Trade Dispute TD 370
Purging of Trade Dispute disqualification
The California Supreme Court in Ruberoid set forth the basic principle that a trade dispute disqualification may be purged although the trade dispute has not ended. The court said:
"We have construed Section (1262) in light of the whole legislative design of relieving workers from the ill effects of unemployment which they have neither willed nor caused. Thus we have said that the disqualification of the Section must rest upon two elements: The worker must voluntarily leave or remain away from his employment and the worker must leave or remain away from his employment because of a trade dispute. As we shall describe in more detail, the first prerequisite involves a volitional test and the second, a causational test.
As to the first test, the volition, the employee here could hardly voluntarily remain away from a job that had ceased to exist. Here the employer’s discharge and replacement of the striking employee precluded the exercise of his volition. The worker could no longer choose to return to the waiting job or remain on strike. In permanently filling the job the employer foreclosed the option. Whether or not the employee would thereafter have left or crossed the picket line to fill the job became a moot and academic question.
Turning to the test of proximate causation, we believe that the trade dispute did not serve as the proximate cause of the unemployment after the employer permanently replaced the striking employees and severed his relationship with them. In analyzing the corollary situation in which the striking employee thereafter accepts permanent employment, we have held that such employee’s permanent full-time employment terminates the former relationship and the disqualification . . . . . The employer’s permanent replacement of the employee operates in the same manner."
- Permanent Replacement
As indicated in the preceding discussion of the Ruberoid case, a permanent replacement of a striker purges the trade dispute disqualification. In Ruberoid, the trade dispute began on September 21, 1958. On October 2, 1958 the employer sent letters to the strikers to "return to work by October 7th or be permanently replaced." On October 17, the employer sent letters to the strikers stating "you have been permanently replaced. "The court held that, "Once the striker’s job was filled, as the letter of October 17 stated, the replacement became the intervening event which cut off the dispute as the cause of the unemployment. By the replacement the employer completely terminated any relationship with the worker."
Under the National Labor Relations Act, an employer may not discharge an employee for participating in lawful strike action; however, the employer may permanently replace the striking employee. If the employee offers to return to work, he/she is placed on a preferential hiring list. Such an individual is entitled to his/her job only if vacancies occur unless (l) he/she has obtained regular and substantially equivalent employment elsewhere in the meantime, or (2) the employer is able to establish substantial business reasons to justify failure to offer reinstatement.
- Permanent Replacement of Some of the Strikers
When an employer has permanently replaced some of the strikers but not all, none of the striking employees are considered to be eligible for benefits. This is presuming there are still suitable jobs available in the striking employees’ occupation.
In the Isobe court case, the employer had hired 25 permanent replacements. There were still jobs available for 147 of the 172 striking employees. The court held that none of the striking employees could purge their trade dispute disqualification since there were still jobs available and none of the striking employees were willing to return to work.
In some cases, however, there may be no suitable jobs available for a certain category of employees, even though there are jobs available for the remainder of the striking employees. For those individuals where there are no jobs available, their trade dispute disqualification may be purged.
- Threat of Permanent Replacement
A mere threat to permanently replace striking employees does not purge a trade dispute disqualification.
In the court case of Windigo Mills, 186 employees went on strike on February 2, 1976. Subsequently, the company sent each employee a letter saying he/she should return to work by February 16, and if the striker did not return by then the employer had the right, under the National Labor Relations Act, to permanently replace the strikers. Only a few returned. There were still jobs available. The court held that none of the claimants could purge their trade dispute disqualification. The employer threatened but did not permanently replace all of the striking employees.
- Permanent Replacement of Some of the Strikers
- Offer to Return to Work
This category discusses the factors that must be considered when a purge of the trade dispute disqualification is requested on the basis the claimant’s offer to return to work does not result in their reemployment. The circumstances involving the offer to return to work issue consist of either:
- An unconditional offer summarily rejected by the employer, or
- A conditional offer to return to work. A conditional offer to return to work is where the claimant/union makes an offer to return to work, but then the claimant/union or the employer attaches conditions to the return to work.
- Unconditional Offer Summarily Rejected by Employer
In this circumstance, the claimants would normally be eligible inasmuch as the unconditional offer to return to work would constitute a new and intervening cause of the claimant’s unemployment.
In Benefit Decision 5804, after the employer secured a temporary injunction which restrained the union from violating terms of the collective bargaining agreement, the striking union called a meeting to consider what action to take. A decision was reached to call off the strike and return to work. However, when the union members and officials went as a group to the plant and offered to return unconditionally, the employer refused to permit their return.
The Board said:
". . . the claimants yielded to the order of the court and collectively reported to work and advised their employer they were unconditionally ready and willing to resume their work . . . the employer’s refusal to permit them to return to work under such circumstances constituted a new and intervening cause for the claimants’ continuing out of work and they were no longer ineligible under Section 56 (1262)."
In Benefit Decision 6416, the Foundry Workers Union called a strike on March 16 and formed a picket line at the employer’s establishment. For collective bargaining purposes, the employer’s office personnel were represented by Machinists Union Local 1586. The contract in effect between Machinists Local 1586 and the employer included a nostrike clause. However, after the foundry workers struck, Local 1586 took no action relative to informing the office workers whether or not to report for work. When they reported to work and observed the picket line, the office personnel did not enter the premises.
In a subsequent meeting with the foundry workers, the machinists pointed out the no-strike clause in their contract. The foundry workers then agreed to move their picket line to permit office personnel to enter the plant, and the office workers attempted as a group, to return to work on March 18. They were met by supervisors who gave them written notices which informed them that because of their concerted strike action with the foundry workers, they could not return until the trade dispute concluded. The Board said:
"In the present matter, the claimants were office personnel and made an effort to return to work on Friday, March 18 . . . but were refused entrance . . . . It follows that on and after March 18 . . . the claimants’ unemployment was not attributable to any voluntary leaving due to a trade dispute but to a refusal of the employer to permit them to return to work."
- Conditional Offer to Return to Work
In this circumstance, the union offers to return to work, however, the union or the employer attaches conditions to the return to work. As a result, the offer does not result in the return to work of the claimants. The decision to purge the trade dispute disqualification will rest on whether or not the facts indicate the union was making a bona fide effort to return despite its conditional offer or its rejection of the employer’s conditions.
- Union’s Conditional Offer to Return to Work
In the California Supreme Court case of Isobe v. CUIAB, the Boilermakers Union struck in August, 1971. Due to the nation’s rising inflation, President Nixon ordered a national wage and price freeze. As a result, the Boilermakers union offered to return to work but only on the condition the employer took all strikers back. The employer refused since it had already replaced 15 percent of the strikers. None of the strikers went back to work. In disallowing the purge of the trade dispute disqualification. The court said:
". . . most of the employees were free to return to their jobs, but instead of so attempting, they assumed the position that no one would return unless all were to be reinstated. Since the employer was not obligated to comply with the demand to reinstate even those employees whose positions had been filled, it is apparent the union was bargaining for additional advantages, thereby prolonging the dispute."
In Benefit Decision 5768, a trade dispute existed between the International Longshoremen and Warehouse Union (ILWU), and the operators of stevedoring and terminal companies in the Hawaiian Island principal ports. The dispute lasted from May 1 to mid-October. During the course of the trade dispute, members of the Marine Firemen, Oilers, Watertenders and Wipers Association (MFOW), who were already on vessels in the islands on May 1, were given permits to pass through the picket lines of the ILWU, on the understanding that they would not sail the vessels from behind the picket lines nor continue to work if nonunion longshoremen began to unload cargo. Crew members of the MFOW subsequently left the vessels when nonunion stevedores did begin unloading cargo. They later offered to return to work with the stipulation that they would work only so long as there were no nonunion employees unloading cargo and the ship was not ordered to sail. The employer refused to permit them to return under these conditions. The Board held that the employer’s rejection of the MFOW members’ conditional offer to perform only those duties that accorded with the wishes of the ILWU, did not serve to terminate the claimants’ ineligibility.
- Employer’s Conditions for Return to Work
In National Broadcasting Company, Inc. (NBC) v. CUIAB, the members of National Association of Broadcast Employees and Technicians (NABET) began a nationwide strike against NBC on March 31, 1976, when their contract expired. Incidents of sabotage occurred at NBC facilities across the nation, although none occurred in California. On April 5, NABET notified NBC it was directing all its members to return to work on April 7. However, on April 6, NBC notified the union it would not agree to the return until it received assurances from the union concerning the prevention of further sabotage. It also wanted a reasonable period for extension of the expired contract, which contained a strike notice provision. On April 7, certain employees attempted to return to work at NBC’s facilities in Burbank and San Francisco. NBC did not allow them to return because it had not received the assurances it had demanded on April 6.
The court, in disallowing the purge of the trade dispute disqualifications, reasoned that in major nationwide trade disputes in which sabotage had previously occurred, it was reasonable for the employer to condition the acceptance of any offer to return to work on assurances that further sabotage would not occur and that workers would give reasonable notice of any further strike action.
In P-B-401, the claimant offered to return to work to his former job as plant superintendent. He placed no conditions on his return to work. The employer, however, would allow the claimant to return only on the conditions that he sign an agreement of nondisclosure due to the confidential nature of the job and to return to work as a cement installer at the same rate of his former pay, but with no bonus. The claimant refused the job. In holding the claimant eligible for benefits, the Board said:
". . . the claimant unconditionally offered to return to his former job as plant superintendent and his employer refused the unconditional offer to return to work because it had abolished the claimant’s former job or for reasons personal to the employer."
In Benefit Decision 5550, the trade dispute arose out of charges by the union that the employer had carried on certain unfair labor practices. During the dispute, some of the employer’s customers withdrew their orders for the duration of the strike. At a later date, the union informed the striking employees they were free to return to work. When the employees offered to return to work, the employer would not allow them to return until the NLRB charges were dropped and the employer’s customers were informed by the union that the matter was settled. The Board held the claimants eligible stating:
". . . while a union’s instructing its members to return to work which they had left because of a trade dispute did not amount to a complete abandonment of the dispute by the union, nonetheless when individual members of the union acted upon this change of circumstances by applying for reemployment with the employer, they were thereafter no longer unemployed due to the trade dispute."
- Subsequent Work
A claimant may purge a trade dispute disqualification by subsequent work. The subsequent work must be bona fide work which severs the employer-employee relationship with the trade dispute employer. There are no definite standards which can be established to meet this criteria in each case. A comparison between the job with the trade dispute employer and the subsequent work must be made considering the following factors:
- Full-time or part-time
- Length of time on job
- Claimant’s usual occupation
- Rate of pay
- Working conditions
Other Factors to be Considered:
- Did claimant take the job with intention to sever the old employer-employee relationship? Will claimant return to work for the trade dispute employer when the trade dispute ends? Did the claimant give notice of resignation to the trade dispute employer?
- Is claimant performing picket duty? Receiving strike benefits?
- Is claimant seeking permanent or temporary work?
- Permanence, Full-time, Length of Time on Job
In Mark Hopkins, Inc. v. CEC, the Hotel and Restaurant Employees’ union struck 18 major San Francisco hotels. Some strikers, through their union, obtained other temporary, stop-gap employment in hotels and restaurants which were not affected by the trade dispute and were subsequently laid off from that work. In holding the claimants had not purged the trade dispute disqualification, the court said:
"Such employment must be bona fide and not a device to circumvent the statute. Mere temporary or casual work does not sever his relationship for it does not effectively replace the former employment. The worker expects its termination and does not look forward to that continuity of work and income that characterizes permanent employment. Similarly, part-time employment of a claimant does not break the causal relation between the trade dispute and his unemployment . . . . It must be judged prospectively rather than retrospectively, with regard to the character of the employment, how it was obtained, and whether it was in the regular course of the employer’s business and the customary occupation of the claimant. In the absence of special circumstances, employment of a short duration admits of an inference that it was not entered into in good faith with the intent that it be permanent."
Temporary work, under special circumstances, may purge a trade dispute disqualification. If the claimant intends to sever his relations with the trade dispute employer and he is in an occupation that normally consists of numerous short-time jobs, temporary work may purge a trade dispute disqualification.
In Benefit Decision 6691, the claimant, an operating engineer, was employed on a highway construction job near Vacaville. The claimant left this job on May 3, because he refused to cross the picket line, and was thus ineligible for benefits under Section 1262.
On May 8, the claimant obtained work as an operating engineer on a residential construction job near Los Banos for an employer whose headquarters were in Turlock, the city in which the claimant resided. The claimant was laid off from this latter job on June 6. The claimant considered the job he obtained on May 8, a more desirable one because of its nearness, and because it was with an employer in his home community. He hoped to get more jobs with this employer. The evidence showed that the claimant would have accepted any work made available to him by the Turlock employer. He returned to the Vacaville highway job on conclusion of the trade dispute only because the Turlock employer had no work for him at the time.
The Board held that this claimant had met all the criteria to purge the trade dispute disqualification. Although the job actually was a temporary one, the nature of the claimant’s occupation made it temporary, and the claimant entered into the job with the intent to make it permanent if possible. The Board said:
"As of June 7, 1962, the claimant’s layoff by the Turlock employer was the immediate cause of the unemployment which followed. If this layoff is the direct as well as the immediate cause of his unemployment after June 6, 1962, it is an intervening event which breaks the causal connection between the leaving of work because of the trade dispute and his unemployment following such layoff.
Since work in the occupation of operating engineer is by nature intermittent, it does not necessarily follow that work of four weeks’ duration must be deemed temporary. The work for the Turlock employer was for an employer in the claimant’s home community at a location closer to his home than that which he had left because of the trade dispute. It was in the claimant’s regular occupation and for an employer for whom the claimant preferred to work because the jobs such employer would have would tend to be near the claimant’s home. The claimant returned to the Vacaville work when the trade dispute ended only because the Turlock employer had no work for him at that time.
These factors support the conclusion that the claimant accepted work with the Turlock employer intending that it replace the work he left because of a trade dispute, and being work in his regular occupation, it did replace it. The work accepted by the claimant on May 8, 1962, thus effectively severed the causal connection between the claimant’s leaving of work because of the trade dispute and the unemployment which succeeded his layoff on June 6, 1962. Accordingly, we conclude that the claimant’s leaving of work because of the trade dispute ceased to be the cause of his unemployment subsequent to that date."
On the other hand, if the claimant’s usual occupation is not one of normally intermittent work, and he obtains a job of only short duration, there is a strong inference that such work was not intended to be permanent. Also, if the claimant did not intend for the new work to sever the employer-employee relationship, it does not purge the trade dispute disqualification.
In Benefit Decision 6001, the claimant was a carpenter and left work on March 31, due to a trade dispute. On April 14, the claimant obtained work as a carpenter which lasted until April 25. The Board held that this claimant had not broken the causal relationship between the leaving due to a trade dispute and the current period of unemployment. The Board said:
"It is further contended that the work accepted by the claimant on April 14, 1962, was bona fide employment, especially since employment by carpenters is transitory in nature, and that such work purged any possible trade dispute disqualification under the rationale of the Mark Hopkins case.
In the instant case, the claimant obtained work in his usual occupation during the course of the trade dispute. However, the employment was of short duration, which admits of an inference that it was not entered into in good faith with the intent that it be permanent. While it is true that carpentry work frequently may be of a transitory nature embracing short periods of employment, the evidence in the instant case discloses that the claimant had worked for the struck employer for a period of sixteen months. There is no evidence that the claimant accepted the intervening work with the intent that it replace his former employment, and his return to this employment upon termination of the employer-employee relationship occurred."
It seems that if the claimant had been able to overcome the inference that the subsequent work was not bona fide, he would have been eligible. However, the claimant stated that he did not intend the work to be other than stop-gap, and thus, failed to meet one of the criteria.
- Claimant’s Usual Occupation, Rate of Pay
The Board has held that if the claimant accepts work in other than his/her usual occupation, especially at a lower wage, the inference that this employment was only intended to be temporary is very strong. This was the case in Benefit Decision 5973, when the Board said:
"In the instant case, the claimant left the construction job where he had been employed many months in his customary occupation as a carpenter . . . . In the instant case, the claimant accepted intervening work of five days’ duration through the teamster’s union at a substantially lower wage. He subsequently accepted employment as a service station operator which he left voluntarily in order to return to his usual occupation as a carpenter. After considering all of the facts in this case, we are of the opinion that the two short jobs not in the claimant’s customary occupation and at a lower wage were of a ‘stop-gap’ nature while he expected to return to his regular job when the carpenter’s strike was settled. We hold, therefore, that the claimant continued to be subject to the trade dispute disqualification during his periods of unemployment involved in this appeal."
- Intent to Sever Employer-Employee Relationship
To purge a trade dispute disqualification by subsequent work, the claimant must have entered into the work with the intent to completely sever the old employer-employee relationship.
In Benefit Decision 4838, the claimant worked as a hand assembler at 66 cents an hour and left the job due to a trade dispute. She subsequently worked as a hand assembler at 50 cents per hour plus a potential bonus and voluntarily quit after six weeks. The claimant stated she accepted the subsequent work as temporary work with the intent she would return to work for the trade dispute employer when the trade dispute ended. In disallowing a purge, the Board said:
". . . it cannot be gathered from the record before us that such employment was taken with the intent that it be retained permanently and as a replacement for the earlier employment."
While a claimant’s notification of resignation to an employer because of subsequent work will be firm evidence the claimant has severed the employer-employee relationship with the trade dispute employer, the Board has ruled that it is possible to purge a trade dispute disqualification although the claimant has not notified the employer of the resignation. In Benefit Decision 4466, the claimant left his work due to a trade dispute on October 29. The claimant’s statement was that he obtained employment subsequent to October 29, which he understood was permanent and full-time. He was laid off on January 5. When accepting this employment it was his intention to sever his employment with the trade dispute employer. The trade dispute employer contended that the employer-employee relationship had not been severed since the claimant never notified the employer of his intention to terminate his employment.
The Board held that the decision of the Department was correct when it held that the claimant was eligible, and then went on to say:
"The evidence presented by the employer at the hearing before the Referee, in our opinion, was insufficient to overcome the findings of the Department. We, therefore, conclude, in the absence of evidence to the contrary, that on and after January 7, 1946, the claimant was not disqualified from benefits under Section 56(a) (1262) of the Act."
- Performance of Picket Duty
In Mark Hopkins v. CEC, the court said:
"Most of the claimants testified that they intended to return to their former jobs at the end of the strike, and they all performed picket duty during the strike unless excused. The performance of picket duty gives rise to the inference that the employee has not relinquished his job there. Such an inference may be rebutted by evidence that shows clearly that the picketing was not performed because of any interest in retaining employment at the struck establishment and that the claimant has relinquished his Position there."
Since the claimants presented no evidence that they had relinquished their jobs with the struck employer, and maintained that they at all times intended to return to their jobs at the end of the trade dispute, the court held them to be ineligible for benefits under code Section 1262.
- End of Season
In determining whether or not the trade dispute disqualification may be purged, it must be determined whether or not the job that the claimant left still exists for him. If the employer is engaged in work that is seasonal, and the season ends while the trade dispute is in progress, the claimant’s disqualification will end when the season ends and there is no longer a job from which the claimant is absent. As the Board said in Benefit Decision 6400:
"The normal season for working in the woods extended approximately from July 1st to November 1st of each year.
Accordingly, the claimant would have been unemployed after November 1st because there was no work available for him in the woods and not because of the trade dispute."
However, if it can be shown that except for the trade dispute the employer might have work during the off season, then the claimant’s disqualification will not terminate with the end of the normal season.
This was the case in Benefit Decision 5741. The employer was in the food processing business, and the processing of vegetables was completed on June 30. Fruits and berries were normally processed after this, but not every year, and not by every employer.
After the establishment of the picket line at the employer’s premises, the employer continued to operate through June 30 with nonunion employees. Repacking work amounting to three or four days’ employment for six to eight production workers was available after this. It was the contention of the claimants that the employer had established a seasonal pattern of operation during the past two or three years and that the cessation of production on June 30 broke the causal connection between the labor dispute and the claimants’ unemployment. It is the employer’s contention that some work was available for some of the claimants based on their seniority, that more extensive production might have been carried on had it not been for the labor dispute and that the claimants continued to be unemployed during July and August because of the trade dispute. The employer testified that he might have processed fruits and berries if he had had a crew available to him.
The Board held that the end of the normal season did not break the causal connection of the claimants’ unemployment since there was a possibility of their working, and said:
". . . it is clear from the evidence that fruits and berries were available and had in past years been processed by this employer during the period in question. In addition, fruits and berries were processed during the particular period of 1950 in other establishments in the general area. When it is considered that contracts for fruits and berries are made at or about the time of harvest, and the testimony of the employer’s manager that from an economic standpoint the employer "should" have processed fruits and berries during the 1950 season, we certainly cannot find that the employer would not have operated during the period in question in 1950 irrespective of the intervention of the trade dispute.
It is also clear from the evidence that some work was available for the claimants, although it only amounted to three or four days for six to eight workers . . . we have previously held that the relationship between the number of jobs available and the number of workers available to fill them is immaterial in trade dispute matters so long as there remains unwillingness on the part of the claimants to accept the jobs which are available. Under the particular facts in this case, we do not believe that the causal relationship between the trade dispute and the claimants’ unemployment has been broken. The claimants, therefore, continued out of work by reason of the fact that the trade dispute was still in active progress in the establishment in which they were employed.
Seasonal workers who have had their trade dispute disqualification purged due to the end of the season may be offered work at the beginning of the next season while the same trade dispute is still active. The offer of work raises an issue under Section 1257(b). Refer to TD 240, Seasonal Employees."
- Closing of Plant
Often a trade dispute will cause an employer to close its plant for the duration of the trade dispute. This will not purge the disqualification since the trade dispute is still the cause of the unemployment. However, if the employer is forced to completely cease operations, as opposed to merely suspending them, the claimant’s job is no longer in existence, and the trade dispute is no longer the direct cause of the unemployment.
To illustrate, an employer is operating a retail establishment, and is struck by the retail clerks. The employer suspends operations for a time, and then while the trade dispute is still in active progress finds that it is no longer financially able to hold on to its business. As of the date the employer permanently ceases operations, the trade dispute disqualification ends. It must be the intention of the employer to permanently cease operations, however, for this principle to apply.
One of the issues in Benefit Decision 5638 touched on this matter. When the claimants struck the employer’s San Francisco warehouse, he moved his operations to his Oakland warehouse. The claimants contended that by closing his San Francisco warehouse, their jobs no longer existed, and they should not be disqualified. The Board held that since the employer had no intention of permanently abandoning his San Francisco operation, the claimants were not free from disqualification. The Board said:
"While the evidence establishes that the employer transferred its grocery and produce warehousing operations to Palo Alto and Oakland respectively during the trade dispute it does not establish that such transfers were intended as a permanent abandonment of future warehouse operations in San Francisco or as a move to deprive the claimants of employment . . ."
On the other hand, if the employer has actually disposed of his business, there can be no doubt that he has abandoned the operation. The claimant’s job, in this case is no longer available to him.
This came before the Board in Benefit Decision 5295. The claimant was a fisherman employed aboard the vessel "Golden Gate." A trade dispute was in active progress between the fishermen and the boat owners from December 31 through February 5. On January 19, the claimant was advised that the Golden Gate had been sold, and that the vessel would thereafter be operated by its new owners, with a new crew, out of a different port. The Board held:
"It is well settled that a disqualification from benefits under Section 56(a) (1962) of the Act is removed by an act on the part of an employer involved in a trade dispute which unequivocally terminates the employment relationship with his employees which had theretofore been only suspended by the dispute. This rule rests on the principle that benefits may be denied because of a trade dispute only while a direct causal connection between the dispute and unemployment subsequent to it remains unbroken. So long as it reasonably appears that his job with a particular employer would be available to a claimant but for a trade dispute, the claimant may, in a proper case be denied benefits if he/she initially left work because of the dispute. But where . . . an employer party to a trade dispute completely dissolves the employment relationship to which the dispute relates by an outright and absolute discharge, the causal connection between the dispute and unemployment which originated in it is clearly broken, and disqualification is no longer in order.
The employer in the matter before us did not discharge the claimant, but we nevertheless think that the principles just discussed may be extended to this case. The sale of the Golden Gate to another to be manned by a new crew just as surely took the claimant’s job away from him as if he had been discharged . . . there was no longer work from which the claimant could be absent - it had been taken from him by his employer, who, by the sale of the vessel, put it beyond his power to employ the claimant on the Golden Gate. The sale of the vessel was therefore a factor intervening between the trade dispute and the claimant’s unemployment subsequent to such sale with sufficient effect to sever the direct causal connection between the two."
- Plant Destroyed
The very same principle applies when the plant is destroyed, as when the plant is sold. There is no longer a job for the claimant to be absent from.
This was the issue in Benefit Decision 5638. The employer’s grocery warehouse in San Francisco was struck on June 15. On August 31, the warehouse was completely destroyed by fire. The evidence showed that the locale of the claimants’ employment was in the grocery warehouse and they could not look to or expect employment with the employer at any other location.
The Board held that these claimants were no longer ineligible, and said:
"It is our opinion . . . that the grocery warehouse of the employer in San Francisco was a separate and distinct "establishment" within the meaning of Section 56(a) (1262). It is our further opinion that when this establishment was rendered useless for grocery operations by a fire that the claimants were no longer unemployed because of the active progress of a trade dispute in that "establishment." Had the trade dispute ended on August 31, 1949, it is apparent that the employer would not have been able to reemploy the claimants in their usual occupations at such "establishment." We hold therefore as to the claimants employed in the grocery warehouse that on and after August 31, 1949, they were no longer unemployed because of the active progress of a trade dispute in the establishment where they were employed and consequently are not ineligible for benefits under Section 56(a) (1262) of the Unemployment Insurance Act on and after such date."
It seems clear that had the employer had other nearby establishments to which the claimants had a right to employment, the Board would have held differently. In that case there would still have been jobs for the claimants and their unemployment would have resulted from their unwillingness to accept the jobs, not the lack of jobs.
- Plant Moved
If, during the trade dispute, the employer closes his local plant and moves his entire operation to a distant point, the claimant’s trade dispute disqualification is purged. This is because the claimant’s unemployment is no longer causally connected with the trade dispute.
However, if the employer moves only a portion of his operations to another locality, the purge of the disqualification is not automatic. It will have to be determined if there is or is not a job available to the claimant. If there is no longer a job available, clearly the claimant is no longer out of work because of the trade dispute. But, if there is a job available, the claimant is still disqualified. This is true even if there are not sufficient jobs for all of the claimants that went out on strike.
In Benefit Decision 5444, the claimants were last employed in the payroll, audit, and accounting sections of an oil refinery. The refinery was located in Oleum, near Richmond. The claimants went out on strike on September 4, and the strike was not settled until the following January 10.
For some two years prior to September 4, the company had been considering the possibility of transferring most of the payroll, accounting, and audit work to its Los Angeles office. As a result of the trade dispute, this move was carried out on or about October 3. There were 59 positions available prior to September 4, and subsequent to the change only 24 remained.
The claimants contended that their disqualification should end on October 3, when the work was moved to Los Angeles. They contend that so long as there are no longer sufficient jobs for all the striking workers, they are no longer unemployed due to the trade dispute. The Board did not agree, and said:
"It is our opinion that the transfer of the claimants’ positions to another establishment of the employer in a distant city did not create a new causative factor in their unemployment and supplant the causal connection existing between their unemployment and the trade dispute.
Throughout the period of the active progress of the trade dispute in the establishment where they were employed, the claimants declined to work for the employer . . . . While it may be true as contended by the claimants that their particular positions were transferred to Los Angeles, they have failed to establish that the employer could not or would not have placed them in comparable positions had they chosen to return to work rather than remain unemployed because of the trade dispute. The evidence shows that after the transfers were accomplished a number of positions still remained in the department in which the claimants were employed. It would therefore be pure speculation on our part to conclude that the transfer of certain positions by the employer rendered it impossible for the employer to provide work for the claimants at Oleum in their usual occupations and especially so in view of the undisputed fact that acceptable work was provided by the employer for two of the three claimants when they applied for work after the trade dispute had ended."
It seems clear from this decision that had all of the positions for which the claimants could qualify been transferred, the claimants would have been eligible. But, the particular position that the claimant left need not be available for him/her so long as a comparable position exists.
- Position Abolished
This category deals with the purge of the trade dispute disqualification by the abolishing of the claimant’s job. This can be either by an action of the employer, or by force of circumstances. Once the job has been abolished, there is a severance of the employer-employee relationship, and no longer a causal connection between the trade dispute and the claimant’s unemployment.
As the Board said in Benefit Decision 5295:
"It is well settled that a disqualification from benefits under Section 56(a) (1962) of the Act is removed by an act on the part of an employer involved in a trade dispute which unequivocally terminates the employment relationship with his employees which had theretofore been only suspended by the dispute. This rule rests on the principle only while a direct causal connection between the dispute and unemployment subsequent to it remains unbroken."
- Voluntary Resignation
Just as in the case of discharge, if the claimant has completely severed the employer-employee relationship by a voluntary resignation during the course of the trade dispute, his/her unemployment is no longer caused by the trade dispute, and the disqualification is purged.
In determining if the claimant has actually quit his/her job, and thus completely severed connection with the employer, the most important factor is the claimant’s intent. Unless the claimant intended to completely sever the employer-employee relationship, there has been no break in the causal connection between the leaving of work and the claimant’s unemployment.
As the Board said in Benefit Decision 5501:
"The law is well settled that a strike or trade dispute simply suspends the employer-employee relationship and does not terminate it. Once the disqualification provided in Section 56(a) (1262) affixes, it continues so long as the trade dispute is the direct cause of a claimant continuing out of work. (Mark Hopkins)
This Board has held in prior cases that the unequivocal termination of the suspended employer-employee relationship existing between a claimant and his trade dispute employer during the active progress of the trade dispute operates to break the chain of causation between the claimant’s unemployment and the trade dispute and becomes the efficient causative factor of his unemployment completely supplanting the trade dispute as the cause thereof."
A claimant who has presented a formal resignation to his employer, which resignation has been accepted by the employer, has clearly severed the employer-employee relationship. This was the case in Benefit Decision 5501. The claimant left his work on September 4, because of a trade dispute and continued unemployed thereafter because he was respecting the picket line. On September 13, the claimant tendered his resignation which was accepted by the employer as a termination of the claimant’s employment. The claimant gave as his reason for termination that he had been called to Oklahoma to help his father operate the family farm.
The Board held that this claimant was eligible under Section 1262, even before the trade dispute was at an end, and said:
"In the instant case it is our opinion that an unequivocal termination of the suspended employee-employer relationship existing between the claimant and his employer during the trade dispute occurred when the claimant tendered his resignation on September 13, 1948, and the employer accepted it. That an unequivocal severance of the employer-employee relationship was effected when the claimant resigned his employment is fortified by the fact the employer refused to employ the claimant on conclusion of the trade dispute because of the prior termination of the employment relationship of September 13, 1948 . . . ."
The Board then went on to determine if the claimant had good cause for leaving his work, and to determine his eligibility under Section 1256. However, even though the Board held the claimant ineligible under Section 1256 for voluntarily leaving without good cause, the trade dispute disqualification was purged. Thus, the Board has implied that it does not matter if the claimant has a compelling reason for leaving his job, just so long as there is an unequivocal resignation, the causal connection is broken.
Just as employment to sever the connection between the trade dispute and the unemployment must be bona fide, so must the resignation, if the disqualification is to be purged. This is what the Board said in Benefit Decision 4874:
"The California Supreme Court in Mark Hopkins Incorporated vs. California Employment Commission set forth the principle that to terminate the disqualification the intervening cause must sever completely the relationships between the striking employee and his former employer. The Court is explicit in its wording the such intervening cause must be bona fide and not a "device to circumvent the statute.""
In Benefit Decision 4874, the Board came to the conclusion that the claimant was using such a "device to circumvent the statute."
The claimant in this case left his work due to a trade dispute. Upon filing his claim for unemployment insurance benefits, he was informed that he would not be eligible because of such leaving. As a result of this information the claimant resigned from his position, and also his membership in the union. The reason given by the claimant for resigning his employment was that he had no intention of returning to work for the employer and that a lighter type of employment would be necessary because of his advanced age.
The Board held:
"In previous cases where it has been held by the Appeals Board that a discharge by the employer will remove the disqualification under Section 56 (a) (1262), the facts showed that the discharge by the employer was unequivocal and completely dissolved the employment relationship between the employer and the worker. In the instant case, however, it seems to us apparent that no affirmative act of discharge can be attributed to the employer and that we cannot overlook or disregard the voluntary and self-serving nature of the resignation tendered by the claimant. A careful examination of the testimony leads us to the conclusion that the claimant’s primary reason for endeavoring to establish a severance of his relationship with his employer was for the purpose of divorcing himself from the trade dispute and thereby rendering himself eligible for unemployment insurance benefits. The mere acknowledgment of an act of resignation, which is the only affirmative action that can be attributed to the employer, cannot reasonably be viewed as bringing about a change in the reason for the claimant’s unemployment when such resignation is requested by the claimant for the sole purpose of removing himself from the trade dispute. It is our opinion that under the circumstances, and within the principle established by the Mark Hopkins case, the resignation of the claimant was not sufficient to terminate his disqualification and break the continuity of his unemployment which was directly traceable to the aforementioned trade dispute."
It is not necessary that the claimant present a formal resignation to the employer. If the claimant has effectively removed himself from the control of the employer, and has intended to completely sever the employer-employee relationship, it is not important in what manner he does this. For instance, if the claimant, during a trade dispute moves his residence from the area of the trade dispute to a distant community, with the intent to make this a permanent move, the claimant has resigned his employment with the trade dispute employer, even though he may never have contacted the employer in any way to inform him of his resignation.
In Benefit Decision 6308, the claimant left his employment on September 23, due to a trade dispute. The claimant testified that he would have gone back to work for the trade dispute employer had the trade dispute been settled. However, about January 1, he moved from Lynwood to San Fernando, and after that he would not return to the trade dispute employer. The Board held that the claimant was ineligible until the date that he moved to a distant community, and said:
". . . Even though the claimant may have considered himself discharged, he intended (until he moved out of the immediate area about January 1, 1955) to return to work with the appellant should the trade dispute be settled after October 12, 1954. Under these circumstances, it is our opinion and we hold that the claimant’s unemployment continued because of the trade dispute until January 1, 1955. Thereafter, it appears that the employer-employee relationship between the claimant and the appellant was effectively terminated and the claimant was no longer ineligible for benefits under Section 1262 of the Code."
If some action of the claimant makes it impossible for him to return to the trade dispute employer, this is in effect a resignation. This is what happened in Benefit Decision 6491. The claimant, a maritime worker, last worked on September 24, when his vessel was laid up by the employer due to an impending trade dispute on September 30. The trade dispute continued from September 30, to the following February 10.
On November 4, the claimant had registered with his union on the offshore shipping list instead of remaining upon the Olson reemployment list. By union rules, the claimant could not be on both lists simultaneously, and his election to be on the offshore list precluded his employment with the Olson Company. Prior to the trade dispute, the claimant had resolved upon such action because his residence was not at the home port of the Olson Company and he had been able to get home but one day of the year he had been employed by such company. If the claimant had not registered on the offshore shipping list, he would have been reemployed by this employer on February 14, upon termination of the trade dispute.
The Board held that the claimant had effectively severed his relationship with the employer, and said:
"It is true that the Supreme Court (Mark Hopkins) speaks of new bona fide employment as terminating that employment which is involved in the trade dispute; but we do not construe the decision as holding that that is the only way in which the employment relationship could be terminated. Rather, we understand that the decision establishes the proposition that, in the case of a trade dispute, the employment relationship cannot be terminated by a mere form or pretense but can terminate only by clear and convincing evidence of the bona fide termination of employment.
In the case now before us, the claimant clearly and unequivocally terminated his employment by this employer and placed himself beyond the possibility of reemployment by this employer because, under the rules of the union, he could not simultaneously retain his preferential position on this employer’s reemployment list after he had registered on the offshore shipping list. Thus, the claimant terminated his employment relationship with this employer on November 4, 1955, when he registered on the offshore shipping list as effectively as though he had secured bona fide permanent work with another employer. The claimant’s bona fide termination of his employment relationship with this employer is further conclusively demonstrated by the fact that he did not apply for reemployment nor was he reemployed by this employer upon termination of the trade dispute. Since the claimant had terminated such employment relationship prior to filing his claim for benefits on November 6, 1955, he was not ineligible under Section 1262 of the Code."
That the Board considered that the claimant had voluntarily resigned his employment with this employer, despite the fact that he never formally told the employer that he was leaving, is clearly demonstrated by the fact that the Board then went on to determine the claimant’s eligibility under Section 1256, and held that the claimant had voluntarily left his employment with good cause.
When the facts disclose that the claimant has been unequivocally discharged and the employer-employee relationship completely severed, this would purge the trade dispute disqualification. It then becomes necessary to resolve the separation issue existing under Section 1256 as to whether the discharge is for misconduct connected with work. See MC 475.
Distinction Between Discharge and Permanent Replacement
Under the National Labor Relations Act, employees who strike for a lawful object cannot be discharged unless the striker commits an illegal act, such as violence on the picket line, etc. If a striking employee can show that the employer unlawfully discharged him/her, the NLRB may award back pay to the employee. An employee who has been lawfully discharged during a trade dispute does not have reinstatement rights to his/her job at the end of the trade dispute.
During a trade dispute, an employer can permanently replace striking employees. The employer is not obligated to reinstate striking employees either at the conclusion of the strike or at the time an unconditional offer to return to work is made unless there are vacancies. If there are vacancies, the striking employee is entitled to reinstatement with seniority rights. These reinstatement rights apply to "economic" strikers. These are strikers who are attempting to obtain some economic concession such as higher wages, shorter hours, or better working conditions.
For UI purposes, a claimant who has been permanently replaced is considered to have been laid off due to lack of work; there is no separation issue under Section 1256. The permanent replacement also serves to purge a trade dispute disqualification.