Trinwith v. Labor & Industry Review Commission

439 N.W.2d 581, 149 Wis. 2d 634, 1989 Wisc. App. LEXIS 287

• Court: Court of Appeals of Wisconsin
• Decided: March 21, 1989
• Docket: 88-1221
• Status: Published

Opinions

SULLIVAN, J.

Steven J. Trinwith (Trinwith) appeals from a judgment that denied him, and about 320 other individuals similarly situated, unemployment compensation (UC).¹ The judgment affirmed a decision of the Labor and Industry Review Commission (LIRC) denying Trinwith UC benefits. Trinwith advances two arguments: (1) that his employer, Patrick Cudahy, Inc. (Cudahy) locked him out of the establishment, and alternatively (2) that Cudahy’s hiring of replacement workers at the reduced wage scale altered his employment relationship sufficiently to create UC eligibility.² We affirm because LIRC correctly determined that Trinwith struck Cudahy and because Wisconsin Supreme Court precedent bars recovery on the replacement employees-altered relationship theory.

Trinwith filed a claim for UC. A LIRC deputy issued a determination barring Trinwith’s eligibility for benefits. See sec. 108.09(2)(b), Stats. Trinwith requested a sec. 108.09(2r), Stats., hearing before a hearing tribunal. An administrative law judge found that Trin-with left his employment because of a strike or other bona fide labor dispute and entered a decision determining his ineligibility for UC. See sec. 108.09(3)(b), Stats. Trinwith timely petitioned LIRC for review of the appeal tribunal’s decision. See sec. 108.09(6)(a), Stats. After a hearing, LIRC issued findings and a decision denying UC for the same reasons as the appeal tribunal. Trinwith brought an action for judicial review. See secs. 108.09(7) and 102.23, Stats. The circuit court entered a judgment confirming LIRC’s denial of UC. See sec. 102.23(1)(e), Stats.

LIRC’s largely undisputed findings establish that Cudahy employed Trinwith and his co-claimants in maintenance and production work. Cudahy was in the business of slaughtering swine and in the production of fresh and processed meat. Local P-40, United Food and Commercial Workers International Union (Local P-40), represented Trinwith. The most recent contract between Local P-40 and Cudahy extended from October 12, 1982 to September 1, 1985. It was extended by the parties to December 31, 1986, to allow for negotiations for a new contract. Cudahy and union representatives began negotiations in November of 1986. On December 23, 1986, Cudahy made its final offer. Two days later, Cudahy informed Local P-40 that negotiations were at an impasse and that Cudahy would implement the terms of its final offer after January 1, 1987. The offer reduced Trinwith’s salary from $9.33 to $7.35 per hour, a reduction of approximately twenty-one percent. Local P-40 and Cudahy met on December 29 and 30, 1986, but to no avail. On December 30, Local P-40 asked Cudahy to extend the contract, but Cudahy refused. The plant was closed on January 1, 1987, due to the New Year’s holiday. On January 2, Cudahy resumed production despite a high rate of absenteeism. On January 3, Local P-40 explained Cudahy’s final offer to its members. The membership voted 686 to 38 to reject Cudahy’s offer.

LIRC further found that on January 4, 1987, Local P-40 set up picket lines at Cudahy’s gates. On January 5, production and maintenance workers failed to appear for their morning shifts. To fill these positions, on January 7, Cudahy management decided to hire replacement employees. On January 9, Cudahy placed a newspaper advertisement to obtain replacement workers. After hiring replacements, the slaughtering and processing resumed gradually. A replacement employee, when hired, signed the following document:

NOTICE OF RIGHT UNDER THE NATIONAL LABOR RELATIONS ACT

I understand that I am a permanent replacement as defined by the National Labor Relations Act and as interpreted by the Employer with regard to decisions by the National Labor Relations Board and the Courts. The term “permanent replacement” does not imply or mean a guarantee of continued employment regardless of the Employer’s needs or desires. I further understand that my continued status as an employee may be contingent on decisions of the National Labor Relations Board, any of its Regional Offices, or the courts or upon agreements reached under the authority of the National Labor Relations Act with the National Labor Relations Board, any of its Regional Offices, or the Courts.

Employee Date

Clock #

By a letter of January 8, Cudahy informed Local P-40 members of the status of permanent replacement employees. The letter stated in part:

When a company hires permanent replacements in an economic strike, each striker retains his/her right to reinstatement, but only as openings occur. That is, if you offer to return to work after permanent replacements have been hired in your place, we would not have to recall you to work immediately. You would then be placed on a preferential recall list for a limited period. Thereafter, as openings occur, and if you are qualified, with seniority, we would recall you back. We would not be allowed by law to displace the permanent replacement workers to make room for you to return.

The facts as conceded by the parties and found by LIRC are binding upon this court. The application of a statute to an undisputed set of facts is a question of law. Ball v. District No. 4, Area Bd., 117 Wis. 2d 529, 537, 345 N.W.2d 389, 394 (1984). LIRC’s application of sec. 108.4(10)(a) and (c), Stats. (1985-86), to these undisputed facts is not binding upon us. See Nottleson v. DILHR, 94 Wis. 2d 106, 115-16, 287 N.W.2d 763, 768 (1980). For purposes of this opinion, we will be referring to the 1985-86 version of the lockout provision. However, sec. 108.04(10)(d), Stats., now contains the lockout provision. As to legal conclusions, we sustain the LIRC's decision if supported by a rational legal basis and if its decision comports with the law including statutes, court decisions and constitutional provisions. Wehr Steel Co. v. DILHR, 102 Wis. 2d 480, 487 307 N.W.2d 302, 306 (Ct. App. 1981), aff'd and modified, 106 Wis. 2d 111, 315 N.W.2d 357 (1982).

Ordinarily, when the legislature charges an administrative agency to apply and enforce a particular statute, we accord “great weight” to the agency’s construction and interpretation of the statute, and we will not set it aside unless clearly contrary to legislative intent. A. O. Smith Corp. v. DILHR, 88 Wis. 2d 262, 267, 276 N.W.2d 279, 282 (1979). However, in a case like this, where the question involved is one of first impression, and the commission’s interpretation does not reflect an unchallenged position, we accord the agency’s interpretation “due weight.” School Dist. of Drummond v. WERC, 121 Wis. 2d 126, 133, 358 N.W.2d 285, 289 (1984). This court accords no deference to the decision of the circuit court in deciding the issues. Schachtner v. DILHR, 144 Wis. 2d 1, 4, 422 N.W.2d 906, 907-08 (Ct. App. 1988).

Trinwith argues that Cudahy locked him out when it reduced his wages by twenty-one percent and hired replacement workers to fill the positions. He contends that exclusion from work when the existing contract expired, and refusal, upon Local P-40’s request, to negotiate further and simultaneously maintain the status quo, was a constructive lockout. See sec. 108.04(10)(c), Stats.³

Trinwith further asserts that LIRC’s narrow interpretation of “lockout” enervates the presumption of eligibility possessed by a benefit claimant. He argues that LIRC’s interpretation alleviates the duty on the part of the party contesting payment of benefits to establish disqualification. See Kansas City Star Co. v. DILHR, 60 Wis. 2d 591, 602, 211 N.W.2d 488, 493 (1973), cert. denied, 419 U.S. 870 (1974). Trinwith concedes that there was a work stoppage on January 4, 1987 to protest Cudahy’s unilateral twenty-one percent wage reduction. Trinwith relies upon a statement of the Wisconsin Supreme Court in De Leeuw v. DILHR, 71 Wis. 2d 446, 452-53, 238 N.W.2d 706, 710-11 (1976), for the proposition that the 1983 amendment of sec. 108.04(10) intended to include Minnesota’s approach to the lockout situation. The De Leeuw court stated that Minnesota takes a “different approach” to lockouts because its statute secures a public policy of permitting UC eligibility for those who become unemployed “through no choice or fault of their own.” Id. at 452-53, 238 N.W.2d at 710-11.

The central question is whether Trinwith engaged in a strike or other labor dispute or whether Cudahy locked him out. As noted, subs. (10) (c) specifically defines “lockout.” Legislative definition of a word compels our acceptance of the term as defined, and we may not look elsewhere for a definition. See Sullivan Bros., Inc. v. State Bank of Union Grove, 107 Wis. 2d 641, 646, 321 N.W.2d 545, 547 (Ct. App. 1982). If a statute is plain and unambiguous, we must apply its plain meaning. See Meunier v. Ogurek, 140 Wis. 2d 782, 766-87, 412 N.W.2d 155, 157 (Ct. App. 1987). A statute is ambiguous if reasonable, well-informed persons could disagree as to its meaning. Standard Theatres, Inc. v. State, 118 Wis. 2d 730, 740, 349 N.W.2d 661, 667 (1984). If a statute contains no ambiguity, we are not free to consult extrinsic sources to ascertain its meaning. Tahtinen v. MSI Ins. Co., 122 Wis. 2d 158, 166, 361 N.W.2d 673, 677 (1985).

We agree with LIRC that sec. 108.04(10)(c), Stats., is unambiguous and that legislative intent can be gleaned from its terms.

We start with the wording of the statute itself. Aparacor, Inc. v. DILHR, 97 Wis. 2d 399, 402, 293 N.W.2d 545, 547 (1980). Subsection (10)(a) excludes from eligibility any employee, except those in a lockout, who lost employment because of a strike or bona fide labor dispute. Subsection (c) defines lockout as “the barring of one or more employes from their employment in an establishment by an employer as a part of a labor dispute ...." Sec. 108.04(10)(c), Stats. The term "barring" is not statutorily defined. "Absent such a legislative definition, the ordinary and accepted meaning of a word used by the legislature can be established by a reference to a recognized dictionary." Goodger v. City of Delavan, 134 Wis. 2d 348, 352, 369 N.W.2d 778, 780 (Ct. App. 1986). Webster's Dictionary defines "barring" as " 1. to fasten with or as with a bar 2. to obstruct by means of a bar or bars; shut off; close 3. to oppose, prevent, or forbid, as by legal action 4. to keep out; exclude ...." Webster's New World Dictionary 111 (2d ed. 1979). We conclude that the legislature clearly intended that an employer lock an employee out of the establishment as a result of a dispute.

Trinwith argues that Cudahy’s refusal to extend the wage rate of the expired contract during negotiations was a bar to employment in the establishment. He relies extensively on two cases that indicate that a company’s failure to bargain at the expiration of a contract may constitute a constructive lockout. He also asserts that the Wisconsin legislature intended to incorporate this concept into its 1983 amendment to subs. (10) and creation of subs. (c).

In Sunstar Foods Inc. v. Uhlendorf, 310 N.W.2d 80 (Minn. 1981), the Minnesota Supreme Court upheld an agency’s finding of fact, based on substantial evidence, that Sunstar had locked out its employees. Id. . Hence, the employees were entitled to UC. The agency’s finding was made under Minn. Stats. Ann. sec. 179.01, subd. 9 (West 1980), which defined a lockout as “the refusal of the employer to furnish work to employees as a result of a labor dispute.” This definition gave the agency leeway to probe whether the lockout was caused by the employer. Subsection (10)(c), however, defines lockout as a “barring” from employment without reference to cause.

In Erie Forge, the Pennsylvania Supreme Court upheld the referee and the agency’s fact-findings that the employer locked out the claimants-employees under Pa. Stat. Ann. tit. 43, sec. 802(d) (Purdon 1960), which provided UC “due to a stoppage of work, which exists because of a labor dispute (other than a lockout) at the factory_” The Erie court determined that the agency decides, as a fact issue, the final cause of and responsibility for the work stoppage. Erie Forge, 163 A.2d at 94. In contrast, subs. (10)(c) does not require inquiry into the cause of the strike or stoppage, it only requires inquiry into whether a “barring” from employment occurred.

In Sunstar and Erie, the two courts upheld agency fact findings under statutes that required the agency to determine, for purposes of lockout, who ultimately caused a work stoppage. Subsection (10) (c) does not require such an inquiry. Therefore, since Cudahy did not bar the employee’s entrance into their place of employment, we conclude that there was no lockout under sec. 108.04(10)(c), Stats.

Alternatively, Trinwith contends that, in the event no lockout occurred, Cudahy’s conduct, particularly its unilateral reduction of wages, modified his employment status sufficiently to qualify him as eligible for UC. He asks us to limit the holding of Rice Lake Creamery Co. v. Industrial Comm’n, 15 Wis. 2d 177, 112 N.W.2d 202 (1961), to its facts.⁴ He contends that Cudahy’s January 8, 1987 announcement to Local P-40 members — that replacements would be permanent — constituted a discharge.

An issue of law is presented as to whether Cu-dahy’s act constituted a discharge. See Carley Ford, Lincoln, Mercury, Inc. v. Bosquette, 72 Wis. 2d 569, 577-78, 241 N.W.2d 596, 601 (1976).

Rice Lake controls this issue. In that case, the supreme court held that loss of employee status, not loss of employment, determined eligibility for UC benefits. See Rice Lake, 15 Wis. 2d at 185-86, 112 N.W.2d at 206. The question is whether the January 8th communication was a discharge. Trinwith insists that the wage reduction so altered his employment relationship that it vitiated any previous ineligibility for UC. However, Rice Lake addressed not a modification in the relationship, but the employer’s act of discharge. The court said “[o]rdinarily a discharge of an employee is an unequivocal unilateral act of the employer, leaving no shred of doubt of his intention.” Id. at 187, 112 N.W.2d at 207.

The January 8 communication was not a discharge, but rather, to the contrary, recited that each employee retained his or her right to reinstatement. Nor did Trinwith consider himself discharged:

Q [Cudahy attorney] Did you hear the testimony today about jobs available at Patrick Cudahy?

A [Trinwith] Did I hear that today, yes. Are you going to pay me $9.33 an hour? I’ll be happy to come back.

We conclude that LIRC correctly determined that Cudahy did not discharge Trinwith by replacing him and his co-claimants with replacement employees at a reduced wage scale. See Carley Ford, 72 Wis. 2d at 579, 241 N.W.2d at 600-01 (1976), which affirmed a DILHR finding of discharge.

In summary, we determine, as a matter of law, that LIRC’s decision and order denying Trinwith and his co-claimants UC must be affirmed because:

(1) they were engaged in a strike or bona fide labor dispute within the terms of sec. 108.04(10)(a), Stats., and were not locked out within subs, (c); and

(2) they were not discharged and their positions were not terminated.

By the Court. — Judgment affirmed.

1 For purposes of this discussion, Trinwith and his co-claimants will be collectively referred to as Trinwith.

2 Section 108.04(10), Stats., was amended, and subs, (c) was created by secs. 1 and 2 of 1983 Wis. Act 468, eff. June 3, 1984. The sections, prior to the secs. 45 and 48, 1987 Wis. Act 38 revisions, provided that:

LABOR DISPUTE, (a) An employe who has left or partially or totally lost employment with an employing unit because of a strike or other bona fide labor dispute, other than a lockout, is not eligible for benefits from the account of the employer whose employment the employe left or lost or any previous employer’s account for any week in which the strike or other bona fide labor dispute is in active progress in the establishment in which the employe is or was employed. [Emphasis added.]

(c) In this subsection, “lockout” means the barring of one or more employes from their employment in an establishment by an employer as a part of a labor dispute, which is not directly subsequent to a strike or other job action of a labor union or group of employes of the employer, or which continues or occurs after the termination of a strike or other job action of a labor union or group of employes of the employer.

Sec. 108.04(10)(a) and (c) (1985-86). See sec. 108.04(10)(d) (1987-88), which now contains the lockout provision.

Prior to its 1983 amendment, subs. (10) provided:

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.

Sec. 108.04(10) (1981-82).

3 Trinwith’s position is exemplified by Erie Forge & Steel Corp. v. Unemployment Compensation Bd. of Review, 163 A.2d 91, 93-94 (Pa. 1960), which states that the test of whether the work stoppage is the responsibility of the employer or the employees is reduced to the following:

Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the pre-existing terms and conditions of employment pending further negotiations? If the employer refuses to so extend the expiring contract and maintain the status quo, then the resulting work stoppage constitutes a “lockout”_

4 The court of appeals is required to enforce decisions and apply opinions of the supreme court. See State ex rel. Eckmann v. DHSS, 114 Wis. 2d 35, 41, 337 N.W.2d 840, 843 (Ct. App. 1983).