Opinion ID: 495286
Heading Depth: 1
Heading Rank: 1

Heading: involuntary/voluntary distinction as basis of south dakota's determination of benefits.

Text: 37 The court concedes that an unemployment compensation decision can be based on a determination of whether the individual claimant is voluntarily or involuntarily unemployed. Op. at 928. Nevertheless, the court concludes that South Dakota denied union members benefits based on their union membership: The record shows that in determining a union worker's eligibility for benefits South Dakota focused on whether the claimant belonged to the Union. Op. at 929 (emphasis added). 1 38 In fact, the record does not show that the state denied benefits based on union membership. In concluding otherwise, the court failed to analyze and discuss the decision of the Secretary of the South Dakota Department of Labor affirming the referee's decisions. 2 In so doing, the court reaches a result unsupportable in both fact and law. 39 First, I believe the record makes clear that South Dakota did not deny benefits based on union membership, but rather, denied benefits based on the voluntary decision of union members to strike. In quoting the referee's decision, the court emphasizes the following: As members of the union which went on strike against the employer,    it cannot be said that the claimants are locked out by the employer. Op. at 926. The proper emphasis, however, and the emphasis which I believe the referee had in mind, is: As members of the union which went on strike against the employer,    it cannot be said that the claimants are locked out by the employer. In other words, the referee did not, as the court mistakenly assumes, focus upon membership in the union as determinative; rather, the referee concentrated on the voluntary action taken by the union on behalf of its members as the key to the state's denial of benefits. The referee correctly reasoned that the union members, by striking, took a stance of voluntary unemployment before any lockout occurred, and thus were not entitled to benefits. 3 40 The decision of the Secretary of the South Dakota Department of Labor, in affirming the referee's ruling, explicitly supports this interpretation. 4 In her opinion, the Secretary noted that the United States District Court of South Dakota, in United Steelworkers of America v. Block, 578 F.Supp. 1417 (D.S.D.1982), had recently addressed similar issues as they applied to a USDA regulation denying food stamps to strikers. The Secretary noted that Block involved the same Homestake strike and factual circumstances as in her ruling. In a deposition, the Secretary stated that she had relied upon the reasoning in Block because [t]he circumstances were so close to this particular case that I used it as precedent. 41 The Secretary recognized that her ruling centered on 61-6-19(3), the lockout exception to denial of benefits, but that South Dakota law had not defined the term lockout. She then quoted from Block, where the district court upheld the USDA's decision that non-union workers were locked out and thus entitled to food stamps: Where an employer ceases operations at the place of employment immediately after a strike is called, and non-union workers are not obligated to honor the strike, the direct cause of the unemployment of non-union workers is the closure of the work place. In re United Steelworkers, Declaratory Ruling No. 82-1, S.D. Department of Labor (Dec. 30, 1982) (quoting Block, 578 F.Supp. at 1423). 42 In approvingly quoting this statement from Block, the Secretary clearly expresses the state's view that it awarded benefits to non-union members in this case not because of their non-membership status, but because their unemployment was totally involuntary. Non-union employees had no say in and were not bound by the strike, and thus, could have continued to work at the mine. It was only because the mine then closed that they became unemployed; the mine closure caused their unemployment. 43 On the other hand, the Secretary recognized that union members were rendered ineligible for food stamps in Block because they participated in the strike leading up to the mine closure. The Secretary expressly stated that the Block decision: 44 reinforces the [South Dakota] Department of Labor's prior rulings. As a member of the union which went on strike against the employer, the claimant would have been part of the group which initiated the labor dispute prior to any employment being withheld by the employer. In the Matter of Leon Stalder, No. 25079, S.D. Dept. of Labor, Unemployment Ins. Div. (Sept. 9, 1982). 45 In re United Steelworkers, Declaratory Ruling No. 82-1. 46 Here the Secretary makes abundantly clear that the state did not deny unemployment compensation benefits based on union membership. Rather, the Secretary explains that union members voluntarily caused their own unemployment by going on strike before the mine closed, in contrast to non-union workers who became involuntarily unemployed because of the mine closure. In her deposition taken on July 20, 1984, the Secretary stressed repeatedly that her decision was based on a voluntary/involuntary, rather than a union/non-union, distinction: 47 In determining the eligibility criterion that were used, when it came to the point of looking at the facts and determining how to interpret our unemployment insurance law to meet that particular circumstance one of the things that I think became very apparent was that we were not necessarily making a determination on eligibility based on union membership. The thing that made the determination is whether they were out of work through no fault of their own. We were held by the Supreme Court and by the unemployment insurance laws themselves that if they are out of work through no fault of their own, then the law is to be liberally construed in their favor. I think what is more the case here is that we have a group of people who had, according to the facts in the hearings, who had indicated that they were ready and willing to go to work, but were unable to because of the company having shutdown or locked them out. 48 Deposition of J. Meierhenry, July 20, 1984, at 37-38 (emphasis added). 49 I would not find that unusual [claimants were asked whether they were members of the union] since our law does not allow striking participants to receive unemployment benefits. 50 Id. at 39. 51 [Claimants who were union members were uniformly denied unemployment compensation benefits] because they were participating in the strike as union members. If they were striking, yes. 52 Id. (emphasis added). 53 [T]hat would be normal [question addressed to claimants whether or not they were members of the United Steelworkers Union] because one who is a member of a union that is on strike--that would be a question you would ask. If a union goes on strike it means everyone with the union. 54 Id. at 40 (emphasis added). 55 They [non-union members] were [granted unemployment compensation] in this case because if they went to work and they were unable to work due to no fault of their own [they were paid]. 56 Id. 57 Well, the facts I guess I still have to repeat what I said prior to this time. The fact is that the decision was not made based upon union and non-union membership. 58 Id. at 42 (emphasis added). 59 To be sure, in this case the term voluntary unemployment equates to union member. The sole reason for this, however, is not because the state intended such a result, but because of the unique facts of this case. The Secretary explicitly recognized this in again quoting from Block: 60 Defendants utilized the distinction of member and nonmember as a means of determining and identifying ineligible strikers. The distinction was relevant solely because of the unique facts of the Homestake strike. When the strike was called--and all union members were undisputably on strike--the Mine immediately closed. Defendants concluded that nonmembers were not given the time or the opportunity to join the strike, and thereby voluntarily became unemployed, before they were involuntarily unemployed by the closure of the Mine. For this reason, defendants treated nonmembers as though they were locked out and, therefore, eligible for food stamps. Defendants did not restrict the right of any person to quit or to join the Union. 61 In re United Steelworkers, No. 82-1, (quoting Block, 578 F.Supp. at 1421) (emphasis added in part). 62 In summary, the Secretary's decision, which the court's opinion totally ignores, does not say that the state granted benefits to non-union workers based on their availability to work or denied benefits to union members based on their union membership. Rather, the Secretary's use of the language in Block 5 clearly establishes that the state granted benefits to non-union members because they were out of work through no fault of their own, i.e., involuntarily unemployed, and that union members were denied benefits because they caused their own unemployment by participating in the strike before any lockout occurred, i.e., voluntary unemployment. By ignoring the Secretary's decision, the court not only abrogated the state's right to set its own criteria for granting or denying unemployment benefits, thus going against the precise teachings of the Supreme Court, it also incorrectly concluded that the state's interpretation of the statute creates an impermissible conflict with the union's section 7 rights. 63 In New York Telephone Co. v. New York State Department of Labor, 440 U.S. 519, 99 S.Ct. 1328, 59 L.Ed.2d 553 (1979), the Supreme Court examined a New York law which simply authorized striking employees to receive unemployment benefits   . Id. at 529, 99 S.Ct. at 1335. In upholding the law against a challenge that it was preempted by the National Labor Relations Act, the plurality noted that the general purport of the [Social Security] program is not to regulate the bargaining relationships between [employers and employees] but instead to provide an efficient means of insuring employment security in the State. Id. at 533, 99 S.Ct. at 1337. After examining the legislative history of the Social Security Act, the Court concluded, and the court here purportedly recognizes, that Congress intended the several States to have broad freedom in setting up the types of unemployment compensation that they wish. Id. at 537, 99 S.Ct. at 1339. Thus, despite the fact that the New York statute altered the relative positions of parties in a labor dispute, the Court concluded: 64 In all events, a State's power to fashion its own policy concerning the payment of unemployment compensation is not to be denied on the basis of speculation about the unexpressed intent of Congress.    In an area in which Congress has decided to tolerate a substantial measure of diversity, the fact that the implementation of this general state policy affects the relative strength of the antagonists in a bargaining dispute is not a sufficient reason for concluding that Congress intended to pre-empt that exercise of state power. 65 Id. at 545-46, 99 S.Ct. at 1344 (emphasis added). 66 Similarly, in Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471, 97 S.Ct. 1898, 52 L.Ed.2d 513 (1977), the Supreme Court upheld a state statute disallowing unemployment benefits if a worker's unemployment was due to a labor dispute other than a lockout at any factory    owned or operated by the employer by which he is or was last employed. In holding essentially that the state could validly treat strikers less favorably than those who were unemployed for other reasons, the Court stated: 67 [The worker's] position is contrary to the principle that the Fourteenth Amendment gives the federal courts no power to impose upon the States their views of what constitutes wise economic or social policy. 68