Court Opinion

ID: 9668115
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:02:45.139541+00
Date Added: 2024-06-11T15:09:28.905736
License: Public Domain

CARTER, Justice
(dissenting).
I respectfully dissent from the opinion of the court. Although the spectre of providing strike benefits for employees from the employment insurance contributions of their employer may be an appealing philosophical rationale for denying unemployment benefits, the record in the present case does not permit such denial under the statute relied on by the appellees. If benefits are to be denied, it must be for some other reason not argued by either the employer or the agency. The opinion of the court fails to respond to the substantial legal issues argued by the parties. Because it is apparent from its argument on this appeal that the agency charged with administering our employment security laws is misinterpreting the statutory disqualification involved in this case and is acting contrary to its own rules, we should deal at length with these legal issues.
The appellants-employees have correctly maintained throughout this litigation that a condition precedent to a section 96.5(4) disqualification is a showing that the particular labor dispute has caused a substantial curtailment in the employer’s business operations. This is the criterion approved in the applicable rules of the Iowa Department of Job Service. In 370 Iowa Admin. Code § 4.33(1), it is provided that “[a]n individual shall be disqualified for benefits if unemployment is due to a labor dispute.” Another rule provides, however, that “[t]o constitute a labor dispute there must be a stoppage of work at the plant or establishment.” 370 Iowa Admin. Code § 4.34(9) (emphasis added).
Although appellees contend that the italicized language in the foregoing rule may be interpreted as referring to an employee not reporting for work at the plant or establishment rather than to a curtailment of operation at the plant or establishment, the context does not sustain this interpretation. An employee claiming unemployment benefits for a particular week would necessarily not have been working during that week. A rule making this a condition for receipt of benefits would thus serve no purpose whatsoever.
This provision of our unemployment insurance laws was enacted in 1937. At this time, the Iowa Legislature, as did the legislatures of approximately three-fourths of the states, adopted the draft bills prepared by a federal committee on economic security for implementation of federal social security legislation. See Lewis, The “Stoppage of Work” Concept in Labor Dispute Disqualification Jurisprudence, 45 J.Urb.L. 319, 322 (1967).
Decisions of courts from other states which have adopted this particular provision of the federal draft bills are in almost unanimous agreement that some curtailment of the employer’s operation is necessary in order to impose this particular statutory disqualification upon the striking employees. Mountain States Telephone & Telegraph Co. v. Sakrison, 71 Ariz. 219, 225 P.2d 707 (1950); Inter-Island Resorts, Ltd. v. Akahane, 46 Hawaii 140, 377 P.2d 715 (1962); Totorica v. Western Equipment Co., 88 Idaho 534, 401 P.2d 817 (1965); Travis v. Grabiec, 52 Ill.2d 175, 287 N.E.2d 468 (1972); Pickman v. Weltmer, 191 Kan. 543, 382 P.2d 298 (1963); Adomaitis v. Director of Division of Employment Security, 334 Mass. 520, 136 N.E.2d 259 (1956); Lawrence Baking Co. v. Unemployment Compensation Commission, 308 Mich. 198, 13 N.W.2d 260 (1944); Deshler Broom Factory v. Kinney, 140 Neb. 889, 2 N.W.2d 332 (1942); Fontaine v. Board of Review, 100 R.I. 37, 210 A.2d 867 (1965); Shell Oil Co. v. Brooks, 88 Wash.2d 909, 567 P.2d 1132 (1977). These and other eases with similar holdings are annotated at 61 A.L.R.3d 693 (1975). Consistent with this view, these courts tend to define “stoppage of work” in terms of a substantial curtailment of the employer’s *528overall operations at the particular site in question. Mountain States Telephone & Telegraph Co., 71 Ariz. at 225, 225 P.2d at 711; Inter-Island Resorts, Ltd., 46 Hawaii at 147-48, 377 P.2d at 720; Travis, 52 Ill.2d at 180-82, 287 N.E.2d at 470-71; Shell Oil Co., 88 Wash.2d at 912, 567 P.2d at 1134.
Although cases may be found where disqualification has been predicated on the mere cessation of work by the striking employee rather than curtailment in the employer’s operation, they have largely been decided under statutes which do not contain the “stoppage of work” language and only require that the unemployment be due to the existence of the labor dispute in order to cause disqualification. A good discussion of the distinction between the two types of statutes is contained in Lawrence Baking Co., 308 Mich, at 202-03, 13 N.W.2d at 262-63. A detailed discussion of the other type of statute is found in Sha-dur, Unemployment Benefits and the “Labor Dispute” Disqualification 17 U.Chi.L.Rev. 294, 309, 319 (1950). An example of the type of statute not requiring “stoppage of work” is the Ohio statute involved in Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471, 97 S.Ct. 1898, 52 L.Ed.2d 513 (1977).
Commentators who have considered the meaning of “stoppage of work” under the draft bills agree with appellants’ contention that this phrase refers to a reduction of the employer’s operations, rather than to cessation of work by a striking employee. These writers believe this interpretation is mandated by the language of the statute which makes benefit ineligibility dependent upon two separate cause and effect determinations, i.e., (1) whether a stoppage of work exists “because of a labor dispute,” and (2) whether the claimant’s unemployment (for any week in which benefits are claimed) is “due to a stoppage of work.” See Shadur, supra, 17 U.Chi.L.Rev. at 313; Lewis, supra, 45 J.Urb.L. at 333-34; Williams, The Labor Dispute Disqualification — A Primer and Some Problems 8 Yand.L.Rev. 338, 339, 344-47 (1955). These commentators buttress this conclusion with reference to the fact that the draft bills of the committee on economic security had their origin in the British Unemployment Insurance Acts which had acquired a settled construction consistent with this meaning.1
Appellees argue that, notwithstanding the weight of authority from other jurisdictions, this court has decided at least three cases involving section 96.5(4) in a manner which is entirely inconsistent with the interpretation espoused by the appellant. The cases for which such claim is made are Galvin v. Iowa Beef Processors, Inc., 261 N.W.2d 701, 702-03 (Iowa 1978); Johnson v. Iowa Employment Security Commission, 239 Iowa 816, 825-27, 32 N.W.2d 786, 790-92 (1948); and Dallas Fuel Co. v. Horne, 230 Iowa 1148, 1153-55, 300 N.W. 303, 305-07 (1941).
In the latter case, the major issues were (1) whether the labor dispute disqualification in section 96.5(4) applies to union workers whose contract has expired and failed to return to work before a new agreement is negotiated, and (2) whether the members of the local union in that case were participating in the labor dispute being carried on by its national organization. No issue was raised in the case concerning the extent to which the employer’s production had been curtailed by the strike. In the Johnson case, the issue centered around the striking employees’ claim that, because of seasonal variations in the coal industry, they would have been unemployed during the period for which benefits were being claimed without regard to whether a strike had ensued. This was resolved as an issue of fact on the record presented in the particular case. No consideration was given to the extent to *529which the employer’s operation had been curtailed during the strike. Galvin is similar to Johnson in that the issue involved the cause of the claimants’ unemployment. They had been laid off prior to the strike and announced the strike when called back to work by their employer. The issue was treated as one of fact with respect to whether the cause of their unemployment was the prior layoff or the later strike. No consideration whatsoever was given to whether the employer’s production had been curtailed.
In none of these cases are the results inconsistent with that which appellant is proposing in the present case. The issue in the present case was not raised in any of those cases. Moreover, it cannot be stated with certainty from the record in any of those appeals that the necessary curtailment of the employer’s operation did not exist. Because this was not contested, it must be assumed that it did. The cited cases therefore provide no support for ap-pellees’ proposed interpretation of section 96.5(4).
In the present case, the employer is a plumbing contractor which, as far as the present record would indicate, has not failed to complete a single job nor been hampered in bidding any new jobs as a result of the strike. The striking workers were immediately replaced by the realignment of existing personnel and the hiring of some new workers. The decision of the agency appeals board, which the majority upholds, reversed its hearing examiner’s award of benefits and imposed a disqualification based upon a misreading of the record. The decision of the appeals board incorrectly states that the evidence reveals a reduction in operations at Tri-State during the strike to “twenty-five percent of capacity.” In fact, the testimony upon which the appeal board relied was that Tri-State’s operations, at' some undisclosed point in time during the strike, was “twenty-five percent to capacity.” This was the testimony of Tri-State’s president and general manager. He went on to indicate in his testimony, however, that the rate of operations varied proportionately with the work available. The fact that Tri-State’s operation was “twenty-five percent to capacity” during the strike provides no evidence of the extent of the curtailment, if any, caused by the labor dispute. In order to answer this question, it is necessary to know at what percent of capacity Tri-State would have operated if the strike had not occurred. Perhaps more critical to the application of section 96.5(4) is that the statute also expressly requires, as a condition for disallowing benefits, that the necessary curtailment in the employer’s operation existed during the particular week for which benefits are claimed. There is absolutely no evidence in the record which would permit the necessary finding in this regard.
Because the record made before the agency when viewed as a whole does not contain substantial evidence of the necessary elements for a section 96.5(4) disqualification, the agency erred in denying appellants’ claims on this ground. I would re; verse the judgment of the district court and the agency.
UHLENHOPP, HARRIS and SCHULTZ, JJ., join this dissent.

. The British Umpires had interpreted the reference to "stoppage of work” as referring "not to the cessation of the workmen’s labour but to a stoppage of the work carried on in the factory, workshop or other premises at which the workman is employed.” Brit.Ump. 1480/1927, BU-495 (1927); Ministry of Labour Analytical Guide U.I. Code 7, Part III, § 43 (1939 ed.). Reliance was placed on the British interpretation in Magner v. Kinney, 141 Neb. 122, 128, 2 N.W.2d 689, 692 (1942).