Court Opinion

ID: 9686941
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:11:52.144249+00
Date Added: 2024-06-11T18:18:23.118173
License: Public Domain

Bashara, P.J.
(dissenting). This is an appeal *463from the Genesee Circuit Court affirming a Michigan Employment Security Appeal Board’s determination denying unemployment benefits to plaintiffs and upholding the constitutionality of the legislative provision under which the denial was authorized.
Plaintiffs are employees of defendant company. They were represented for collective bargaining purposes by the United Auto Workers Union. The UAW and Universal Engineering Division, Houdaille Industries, Inc., had been bound by a collective bargaining agreement which expired by its terms on June 1, 1971.
On April 1, 1971, the company gave notice of its intent to terminate the agreement as of May 31, 1971. A series of some 23 meetings were held by representatives of both sides concerning wages, seniority, length of the new contract and flexibility of the work force.
During the negotiations, the UAW expressed a desire to continue working under the existing agreement, even beyond the date of expiration. However, it indicated that such continuation of work was contingent on making any new agreement retroactive to the June 1st expiration date.
On May 26, 1971, the company sent a letter to the union announcing that unless their final proposals were accepted, it planned to close the plant. The union responded with counter proposals on May 28 and May 30.
On May 31, 1971, the company indeed locked out its employees. Two weeks later, negotiations were resumed. The lockout was terminated on August 23, 1971. The employees returned to work without a contract. The new contract was signed and ratified on January 13, 1972. By its terms, it was effective December 27, 1971.
*464The employees applied to the Michigan Employment Security Commission for unemployment benefits during the period of the lockout. The multiclaimant benefit section of the MESC determined that their unemployment was due to a "labor dispute in active progress”, and disqualified them from receiving benefits by virtue of MCL 421.29(8); MSA 17.531(8). This finding was confirmed by a hearing referee at an evidentiary hearing, and by the Appeal Board.
The Genesee Circuit Court upheld the Appeal Board’s determination that the claimants’ unemployment was due to "a labor dispute in active progress”, but found that § 29(8), the applicable section of the Employment Security Act, was unconstitutional in that it deprived claimants of equal protection under the law. On motion for rehearing, the court reversed itself under the authority of Ohio Bureau of Employment Services v Hodory, 431 US 471; 97 S Ct 1898; 52 L Ed 2d 513 (1977).
I
Plaintiffs first contend that the finding of the Appeal Board that plaintiffs were unemployed due to a labor dispute in active progress is not supported by the evidence. The relevant portion of the applicable statute, MCL 421.29(8); MSA 17.531(8), is as follows:
"An individual shall be disqualified for benefits for any week with respect to which his total or partial unemployment is due to a labor dispute in active progress, or to shutdown or start-up operations caused by that labor dispute, in the establishment in which he is or was last employed, or to a labor dispute, other than a lockout, in active progress, or to shutdown or start-up operations caused by that labor dispute, in any other *465establishment within the United States which is functionally integrated with the establishment and is operated by the same employing unit.”
Any attempt to answer the question of whether, under the facts of this case, a labor dispute was in active progress must begin with a definition of the term "labor dispute”. The term has been clearly defined by our Supreme Court as "a controversy between employer and employees regarding hours, wages, conditions of employment”. General Motors Corp v Employment Security Comm, 378 Mich 110, 117; 142 NW2d 686 (1966), citing Lillard v Employment Security Comm, 364 Mich 401, 420; 110 NW2d 910 (1961). Cf., MCL 421.29(8)(b); MSA 17.531(8)(b), MCL 423.2(b); MSA 17.454(2)(b).
We next consider the meaning of the words "due to”. Plaintiffs argue that the standard must be one of absolute causation. In other words, the disqualification would occur only if the sole reason for plaintiffs’ unemployment was due to a labor dispute.
Rather, I would opt for the theory espoused by the MESC as the "efficient cause” or "cause-in-fact” concept. The application of this test is to ask whether plaintiffs would have been unemployed despite the labor dispute. If so, then the unemployment was not "caused by” or "due to” the labor dispute. On the other hand, if the unemployment would have occurred because of the labor dispute, in spite of any other reason including economics, the causality necessary to prove disqualification has been established.
In point of fact, all of the cases relied on by plaintiffs in support of the "absolute cause” theory are actually cases standing for the "cause-in-fact” proposition. See Scott v Budd Co, 380 Mich 29; 155 NW2d 161 (1968), Abbott v Unemployment Com*466pensation Comm, 323 Mich 32; 34 NW2d 542 (1948), Dann v Employment Security Comm, 38 Mich App 608; 196 NW2d 785 (1972).
Finally, it should be noted that no labor dispute is ever decided in a vacuum. Practical considerations such as economics guide both management and labor in determining whether a strike or lockout should be effectuated, and how long it should be in effect.
Having defined the terms, we are thus led to a resolution of the question. The issue is one of fact. Bedwell v Employment Security Comm, 367 Mich 415; 116 NW2d 920 (1962), Baker v General Motors Corp, 74 Mich App 237; 254 NW2d 45 (1977).
By constitution, statute and case law, findings of the Appeal Board must be left undisturbed as long as they are supported by competent, material and substantial evidence on the whole record. Const 1963, art 6, §28; MCL 421.38(1); MSA 17.540(1), King v Calumet & Hecla Corp, 43 Mich App 319; 204 NW2d 286 (1972).
A review of the record reveals the existence of substantial evidence in support of the findings of the Appeal Board. From April 1, 1971, until the May 31, 1971, termination date, the parties met more than 20 times in an attempt to resolve differences so that a new agreement could be reached. Various proposals and counter-proposals were offered. When the company advised the union that it would cease operations on May 31, 1971, the union countered that its members would continue to work under the old agreement as long as any future agreement would be retroactive to June 1, 1971.
The labor dispute still existed when the employees returned to work on August 23, 1971, and throughout the time the company and union re*467established and continued negotiations. In fact, a subsequent agreement was not accepted and approved by both parties until January 13, 1972.
I must conclude that there is competent, material and substantial evidence to support the Appeal Board’s decision to disqualify the plaintiffs under the statute.1
II
Having determined plaintiffs’ disqualification under the Michigan statute, I now address the issue raised concerning its constitutionality. Plaintiffs contend the statute violates the equal protection clause of both the United States and Michigan Constitutions.
The United States Supreme Court has clearly spoken to the issue. In Ohio Bureau of Employment Services v Hodory, supra, the Court reviewed the constitutionality of an Ohio unemployment statute which disqualified an employee who was furloughed as a result of a strike at another plant owned by the claimant’s employer. In upholding the statute as not violative of equal protection, the Court said that,
"The statute does not involve any discernible fundamental interest or affect with particularity any protected class. * * * the test of constitutionality, therefore, is whether the statute has a rational relation to a legitimate state interest. Brief for Appellee 29. See New Orleans v Dukes, 427 US 297 [96 S Ct 2513; 49 L Ed 2d 511] (1976). Our statement last Term in Massachusetts *468Bd of Retirement v Murgia, 427 US 307 [96 S Ct 2562; 49 L Ed 2d 520] (1976), explains the analysis:
" 'We turn then to examine this state classification under the rational-basis standard. This inquiry employs a relatively relaxed standard reflecting the Court’s awareness that the drawing of lines that create distinctions is peculiarly a legislative task and an unavoidable one. Perfection in making the necessary classifications is neither possible nor necessary. Dandridge v Williams, [397 US 471] 485 [90 S Ct 1153; 25 L Ed 2d 491 (1970)]. Such action by a legislature is presumed to be valid.’ Id., at 314 [96 S Ct 2562; 49 L Ed 2d 520].” 431 US at 489.
The Court, quoting extensively from Dandridge, supra, summarized its holding as follows:
" 'If the classification has some "reasonable basis”, it does not offend the Constitution simply because the classification "is not made with mathematical nicety or because in practice it results in some inequality.” Lindsley v Natural Carbonic Gas Co, 220 US 61, 78 [31 S Ct 337; 55 L Ed 369 (1911)].’ Dandridge v Williams, 397 US at 485. The rationality of this treatment is, of course, independent of any 'innocence’ of the workers collecting compensation.” 431 US at 491.
In Michigan, our Supreme Court has repeatedly said that the equal protection clause of the Michigan Constitution affords "the same rights as the Federal equal protection clause”, Fox v Employment Security Comm, 379 Mich 579, 588; 153 NW2d 644 (1967). See also Moore v Spangler, 401 Mich 360; 258 NW2d 34 (1977), Wolodzko v Wayne Circuit Judge, 382 Mich 528; 170 NW2d 9 (1969). I must conclude that the Michigan Supreme Court would also apply the Hodory test of minimal scrutiny using "any rational basis” as its standard of review.
Plaintiffs contend that the plurality opinion in *469Manistee Bank & Trust Co v McGowan, 394 Mich 655; 232 NW2d 636 (1975), dictates that the "substantial relation to the object” test is applicable. However, the criteria necessary for application of the test in Manistee Bank, (1) that there be an exception to a common-law or general rule and (2) that the exception is no longer experimental, do not appear to be present in the instant matter.
It should be noted that subsequent decisions have limited the "substantial relation” test to the unique circumstances of each case. See e.g., McAvoy v H B Sherman Co, 401 Mich 419; 258 NW2d 414 (1977), Cruz v Chevrolet Grey Iron, Division of General Motors Corp, 398 Mich 117; 247 NW2d 764 (1976).
In McAvoy, the Supreme Court held:
"In the case at bar, it becomes immediately apparent that the thrust of the legislation challenged is primarily social and economic. The legislation involved deals with property rights, not fundamental rights. Therefore, the burden is on the appellants to show the classification is arbitrary and does not bear a rational relation to the object of the legislation.” 401 Mich at 453-454.
Our inquiry must lead us, then, to determine if there is any rational basis for which the classification encompassed by § 29(8) was created.
First, the purpose of the Michigan Employment Security Act, as articulated in § 2, MCL 421.2; MSA 17.502, is to provide interim unemployment benefits for those who suddenly find themselves unemployed through no fault of their own. I M Dach Underwear Co v Employment Security Comm, 347 Mich 465; 80 NW2d 193 (1956). It seems reasonable to conclude that the Legislature did not think those employees involved in a labor dispute would fit the purpose of the act. There *470exists, therefore, a rational basis for the legislative action whether one agrees or disagrees with the proposition.
The second purpose of the act, and specifically § 29(8), is to insure that the state remains neutral in labor disputes. Thus if either a strike or a lockout exists at a particular plant, the state will not investigate to determine who is right or wrong in the dispute. MESC will determine only if a labor dispute does in fact exist and whether a claimant’s unemployment was due to the labor dispute. The policy of neutrality by the state has long been recognized as a worthwhile objective by the Supreme Court. See Noblit v The Marmon Group, 386 Mich 652; 194 NW2d 324 (1972), Lilard, supra, and Buzza v Unemployment Compensation Comm, 330 Mich 223; 47 NW2d 11 (1951).
I would hold that the statutory provision meets not only the "rational basis” test, but that it also bears a substantial relation to the purpose of the law. It is not violative of the plaintiffs’ right to equal protection regardless of which standard of review is employed.
Ill
Plaintiffs also contend that the Federal labor law under the National Labor Relations Act preempts the rights of states to disqualify employees affected by a labor dispute from receiving unemployment compensation benefits.
As plaintiffs argue, the United States Supreme Court specifically reserved the question in Hodory, supra. However, the Court in this case did uphold similar statutory schemes involving the Social Security Act and the Federal Unemployment Tax Act.
*471The United States Supreme Court, in a recent plurality opinion, upheld a New York unemployment compensation statute against a Federal preemption challenge. New York Telephone Co v New York State Dep’t of Labor, — US —; 99 S Ct 1328; 59 L Ed 2d 553 (1979). This decision is equally applicable to the claims of the plaintiffs in the instant case. Therefore, it must be concluded that Federal law has not preempted the legislative scheme found in § 29(8) of the Employment Security Act.
I would affirm the judgment of the trial court. No costs, a public question being involved.

 I recognized that another panel of this Court has reached what appears to be an opposite result in Smith v Employment Security Comm, 89 Mich App 212; 280 NW2d 489 (1979). The facts recited in Smith appear to be distinguishable from those in the case at bar. I further note that National Gypsum Co v Administrator, Louisiana Dep’t of Employment Security, 313 So 2d 230 (La, 1975), relied on by the Smith Court, is a minority holding among American jurisdictions.