Johnson v. LaGrange Shoe Corporation

70 N.W.2d 335, 244 Minn. 354, 1955 Minn. LEXIS 591

• Court: Supreme Court of Minnesota
• Decided: April 22, 1955
• Docket: 36,381
• Status: Published

Opinions

Knutson, Justice.

Certiorari to review a decision of the division of employment security denying unemployment benefits.

The facts are not in dispute. LaGrange Shoe Corporation owns and operates a shoe factory in Eed Wing, Minnesota. At the time here involved it employed about 150 production and maintenance employees. The United Shoe Workers of America, CIO, Local No. 211, was the sole bargaining agent for all such employees. Of the 150 employees, all except 18 were members of the union. Of the claimants here involved, all but four were members of the union. On September 17, 1952, the company and the union entered into a collective-bargaining contract which was to expire on October 20,1953, covering wages, working conditions, and other terms and conditions of employment. With respect to vacations, the contract contains the following provisions:

“The Company agrees to give to each Employee with more than one year’s continuous service as of June 30th, 1953, one weeks vacation with pay; such vacation pay to be figured as forty hours times the average hourly earnings exclusive of any overtime payments for each Employee for the F. I. C. A. accounting period ending March 31st. Vacation pay so figured shall be paid prior to the vacation period.

“The Company also agrees to give Employees with more than five years continuous service, two consecutive weeks vacation with pay; such vacation pay to be figured the same as the first week vacation pay, and shall be paid prior to the vacation period.

“It is further agreed that the vacation weeks shall be during the Eed Wing Public School Summer Vacation dates, with the exact weeks to be specified by the Company thirty days in advance of the actual vacation period.

“During the month of February, all those Employees entitled to the two weeks vacation, and who are desirous of actually having the two weeks time off, shall notify the Company of their wishes. Within one week after the actual vacation dates have been announced, the Company shall have the opportunity of trying to work out satisfactory vacation dates with the Employees who have signified their desire to take the two weeks off, or, in the interest of production needs, to discourage these Employees from taking two weeks off. Failure of the Employer to convince the Employee shall in no way prohibit the Employee from taking their second week’s vacation.

“It is agreed that any Employee discharged for. cause or any Employee quitting the employ of the Company prior to June 30th of the vacation year, shall forfeit all claims to any vacation pay.

“For purposes of this paragraph, continuous service is defined as any Employee who was employed on June 30th of the previous year and who received wages in thirty-six of the fifty-two weeks in the fiscal year. Leaves of absence not to exceed thirty days, and absences caused by sickness or other illness not to exceed three months shall not be cause for break in continuous service.”

In February 1953, pursuant to this contract, the company posted a notice requesting that employees wishing to take a two-week vacation notify it of their desires. From 80 to 90 percent of the employees so notified the company. Thereafter, the company gave timely notice that it would close the plant for vacation purposes from June 22 through July 5. The nature of the company’s production is such that it could not operate with such a large percentage of its employees on vacation. During the past seven years the company has closed down for vacation, although in 1952 it closed down for only one week. Fourteen of the company’s employees who were entitled to only one week vacation with pay and five who qualified for no vacation with pay under the contract filed claims for unemployment benefits. The claims were disallowed and, after the usual administrative appeals, are here on certiorari to review the final decision of the commissioner.

Many of the questions involved here were determined in Jackson v. Minneapolis-Honeywell Regulator Co. 234 Minn. 52, 47 N. W. (2d) 449. It is the contention of relators (1) that subsequent events have so eroded the Honeywell case as to render it untenable or lacking in authority; (2) that if the Honeywell case is adhered to it is not controlling here; and (3) that the policy of our unemployment compensation statute will be vindicated by awarding claimants benefits for their period of unemployment.

In deciding the Honeywell case, we discussed and followed the cases of In re Employees of Buffelen Lbr. & Mfg. Co. 32 Wash. (2d) 205, 201 P. (2d) 194; Moen v. Director of Div. of Employment Security, 324 Mass. 246, 85 N. E. (2d) 779, 8 A. L. R. (2d) 429; Mattey v. Unemployment Comp. Board, 164 Pa. Super. 36, 63 A. (2d) 429; and Paden City Pottery Co. v. Board of Review (Cir. Ct.) 8 CCH, Unemployment Ins. Rep. W. Va. par. 8090.

Relators now contend that those cases are no longer authority in the states where they have their origin. The state of Washington, by statute, has adopted a rule contrary to the decision of its court in the Buffelen case.² Massachusetts, by statute, likewise has adopted a rule contrary to the Moen case.³

In West Virginia the legislature apparently adopted the same rule followed by the court in its decision in the Paden case.⁴ Since the decision in the Paden case, the West Virginia court also has had occasion to reconsider the entire matter in Bennett v. Hix (W. Va.) 79 S. E. (2d) 114. See, also, the decision of the circuit court in the thirteenth judicial circuit at Charleston, West Virginia, in Sylvania Elec. Products Co. v. Appeal Board, 8 CCH, Unemployment Ins. Rep. W. Va. par. 8134.

Relators contend that the Pennsylvania court has rejected its decision in the Mattey case in the later case of Golubski Unemployment Comp. Case, 171 Pa. Super. 634, 91 A. (2d) 315. A review of the later Pennsylvania cases shows this to be erroneous. In Philco Corp. v. Unemployment Comp. Board, 175 Pa. Super. 402, 105 A. (2d) 176, the Mattey and Golubski cases are distinguished and the Mattey case is reaffirmed. In the still later case of General Elec. Co. v. Unemployment Comp. Board, 177 Pa. Super. 49, 110 A. (2d) 258, the Golubski case is again distinguished and the Mattey and Philco cases followed.

Since our decision in the Honeywell case our attention has been called to the case of Matter of Rakowski, 276 App. Div. 625, 97 N. Y. S. (2d) 309; and other courts have adopted the same view. Matter of Naylor, 281 App. Div. 721, 117 N. Y. S. (2d) 775, affirmed, 306 N. Y. 794, 118 N. E. (2d) 816; In re Gerlach (S. Ct. App. Div.) CCH, Unemployment Ins. Rep. N. Y. par. 8936; Beaman v. Bench, 75 Ariz. 345, 256 P. (2d) 721.

Several lower courts also have followed the same rule. See, Collopy v. Porter (Ct. of Common Pleas) 6 CCH, Unemployment Ins. Rep. Ohio, par. 8260; Cambridge Glass Co. v. Bureau of Unemployment Comp. (Ct. of Appeals) 6 CCH, Unemployment Ins. Rep. Ohio, par. 8411; I. M. Dach Underwear Co. v. Employment Security Comm. (Cir. Ct.) 4 CCH, Unemployment Ins. Rep. Mich. par. 8445; Elliott v. Bureau of Unemployment Comp. (Ct. of Common Pleas) 6 CCH, Unemployment Ins. Rep. Ohio, par. 8384.

We see no reason for disturbing our decision in the Honeywell case. Our legislature has had a full session since that decision and is now again in session. If our decision correctly construed our statute in the Honeywell case, which we believe it did, it is as sound now as it was then. If the statute is to be amended, it should be left to the legislature to do so as it did in Washington and Massachusetts.

Relators next contend that the facts in the case now before us differ from those in the Honeywell case to such an extent that the decision in that case is not authority for denying compensation benefits here. The contract in the Honeywell case contains the following provision (234 Minn. 54, 47 N. W. [2d] 450):

“The Company shall have the option to establish a vacation shutdown between June 1st and August 30th of the then current year. All employees shall take time off equal to the established length of the vacation shutdown, except those employees the Company may require to work during the vacation shutdown.”

In the case now before us the contract does not expressly state that all employees shall take time off during the vacation shutdown, nor does it expressly state that the company may shut down the plant for vacations. It must be assumed, however, that the union, acting as agent for the employees, was familiar with the custom of the company of closing down for vacations during previous years. In construing a collective-bargaining contract of this kind, we must do so with some semblance of realism. Collective-bargaining contracts of this kind today are negotiated by representatives of both union and employer who are thoroughly familiar with their work and with the law applicable to such contracts. Here the evidence is conclusive that the plant could not operate with 80 to 90 percent of its production force on vacation. The main distinction between the two contracts is that in the Honeywell case the company had the option of closing the plant. Here the employees, by signifying their desire to take a vacation in such large numbers as to make it impossible to operate the plant, had in effect the option to force a shutdown. To hold that under this contract the parties did not contemplate a shutdown in view of the past experience in that regard, when so many employees chose to take vacations as to make it imposssible to' operate, simply ignores that which must be apparent to everyone. It would seem to us that in view of our decision in the Honeywell case, if the union had intended that the company should furnish employment for those employees not entitled to vacation pay during a shutdown, even though the plant could not operate, it would have been a simple matter so to provide in the contract. It would seem, if that had been the intention of the parties, that the contract would have provided paid vacations for all employees. Provisions granting paid vacations to employees who meet certain specified qualifications and not to others would seem to negate such construction of the contract. With respect to the vacation period, this contract contains the following provision :

“It is further agreed that the vacation weeks shall be during the Red Wing Public School Summer Vacation dates, with the exact weeks to be specified by the Company thirty days in advance of the actual vacation period.” (Italics supplied.)

The contract speaks of the vacation period in the singular. This hardly could contemplate anything but that all vacations should be taken at the same time. We believe that the only fair construction of this contract in the light of the past experience is that, when such a large percentage of the employees exercised their right to take vacations as to make it impossible to operate the plant, the company had the right to close down during the period specified in the contract and that our decision in the Honeywell case controls the rights of those employees not entitled to vacation pay.

Under the rules of construction pertaining to unemployment laws, relators contend that benefits should be awarded to these claimants. In Nordling v. Ford Motor Co. 231 Minn. 68, 76, 42 N. W. (2d) 576, 581, 28 A. L. R. (2d) 272, we stated the rules applicable to construction of our unemployment laws to be as follows:

“Unemployment compensation statutes were enacted during a period of distress and were designed to relieve the hardship caused by unemployment due to no fault of the employe. The legislative purpose behind the enactment of our act is to be found in the legislative declaration of public policy, § 268.03. It is a general rule that a liberal construction is usually accorded statutes which are regarded by courts as humanitarian or which are grounded on a humane public policy. * * * Where there are disqualifying provisions, the exceptions should be narrowly construed. But these rules of construction do not mean that we are at liberty to put something into the statute which is not there. Our function, guided by ordinary rules of construction, is to ascertain, if we can, what the legislative intent was and to give effect to it.”

For a history and nature of our act, see Bucko v. J. F. Quest Foundry Co. 229 Minn. 131, 38 N. W. (2d) 223.

Were it not for the statutory definition of “unemployed,”⁵ it would be doubtful if it could be said that an employee on vacation is unemployed at all. Certainly he retains all rights incident to his employment status. The statute limits our consideration, however, to the question whether he is voluntarily or involuntarily unemployed. Where he has agreed, through the medium of his bargaining agent, directly or by implication, that the plant may close down during a vacation period, we think that under our rule of construction it should be held that he is voluntarily unemployed or, more strictly speaking, on a leave of absence.

The contra cases relied on in the dissenting opinion are distinguishable either on the facts or the law. Some of the cases are distinguished in Beaman v. Bench, 75 Ariz. 345, 256 P. (2d) 721. In some of the cases the court writing the opinion has distinguished its case from our Honeywell case. In Schettino v. Administrator, 138 Conn. 253, 257, 83 A. (2d) 217, 219, the Connecticut court said:

“* * * This case [Jackson v. Minneapolis-Honeywell Regulator Co. 234 Minn. 52, 47 N. W. (2d) 449] appears to have been decided upon the authority of cases arising under the Washington, Pennsylvania, West Virginia and Massachusetts statutes. These statutes, in terms, disqualify plaintiffs who Voluntarily’ leave their employment. The difference in the wording of these statutes from that of our own (§ 7508[2][a]) necessarily affects the reasoning in those opinions. The test of Voluntarily’ leaving therein discussed and applied is not the test applied in this state.”

In American Bridge Co. v. Review Board, 121 Ind. App. 576, 580, 98 N. E. (2d) 193, 195, in discussing some of the cases cited by us with approval in the Honeywell case, the Indiana court said:

“All of the foregoing cases are clearly distinguishable from the case at bar. In the instant case there is no question but that the shutdown occurred as a result of voluntary action of the company for the purpose of talcing inventory, and as stated in the notice, insofar as possible, the period will be designated for vacations. By the use of the words ‘insofar as possible, this period will be designated for vacations’ the company does not show a clear and unequivocal intention to declare vacations for all. By reason of the terms of the employment contract with the union, such period could only be designated for employees of the plant who were eligible for vacations.” (Italics supplied.)

Apparently the dissent overlooks the distinction drawn by Pennsylvania’s own courts between Golubski Unemployment Comp. Case, 171 Pa. Super. 634, 91 A. (2d) 315, and the other Pennsylvania cases discussed above. Nor does the student note in 36 Minn. L. Rev. 426 furnish any authority for the dissent. That note criticizes our decision in the Honeywell case. The dissent apparently accepts the decision in the Honeywell case but seeks to distinguish it on the facts from the instant case. It is difficult to see how the law review note, even if we accept it as authority, could be of any help in sustaining the position of the dissent.

Affirmed.

2 «* * * the cessation of operations by an employer for the purpose of granting vacations, whether by union contract or other reasons, shall in no manner be construed to be a voluntary quit nor a voluntary unemployment on the part of the employees.” Rev. Code of Wash. 50.20.115.

3 * * * An individual who is not entitled to vacation pay from his employer shall be deemed to be in total unemployment during the entire period of any general closing of his employer’s place of business for vacation purposes, notwithstanding his prior assent, direct or indirect, to the establishment of such vacation period by his employer.” Ann. Laws of Mass. c. 151A, §l(r)(2).

4 “* * * an individual shall be disqualified for benefits:

¡í» *]* ^ *(• V

“For each week in which he is unemployed because of his request or that of his duly authorized agent for a vacation period at a specified time that would leave the employer ho other alternative but to suspend operations.” W. Va. Code 1949 Ann. § 2366(78) (8).

5 See, Jackson v. Minneapolis-Honeywell Regulator Co. 234 Minn. 52, 47 N. W. (2d) 449.