NO. 83-470 

IN THE SUPREME COURT OF THE STATE OF ?lOMTANA 

1984 

FEDERAL AVIATION ADMINISTRATION, 

Petitioner and Respondent, 

THE MONTANA STATE DEPARTMENT OF LABOR 

and INDUSTRY: and 24 members of the 

Professional Air Traffic Controllers' 

Organization, 

Respondents and Appellants. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Henry Loble, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants : 

Norman H. Grosfield argued for PATCO, Utick, Grosfield 

& Uda, Helena, Montana 

R. Scott Currey, Dept. of Labor & Industry, Helena, 

Montana 

For Respondent: 

Allen R. McKenzie, Asst. U.S. Attorney introduces Karl 

B. Lewis who argued for FAA, Butte, Montana 

Submitted: June 12, 1984 

Decided: August 15, 1984 

405 ; : ;Ya4 Filed: 

Clerk 
1 Justice L.C. Gulbrandson delivered the Opinion of the 

Court. 

This case comes on appeal from an 3rder of the 

District Court of the First Judicial District, Lewis and 

Clark County, reversing a. decision of the Board of Labor 

Appeals which had granted twenty-four members of the 

Professional Air Traffic Controllers' Organization (PATCO) 

unemployment benefits. We affirm. 

The terms of the PATCO members' employment were 

governed by a nation-wide collective bargaining agreement 

between PATCO and the Federal Aviation Administration (FAA). 

After the collective bargaining agreement expired in I'larch, 

1981, negotiations concerning a new contract ensued between 

PATCO and the FAA, and on June 22, a tentative 

agreement was negotiated. However, PATCO members did not 

ratify the agreement and bargaining for a new labor contract 

began again. When an agreement could not be reached, PATCO 

members withheld their services from employment beginning 

August 3, 1981. 

A11 members of PATCO, at the time they were hired by 

the FAA, had signed affidavits that generally provided as 

follows: That the member had not participated in any strike 

against the government of the United States or any agency 

thereof, and would not so participate while an employee of 

the government of the United States or any agency thereof. 

Various members of PATCO were warned that they should 

not strike or withhold their services, and a restraining 

order was issued against PATCO personnel in Washington D.C. 

In addition, the President of the United States ordered, in 

a televised statement, that the PATCO members should return 
to work within forty-eight hours or they would be subject to 

discharge. On August 3, 1981, the chief air traffic control 

operators at Billings, Great Falls and Helena called the 

PATCO members and requested they report for work as 

scheduled. On August 4, 1981, the Regional Office of the 

FAA in Denver, Colorado, sent each Montana employee a 

telegram and directed them to return to work. Shortly 

thereafter, all members of PATCO who withheld their services 

were terminated from employment with the FAA. 

Subsequent to their termination from employment, 

twenty-four Montana members of PATCO sought state 

unemployment benefits. On December 2, 1981, certain appeals 

referees sustained the determinations of various 

administrative deputies who had found the PATCO members were 

disqualified to receive benefits under the Montana 

Unemployment Insurance Act (the Act) because they were 

discharged for misconduct connected with their work. 

Specifically, the appeals referees found that each PATCO 

member was discharged by the FAA for violating 5 U.S.C.A. 

section 7311 (1980) and 18 U.S.C.A. section 1918 (1970) and 

concluded that the PATCO members were disqualified from 

unemployment compensation under section 39-51-2303, MCA, 

(discharge due to misconduct). Thereafter, the PATCO 

members appealed the referees' decision to the Board of 

Labor Appeals (the Board). 

On February 3, 1982, the Board reversed the decision 

of the appeals referees and granted the PATCO members 

unemployment benefits. Relying on Continental Oil Co. v. 

Board of Labor Appeals (1978), 178 Mont. 143, 582 P.2d 1236, 

the Board found that since the PATCO members' strike was 
part of an overall labor dispute they left their jobs 

because of a labor dispute and were not discharged for 

misconduct. The Board stated that "[tlhe fact that the 

strike was in violation of Federal law does not terminate 

the strike itself from the flow of the other events in this 

dispute much as a 'wildcat' strike in the private sector 

would violate a 'no strike' labor agreement and civil 

injunctive relief to the employer." The Board concluded 

that section 39-51-2305, MCA, (disqualification when 

unemployment due to stoppage of work), rather than section 

39-51-2303, MCA, (discharge due to misconduct), was the 

proper statutory provision under which to consider the issue 

of the PATCO members' eligibility for unemployment benefits. 

On March 19, 1983, the FAA appealed the decision of 

the Board to the District Court. On September 8, 1983, the 

District Court reversed the decision of the Board and found 

that the PATCO members were disqualified from receiving 

unemployment compensation because they had been discharged 

for misconduct. Noting the PATCO strike was in violation of 

federal law, the District Court rejected the Board's 

interpretation and application of Continental Oil, supra, 

since that case did not involve an illegal strike. 

From the District Court's decision reversing the 

Board, the Department of Labor and Industry and the PATCO 

members appeal to this Court. 

The two statutory provisions pertinent to this appeal 

are as follows: 

"39-51-2303. ................................ Disqualification for 

discharge due to misconduct. An individual shall be disqualified for benefits 

if he has been discharged: 

"(1) for misconduct connected with his 
work or affecting his employment until 2n 

individual has performed services, other 

than self-employment, for which 

remuneration is received equal to or in 

excess of eight times his weekly benefit 

amount subsequent to the week in which 

the act causing the disqualification 

occurred. 

"(2) for gross misconduct connected with 

his work or cornmitted on the employer's 

premises, as determined by the 

department, for a period of 12 months. 

"39-51-2305. ................................. Disqualification when 

------------- unemployment due to stoppage of work. 

(1) Effective April 1, 1977, an 

individual shall be disqualified for 

benefits for any week with respect to 

which the department finds that his total 

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, . . . " 

The definition of misconduct generally accepted in 

most jurisdictions and adopted by this Court in Gaunce v. 

Board of Labor Appeals (1974), 164 Mont. 445, 448, 524 P.2d 

1108, 1110, was set forth in Boynton Cab Co. v. Neubeck 

(1941), 237 Wis. 249, 296 N.W. 636. In Boynton Cab Co., the 

court held that the term "misconduct" referred to conduct 

evincing such a willful or wanton disregard for an 

employer's interest as is found in the deliberate violation 

or disregard of standards of behavior which the employer has 

the right to expect of his employees or in negligence of 

such a degree or recurrence as to manifest equal 

culpability, wrongful intent, or evil design. 

Appellants rely on Claim of Heitzenrater (1966), 19 

N.Y.2d 1, 224 N.E.2d 72, in arguing that the PATCO members' 

strike did not constitute misconduct as defined in Boynton 

Cab Co. and Gaunce. In Claim of Heitzenrater, the New York 
court held that employees who participated in a strike in 

violation of the no-strike clause of a private contractual 

agreement were not guilty of misconduct and were therefore 

entitled to receive compensation under the striker-benefit 

provisions of the statute. The New York court initially 

noted that the mere existence of a strike or other 

industrial controversy does not necessarily preclude a 

finding of misconduct. However, the court stated that in 

disputes arising out of private contractual agreements, a 

finding of misconduct would require the resolution of 

factual issues as we11 as complicated questions of labor 

law, and that such matters "are best left to agencies 

especially qualified to deal with them, namely the Federal 

and State Labor Boards and labor arbitrators," rather than 

the individuals administering the unemployment compensation 

laws. Claim of Neitzenrater, supra, 19 N.Y.2d at 7, 224 

N.E.2d at 75-76. 

However, the New York court subsequently held that in 

situations where the Legislature has specifically prohibited 

strikes or other concerted activity, an employee's violation 

of that proscription constitutes misconduct as a matter of 

law. Rodriguez v. Presbyterian Hospital (1973), 32 N.Y.2d 

577, 582, 300 N.E.2d 418, 420. In Rodriguez, a hospital 

employee participated in a strike that had been expressly 

declared unlawful by statute because of the need to protect 

the public from the disruption of essential services in the 

area of health and hospital administration. The Rodriguez 

court noted that the traditional reluctance of the 

Legislature to intervene in the realm of employment 

relations was overridden in this case by a compelling need 
to ensure the public safety in the critical area of health 

care. Given this important legislative purpose, the 

Rodriguez court held that violation of the statutory mandate 

prohibiting strikes amounted to "legislatively defined" 

misconduct. Rodriguez, supra, 32 N.Y.2d at 582, 300 N.E.2d 

at 419. Unlike violations of a private collective 

bargaining agreement, the legislation prohibiting strikes 

involved no complex issues of labor law because "the 

Legislature itself resolved all such issues by explicitly 

proscribing and expressly stamping as unlawful strikes and 

work stoppages by . . . public employees . . . " Rodriguez, 

supra, 32 N.Y.2d at 582, 300 N.E.2d at 420. The Rodriguez 

court concluded that the actions of an employee in violating 

the statutory prohibition against striking fell squarely 

within the misconduct provisions of the New York 

unemployment compensation statutory scheme. Rodriguez, 

supra, 32 N.Y.2d at 582-583, 300 N.E.2d at 420. 

In the case at bar, this Court must consider the same 

issue as was presented in Rodriguez, specifically, whether 

participation in an unlawful strike constitutes misconduct 

as a matter of law. The facts reveal that a strike occurred 

whicli is unlawful according to the provisions of 5 U.S.C.A. 

section 7311 (1980) and 18 U.S.C.A. section 1918 (1970). 

In Ranone v. Board of Review (1984), No. 82-368-M.P., 

116 LRRM 2134, 2136-37, the Rhode Island court considered 

whether PATCO members, discharged from federal employment 

for engaging in the same illegal strike of August 3, 1981, 

were ineligible for unemployment compensation. The Rhode 

Island court stated: 

"We find persuasive the reasoning of the 

Rodriquez court in holding that the 
misconduct provision disqualifies an 

employee from benefits when the 

unemployment resulted because of an 

unlawful strike. Here, the federal air 

traffic controllers acted in violation of 

the congressional mandate that expressly 

prohibits strikes by federal employees. 

5 U.S.C.A. section 7311. That statutory 

prohibition and the criminal sanctions 

provided pursuant thereto evince an 

unequivocal congressional intent to 

prevent the disruption of public services 

in order to 'ensure that the machinery of 

the Federal Government continues to 

function at a 11 times without 

interference.' United Federation of 

Postal Clerks v. Blount, 325 F.Supp. 879, 

884, 76 LRRM 2932 (D.D.C. 1971)." 

We agree with the Rhode Island court's application of 

Rodriguez and hold that the misconduct provision of 

Montana's Unemployment Insurance Act applies to the PATCO 

strike and disqualifies the PATCO members from benefits 

because the unemployment resulted from an unlawful strike. 

The PATCO members engaged in conduct which was, at least, in 

deliberate disregard of the employer's interests and of the 

standards of behavior the employer had the right to expect 

of its employees. Gaunce, supra, 164 Mont. at 448. 

We therefore hold that the actions of the PATCO 

members in engaging in a prohibited strike constituted 

misconduct under Montana law and the District Court did not 

err in holding that the PATCO members were disqualified for 

unemployment benefits under section 39-51-2303 gCA* 

Affirmed. 
We concur: 

Chief Justice 

-I_._- 

Justices 
Mr. Justice John C. Sheehy, dissenting: 

Let us first be clear about what this case involves. 

This decision does not mean the discharged air controllers 

will not receive unemployment benefits. They have already 

received them, and we all recognize the impossibility of 

recovering the benefits from the individual air controllers. 

What the majority has done is agree that the already 

hard-pressed state unemployment insurance fund will reimburse 

the FAA for the cost of the benefits. Thus will the FAA 

escape fiscal responsibility for the ills which the federal 

government brought down on all of us by its refusal to 

correct the intolerable working conditions to which it had 

subjected and does now subject the controllers at our 

airports. We ought to put the responsibility for the 

payment, not on the employers of this state, but on the feds 

who indeed were more interested in breaking labor than 

protecting our air safety. 

In the six years I have served the Court, I have been 

accorded the opportunity to write some far-reaching 

decisions, and to disagree with others equally far-reaching. 

In most of them, however, I saw where the Court could pride 

itself as a fair arbiter in deciding between the individual 

and the sometimes overwelming use of power by officials, 

better termed by Hamlet as "the insolence of office." Today 

I am not proud. My Court has called workers guilty of 

misconduct for obeying the call of their national union to 

strike. My stomach turns at this. Helpless in the power 

struggle, the air controllers chose to support each other in 

their cry for better working conditions. Misconduct? We 

should rather admire the courage it took to give up their 
jobs and benefits rather then bend their necks to their 

would-be masters. 

I do not exaggerate the abusive working conditions that 

led the controllers to their choice. In the Wall Street 

Journal of July 5, 1984, on page 10, there is quoted in part 

a letter to the FAA's administrator from the chairman of Pan 

American Airlines which states: 

"The air traffic controller problem has gone from 

bad--to worse--to horrible--to intolerable. [Pan 

Am is] now experiencing more frequent and more 

substantial delays in clear, optimum conditions 

than we were incurring during severe conditions a 

few months ago." 

In the Billings Gazette, Tuesday, July 10, 1984, page 

7B, one finds the Associated Press story concerning the 

increase in the number of flight delays in and out of major 

airports which causes scheduling and arrival troubles for the 

airlines. The airlines blame the Federal- Aviation 

.Administration for the over-burdened air traffic control 

system. The FAA, which cannot now blame the new 2j.r 

controllers it brought into position, blames the airlines. 

Here is a paragraph, three years after the strike, to dampen 

your soaring spirit: 

"The government's air traffic control system is 

still recovering from the strike three years ago 

when 11,400 controllers were fired. The FAA is 

1,000 controllers short of what it considers full 

strength, and many of the current controllers are 

inexperienced. " 

We ought to place misconduct where it properly should 

lie, on the administration that brought this alarming 

condition about. We ought to recognize that the air 

controllers had the right in 1981 to the same principle that 

we applaud in the Declaration of Independence, that "when a 

long train of abuses and usurpations, pursuing invaria.b,-y the 

same object, evinces a design to reduce them under a.bsolute 
despotism, it is their right, it is their duty, to throw off 

such government and to provide new guards for their future 

security." 

We should not succumb, as most of government has, to 

government by Gallup Poll. 

The statute on misconduct, section 39-51-2303, MCA, wa.s 

never intended by the legislature to apply to unemployment 

caused by labor dispute. Misconduct in the sense of that 

statute refers to individual fraud, theft, vandalism, and 

other acts which bring about a firing because of those acts 

against the employer. The only statute we have applicable to 

a labor dispute is section 39-51-2305(l), MCA. In City of 

Bill-ings v. State Board of Labor Appeals (Mont. 1983), 663 

P.2d 1167, 1174, 40 St.Rep. 648, 655, we said concerning the 

labor disputes statute: 

"In examining the statute, note that the inclusion 

of the phrase 'stoppage of work' by the legislature 

is not intended to be a synonym for 'strike' or 

'lockout.' If the legislature meant that a 

striking or locked out employee would be 

disqualified for benefits, it had to only eliminate 

the phrase 'stoppage of work' so as to make the 

section read that the individual is disqualified 

for benefits if his total unemployment is 'because 

of a labor dispute at the factory.' When the 

legislature inserted the words 'due to a stoppage 

of work,' it meant that the factor to be considered 

in connection with disqualification meant more than 

that the individual claimant was on strike, or 

locked out in a labor dispute. There may be a 

labor dispute and yet no stoppage of work. 

Montana has aligned itself with the majority of 

courts holding on the question that the phrase 

'stoppage of work, ' refers to the employer's 

operations rather than to the individual employee's 

work (citing authority.) This so called 'American 

rule' allows strikers to collect benefits so long 

as their activities have not substantially 

curtailed the productive operations of their 

employer. (Citing authority. " 

City of Billings, supra, and other cases (Continental 

Oil Company v. Board of Labor Appeals (1978) , 178 Mont. 143, 
582 P.2d 1236; Decker Coal v. Employment Security Division of 

923 

Montana (Mont. 1983), 667 P.2d BHL, - St.Rep. ) , have 

indicated our interpretation of the unemployment compensation 

benefits statutes as to leave the matter of labor disputes to 

the legislature and to the parties, and to determine the 

rights of workers to unemployment insurance benefits solely 

upon the provisions of section 39-51-2305(l) when a labor 

dispute is involved. The majority without discussion has 

departed from that position. 

I would affirm the Board of Labor Appeals that no 

stoppage of work had occurred and that the air controllers 

were entitled to the benefits which they received. The 

effect would be to tell the FAA that it and not Montana 

employers must hear the burden of its intransigence. 

e 3k 

Justice 

Mr. Justice Frank B. Morrison, Jr.: 

I concur in the dissent of Mr. Justice Sheehy. 

I join in the dissent of Mr. Justice Sheehy.