Court Opinion

ID: 9635443
Source: CourtListenerOpinion
Date Created: 2023-08-22 13:50:35.916626+00
Date Added: 2024-06-11T18:09:27.243071
License: Public Domain

NIX, Chief Justice,
dissenting.
In my judgment the majority’s analysis fails to precisely identify the operative facts upon which the resolution of this issue should turn. Moreover, a critical fact, i.e., the point in time the underlying employment relationship between Penflex, Inc. and the members of the bargaining unit herein involved terminated, does not appear in the record before us.1 It is my opinion the record clearly establishes *298that the work stoppage was initiated by the employees on July 1, 1980 and consequently under section 402(d) of the Unemployment Compensation Law, Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(d), they were not entitled to unemployment benefits during the period of that labor dispute.
At some later point the underlying employment relationship between Penflex, Inc. and the members of this bargaining unit terminated. From the moment of that termination the former employees would then have been eligible for benefits, unless they had gained employment elsewhere. Although I am of the view that the members of the bargaining unit did participate in a strike, thus rendering them ineligible for benefits during that strike, I share with the majority the opinion that their activities did not constitute willful misconduct that would bar their recovery under section 402(e) once the underlying employment relationship was severed. 43 P.S. § 802(e).
I therefore would remand the matter to the Unemployment Compensation Board of Review for purposes of determining when the expectation of continued employment ended and the underlying employment relationship was severed. I would direct the Board to award benefits from that date, unless other impediments, then present, precluded such an award.
It is not unusual in the area of labor-management relations that differences arise in the negotiations for collective bargaining agreements. Unfortunately there are times When those differences aré irreconcilable. Fortunately, in most instances they are resolved, a new agreement is reached and the differences are accommodated. The avoidance of a work stoppage during these trying and traumatic periods is in the best interests of all. However, there are situations where a strike or a lockout is the only vehicle capable of encouraging serious negotiations. Nevertheless, *299it is in the best interest of society to design its rules governing this segment of our activities to encourage the resolution of these disputes without a work stoppage and the concomitant unemployment. Most importantly, a permanent rupture of the employment relationship is to be avoided whenever possible. The legislature was obviously mindful of these societal objectives in designing a scheme for the payment of employment benefits. The judiciary has an equal responsibility in interpreting those provisions to give full force and effect to that design.
The majority’s analysis in this case appears to turn upon the action of the employer taken in response to the employees’ participation in a strike. In so doing, it obfuscates what I consider to be the critical issues in this case. Under these facts a clear distinction has to be drawn between the collective bargaining contract which sets the terms and conditions of employment and the underlying employment relationship. Moreover, the majority fails to consider the Vrotney rule2 and its application to the facts of this case.
A collective bargaining agreement does not create, nor does its termination destroy the employer-employee relationship. Rather, a collective bargaining agreement merely establishes the terms and conditions which will govern that relationship during the life of the agreement. In J.I. Case Co. v. N.L.R.B., 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed.2d 762 (1944), the United States Supreme Court observed:
Collective bargaining between employer and the representatives of a unit, usually a union, results in an accord as to terms which will govern hiring and work and pay in that unit. The result is not, however, a contract of employment except in rare cases; no one has a job by reason of it and no obligation to any individual ordinarily comes into existence from it alone. The negotiations between union and management result in what has often *300been called, a trade agreement rather than a contract of employment.
Id. at 334-35, 64 S.Ct. at 578-79.
Accord, Amalgamated Association of Street, Electric Railway and Motor Coach Employ. of America, Div. 85 v. Pittsburgh Railways Co., 393 Pa. 219, 223, 142 A.2d 734, 736, cert. denied, 358 U.S. 882, 79 S.Ct. 123, 3 L.Ed.2d 112 (1958). Thus, during a work stoppage precipitated by the inability of the parties to negotiate a new collective bargaining agreement prior to the expiration of the old, the employer-employee relationship continues; only actual work has ceased. From the expiration of the collective bargaining agreement, during the period of the negotiation of the new contract, the underlying employment relationship continues and is restructured by the terms of the new collective bargaining agreement that results.
By promoting continuation of the commercial enterprise during the period between expiration of a collective bargaining agreement and the negotiation of its successor, application of the Vrotney rule avoids the commercial, economic and social dislocation that invariably ensues from production interruptions. Vrotney Unemployment Compensation Case, 400 Pa. 440, 444-445, 163 A.2d 91, 93-94 (1960). Accord, Fairview School District v. Commonwealth, Unemployment Compensation Board of Review, 499 Pa. 539, 454 A.2d 517 (1982); Borello v. Unemployment Compensation Board of Review, 490 Pa. 607, 417 A.2d 205 (1980); Unemployment Compensation Board of Review v. Sun Oil Co., 476 Pa. 589, 383 A.2d 519 (1978), appeal dismissed, 440 U.S. 977, 99 S.Ct. 1782, 60 L.Ed.2d 237 (1979); Philco Corporation v. Unemployment Compensation Board of Review, 430 Pa. 101, 242 A.2d 454 (1968). Vrotney fosters maintenance of the status quo established under the terms and conditions of the expiring contract during the negotiation period. As we recently emphasized in Local 730, United Assoc. of Journeymen and Apprentices of the Plumbing and Pipe-fitting Industry v. Commonwealth, Unemployment Compensation Board of Review (Trane), *301505 Pa. 480, 480 A.2d 1000 (1984), the sole test for determining whether a work stoppage is a lockout or a strike for purposes of entitlement to unemployment compensation benefits is which side, union or management, first refused to continue operations under the status quo.3 Trane, supra, 505 Pa. at 484, 480 A.2d at 1002.
A majority of this Court unfortunately deviated from Vrotney’s clear and easily applied rule in High v. Commonwealth, Unemployment Compensation Board of Review, 505 Pa. 379, 479 A.2d 967 (1984), embracing a theory which permits a shifting of the initial responsibility for the work stoppage on the basis of subsequent offers to restore the status quo.4 As pointed out by Justice Larsen in his dissent in High,
*302Responsibility for the work stoppage, and thus, the determination of whether the stoppage is a strike or a lockout is established at its inception. Actions taken after the cessation of work activity cannot erase the initial responsibility and place the parties in the positions they previously occupied. If it were otherwise, responsibility for a work stoppage would be subject to repeated change. A lockout on Monday could be a strike on Wednesday, a lockout again on Friday, and so on and so forth. This would tend to encourage parties to continually jockey for position at the expense of sincere negotiations toward a settlement____ Fixing responsibility at the outset forces the parties to act responsibly, sincerely and in good faith at the initial stages of a potential work stoppage.
Id., 505 Pa. at 390, 479 A.2d at 972-73. (Larsen, J., dissenting, joined by Nix, C.J., and Zappala, J.)
Thus, the salutary rule of Vrotney, heretofore consistently applied by this Court, should remain the exclusive test for determining entitlement to benefits.
Vrotney, of course, applies to situations where the underlying employment relationship continues to exist. In a situation where the employer-employee relationship is totally severed following the expiration of a collective bargaining agreement, the person seeking benefits is clearly “unemployed” as that term is defined in section 4 of the Act. 43 P.S. § 753(u) (1964). Whereas the Vrotney rule should be applied in such a manner that the initial responsibility for the work stoppage controls the status of the employee for unemployment compensation purposes during that period where the employment relationship continues, a different situation is presented the moment the underlying contract of employment is severed. In that instance the employees are unemployed and their status for unemployment compensation purposes is properly at that point reevaluated. Absent a showing that the severance of the employment relationship resulted from the willful misconduct on the *303part of the employee, he or she would be eligible for benefits. Section 402(d) and Vrotney presuppose the continuation of the underlying employer-employee relationship and thus do not extend to individuals who are no longer employed.5
In the instant case the status quo was first disrupted by the employees when they withheld their services and set up picket lines, contrary to the advice of their union, on July 1, 1980. Thus under Vrotney the work stoppage was a strike and the employees are not entitled to benefits for the period during which they refused to work. Their July 3, 1980 offer to return to work and its rejection by the employer should not affect that determination. Here, however, at some point further negotiations terminated and the underlying employment relationship ended. Such .altered condition would then justify a reevaluation of the claimant’s status for unemployment compensation purposes.
On this record, it cannot be determined precisely when negotiations were ultimately abandoned and the prospect of a return to work no longer existed. A remand to the Board for that purpose is proper. As of that time section 402(d) was no longer applicable, since the cessation of work was no longer due to a labor dispute, but rather, from that point, resulted from the severance of the employment relationship. Further, I agree with the majority’s conclusion that this record does not establish a showing that the discharge resulted from willful misconduct as described in subsection 402(e).
Accordingly, I would remand with instructions that the instant appellants should be determined to be entitled to benefits from the date that it is found that the employment relationship ceased, if they otherwise qualified for benefits.

'. Although it appears from this record that the parties were not able to agree upon a new collective bargaining agreement, the record before us is inadequate to determine when that fact occurred. The majority suggests that the termination of the employment relationship may have occurred when the employer on July 1st notified the then striking employees of their dismissal. However, there are other facts in the record which positively establish that both negotiations and the prospect of continued future employment continued beyond July 1st. For example, the record reflects further contacts between the employees and management on July 3rd, July 7th, and during the week of July 8th. Most persuasive is a stipulation that is found in the record of In Re: Howard W. Anderson, (one of the claimants) Appeal No. 80-1-C-478, during a hearing on November 7, 1980 before a referee wherein it is noted:
As a result of that discussion, we’re going to attempt to stipulate to some of the basic facts that all of the claimants were employees of Penflex, Inc., and all were members of bargaining unit which was represented by Plumber's Union Local 690, which union was the bargaining agent for the unit with Penflex. That a collective bargaining agreement had been in effect between union and company, which had an expiration date of June 30, 1980. Negotiations had been held between the union and the company, which negotiations are continuing. However, the terms of the new agreement to succeed the expiring collective bargaining agreement have not been agreed upon.
Id. at 1 (JC1) (emphasis added).
*298From everything above it is clear there was an expectation of continued future employment long beyond the July 1st date seized upon by the majority.

. See Vrotney Unemployment Compensation Case, 400 Pa. 440, 444-445, 163 A.2d 91, 93-94 (1960).

. The initial acceptance of the Vrotney standard was based on its easy application on the administrative level and at the same time it served the basic policy concerns involved. Vrotney was designed to encourage the continuation of the work relationship under terms previously agreed to by the parties during that difficult period between the expiration of the old agreement and before the new terms of employment had been agreed upon. Fairview School District v. Commonwealth of Pennsylvania, Unemployment Compensation Board of Review, supra, 499 Pa. at 546, 547, 454 A.2d at 521; Unemployment Compensation Board of Review v. Sun Oil Co., supra, 476 Pa. at 595, 383 A.2d at 522; cf. Borello v. Unemployment Compensation Board of Review, supra, 490 Pa. at 612, 417 A.2d at 208 (1980). Moreover, the administrative units involved in the compensation eligibility decision would have little difficulty in resolving the simple factual question of who first departed from the terms of the expired agreement. Unemployment Compensation Board of Review v. Sun Oil Co., supra, 476 Pa. at 598, 383 A.2d at 522. Once we complicate that decision with requirements of ascertaining the good faith or the justification of a party altering the former terms, we create a standard infinitely more difficult to administer, without a corresponding benefit being derived for such a modification.
Local 730, United Assoc. of Journeymen and Apprentices of the Plumbing and Pipe-fitting Industry v. Commonwealth, Unemployment Board of Review, 505 Pa. 480, 486-487, 480 A.2d 1000, 1003-1004 (1984).

. We notice that the majority ignores the High decision in its analysis in this case. If it had been employed the employees would have been ineligible when they refused to work on July 1st and would have regained eligibility when the employer refused to accept their offer to return on July 3rd.

. Where unemployment results from "discharge" or severance from employment, the Vrotney analysis is inapplicable by definition because that analysis is utilized only where "unemployment is due to a stoppage of work which exists because of a labor dispute. . . .” 43 P.S. § 802(d).