon the dispute and voluntarily quit the job? 2) If so, does the claimant have good cause for the voluntary quit? Refer to TD 370 and VQ 440 for a discussion of these issues.

  4. Voluntary Quit at End of Trade Dispute

    The employer-employee relationship is suspended during the trade dispute. When an individual chooses not to return to work at the end of the dispute, to resume the employer-employee relationship, the refusal to return constitutes a voluntary quit under Section 1256.

    In PB 208, a claimant who left work because of a trade dispute did not return to work when the strike ended because he had moved to a new locality to look for work while the strike was active. The Board held that his failure to return to work constituted a voluntary quit as of the time work was resumed.

B. Trade Disputes and Discharges

Refer to BDG MC 475 for guidance on trade disputes and discharges.

C. Trade Disputes and Suspensions

When an individual is suspended during or at the end of a trade dispute, an issue under Section 1256 is raised on the reason for the suspension.

In PB 231, several employees who were the active participants in a one-day walkout on June 25, 1963, were suspended from 30 to 60 days when they attempted to return to work. They were suspended because they had taken an active part in leading or furthering the walkout in violation of the "no strike" clause in the existing contract.

The Board concluded there was a trade dispute for the one-day period and that the employees left due to the trade dispute.

The Board also concluded the trade dispute ended when the striking employees returned to work and that their unemployment, after they attempted to return to work, was due to their suspension. The Board said:

"When the claimants returned to work on June 26, 1963, they ceased to be unemployed because of a trade dispute in active progress. Their subsequent unemployment resulted from the act of the employer suspending them. Such action by the employer was made for disciplinary reasons under the provisions of Section 117 of the collective bargaining agreement. It was a result which the claimants knew, or could reasonably be expected to know, might flow from their violation of the agreement’s "no strike" clause. In these circumstances, it must be held that it was the deliberate violation of the collective bargaining agreement by the claimants which led to their suspension and thus was the proximate cause of their unemployment at the time their claims were filed.

In Benefit Decision No. 6618, we held that the claimant therein had voluntarily left his work without good cause when he was suspended from his work because of his deliberate violation of the rules of employment on the waterfront, which rules were established in accordance with the collective bargaining agreement then in effect.

Since the claimants (herein) were suspended because of their deliberate violation of the collective bargaining agreement, we reach the same conclusion in their cases."

D. Trade Disputes and Suitable Work

Whenever a claimant refuses an offer of work because the employer is involved in a trade dispute, the first question to be resolved is: Should the claimant’s refusal be resolved under Section 1262 or 1257 (b)?

The issue to be resolved depends on whether or not there was an employer-employee relationship between the claimant and the employer at the time of the job offer. If there is no employer-employee relationship at the time of the job offer, the provisions of Section 1262 do not apply. Section 1257 (b) applies. This is because an individual must voluntarily leave work to be subject to the provisions of Section 1262 and to leave work presumes there was an employer-employee relationship at the time of the leaving. If there is an employer-employee relationship at the time of the job offer, the refusal of the offer is tantamount to a leaving of work, and the claimant would be subject to the provisions of Section 1262.

Example: Claimant is employed as a temporary worker. On October 10, the claimant is laid off with a scheduled return to work date of October 24. A trade dispute begins on October 22 so the claimant refuses to report to work on October 24. Since the claimant had a fixed return to work date, the employer-employee relationship was not severed at the time of the layoff and job offer. Accordingly, the claimant is subject to the provisions of Section 1262. Since the claimant, in effect, voluntarily left the work due to the trade dispute, the claimant is ineligible under Section 1262.

On the other hand, if the above temporary worker was laid off on October 10 without a fixed return to work date, the claimant would be considered on an indefinite layoff. An employer-employee relationship is severed by an indefinite layoff. If the employer offered work on October 23 to begin October 24, the date the trade dispute started, the refusal would have to be resolved under Section 1257(b). Refer to BDG SW 315, 475 and 480 for guidance on resolution of the suitable work issue.