Court Opinion

ID: 9551036
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:46:52.850397+00
Date Added: 2024-06-11T15:22:55.767407
License: Public Domain

*377JENNINGS, Justice
(dissenting).
I dissent. Kennecott’s collective bargaining agreements with each of the bargaining agents, Lodge 942 Brotherhood of Locomotive Firemen and Engincmen, Local 314 International Brotherhood of Electrical Workers, International Union of Mine, Mill and Smelter Workers and the United Steelworkers of America, consisted of two separate instruments — one covering wages and working conditions, and one covering health and welfare benefits. The former established differing wage rates and conditions of employment for each group of workers represented by the bargaining agent, whereas the latter established terms which were substantially the same for all employees.
Prior to the expiration of these contracts negotiations on wages and working conditions were conducted in Arizona on a local level by the Company and representatives of each union concerned. Negotiations on the health and welfare plan, however, were conducted at Salt Lake City, Utah by regional representatives of the Company and international representatives of the Steelworkers and Mine-Mill. Appellants were not represented at these bargaining sessions, but because it had been the policy of the Company to maintain a uniform plan of health and welfare benefits for all employees, and because the appellants were not dissatisfied with the existing provisions of the contract, it was understood that they would accept whatever came out of the Salt Lake City negotiations with respect thereto.
The Employment Security Commission ruled that A.R.S. § 23-777, subd. A disqualified appellants from receiving unemployment compensation during the strike which followed a breakdown in negotiations at Salt Lake City, because their unemployment resulted from a labor dispute in which they were “directly interested.” The statute is patently remedial and should be liberally construed to effect its beneficent purpose, which is to allow compensation to those who are involuntarily unemployed through no fault of their own, A.R.S. § 23-601, and the disqualifying provisions should be narrowly construed. Reynolds Metals Co. v. Thorpe, 41 Ala.App. 331, 133 So.2d 709 (1961) ; Southwest Lumber Mills v. Employment Security Comm’n, 66 Ariz. 1, 182 P.2d 83 (1947).
Admittedly, a majority of American courts hold an employee to be directly interested in a labor dispute if his wages, hours or working conditions will be affected by the outcome of the labor dispute which has caused his unemployment. But the fallacy of this test lies in its failure to recognize that an employer may be motivated to confer some benefits solely by the practical economic requirement of maintaining parity in working conditions among all employees, in which event every employee would be affected to some extent by a change in working conditions. Thus, by *378substituting “affected” for “directly interested” the majority equates direct interest with “mere” interest or even “indirect” interest, thereby effectively repealing all statutory exceptions to the labor dispute provision when working conditions are an issue. The purpose of the “directly interested” provision was to eliminate the possibility of the key man strike — a device consciously employed by a union to impede production by removing a handful of workmen from an integrated operation.1 Without this safeguard all nonstriking union members thrown out of work by the ensuing .shutdown would be entitled to compensation benefits although their interest in the strike was as great as that of the few strikers. Compensation in such cases would be tantamount to payment of strike benefits by the state in violation of its hypothetical neutrality in labor disputes. Although the same tactic might be used by a key union when bargaining is conducted by a joint trade council or similar organization, it is difficult to envision its applicability to bargaining conducted by unions with separate financial reserves when the gains achieved by one union will not automatically be applied to the others.
. A minority of courts have reacted to the obviously unfair and unintended results of the majority rule by interpreting “directly interested” to mean the furtherance of a labor dispute by participation and activity therein. Kieckhefer Container Co. v. Unemployment Compensation Comm’n, 125 N.J.L. 52, 13 A.2d 646 (1940); Wicklund v. Commissioner, 18 Wash.2d 206, 138 P.2d 876 (1943). Whereas the statute expressly disqualifies individuals participating in labor disputes, the term “directly interested” must have some meaning other than participation. Huiet v. Boyd, 64 Ga.App. 564, 13 S.E.2d 863 (1941).
The purpose of the statute may be implemented and the evils of these alternative interpretations avoided, however, by limiting the application of the “directly interested” clause to individuals whose wages, hours or conditions of employment will be automatically ascertained by settlement of the dispute as distinguished from individuals whose wages, hours or conditions of employment may or will be reviewed and altered in the light of such settlement.2 The distinction here suggested may be illustrated by two cases. In Shell Oil Co. v. Cummins, 7 Ill.2d 329, 131 N.E.2d 64 (1956), the envployer was negotiating with twelve unions which represented its employees. Agreement was reached with ten unions but the remaining two struck,. causing a shutdown *379of operations. In order to get the employees bade to work the company offered a wage increase for all employees. The court affirmed an award of unemployment benefits to the nonstriking union members, saying:
“In its reply brief the appellant admits ‘that Shell’s policy at the refinery has been not to make any substantial distinction in the wage rates paid to the various union crafts. In other words, a wage increase granted to one union would be granted to all.’ On the other hand, there was no evidence, whatsoever, to show that the claimants either requested further wage negotiations or, absent the picket line, would have failed to honor the terms of their prior agreement had a wage increase not been forthcoming. From these facts, we feel it was reasonable to conclude that, as to the ten ratifying unions, any wage increase which they received was voluntarily tendered by the employer for the purpose of creating good will and of promoting harmonious employment relationships. By accepting this generosity, these claimants cannot be said to have become directly interested in the labor dispute.” 7 Ill.2d at 336, 131 N.E.2d at 68.
In Dravo Corp. v. Unemployment Compensation Bd., 187 Pa.Super. 246, 144 A.2d 670 (1958), an employers’ association, which was conducting joint negotiations with a trade-union council made up of representatives from four unions, reached an interim agreement with the carpenters’ union. A new multiple employer, multiple union agreement was subsequently entered into, but only after a strike by one of the unions forced a shutdown of operations. The court denied compensation to the nonstriking carpenters on the ground that they were directly interested in the strike because the interim agreement was intended to be operative only until the new agreement, which was negotiated on behalf of and for the benefit of the members of all unions, should go into effect.
In the instant case the Company admits that each of the unions could have insisted that it have a particular health and welfare plan for its members even though other unions might have a different plan, and that each union could have attempted to enforce such demands by a strike. It is not disputed that appellants’ unions were not represented at the negotiations in Salt Lake City and that the negotiations there did not bind them. Nor is it disputed that the Company, as a matter of policy, may extend to nonrepresented employees the same welfare program that was exacted from it by represented employees, or from time to time change that policy and refuse to so extend the plan to nonrepresented employees.
It is apparent from the foregoing that the details of the health and welfare plan which *380were agreed upon at Salt Lake City would not automatically be extended to the non-represented unions’ members. It would in fact require acceptance by these unions and agreement thereto by the Company. Therefore, appellants were not directly interested in the strike and are entitled to compensation.

. Unemployment Benefits, 49 Colum.L.Rev. 550 (1949) ; Shadur, Unemployment Benefits and the “Labor Dispute” Disqualification; 17 U.Chi.L.Rev. 294; 329 (1950) ; Williams, The Labor Dispute Disqualifieation — A Primer, 8 Vand.L.Rev. 338, 350 (1955).

. 10 Ben.Ser. 10-11842 (Conn.R.l946) ; 17 U.Chi.L.Rev. 294 n. 164 (1950).