Court Opinion

ID: 6374682
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:52:49.350722+00
Date Added: 2024-06-11T15:50:07.805244
License: Public Domain

PALLADINO, Judge,
dissenting.
I respectfully dissent. Because I believe that an employee who initiates a work stoppage must offer to end it before becoming eligible for unemployment compensation benefits, I would reverse the decision of the Board and deny Claimant benefits.
As noted by the majority, the issue presented in this matter is where an employer hires “permanent” employees to replace striking employees, must the striking employees make an unconditional offer to return to work in order to avoid being disqualified for benefits under Section 402(d) of the Unemployment Compensation Law (Law).1
This precise issue was addressed by this court as recently as February 1993 in Bruce Plastics, Inc. v. Unemployment Compensation Board of Review, 153 Pa.Commonwealth Ct. 439, 621 A.2d 1130 (1993) and Silo, Inc. v. Unemployment Compensation Board of Review, 153 Pa. Commonwealth Ct. 163, 620 A.2d 663 (1993). Relying on Penflex v. Bryson, 506 Pa. 274, 485 A.2d 359 (1984), the majority cavalierly concludes that Silo, Bruce Plastics and other established precedent of this court were wrongly decided. Therefore, the majority overrules those decisions and holds that when an employer hires replacement workers, the striking employees need not offer to return to work before becoming eligible for unemployment compensation benefits. I strongly disagree.
*550Initially, I note that the supreme court specifically limited the rationale of Penflex to the facts of that case, stating, “[o]ur holding today is a very narrow one which will not apply in most labor disputes.” 506 Pa. at 296, 485 A.2d at 370. Additionally, the majority concedes that the facts of Penflex are distinguishable from those before us in the present action. The most important distinction between the facts in the two cases is that the employees in Penflex were terminated by their employer the same day the employees initiated what the employer considered to be an illegal strike.
The supreme court began its analysis by noting that section 402(d) of the Law only applies in situations where there is an ongoing employer/employee relationship. Next, the court concluded that because the employees in Penflex were unquestionábly terminated on the day the strike began, the employment relationship was severed, and therefore, section 402(d) did not apply. The court then went on to analyze the case under section 402(e) of the Law, 43 P.S. § 802(e), holding that the employees’ actions in initiating the strike did not constitute willful misconduct and, therefore, the employees were entitled to benefits.
The issue in Penflex was not whether the employment relationship was severed by the actions of the employees or the actions of the employer, but rather, the issue was limited to a determination of whether the employees’ actions, in initiating a purportedly illegal strike which resulted in their dismissal, rose to the level of willful misconduct. Because neither the facts of Penflex nor the issue presented therein are analogous to the present action, I submit that the majority’s reliance on Penflex is misplaced.
Silo, a unanimous panel decision is factually and legally indistinguishable from the present action and is therefore, controlling. In Silo, the employees continued to work under the terms of an expired collective bargaining agreement while the parties negotiated the terms of a new agreement. The employer notified its employees that in the event of a strike, it would continue operations and try to recruit “permanent” replacement workers. Thereafter, the union initiated a work *551stoppage and established picket lines. Later that day the employer began to hire replacement workers. While “permanently” replaced, the employees continued to accrue sick leave, pension credit and seniority. The employer unilaterally implemented the terms of its final proposal. At no time did the union make an unconditional offer to return to work.
This court, citing Acme Corrugated Box Company v. Unemployment Compensation Board of Review, 131 Pa.Commonwealth Ct. 251, 570 A.2d 100 (1990) (en banc) (Acme II)2 and T.B. Wood’s Sons Co. v. Unemployment Compensation Board of Revieiv, 150 Pa.Commonwealth Ct. 217, 615 A.2d 883 (1992),3 concluded that the employees were ineligible for benefits under section 402(d) of the Law because the work stoppage remained the result of a strike, the hiring of “permanent” replacement workers notwithstanding, until an unconditional offer to return to work was made by the employees.
In the present action, as in Silo, the employees continued to work under the terms of an expired collective bargaining agreement while negotiations for a new agreement continued. The union then initiated a work stoppage and established picket lines. The employer decided to continue operations and striking employees were informed that employer would begin to hire “permanent” replacements if a settlement was not reached. Even though “permanently” replaced, the employees continued to accrue sick leave, seniority, and life insurance benefits and continued to negotiate a new contract.
*552Despite the obvious' indicia of continued employment, the majority concludes that the employment relationship was severed when employer “permanently” replaced Claimant, and therefore, Claimant was no longer disqualified from receiving benefits under section 402(d) of the Law. Furthermore, the majority concludes that because employer hired 43 replacement workers, the employment relationship with all 121 striking employees was severed, thus, making all striking employees eligible for unemployment compensation benefits.
I submit that in accordance with established precedent of this court, the striking employees of Canonsburg General Hospital are ineligible for benefits under section 402(d) of the Law. Accordingly, I would continue to hold that even if a striker is “permanently” replaced during a strike, the cause of the striker’s unemployment remains the strike, and not the hiring of a replacement, unless and until the striker offers to return to work under the terms of the expired contract and that offer is rejected by the employer. At that point, it is the employer who has refused to return to the status quo; therefore, it is the employer who is responsible for financing the labor dispute.

. Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(d) which provides in pertinent part:
An employe shall be ineligible for compensation for any week— (d) In which his unemployment is due to a stoppage of work, which exists because of a labor dispute (other than a lock-out) at the factory, establishment or other premises at which he is or was last employed: Provided, That this subsection shall not apply if it is shown that (1) he is not participating in, or directly interested in, the labor dispute which caused the stoppage of work, and (2) he is not a member of an organization which is participating in, or directly interested in, the labor dispute which caused the stoppage of work, and (3) he does not belong to a grade or class of workers which, immediately before the commencement of the stoppage, there were members employed at the premises at which the stoppage occurs, any of whom are participating in, the dispute.

. In Acme II, the striking employees were replaced by “permanent” replacements. Thereafter, the striking employees made an unconditional offer to return to work which was refused by the employer. This court held that the employment relationship was severed when the offer to return to work was refused, not when the "permanent" replacements were hired.

. In T.B. Wood’s, the employer hired “permanent” replacement workers and subcontracted out 40-60% of the work performed at the plant where the striking employees worked. This court concluded that the requirements of Acme II had not been met because the union failed to make an unconditional offer to return to work. Therefore, we held that the employees were ineligible for benefits under section 402(d) of the Law.