Trade Dispute TD 320

Special Situations

This category covers a variety of situations involving the question of whether or not employees voluntarily left their jobs due to a trade dispute.

A. Functional Integration

Employees in a single bargaining unit may work for the same employer in geographically separate establishments, but whose operations are inter dependent. Where the facts indicate it was union strategy to call a strike in one establishment which, subsequently, leads to the layoff of nonstriking employees in a separate establishment, all of the members of the bargaining unit are subject to disqualification under Section 1262. The employer’s entire operation is considered one establishment.

In the General Motors court case, the employer and the union were negotiating on national issues. At the same time, separate negotiations on local issues were being carried on at each local GM plant. At both Oakland and Van Nuys, the Chevrolet production workers struck but the Fisher body workers did not strike. Fisher bodies are produced on assembly lines and then sent directly into the Chevrolet plant which is next door. The court held that the Fisher body union employees who were laid off were disqualified as they were participants in the union strategy. Their unemployment was foreseeable due to the nature of the employer’s functionally integrated operation.

B. Employer Advised Employees Will Not Work

When an employer has been advised by an indirectly involved union that its members will not work due to an impending trade dispute, the members are considered, in effect, to have voluntarily left their work even though the employer does not offer work to them.

In BD 4615, the claimants were members of an indirectly involved Oakland bakery drivers’ union. The claimants loaded bakery goods at the Oakland depot and delivered them to its customers. On November 9, 1945, the San Francisco bakery drivers’ union, whose members worked under a separate contract than the Oakland drivers, struck their employer in San Francisco. The San Francisco employer, by mutual agreement with the other San Francisco bakeries, closed its San Francisco plant. The claimants’ Oakland business agent was then asked by the employer if the men would be willing to handle bread produced by a bakery in Berkeley. The business agent said they would not. Accordingly, the employer did not bring any bread to its Oakland depot and although the claimants reported for work there at their usual time on November 12, they were advised there was no work for them.

The Board held the claimants voluntarily left their work due to the trade dispute. The business agent of the claimants’ union was acting as their representative when he led the employer to believe that the claimants would not perform any work during the trade dispute. The product was of highly perishable nature and it would have been an idle act to require the employer to manufacture a supply of its products to subject the claimants to a work test.

It should be noted that all of the members of the union indirectly involved were disqualified on the word of their business agent to the employer that they would not work. The members themselves did not participate in any strike vote nor did they give direct prior authorization to the business agent to tell the employer they would not continue working. They may not have been aware of their union’s position when they reported to work. The business agent, however, was empowered to act for them in matters concerning labor relations. The agent clearly was acting in a responsible capacity on their behalf. Refer to Theory of Agency in TD 5.

C. Intermittent Work at Nonstruck Branches

A claimant who refuses to cross a picket line at his/her normal work location and works only at other branches which are not picketed is considered subject to disqualification under Section 1262 while intermittently unemployed.

In BD 4396, the claimant, a member of a warehousemen’s union, worked for an employer at its main establishment where machinists were also employed. The machinists declared a strike against the employer and placed a picket line around the main establishment. On reporting for work at the main plant the claimant did not enter the plant although invited to do so, because of a picket line. It was the warehousemen union’s position that its members would not work at the picketed job site. The claimant was assigned to other establishments which were not picketed (machinists were not employed at these other job sites) and worked at these other establishments intermittently until the strike was over. Work would have been available for him at the main plant.

The Board held the claimant was subject to disqualification under Section 1262 for those periods when he was unemployed during the trade dispute.

D. Locked Gates - Reason for Not Reporting to Work

A claimant may state he/she did not report to work when the trade dispute began because the gates were locked when he/she reported to work. It is not uncommon for an employer to take various security measures when involved in a trade dispute, including locking its gates. A locked gate, in and of itself, does not signify the claimant is eligible under Section 1262.

The claimant’s eligibility would depend on whether or not he/she made a bona fide effort to report to work. The claimant would be expected to check whether there were any other entrances which he/she could enter. The claimant would be expected to contact his/her supervisor by phone, if necessary, to determine if work was available. If other employees have reported to work, the claimant’s statement that he/she was unable to report to work would be less credible.

It is also possible the employer may have shut down operations and locked the gates because the union directly involved had previously given advance notice it would take strike action on the day of the closure. The claimant may have been unaware of the union’s action. If the claimant is a member of the union directly involved, his/her unemployment is considered directly attributable to the strike notice. Therefore, the claimant would be considered ineligible under Section 1262. Refer to TD 60, Coast Packing court case.

E. Lack of Contract

This category deals with the cessation of work because there is no longer a union contract. When the employees leave their work rather than continuing without a contract, there may be a trade dispute in existence.

In Benefit Decision 5435, the claimant was a member of Local 7 of the Cleaners and Dyers union. A collective bargaining agreement between the union and the employer under which the claimant had been employed expired on June 5. Negotiations for a new contract went on after June 5, but by July 30, the parties had not reached an agreement. Among the issues involved in the negotiations were wages, hours, working conditions, whether the shop was to be union or not, and other like considerations.

On July 30, a union meeting was held during working hours off the employer’s premises. After the meeting, the claimant and at least some of her fellow employees did not return to work, but instead established a picket line outside the employer’s shop. These workers, among them the claimant, remained away from their work until late August, when a collective bargaining agreement was reached.

The union business agent testified that the collective bargaining agreement here in question was but one of many which was in negotiations in the cleaning industry during the same period. He further stated that the union did not intend that the workers should strike during negotiations, and that he had urged the workers at this Plant not to leave their work.

The Board held the claimant was unemployed due to a trade dispute, and said:

Again, in Benefit Decision 6193, the claimants were members of Local 112 of the United Shoe Service Employees. They were employed under the terms of a collective bargaining agreement in force between the employers and the union. The agreement provided that it would expire October 31, and that the employees would receive a specified wage for a 40-hour week with time and a half for overtime.

Negotiations commenced approximately two weeks prior to the expiration of the contract. The employer insisted that there be a return to the 44-hour week in force prior to this contract, on the ground that the 40-hour week, which had been adopted only as a trial measure, had proven impractical. Approximately one-third of the employees reported for work for the extra four hours in early November, but the remainder did not. The following week these claimants again failed to report for the extra four hours’ work, and were then replaced by the employer.

The Board held that these individuals were disqualified under Section 1262 of the Code, and said:

F. Apprentice

Apprentices enter training programs under the auspices of the apprenticeship provisions of the Labor Code and the State Division of Apprenticeship Standards. Local Joint Apprenticeship Committees consisting of labor unions and contractor associations coordinate and supervise the job and classroom instruction. Joint Apprenticeship Committee rules require apprentices to be supervised by a qualified journeyperson when performing on the job.

An apprentice may contend it would have been a futile gesture to report to work when strike action began on the basis there would have been no one to supervise his/her work.

If the apprentice is a member of the union directly involved and was eligible to participate in the strike vote, his/her eligibility should be resolved in the same manner as any other member of the union directly involved, i.e., if he/she did not report to work due to the trade dispute, he/she would be ineligible under Section 1262. It would be fallacious to argue that there was no journeyperson to supervise the work when the apprentice is a member of the union which caused the journeyperson not to report to work.

On the other hand, if the apprentice is not a member of the union directly involved and does not have the right to participate in the strike vote, his/her eligibility will depend on whether or not the employer had work available which could be supervised. In some cases, the employer may use its supervisors to provide the necessary supervision. If no supervision was available, the claimant would not be subject to disqualification under Section 1262. If supervision was available, the claimant would be considered ineligible under Section 1262.

G. Television Writers

This category covers the eligibility of television writers who are involved in a trade dispute.

Guidance on their eligibility is provided in BD 6630. In this decision, the claimants were free lance writers who were employed by producers to write television stories and teleplays to be used for the filming of television shows. They were members of the Writers Guild of America. The employers (producers) were signatories to the master collective bargaining agreement called "Independent Producer Writers Guild of America Basic Film Television Agreement of 1956." Approximately 75 percent to 85 percent of the work available to the claimants were with these producers.

The writing of teleplays consisted of three phases: story, first draft teleplay, and final draft teleplay. Under the contract, the writers were obligated to make revisions to any of the writeups. Revisions to the final draft teleplay were called "polishes."

In addition to being under the master collective bargaining agreement, the writers signed individual contracts with the producer for writing a story only, or story, first draft and final draft teleplay, or first draft and final draft teleplay. Occasionally, they were hired to write a first draft teleplay only.

The collective bargaining agreement provided that after the expiration of the master contract:

• The current individual employment contracts were considered automatically suspended as to service and compensation.
• The writer incurred no liability for breach of contract for respecting the strike call provided that at the end of the strike, the writer resumed work on demand of the producer.
• The producer could terminate the contract if the writer took strike action.

The writers were paid in installments: upon delivery of the story, first draft teleplay, and final draft teleplay.

The trade dispute began on January 16, 1960, and was still continuing at the time of the Administrative Law Judge’s hearing in June, 1960. The following is a description of the categories of claimants and the Board’s decision:

• Writers who had submitted their final draft teleplay two or three days prior to the trade dispute and were subject to call for polishes. The writers were not asked to do the polishes during the trade dispute; however, the Board held that a request was not necessary since it would have been a futile gesture to make such a request.

The Board held they were ineligible under Section 1262 on the basis they were still "employed" on a standby basis to perform revisions which might be requested.

• Writers who were under contract and were in the process of completing a story, first or final draft teleplay but refused to do so because the trade dispute began.

The Board held they were ineligible under Section 1262 for leaving their work due to the trade dispute.

There were several trade dispute purge issues which developed during the course of the trade dispute in BD 6630.

• Some writers received full payment during the trade dispute even though they had not completed their script. The unfinished script was completed by the producer and the finished product was used. The films were made.
• Termination letters were sent to the writers during the trade dispute due to failure to complete their contract.
• A writer secured subsequent work as a writer with an employer not involved in the trade dispute for a few weeks on two separate occasions during the trade dispute.

The Board did not allow a purge of the trade dispute disqualification for any of the claimants in the above three categories.

For the claimants who were paid in full and the film used, the Board said:

In holding that the termination letters did not serve to purge the trade dispute disqualification, the Board cited the Thomas court case. In this court case, the employer sent the striking employees letters of termination on January 18, 1946. However, the employer subsequently sent letters to the employees on January 21 and February 18, 1946, asking that they return to work immediately or as soon as the strike was over. It was the court’s opinion the termination notices did not cause the claimants to remain away from their jobs and that it was the claimants’ continuing unwillingness to cross the picket line which caused the claimants to remain out of work.

In denying the purge on the basis of subsequent work, the Board held that the stop-gap nature of the work the claimants secured did not serve to purge the trade dispute.

H. Request to Continue Working During TD

In some instances, a few employees who are members of the union directly involved may request to continue working after the trade dispute begins but there is no work available because the strike action has effectively closed operations. The employer cannot continue to operate with only a few employees.

There would have to be substantial evidence to show the claimants have abandoned the trade dispute to exempt them from the disqualifying pro visions of Section 1262. It should be recognized it was the claimants’ union which caused the closure to occur. While individual members may have been opposed to the strike action, the majority were apparently in favor of striking, and it was the union’s collective action which caused the shutdown. The claimants would share in the benefits of the settlement of the dispute.

A strong indication that the claimant has abandoned the dispute would be if he/she decided to give up his/her union membership.

I. Federal Preemption Argument

The Supremacy Clause of the Federal constitution provides that a federal statute shall prevail over a state law where there is a conflict, i.e., federal law preempts state law. Under the National Labor Relations Act, employees have the right to engage in lawful concerted activities for the purpose of collective bargaining. The right to strike for a lawful objective is specifically included in the Act. In some instances where the claimants have taken strike action, the union may contend the claimants should be eligible on the basis the state law (Section 1262) is preempted by the federal law (National Labor Relations Act) which provides the employees the right to strike.

In the Acuff court case, 800 Greyhound employees went on strike because the employer and the union could not reach agreement on a new contract and the employer implemented a 17 percent reduction in wages. The employees were disqualified under Section 1262 for voluntarily leaving their jobs due to the trade dispute. Included in their argument for holding the claimants eligible, the union contended the trade dispute disqualification (Section 1262) interfered with their right under the National Labor Relations Act to engage in concerted activity for the purpose of collective bargaining. The court, however, held the claimants disqualified, stating:

J. Maritime Trade Disputes

This special section has been devoted to Maritime trade disputes due to the uniqueness of the principles governing the eligibility of maritime claimants. In cases where the maritime claimant was working and voluntarily left the work due to the trade dispute, the claimant is subject to disqualification under Section 1262; however, as a result of several California court decisions, maritime claimants may be subject to disqualification under Section 1262, although they may have been laid off due to lack of work prior to the trade dispute without a scheduled return to work date and are unemployed at the time the trade dispute began. It’s there fore possible that these claimants may be in Continued Claims status, collecting UI benefits, and would then have to be disqualified under Section 1262, effective with the week the dispute began. To better under stand the basis for the above principle, it is necessary to explain the hiring hall arrangement of the maritime industry and the basis for treating the entire waterfront members of the employer association as the employer of the claimant.

Hiring Hall

The hiring hall in the maritime industry is a jointly operated (employer and union) hiring hall. In order that the work may be divided among the members of the unions, the employers place orders for workers with the hall and the workers are dispatched from the respective halls in the order they registered. The employers are members of the Pacific Maritime Association, who in effect operate as a single employer. No employer may hire a worker except through the hiring hall and no member may seek work except through the hiring hall. Also, once the worker is dispatched, the employer may not refuse to hire the worker.

"Establishment" - Entire Waterfront

Because of the special hiring hall conditions, the Court has held that the entire waterfront is the "establishment" for whom the claimants work; they are attached to the industry and not to one particular employer.

The controlling court case in this matter is Matson Terminals, Inc. v. C.E.C. In this case, the employers operated pier and terminal facilities in the San Francisco Bay area and were associated together in an incorporated, nonprofit association, the Waterfront Employers Association of San Francisco (now the Pacific Maritime Association). The claimants worked intermittently at various places for these employers.

The method of hiring longshoremen prescribed by the collective bargaining agreement between the association and the union, was that instead of reporting to the dock operated by each company, the claimants reported to a hiring hall maintained and operated by the employer’s association and the union. Employers placed their requests for workers with the dispatcher at the hiring hall.

The employers in this case employed dock checkers, who keep records of the cargo loaded or discharged from the ships. The dock checkers belonged to the ship clerks’ union, a local affiliated with the same international as the longshoremen’s local. The ship clerks’ union called a strike on November 10. The strike continued until January 3. Members of the longshoremen’s union did not work for the employers involved during this period but filed claims for unemployment insurance. When the strike began, some claimants were working on unfinished jobs for employers against whom the strike was declared; others were at the hiring hall awaiting their next assignment; others who were working for employers not involved in the trade dispute, did not stop work until their job assignments were completed.

The claimants (longshoremen) in the present case refused to work because of the trade dispute. They could have continued working at the same docks, for the same employers, under the same dispatching arrangements through the hiring hall as they had before the ship clerks’ strike, and would have done so but for that strike and their unwillingness to cross the ship clerks’ picket line. They worked as they had in the past until the clerks strike began and from then until the end of the strike refused to do any work affected by the strike.

When the strike was over they returned to their work in the only way they could, by reporting to the hiring hall, each accepting his share of the work as it was assigned. The failure of the claimants to work during the period for which benefits were claimed was attributable solely to the trade dispute between their employers and the ship clerks’ union.

The claimants contended that they did not fall within the provisions of Section 1262 because, except for those longshoremen engaged upon a work assignment at the time the clerks’ strike was called, there was no relationship of employer-employee between the claimants and any particular employer. They further contended that the fact they have a right to be dispatched to new assignments in proper rotational order did not put them in the legal relationship of employer-employee. For this reason, they argued that there was no trade dispute at their "establishment."

In answering this argument, the Court defined "establishment" in this case and said:

In the Barber and Crouse case, the Court again considered the status of claimants who obtained their work through the union - in this case the maritime union - and whether or not they were involved in the trade dispute when they were not in an employer-employee relationship. The Court held:

"Upon the record before it, the Unemployment Insurance Appeals Board was correct in holding that petitioners herein were disqualified from receiving unemployment benefits by reason of Section 56(a) (1262) of the Act. This holding is fully supported by Matson vs. Commission, American-Hawaiian vs. Commission, and W.R. Grace vs. Commission (citations omitted), a series of cases decided in 1944. These cases have established the rule that, where there exists a group attachment to certain work under the hiring hall arrangements substantially similar to the present case, members of a union who participate in group action to declare their refusal to work by reason of a trade dispute, may be deemed to have left their work within the meaning of Section 56(a) (1262), even though, as in the present case, they were not in a technical employer-employee relation ship at the time of the dispute but were in an interval between work assignments as a normal incident of their employment."

Maritime Trade Dispute Involving Single Employer

If the strike is not industrywide, the disqualification is not necessarily industrywide, because the "establishment" of the strike is not the entire industry and so the "establishment" of the claimants are not necessarily struck "establishments." That is, when only one company is being struck, only longshoremen who are dispatched to that company and refuse to work are disqualified under Section 1262.

This was the case in W.R. Grace & Co. v. C.E.C. The ship clerks struck one steamship company and all the other steamship companies refused to hire any clerks. Clearly all of the ship clerks were unemployed due to a trade dispute. However, the steamship companies continued to place orders for longshoremen, and it was possible for the longshoremen to work without the ship clerks. In this case there were three classifications of longshoremen.

• Those longshoremen who, upon reporting at the docks, were told by the employers or their agents not to begin work unless they were willing to continue without clerks;
• Those who stopped working when they reached that stage in their work where clerks are usually employed; and
• Those who were told by the employers to return to the hiring hall, either before or after they had begun work.

Those longshoremen in the first two classifications were disqualified under Section 56(a) (1262). Although it was customary for certain work to be done by clerks and that they were customarily employed at some of the docks, there was no finding that the longshoremen could not do their work without clerks, and the evidence indicated they were not essential to the performance of the longshore work. The stoppage of work, therefore, could not be attributed to any physical inability to continue, and was equivalent to a leaving of work, whether the subsequent departure from the employer’s premises was on the longshoremen’s own volition or at the employer’s direction.

Those claimants, however, in the third classification described above, who were told by their employers to return to the hiring hall either before or after the commencement of work, did not leave their work within the meaning of Section 1262, unless they were told to return to the hiring hall because of their refusal to work without clerks. It appears from the record that some of the claimants were never dispatched from the hiring hall, although there is evidence that during the period of the dispute between June 17 and June 27, orders for longshoremen were placed by the employers with the dispatcher at the hiring hall that were not filled. These claimants were not disqualified under Section 1262 unless they refused to be dispatched in response to the employers’ request for longshoremen.

In Benefit Decision 5719, the Board applied the ruling of the court in the Matson case. The claimants were members of Local 10 of the ILWU. The employers were members of the Pacific Maritime Association. Orders for longshoremen were placed by the employers with the hiring hall and longshoremen were dispatched to work in rotation as determined by the position of his "plug" on the plugboard in the hiring hall.

In May, a trade dispute existed in Hawaii between the majority of stevedoring companies and their employees. The stevedoring companies in Hawaii were not members of the Pacific Maritime Association. Their employees were members of Local 136 of the ILWU.

On August 13, Matson Terminals ordered men through the union for work on the SS Hawaiian Refiner to start work at 8 a.m. on August 18. The SS Hawaiian Refiner was to be loaded with general cargo for Hawaiian ports, to be discharged at such ports by any longshore labor available. Men were assigned by the dispatcher of the hiring hall to the SS Hawaiian Refiner and reported to the docks shortly before 8 a.m. on the 18th. There were present two pickets, members of the ILWU, Local 136, who formed a picket line at the head of the dock. The assigned men were ordered into the dock in the usual manner, but refused, and failed to work the SS Hawaiian Refiner. The Board held:

However, only the one "establishment," Pier 50-A, was being struck, so that only those claimants who were dispatched to that pier left "their work" because of a trade dispute.

K. Commercial Fishers’ Trade Disputes

Definition of Terms - Sections 1252.1 and 1252.2

"Commercial fishermen" are defined in Section 1252.2 of the UI Code as " . . . individuals who are members of a crew of a vessel engaged in the capture of fish for sale and not in pleasure or sport fishing."

Section 1252.1 of the UI Code states that although a commercial fisher may be totally unemployed during a week, he or she is "still attached to his employer from the standpoint that there did not occur any severance of the employer-employee relationship . . ." Crew members continue to be employed on a specific vessel, even though they are standing by to be called to work, unless they have quit or been discharged.

A trade dispute exists when a boat owner offers work which the crew members refuse because they are dissatisfied with their potential earnings. Unsuccessful negotiations between the operator of a fishing boat and a buyer of fish do not constitute a trade dispute; such negotiations are between two employers.

• When a fishing boat owner has not agreed with the buyer on the price of fish and the boat does not have orders for fish, there is no issue under Section 1262. Crew members are eligible under Section 1252.1(C).
• If the boat does not go fishing during a week because of a trade dispute, none of the crew would qualify as totally unemployed because the lack of work is not due to one of the qualifying reasons in Section 1252.1. In this situation the crew members would be ineligible under both Section 1252.1 and Section 1262.
• If a boat engages in an act of catching or attempting to catch fish during a week in which it is determined that the crew is involved in a trade dispute, the crew is ineligible for benefits for that entire week under Section 1262.
• If a vessel is tied up for repairs prior to the onset of a trade dispute, crew members would continue to be eligible for benefits under Section 1252.1 (d) until the repairs are completed. At that point the reason for their unemployment would be the trade dispute and the disqualifying provisions of Sections 1252.1 and 1262 would apply.
• Once a trade dispute is in progress, and either the boat owners ask the buyer for a higher price for fish or the buyers withdraw their orders for fish, the primary reason for not working is still the trade dispute. Crew members are ineligible under Section 1262.

Eligibility of Crew Members on Standby

Trade disputes in the fishing industry often occur while the crews are standing by, waiting to be called. Under the specific circumstances enumerated in Section 1252.1, a week in which crew members earn no wages and perform no services does not sever the employer-employee relationship. Therefore, once an offer of work is made, Section 1262 does apply. If the union has advised the boat owner that the crew will not go fishing until its demands are met, it is not necessary for the boat owner to make the futile gesture of calling the individual members of the crew to work for a finding of ineligibility under Section 1262.

Eligibility of Captains and Corporate Officers

Fishing boat captains and corporate officers who act as members of the crew normally cannot belong to the same union as other crew members. As an employee, such an individual cannot be said to have left work because of a trade dispute. Eligibility must be determined under Sections 1252.1 and 1252.2.

• If the boat is tied up for full weeks because the crew is involved in a trade dispute, the captain and those members of the crew who are corporate officers are not eligible because the reason for the tie up is not one of the four specified in Section 1252.1.
• If the crew of a boat becomes involved in a trade dispute during a week in which an act of catching or attempting to catch fish was made, the captain and corporate officer crew members will be eligible under Section 1252.2, if the fishing was less than full-time.
• If the captain and corporate officer crew members go fishing with a pickup crew after the vessel is involved in a trade dispute, they would be eligible for benefits under Section 1252.2, if the boat fished less than full-time.
• If the captain-officer of a corporate-owned fishing vessel takes the vessel fishing with a crew made up of other officers of the corporation during a trade dispute, but in a method other than the usual, and one which he or she would not have otherwise engaged in because of the normal lack of remuneration, neither the captain nor the other corporate officers would be eligible under Sections 1252 or 1252.1. In effect, the boat would continue to be tied up from its normal method of fishing and the reason would be because of a trade dispute and not one of those reasons enumerated in Section 1252.1.
• Captains or corporate officers of a corporation whose vessel is tied up because of a trade dispute who go fishing as crew members of another vessel during a trade dispute are ineligible under Section 1252.1 because they cannot establish a reason other than the four specified in Section 1252.1.

L. Strike Benefits

Refer to TPU 460 for guidance on whether or not strike benefits are deductible wages under Section 1279.