Court Opinion

ID: 9689985
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:51:00.72672+00
Date Added: 2024-06-11T18:18:53.084904
License: Public Domain

MOSER, P.J.
(dissenting). I conclude that the twenty-one percent wage reduction instituted by Patrick Cudahy was a harsh and unreasonable action which effectuated a lockout of its employees pursuant to sec. 108.04(10), Stats. Furthermore, I conclude that the LIRC exhibited extreme management bias in determining that the Patrick Cudahy employees were not locked out. Therefore, I would reverse the judgment of the trial court affirming the LIRC decision. I would *649hold that the employees be allowed to claim U.C. benefits.
The pertinent statute sections provide as follows:
108.04(10) Labor Dispute, (a) An employe who has left or partially or totally lost his or her work with an employing unit because of a strike or other bona fide labor dispute, other than a lockout, is not eligible to receive benefits based on wages paid for employment prior to commencement of the dispute for any week in which the dispute is in active progress in the establishment in which the employe is or was employed, ....
(d) In this subsection, “lockout” means the barring of one or more employes from their employment in an establishment by an employer as a part of a labor dispute, which is not directly subsequent to a strike or other job action of a labor union or group of employes of the employer, or which continues or occurs after the termination of a strike or other job action of a labor union or group of employes of the employer.
Reviewing courts will accept an agency’s factual findings if they are supported by credible and substantial evidence, but whether certain facts taken together constitute either a loss of employment because of a bona fide labor dispute or a lockout is a question of law.1 Generally, reviewing courts defer to agency decisions that are significantly within the expertise of a particular agency.2 Furthermore, due weight is given agency decisions when the legal conclusion(s) reached *650are of first impression or involve statutory interpretation.3 However, there must be a rational basis to support the agency’s conclusion(s),4 and the agency’s interpretation of the statute as applied to the facts must be reasonable.5
Wisconsin case law is not on point as to whether a twenty-one percent wage decrease, coupled with the circumstances in the case at hand, constitutes a lockout under sec. 108.04(10), Stats. Subsection (10)(d) requires that the wage decrease (1) bar employees (2) as a result of a labor dispute which (3) is not subsequent to a strike or other action of a labor union or group of employees. However, we may look to the law of our sister state, Minnesota, for interpretive guidance.
Minnesota’s unemployment compensation law closely resembles that of Wisconsin. In Minnesota, employees are disqualified from U.C. benefits if they have engaged in a strike that is a bona fide labor dispute.6 The Minnesota statutes define “labor dispute” as
any controversy concerning employment, tenure or conditions or terms of employment or concerning the association or right of representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms, tenure, or other conditions of employment, regardless of whether or not the relationship of employer and employee exists as to the disputants.7
*651However, nothing in the above statute is deemed to deny U.C. benefits to any employee “who becomes unemployed because of a lockout.”8 A “lockout” is defined as the refusal of an employer to furnish work to employees as a result of a labor dispute.9 Sunstar Foods, Inc. v. Uhlendorf10 provides further insight as to the meaning of “lockout” under Minnesota law.
In Sunstar, the Minnesota Supreme Court determined that a unilateral wage reduction of twenty-one to twenty-six percent constituted a “lockout.” That court upheld the reviewing agency’s decision that the wage reduction was “such an unreasonable condition of employment that the employees had no alternative but to leave.”11 The court thus found that a decrease in wages between twenty-one and twenty-six percent is good cause for employment separation and entitles workers to U.C. benefits.12
I conclude that the LIRC’s decision to deny Trinwith’s claim for U.C. benefits was neither rational nor reasonable. The unilateral twenty-one percent wage reduction was harsh and unreasonable. This “take it or leave” proposal left Patrick Cudahy employees with no alternative but to leave their jobs. Thus, I would hold that there was a lockout under sec. 108.04(10), Stats., and that Trinwith and his fellow workers are entitled to U.C. benefits.
While the above would be dispositive of this appeal, I am compelled to add that the LIRC exhibited extreme management bias in determining that Patrick Cudahy employees were not locked out. The LIRC exhibited its bias by: (1) not considering certain rele*652vant and uncontroverted facts brought before it; (2) not considering the social implications of the notice issued by Patrick Cudahy on December 25, 1986; (3) ignoring evidence of certain bad faith negotiations; and (4) ignoring tax benefits Patrick Cudahy received as a result of implementing its final offer of December 23.
Agency examiners, such as the LIRC appeal tribunal, must remain neutral in deciding cases brought before them.13 Furthermore, while they are not bound by common law or statutory rules of evidence, they are required to admit all evidence having reasonably probative value.14 Also, agency examiners must provide a showing of discretion for their decisions, which illustrates more than a choice between alternatives, and that a particular ruling is derived from facts, or inferences from facts, in the record.15 Thus, agency rulings must be based upon a logical rationale supported by proper legal standards.16
The LIRC exhibited management bias by failing to consider the following probative information: (1) Trin-with and his fellow workers already gave Patrick Cudahy wage concessions in 1982 and in 1984; (2) for sixteen months prior to January 1, 1987, Patrick Cudahy made a profit of $750,000; (3) in addition to calling for across-the-board wage reductions, the final offer of December 23 allowed Patrick Cudahy to fill unemployment vacancies with part-time employees. This would allow up to twenty percent of the work force to be part-time, and such employees could work up to *653thirty hours per week, but they would not receive health insurance, retirement benefits or vacation and holiday pay; and (4) the final offer provided that Patrick Cudahy would restudy the work standards of all union jobs. It was an abuse of discretion for the LIRC appeals tribunal to not consider this information.
The tribunal also abused its discretion by ignoring the social import of the December 25 notice. On Christmas Day, 1986, Patrick Cudahy employees were told that the terms of the December 23 final offer would be instated on January 1, 1987. Thus, on January 1, 1987, workers’ wages would be reduced by twenty-one percent, part-time employees could be hired and constitute twenty percent of the work force, and job standards would be reevaluated. The timing of this action evidences a calculated, mean-spirited, hard-heartedness that makes Scrooge’s conduct towards Bob Cratchitt pale into insignificance. The appeal tribunal’s failure to consider this information exhibits almost absolutely uncaring management bias.
Another abuse of discretion occurred when Patrick Cudahy employees requested an adjournment of the LIRC appeals hearing because a National Labor Relations Board (NLRB) administrative law judge (ALJ) tentatively held that Patrick Cudahy had bargained in bad faith. The LIRC appeals tribunal noted that the NLRB ALJ decision was pending before the NLRB appeals board. The LIRC tribunal refused to grant Trinwith’s request because: (1) the letters viewed by the NLRB ALJ preexisted the initial LIRC hearings, and were not subpoenaed by Trinwith; thus, the letters were not considered during the earlier hearings; and (2) the letters did not constitute “newly discovered evidence,” and thus they could not justifiably be introduced on appeal. I would hold that the LIRC appeals tribunal abused its discretion in rejecting evidence of *654the ALJ’s decision finding that Patrick Cudahy had bargained in bad faith. That information was probative and should have been considered.
Finally, it is uncontroverted that when Patrick Cudahy hired the replacement workers,17 it applied for federal tax credit under the targeted jobs tax program created by the Federal Tax Reform Act of 1986. The record reflects that the president of Patrick Cudahy testified that approximately five hundred replacement employees were involved in the tax credit attempt, and that the program could have provided Patrick Cudahy with a $1,200,000 exemption because of these new employees. This potential bottom-line profit was relevant to show Patrick Cudahy’s incentive to replace union employees with the five hundred replacement workers. The LIRC tribunal abused its discretion by failing to consider this relative information.
I would therefore reject LIRC’s pious postulation that its decision was neutral, and hold that all of the above examples illustrate its obvious management bias, and that this bias unequivocally infected its decision-making process. I would hold as a matter of law that the LIRC acted unreasonably, and I would also hold as a matter of law that instituting the terms of the December 23 final offer was so harsh and unreasonable that it constituted a “lockout” as defined in sec. 108.04(10)(d), Stats. Therefore, Trinwith and his coworkers were not involved in a strike resulting from a bona fide labor dispute under sec. 108.04(10)(a). The Patrick Cudahy employees are thus entitled to U.C. benefits.

Hemstock Concrete Prods., Inc. v. LIRC, 127 Wis. 2d 437, 439, 380 N.W.2d 387, 389 (Ct. App. 1985).

Esparza v. DILHR, 132 Wis. 2d 402, 405, 393 N.W.2d 98, 100 (Ct. App. 1986).

School Dist. of Drummond v. WERC, 121 Wis. 2d 126, 133, 358 N.W.2d 285, 289 (1984).

Id. at 135, 358 N.W.2d at 290.

Esparza, 132 Wis. 2d at 408, 393 N.W.2d at 101.

Minn. Stat. Ann. sec. 268.09 subd. 3(a) (West 1989).

Id. sec. 179.01 subd. 7 (West 1989).

Id. sec. 268.09 subd. 3(c)(2).

Id. sec. 179.01 subd. 9.

 310 N.W.2d 80 (Minn. 1981).

Id. at 85.

Id. at 84-85.

Marathon Elec. Mfg. Corp. v. Industrial Comm’n, 269 Wis. 394, 405, 69 N.W.2d 573, 579-80 (1955).

Sec. 227.45(1), Stats; Village of Menomonee Falls v. DNR, 140 Wis. 2d 579, 609, 412 N.W.2d 505, 518 (Ct. App. 1987).

Reidinger v. Optometry Examining Bd., 81 Wis. 2d 292, 297, 260 N.W.2d 270, 273 (1977).

Id.

I do not take issue with Wisconsin law regarding the hiring of replacement workers during strikes, particularly Rice Lake Creamery Co. v. Industrial Comm’n, 15 Wis. 2d 177, 112 N.W.2d 202 (1961).