De Leeuw v. Department of Industry, Labor & Human Relations

238 N.W.2d 706, 71 Wis. 2d 446, 1976 Wisc. LEXIS 1244

• Court: Wisconsin Supreme Court
• Decided: February 23, 1976
• Docket: 578 (1974)
• Status: Published

Opinions

Wilkie, C. J.

In this unemployment compensation case the sole issue on appeal is whether the five plaintiff-appellants, bricklayers employed by Nelson & Company, Inc., a general construction firm, defendant-respondent here, were correctly held ineligible for unemployment compensation covering the time after each became unemployed until September 6, 1968, since they lost their employment because of a bona fide labor dispute in the Milwaukee area (involving other employees of the respondent and other employers), such denial being in accordance with the provisions of sec. 108.04 (10), Stats. The deputy commissioner, the appeal tribunal and the Department of Industry, Labor & Human Relations (DILHR) all held to this effect and this determination was confirmed by the circuit court. We agree.

The facts are undisputed. The five claimants are Milwaukee-area masons employed by Nelson & Company, Inc., a general construction firm. Although Nelson is based in Racine, Wisconsin, during the summer of 1968 it had several multi-million dollar construction projects in the four-county area covered by Milwaukee, Washington, Waukesha, and Ozaukee counties. It was a member of the Allied Construction Employers Association (ACEA), the bargaining agent for construction company employers in this four-county area.

On July 18,1968, after negotiations for a new contract with the laborers had reached an impasse and a strike seemed imminent, ACEA locked out the laborers in this four-county area. Even though mason work was available in the area, the effect of the lockout was to put area masons out of work. Masons cannot work without laborers who are needed to mix mortar, carry block, and construct scaffolding.

Esche and Anderson were two Milwaukee-area masons who were laid off when the lockout began. Esche called a Nelson foreman in Racine and asked for work in Racine. He went to work there for two days, on July 22d and 23d, after which he was unemployed. Anderson worked until July 30th, when he was laid off. Both men worked until the mason work on the particular projects they were assigned to was completed.

Kerber was a Milwaukee-area mason who had been temporarily assigned to the Racine area prior to the lockout in order to set a particular type of stone at a certain project there. This temporary assignment was completed on August 2d, after which Kerber was unemployed. Drichta was another Milwaukee mason who was working on a Racine project when the lockout occurred. He continued working in Racine until this job was done on August 13th, after which he was unemployed. Fallon, the fifth mason, was also assigned to a Racine project at the time of the lockout. However, he was out of work with an injury from July 2d to July 22d. He returned to work in Racine for one day, July 23d. The job he was working on was finished on that day, and he was thereafter unemployed.

Mason work was available in the four-county' area during this period, but these five masons could not return to jobs there because of the lockout. Milwaukee-area masons were out of work because of the lockout. Nelson was willing to continue these five masons working in Racine but could not because demand for mason work was low there, and there were no jobs available. The five claimants continued to be unemployed until September 6, 1968, at which time the lockout.ended, and both laborers and masons returned to work.

This controversy surrounds the meaning and interpretation of sec. 108.04 (10), Stats., which providés- as follows: • •

“Labor dispute. An employe who has left (or partially or totally lost) his employment with an employing unit because of a strike or other bona fide labor dispute shall not be eligible for benefits from such (or any previous) employer’s account for any week in which such strike or other bona fide labor dispute is in active progress in the establishment in which he is or was employed.” (Emphasis supplied.)

Our review here involves a Question of law, first as to the meaning and construction of the statute and second, as to the application of the proper standard of causation to the undisputed facts of the case.

Our decisions have previously determined that whether certain undisputed facts constitute loss of employment because of a labor dispute presents a question of law.¹ In reviewing such a question of law, this court does defer to a certain extent to the legal construction and application of a statute by the agency charged with enforcement of that statute.² We are further guided by the rule of review under which, as to questions of law, we will not reverse a determination made by the enforcing agency where such interpretation is one among several reasonable interpretations that can be made, equally consistent with the purpose of the statute.³

The first crucial question in this case is to settle on standards of causation for the unemployment of the five applicants. We adopt the “but for” test in determining whether the lockout caused the unemployment of these five masons. Under this test an employee is disqualified under sec. 108.04 (10), Stats., only in those cases in which he would be working but for the existence of a bona fide labor dispute. This test is more consistent with •the main statutory purpose of providing income support to unemployed workers⁴ than a “substantial factor” test would be, and yet it does not defeat the purpose of seeing to it that the employer does not finance a labor dispute in which he is a principal.⁵

The “but for” test is the standard employed in other jurisdictions and is the test recommended by most commentators on this subject.⁶ It is the test which has been employed by appeal tribunals within DILHR.⁷

Having determined the test to be applied in determining the cause of unemployment, we now pass to a consideration of the application of the “but for” test.

It is undisputed that there was work available in the Milwaukee area for these masons when they finished their temporary jobs in Racine. It is also conceded that the only factor which prevented these Milwaukee masons from taking up this Milwaukee-area work was the lockout of laborers by ACEA. From these two facts it follows as a matter of law that these five masons would have been working but for the existence of the lockout. They were thus unemployed during the time .prior to the September 6th resumption of work “because of” a bona fide labor dispute and so were ineligible for benefits during this period.

The claimants seek to avoid this conclusion by contending that they first lost their employment because of the low demand for mason work in Racine during the summer of 1968. Put another way, these five masons assert that, but for this lack of work, they would have been working in Racine during this time. But this reasoning is only superficially persuasive, and must ultimately be rejected, in light of two factors peculiar to this case. The first is the nature of employment in the construction industry. As the trial court noted, employment in this industry involves a succession of temporary projects, with the workers finishing one job and moving on to another project where work is available. The second factor is that these claimants are all Milwaukee-area masons, and their presence in the Racine area was temporary. For example, Kerber was in the Racine area only in order to set a particular type of stone and would presumably have returned to the Milwaukee area immediately after completing this special project. So also, Esche and Drichta ended up working for a brief time in the Racine area solely as a stopgap measure because they were out of work in Milwaukee.

Thus, when these Milwaukee-area masons completed what work there was in the Racine area, they would naturally look first to the Milwaukee area, both because that was their regular area of employment and because that was where work was available. Because of the labor dispute, however, they could not take up this work, and thus, at this point, they became unemployed because of a labor dispute. In other words, unavailability of work in the Racine area cannot in this case be regarded as a relevant causative factor when there was other work available in these claimants’ regular place of employment.

As we noted at length in Cook v. Industrial Comm.,⁸ many efforts have been made to bring about a legislative change in sec. 108.04 (10), Stats., which would allow benefits to nonparticipants in bona fide labor disputes. By the failure of the legislature to adopt these proposals, it has indicated approval of the construction placed on the labor dispute provision by the administrative agency charged with the enforcement of the Wisconsin Unemployment Compensation Act. The interpretation is that an employee is not eligible for unemployment compensation if he has lost his employment due to a bona fide labor dispute involving other employees of the same employer. In addition, sec. 108.04 (10), as a disqualifying statute, does not contain an exemption for workers who lose their jobs because of a lockout, as do the statutes of many states. In A. J. Sweet, Inc. v. Industrial Comm.9 this court construed the phrase “bona fide labor dispute” to include a lockout. The net effect of the interpretation of sec. 108.04 (10) required by its plain language (and made in Cook and Sweet) is that employees, like these masons, who are not working because other employees have been locked out are denied unemployment compensation.

The analogous statute of our sister state of Minnesota takes a different approach to this situation. Sec. 268.09 (1) (5) of the Minnesota Statutes provides, as does sec. 108.04 (10) of the Wisconsin Statutes, that an employee is disqualified if he has left or partially or totally lost his employment because of a strike or other labor dispute. However, this subdivision specifically exempts an employee “who becomes unemployed because of a lockout.” In addition, this subdivision provides that, if the disqualification applies, it lasts for only one week “for any employee who is not participating in or directly interested in the labor dispute.” Such an approach allows employees who have not chosen to strike and employees who are not directly involved in a labor dispute to share in the benefits of unemployment compensation. This statutory approach remains consistent with the public policy of allowing benefits to those who are out of work through no choice or fault of their own.

Given the present wording of sec. 108.04 (10), Stats., however, these applicants were correctly denied unemployment compensation. First, there was no challenge made on appeal to the bona fides of the lockout.¹⁰ Second, there is no question but that these employees lost their employment because of their dependence upon the locked-out employees rather than because of economic reasons or because of a strategic decision by the employer to shut down all production.¹¹

By the Court. — Judgment affirmed.

1 Marathon Electric Mfg. Corp. v. Industrial Comm. (1955), 269 Wis. 394, 404, 69 N. W. 2d 573, 70 N. W. 2d 576. See also: McGraw-Edison Co. v. ILHR Dept. (1974), 64 Wis. 2d 703, 709, 221 N. W. 2d 677, and Milwaukee Transformer Co. v. Industrial Comm. (1964), 22 Wis. 2d 502, 510, 126 N. W. 2d 6 (whether facts found constitute misconduct under sec. 108.04 (5), Stats., is question of law); Fish v. White Equipment Sales & Service1, Inc. (1974), 64 Wis. 2d 737, 742, 221 N. W. 2d 864 (whether facts found constitute voluntary termination of employment under sec. 108.04 (7), Stats., is question of law).

2 Milwaukee Transformer Co. v. Industrial Comm., supra, footnote 1, at page 510; Cook v. Industrial Comm. (1966), 31 Wis. 2d 232, 240, 142 N. W. 2d 827; see also: Tecumseh Products Co. v. Wisconsin E. R. Board (1964), 23 Wis. 2d 118, 126 N. W. 2d 520.

3 Milwaukee Transformer Co. v. Industrial Comm., supra, footnote 1; Tecumseh Products Co. v. Wisconsin E. R. Board, supra, footnote 2.

4 Fish v. White Equipment Sales & Service, Inc., supra, footnote 1, at page 746; Milwaukee- Transformer Co. v. Industrial Comm., supra, footnote 1, at page 511.

5 Marathon Electric Mfg. Corp. v. Industrial Comm., supra, footnote 1, at page 408.

6 See, for example: Jerre S. Williams, The Labor Dispute Disqualification — A Primer and Some Problems (1955), 8 Vand. L. Rev. 338 at 344; Milton I. Shadur, Unemployment Benefits and the “Labor Dispute” Disqualification (1950), 17 U. Chi. L. Rev. 294 at 313, 315.

7 See, for example: 1960 Digest of Wisconsin Unemployment Compensation Cases, LD-580, Unemployment Due to Labor Dispute, 176 at 177, Case 38-A-561, where it was decided that a worker was ineligible for benefits because “there would have been work available for him but for the strike.”

8 Supra, footnote 2.

9 (1962), 16 Wis. 2d 98, 114 N. W. 2d 141, rehearing denied 16 Wis. 2d at 110a, 114 N. W. 2d 853.

¹⁰

A. J. Sweet, Inc. v. Industrial Comm., supra, footnote 9.

11 Cook v. Industrial Comm., supra, footnote 2; Kansas City Star Co. v. ILHR Dept. (1973), 60 Wis. 2d 591, 211 N. W. 2d 488, rehearing denied (1974), 62 Wis. 2d 783, 217 N. W. 2d 666.