Court Opinion

ID: 9686942
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:11:52.15034+00
Date Added: 2024-06-11T18:18:23.120839
License: Public Domain

R. M. Maher, J.
(concurring). I agree with Judge Brennan that reversal is required. I do not believe that the labor dispute exception of the Michigan Employment Security Act was intended, regardless of circumstances, to disqualify from benefits those who are unemployed as a result of unilateral action taken by their employer.
The controversy in the case before us was initiated when the employer gave the union notice of its intent to terminate the collective bargaining agreement as of midnight, May 31, 1971.1 The parties subsequently entered negotiations in an attempt to reach a new agreement. On May 26, 1971, the employer sent the union its "final offer” with a letter in which it indicated its intention to close the plant at midnight on May 31, 1971, because of the lack of agreement. The letter concluded:
"In consideration of the withdrawal of any and all Union demands at Universal Engineering regarding a *472Houdaille Council, including the demand for a Houdaille Council step in the Grievance Procedure, Universal Engineering will continue to operate the Frankenmuth plant through June 4 to facilitate the current negotiations and to permit the Union to hold necessary meetings to vote on the Company final proposal. Operations of the plant after June 4 is subject to settlement of the current labor dispute.
"The Company stands ready to continue negotiations at any time.” (Emphasis added.)
The union responded with counter-proposals, and stated:
"This proposal is made on the basis of the Company withdrawing all the demands listed in the first paragraph of the Company’s proposal made May 26, 1971. Also, settlement of all other non-economic issues as presented by the Union. Plus, we are willing to bargain past May 31 until an agreement is reached. We have no intention of striking the plant with the understanding any agreement will be retroactive to June 1, 1971. We want to make it clear we have no intention of striking the plant at this time.” (Emphasis added.)
Although both parties indicated a willingness to continue bargaining, the employer was willing to bargain only until June 4, while the union was willing to bargain until an agreement was reached. Although the union mentioned retroactivity of any agreement in connection with its willingness to continue working, it then repeated that it had no intention of striking without any mention of conditions which must be met. The employer, on the other hand, stated unequivocally its intention to close the plant unless agreement was reached by June 4. The facts that the employees subsequently returned to work without a contract and that the new collective bargaining agreement, when concluded, was not retroactive support the *473conclusion that the employees’ willingness to work was not contingent upon the new contract being retroactive.
There is considerable evidence in the record indicating that the employer was experiencing a business decline which resulted in at least one layoff and might have been expected to have caused more layoffs had there been no lockout. On the other hand, the union had not threatened to strike, no strike vote had been taken, and no picketing took place during the lockout. Looking at the record as a whole, I think it is clear that this "labor dispute” was initiated entirely by the employer and that the "lockout” was a unilateral action by the employer which was precipitated not by the actions of the union or the employees, but by the economic status of the employer’s business. Under these circumstances, I am of the opinion that the labor dispute exception should not be applied to deny the employees benefits.
The basic principles which must be kept in mind in evaluating unemployment benefits claims which arguably come under the labor dispute exception were recently summarized in Baker v General Motors Corp, 74 Mich App 237, 247; 254 NW2d 45 (1977), lv gtd 402 Mich 828 (1977):
"The Michigan Employment Security Act is intended to provide relief from the hardship caused by involuntary unemployment. As the purpose of the act is remedial, it is to be liberally construed. MCL 421.2; MSA 17.502, Noblit v The Marmon Group, 386 Mich 652; 194 NW2d 324 (1972), Salenius v Employment Security Comm, 33 Mich App 228; 189 NW2d 764 (1971). Conversely, the disqualification provisions of § 29 are to be read narrowly. Salenius v Employment Security Comm, supra. Nevertheless,
" 'All interested parties who are involved in a claim for unemployment compensation * * * must be dealt *474with on an impartial basis. The unemployment compensation fund should never be used to finance claimants who are directly involved in a labor dispute, nor should it ever be denied to claimants who are legally entitled to receive benefits. * * * None of the money accumulated in this fund should ever be disbursed for the purpose of financing a labor dispute nor should it be illegally withheld for the purpose of enabling an employer to break a strike. The State of Michigan, in so far as this act is concerned, must remain neutral in all industrial controversies.’ Lawrence Baking Co v Unemployment Compensation Comm, 308 Mich 198, 213; 13 NW2d 260, 265; 154 ALR 660, 669 (1944), cert den 323 US 738; 65 S Ct 43; 89 L Ed 591 (1944).”
The responsibility of this Court is to assure that the purpose of the Employment Security Act is fulfilled without compromising the neutrality of the State of Michigan toward labor-management controversies. Just as unemployment compensation benefits may not be used to support employees during a strike, so too denial of benefits may not be used to strengthen the position of an employer who has locked out employees who are willing to work. Where the record reveals that the contract was terminated at the option of the employer, an absolute deadline for settlement was imposed unilaterally by the employer and a lockout was instituted without any provocation by the employees, who continued willing to work and to negotiate, I am convinced that the labor dispute exception does not apply.
Just as economic factors invariably play a part in determining tactics of both labor and management during any labor dispute, there is in times of economic instability almost always "a controversy between employer and employees regarding hours, wages, conditions of employment”. General Motors Corp v Employment Security Comm, at 117, *475quoted in Judge Bashara’s opinion. To permit the employer to escalate that controversy, unilaterally and at will, to the point of a lockout, and then to permit him to use the labor dispute exception to deny his employees unemployment compensation benefits, is to subvert both the aim of the act and the policy of neutrality in labor disputes. Although the courts have historically been reluctant to inquire into the merits of a labor dispute, Lawrence Baking Co v Unemployment Compensation Comm, supra, I believe that we are not precluded from inquiring into the question whether the labor dispute in fact precipitated the layoff.
The burden rests on the employer to prove that the labor dispute exception applies, Salenius v Employment Security Comm, 33 Mich App 228; 189 NW2d 764 (1971). While I agree that lockouts might be a legitimate weapon in a bona fide labor dispute, where negotiations are continuing, no strike is imminent, the employees are willing to continue work without a new contract, and no other action has been taken against the employer by the union, by any group of employees or by anyone with whom the employees share a community of interest, the employer has simply not carried his burden of establishing that the labor dispute caused the lockout. See Scott v Budd Co, 380 Mich 29; 155 NW2d 161 (1968). The mere fact that negotiations are underway does not automatically bring a lockout within the labor dispute exception. See Salenius, supra, Smith v Employment Security Comm, 89 Mich App 212; 280 NW2d 489 (1979).
The Attorney General in his brief points out that the statutory section in question expressly provides that a lockout in another establishment of the same employer which is functionally inte*476grated with the establishment in which the claimant is employed does not disqualify the claimant from benefits, but that no express lockout exception is made for labor disputes in the establishment in which the claimant is employed. From this, the Attorney General argues that any lockout in the same establishment in which a claimant is employed per se disqualifies him from benefits, whatever the genesis of the lockout. I do not agree that the express exception for lockouts in other establishments compels the conclusion that the Legislature intended that any lockout in the establishment in which the claimant is employed would disqualify him for benefits, without regard to the genesis of the lockout. I am of the opinion that the Legislature simply intended that no claimant would be disqualified because of a lockout at a plant other than that at which he is employed whatever the circumstances of that lockout. As to lockouts in the establishment in which the claimant is employed, I agree that in a labor dispute where, for example, the employees are no longer willing to bargain, or where ultimatums are delivered or concessions demanded as a condition of continuing work, or a strike or a slowdown is threatened, and a lockout results, employees are disqualified from receiving unemployment compensation benefits under MCL 421.29(8); MSA 17.531(8). Cf., Salenius, supra, and Michigan Tool Co v Employment Security Comm, 346 Mich 673; 78 NW2d 571 (1956). Where an employer locks out employees who are willing to work and to continue peaceful negotiations, however, I agree with the view expressed in Smith v MESC, supra, that the employees are not disqualified from benefits.
I therefore concur in Judge Brennan’s opinion for reversal.

 The contract provided that although the agreement expired on June 1, 1971, it would continue in effect for successive 60-day periods until either party gave notice of its intent to terminate the agreement not less than 60 days after the date of the notice.