Trade Dispute TD 60

Initial Work Stoppage Action

This category contains a discussion of the various types of initial work stoppage actions and the principles governing a claimant’s eligibility under Section 1262 when a claimant is involved in such action.

A. Strike Action - Voluntary Leaving

By far, the most common type of initial work stoppage action is strike action, i.e., walking off the job or refusing to report to work. The Court established in the Bodinson case that the claimant must have voluntarily left due to the trade dispute for the disqualifying provisions of Section 1262 to be applicable. The Court said:

". . . disqualification under the Act depends upon the fact of voluntary action, and not the motives which led to it. The legislature did not seek to interfere with union principles or practices. The act merely sets up certain conditions as a prerequisite to the right to receive compensation, and declares that in certain situations the worker shall be ineligible to receive compensation. Fairly interpreted, it was intended to disqualify those workers who voluntarily leave their work because of a trade dispute."

Accordingly, when claimants take strike action by voluntarily leaving due to a trade dispute, the claimants are subject to disqualification under Section 1262. Unlike the voluntary leaving provisions of Section 1256, there are no good cause provisions in Section 1262. The final decision is not predicated on the merits of whether or not the claimants had compelling reasons for taking strike action.

In the Chrysler court case of 1953, the production workers took strike action and were, therefore, disqualified under Section 1262. The office workers were laid off at a later date because of lack of production. The union office workers belonged to the same union as the production workers and could vote on whether or not to strike. They were disqualified since they voluntarily accepted the union’s strike strategy. The nonunion office workers were not disqualified since they had no control or voice in the union’s strategy.

The above case indicates that members of the union directly involved who are laid off may be disqualified if they had a part in the union strategy. The nonunion office workers who were laid off were not disqualified since they had no control or voice in the union strategy. The court said:

"Where a union uses the tactical maneuver of a strike against only one employer, and where a termination of employment is reasonably foreseeable by the use of such strategy, the consequent unemployment of nonstriking workers who are members of the union must be regarded as voluntary."

In the Chrysler court case of 1962, the production workers struck and were disqualified. The employer laid off clerical workers and engineers who were part of the same amalgamated union but who had separate contracts and who had no right to vote on whether or not to strike. The claimants were considered eligible.

Mere union membership is insufficient to disqualify a claimant under Section 1262. A disqualification requires voluntary action. In this case, the nonstriking union members had no vote on whether or not to strike.

B. Honoring of Picket Line

A member of a union not involved in the trade dispute who refuses to cross a picket line due to a trade dispute is considered to have voluntarily left due to the trade dispute. The individual is considered to have adopted the trade dispute as his/her own. Consequently, the claimant is subject to disqualification under Section 1262.

In the Bodinson court case, the Welder’s union struck the employer and established a peaceful picket line. The claimants were members of the Machinist’s union, which was not involved in the trade dispute, but they honored the picket line. The claimants maintained that they did not leave their work voluntarily, but were prevented from going to work by the picket line. The court held that they had made the choice not to cross the picket line and thus their unemployment, or leaving of work, was voluntary. The court said:

"It is true that under the proper construction of the statute an employee who is prevented from working through no act of his own is entitled to compensation, for example, where he is barred by force from the premises where he has been working. But that is not the situation here. If the picket line was maintained within the limits permitted by law, as this one presumably was, no physical compulsion was exerted to prevent corespondents from working. They were unemployed solely because, in accordance with their union principles, they did not choose to work in a plant where certain of their fellow employees were on strike. Their own consciences and faith in their union principles dictated their action. This choice is one which members of organized labor are frequently called upon to make, and in the eyes of the law this kind of choice has never been deemed involuntary."

The Board has consistently held to the principle enunciated in the Bodinson case. As the Board said in Benefit Decision 5805:

"Although the claimants were not interested in the trade dispute which led to the establishment of a picket line on March 2, 1951, the record is clear that they left their work on that day on their own initiative and without instructions from their employer. Under the circumstances, we hold that the claimants effectively made the trade dispute their own and that by their leaving they became subject initially to the ineligibility provisions of Section 56(a) (1262) of the Act (Bodinson Mfg. v. California Employment Commission.)"

The mere fact that there is a picket line and that the claimant does not cross it does not automatically make the claimant subject to disqualification. Unless the claimant is given the opportunity to make the choice of whether or not he or she will cross the picket line, he/she cannot be said to have left the work due to a trade dispute.

In BD 5545, the claimant became unemployed when her employer was struck by a union other than the one that the claimant belonged to. The claimant reported to work shortly before 9 a.m., the hour she was to report for work, and found the door locked. She called the employer and he told her she might as well go home. There was a picket line at the establishment, and the claimant said that she would not have crossed the picket line in any case. The Board held that the claimant was laid off, and thus did not voluntarily leave her work due to the trade dispute. The Board went on to say:

"Although there is some evidence in the record that the claimant would have been unwilling to cross the picket line in order to go to work even though the employer had offered to put her to work, her attitude on this point is immaterial since she was not instructed to work."

C. Lockouts

A lockout is a cessation of the furnishing of work to employees by the employer in an effort to obtain more desirable terms for the employer.

  1. Unilateral Lockout:

    A unilateral lockout occurs when the union directly involved has not given strike notice, but the employer decides to lock out members of the union directly involved. In a unilateral lockout, the claimants are not subject to disqualification under Section 1262.

    In the Coast Packing Company court case, the Butchers’ union contract was to expire October 1, 1961. Sometime before this expiration date the employers requested the union to give advance notice of any strike action so the employers could avoid substantial economic losses that they had suffered in the past when abrupt strike action caused spoilage of fresh meat. When the union refused to give advance notice, the employers commenced an orderly shutdown on September 29th and laid off the employees.

    The court held that the employer’s precautionary shutdown to protect inventory because the employer felt the union would strike at any time is insufficient to cause the disqualification of the laid off employees. There was no strike notice given by the union.

    In another meat packing case, Morrell and Company, the court followed the Coast Packing decision. In Morrell, the employer’s contract with the Butchers’ union was about to expire. The employees voted their representative the authority to call a strike, but set no date. The employer twice requested an extension of the contract or 72 hours’ notice before strike action, but was refused.

    To protect itself against loss, the employer closed the plant to the union members and used supervisors and salesmen to dispose of the inventory and maintain the plant. No ultimatum had been given by the union to the employer. The union did not obtain necessary strike approval from higher authorities.

    The court held the claimants eligible within the meaning of Section 1262. It rejected the employer’s argument that the threat of a strike had been increased to a reasonable certainty by a strike authorization vote and the refusal to either extend the contract or give strike notice.

  2. McKinley Lockout

    In the McKinley court case, the Sacramento Wholesale Bakers’ Association of seven members and the Bakery and Confectionary Workers union had bargained for a master contract since 1935. In the 1946 bargaining session, the employer association advised the union that if there was strike action against any member of the association the other employer members would lock out their bakery union members.

    The court held all of the claimants disqualified under Section 1262. The court stated that where there is collective bargaining between a union and employer association and the association notifies the union in advance that if there is a strike against any one member of the association the other employer members will lock out their union directly involved employees, the locked out employees are ineligible under Section 1262. The employer association’s position is known as a "strike against one is a strike against all". The court reasoned that the unemployment of the bakery workers was caused by their own action taken with full knowledge of its consequences.

    McKinley Application - Limited Lockout

    In the Gardner court case, the court held the McKinley rule applied even though the employer association lockout was not unanimous.

    In Gardner, the Santa Clara County Restaurant Association, on April 28, 1955, notified the restaurant union that a strike against one employer would be considered a strike against all. There were 70 employers in the employer association (also 44 employers who were not members but had given the association authority to serve as their bargaining agent). On May 25, the union called a strike against 10 employers, and the association retaliated on the same day by notifying its members to lay off their employees the next day. The lockout was about 70 percent effective as to total number of employees affected; about 35 employer members had complete lockouts.

    McKinley Application - No Strike Sanction

    In another court case, Artigues, the court held the McKinley rule applied even if the striking union did not have strike sanction from its international organization.

    In Artigues, in June 1963, the motion picture projectionists, member of Local 162 of the International Alliance of Theatrical Stage Employees and Motion Picture Operators, commenced negotiations for a new master contract with the San Francisco Theater Owners’ Association. During negotiations, the association advised the union that a strike against one would be considered a strike against all. On November 12, the union advised the association that a request for strike sanction from the union’s international had been made but that no reply had yet been received. On November 13, the union struck two theaters, and the remaining theaters locked out their union employees.

    The claimants who were locked out contended they should not be responsible for the strike action of their fellow members because the strike was "illegal" since there had been no strike sanction granted from the international.

    The court replied:

    "To hold, as respondents urge, that a local union and its members are not responsible for a strike called by their elected officers because no "strike sanction" was given would tend to encourage such "illegal" strikes. A local union could thus obtain for its members all of the fruits of a strike while at the same time the members and their union would be relieved of any responsibility therefor."

    McKinley Application - Two Locals Involved

    In PB 24, Boilermakers Local 6 in San Francisco and Local 10 in Oakland were represented by a single negotiating committee. During negotiations for the latest contract the employer association, the California Metal Trades Association, warned the unions that a strike against one would be a strike against all. Thereafter, On April 10, two employers were struck by Local 10 and one employer by Local 6. On that same day, the employer association warned the unions that a lockout of all employees would occur if all employees did not return to work immediately. On April 13, all Local 6 members returned to work but only some members of Local 10 returned to work. On April 17, the employer locked out all employees at the nonstruck plants.

    In holding the claimants disqualified under Section 1262, the Board said:

    "It is not possible to separate the actions of Local No. 10 and Local No. 6 members. They acted as a unit in negotiations, and the employer representative had made it clear that the invitation to return to work was for all and not just some of the workers affected. It is perhaps unfortunate for members of Local No. 6, who were willing to return when CMTA offered to lift the lockouts, that their affairs were so intertwined with and indivisible from those of members of Local No. 10. These are the facts, however, and it was the choice of both locals that they be so aligned. We conclude that the actions of the members of both locals on and after the pivotal date of April 10, 1967 were voluntary, mutually binding, undertaken for a common goal and were acquiesced in, or not objected to, by union officers."

    Accordingly, the McKinley rule applies if there is a refusal to return to work by at least one of the locals in a union which is negotiating as a single entity for all of the locals.

  3. Lockout Followed By Recall to Work

    In some cases, an employer who has unilaterally locked out the members of the union directly involved may subsequently recall the employees to work. Under these circumstances, the employees who were initially eligible under Section 1262 due to the unilateral lockout may then be subject to a trade dispute disqualification if they refuse to return to work due to the trade dispute.

    In PB 451, the employer was unable to reach a contract agreement with the union and therefore locked out the members of the union directly involved. The Board held that the employer-employee relationship was not severed during the lockout, stating:

    "As in Mark Hopkins, the situation before us involves unemployment resulting from a trade dispute. Although the claimant ceased performing services on or about June 1, 1985, that event was brought about by neither a voluntary leaving of work, a discharge, a lack of work, or anything other than a dispute regarding the terms and conditions of employment. Neither party had taken any affirmative action to sever the employment relationship."

    Inasmuch as a lockout preserves the employer-employee relationship, the work subsequently offered to the locked out employees is not "new work" and therefore not unsuitable under Section 1259a. If the claimants refuse the recall to work, they would be, in effect, voluntarily leaving their jobs due to the trade dispute at that point and would be subject to disqualification under Section 1262.

D. "Wildcat Strike"

A "wildcat strike" is a strike over conditions of work by employees contrary to the advice or without the consent of their union. A "wildcat strike" meets the definition of a trade dispute. Inasmuch as the employees have voluntarily left due to a trade dispute, the employees would be subject to disqualification under Section 1262.

Such strike action is normally not condoned by the union because there is usually an unexpired contract with a "no strike" clause. As a result of the violation of the "no strike" clause, the employer may discharge the striking employees. See MC 475 for resolution of the discharge issue.

E. Jurisdictional Dispute

Sometimes a dispute over which union is to represent workers in a plant or company will result in the cessation of work. This is a jurisdictional dispute and is a trade dispute within the meaning of Section 1262.

The Board decided the issue of jurisdictional disputes in BD 3829. The claimants in this case were all cannery workers for Libby, McNeil and Libby. For a number of years prior to the period involved in this case, the employer operated under a collective bargaining agreement with the Teamsters Union, A. F. of L. Under this agreement, the employees at the cannery had been required to clear through the local A.F. of L. Union before being hired.

Over a considerable period of time, a number of employees in the cannery had changed their union allegiance by joining the C.I.O. Union. All claimants who were involved in this appeal were members of the C.I.O. at the time that the controversy arose.

As the membership of cannery workers in the C.I.O. Union increased, demands were made on the employer’s association for recognition of this organization as the bargaining agent for the cannery employees.

The controversy was referred to the National Labor Relations Board. An election was held, but was inconclusive since neither union received a majority of votes. The National Labor Relations Board called for a new election, however, no such election had been held at the time of this dispute.

Prior to March 1, 1946, (the expiration date of the A.F. of L. contract), the C.I.O. Union took no official action to dissuade its members from retaining membership in the A.F. of L. Union.

On or about April 26, 1946, the employer advised all of its employees that a contract with the A.F. of L. Teamsters Union had been renewed. Also, that continued employment in the cannery would depend upon membership in the Teamsters Union, and that on or about April 29, representatives of the Teamsters Union would be present at the plant for the purpose of accepting applications for enrollment in the Teamsters’ organization.

The workers who were members of the C.I.O. Union, voted unanimously that they would refuse to pay dues to the Teamsters Union. Also, in the event the company brought the Teamsters’ representatives into the plant that the workers would stop work. They further voted that they would remain at their jobs and notify the company that they would resume work as soon as the Teamsters’ representatives were taken out of the plant and stopped bothering them.

Two representatives of the A.F. of L. Teamsters Union came into the plant at about 8:45 a.m. on April 29, and the employees were advised that they must go to the office and pay dues to the Teamsters Union. The employer stated that in the event the workers refused to pay Teamsters’ dues and refuse to return to work within 30 minutes of the time he finished speaking, he was going to close the plant and ship the produce to other canneries. No work was performed after 9:00 a.m. on that date.

The Board held that this was a jurisdictional dispute, and therefore a trade dispute was in existence. The Board said:

"We find ample ground for holding that the dispute underlying the cessation of work at the Libby Plant on April 29, was a ’trade dispute’ within the meaning of that term as used in Section 56(a) (1262) of the Act.

The term ’trade dispute’ is not defined in the Unemployment Insurance Act. There is no question that a strike or lockout originating over a difference of opinion between an employer and his workers concerning wages or hours falls within the definition of that term. But, we are here concerned with a more intangible conflict concerning the right of the workers to representation by one or the other of two labor organizations. That the definition is sufficiently broad to include more than strikes and lockouts, is clearly indicated in a recent decision of the United States Supreme Court, construing the meaning of the term ’labor dispute’ in the Alaska Unemployment Compensation law."

In the case of Unemployment Compensation Commission of Alaska vs. Aragon:

"The term "labor dispute" includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee.

In light of this authority we conclude that a trade dispute within the meaning of the California Unemployment Insurance Act can be concerned with jurisdictional issues and with questions of representation of workers by labor organizations."

Using the same line of reasoning, the Board said in Benefit Decision 4910:

"On August 18, 1946, the claimant’s labor organization placed a picket line at the employer’s establishment in protest of the employer’s allegedly dismissing workers for refusal to join the Teamsters Union. It would appear, therefore, that a jurisdictional dispute was in progress between two rival labor organizations."

F. Slowdown/Sitdown Strikes

When the employer is forced to close down because the employees have slowed down production, this is not a lockout. In this case, the claimant’s own action brought about his/her unemployment.

In Benefit Decision 4588, the Board considered the question of a work slowdown. Negotiations concerning wages and hours had been in progress between the employer and the union. Two series of alleged work slowdowns had occurred during the period of negotiation. There was a 50 percent drop in production. The latest culminated in the suspension of operations by the employer and the establishment of a picket line by the claimants. The claimants contended that the closing of the plant was a lockout. The Board held that the claimants had voluntarily left their work due to a trade dispute:

"It is the contention of the claimants that they did not leave their work because of a trade dispute but on the contrary were locked out by their employer. We find it difficult to accede to this contention in view of the preponderance of evidence establishing a work slowdown by the claimants preceding the closing of the establishment.

No support can be found for the argument of the claimants that they were without employment because they were locked out by their employer. It is well settled that a lockout exists when the employer ceases to offer work to his employees in an effort to obtain for himself more favorable or desirable terms from his employees. The employer in the instant case offered employment which was refused. In extending the offer he did not make any effort nor try to obtain in any way more favorable or desirable terms but only imposed as the sole condition that work be performed in the same manner as in the past. The facts in this case, fall far short of establishing a lockout."

For sitdowns, where the employees remain in the plant but refuse to work, the shutdown of the plant by the employer would also not be viewed as a lockout. The employees would be considered to have left their work due to the trade dispute.

G. Sickouts

Sickouts are work stoppages in which the employees attempt to put pressure on the employer to acquiesce to their demands by not reporting to work, feigning illness.

If the facts indicate the employees are participating in a sickout, they would be considered to have voluntarily left their jobs due to a trade dispute. Accordingly, they would be subject to disqualification under Section 1262. Factors which indicate the employees are participating in a sickout are as follows:

  • Number of employees involved. If a relatively large number of employees call in sick during the same period, the employees are probably participating in a sickout since it would be highly improbable they would all be sick during the same time.
  • Failing contract negotiations. Sickouts usually occur during a period when the employees are dissatisfied with the progress of the contract negotiations.
  • Illegality of taking direct strike action. The employees may be prohibited from taking direct strike action, i.e., walking off the job, by a "no strike clause" in a current contract. For certain government workers, they may be prohibited from taking strike action by federal or state law. Therefore, the foregoing employees may express their dissatisfaction by participating in a sickout. Sickout action, however, may also be considered illegal.
  • No medical verification of illness. If the employees do not have medical verification for their illness, this would indicate they may be participating in a sickout. If a claimant, however, indicates he/she did not report to work due to illness and has medical verification, the claimant should not be considered to have voluntarily left work due to the trade dispute. It should also be noted that if the employee does not report to work upon recovery due to the trade dispute, he/she would be subject to a trade dispute disqualification.

H. Intermittent Work Stoppages

Intermittent work stoppages are repetitious walkouts within a relatively short span of time. Such walkouts often result in the discharge or suspension of the employees.

In an NLRB case, Honolulu Rapid Transit v. Transit Workers Union of Hawaii, the union resorted to intermittent strike activities after the contract expired. The workers did not report to work on Saturdays and Sundays, which had the effect of seriously disrupting operations. After this continued for several weekends, the employer warned the employees that further refusals would mean a 15-day suspension. The employees continued their intermittent work stoppage and were thereafter suspended.

The union contended the suspension was unlawful in that the company was compelling the strikers to work full-time or not at all, thus denying them the right to strike.

The court held that:

" employer is not required, at the risk of prosecution, to alter and adjust his operating schedules and hours to the changing whim which may suit the employees’ or a union’s purpose. Establishment of work schedules is a responsibility (and prerogative) of the employer which may, of course, be the subject of bargaining. Employees may not, however, simultaneously accept and reject them, and thereby in effect establish and impose upon the employer their own conditions of employment."

Accordingly, the court held that the intermittent work stoppages were not "protected activity" under the National Labor Relations Act and, therefore, there was no violation in the law when the employer suspended the employees.

Under similar factual circumstances, for UI purposes, it would be considered there was a trade dispute in existence and the subsequent suspension would be considered a discharge for misconduct under Section 1256.

I. Sympathetic Strike

When employees stop working in sympathy with other employees, there is a trade dispute in existence. This is true even though the employees and their union may have no grievance with the employer. It is not necessary that the employees be members of or involved in the affairs of the striking union, if they leave their work out of sympathy, they have made the strike their own.

In W.R. Grace and Company v. California Employment Commission, the longshoremen left their work because they would not work without checkers. The ship’s clerks and checkers were on strike. The Court ruled that the longshoremen were involved in a trade dispute when it said:

"It was not essential to disqualification that a dispute exist directly between the longshoremen and the employer; if the former left their work because of the dispute between the employer and the ship’s clerks, they in effect made the latter dispute their own and are within the disqualification of Section 56(a) (1262)."

In Benefit Decision 6398, a dispute arose between Kaiser Steel Corporation and Local 2869, the United Steel Workers of America. The incident causing the work stoppage arose because, on April 11, 1954, four powerhouse mechanics had been assigned to move a motor from the powerhouse to a nearby area. A dispute arose as to whether it was the responsibility of the powerhouse mechanics to move the motor or whether it should have been moved by the forge and wellrigging crew. The stoppage resulted from this dispute. On April 14, 1954, a grievance was filed under the procedure set up in the agreement. By Wednesday, April 21, 1954, no word had been received from the chairman of the union grievance committee, consequently, the powerhouse mechanics were again assigned the job of moving the motor in question. Mechanics asked for their timecards and stated they were "going home." These four individuals and the other powerhouse mechanics left the job and the plant at approximately 8:30 a.m. on April 21, 1954. Shortly thereafter, the maintenance men began returning to their cleanup areas and started making preparations to leave the plant. Also, the employees in some of the rolling-mill units began making preparations to leave the job, and word was received by some supervisors that none of the rolling mills would be operating after 12 noon.

In deciding whether a trade dispute was in existence, the Board cited several authorities. The Board stated:

"In attempting to frame a definition of "trade dispute," this Board stated in Benefit Decision No. 5527:

At the outset our inquiry must be directed toward ascertaining whether or not there was a trade dispute within the meaning of the above provision of law. The term "trade dispute" is not defined in the Unemployment Compensation Act nor is it defined in any other California statute. The only unemployment insurance law wherein we find the term "trade dispute" defined appears in Section 26 of the British Unemployment Insurance Act of 1935, and reads:

"Trade dispute" means any dispute between employer and workmen, or between workmen and workmen, which is connected with the employment or nonemployment or with the terms of employment, or with conditions of labor, or any persons, whether workmen in the employment of the employer with whom the dispute arises or not.

In W.R. Grace and Company vs. California Employment Commission, the Supreme Court of this State declared that:

We believe that it is apparent that, in this case, the stoppage of work occurred when certain employees of the employer left their work in sympathy with the powerhouse mechanics, as to which it may properly be called a trade dispute. Such employees were properly disqualified as leaving their work voluntarily because of such a dispute. . ."