U.S. Tsubaki, Inc. v. Dir., Ohio Dept. of Job & Family Servs.

2016 Ohio 851
Ohio Court of Appeals·Decided March 4, 2016·No. E-15-009·Published

Opinion

IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT

ERIE COUNTY

U.S. Tsubaki, Inc. Court of Appeals No. E-15-009 Appellant/Cross-Appellee Trial Court No. 2012-CV-0510 v.

Director, Ohio Department of Job & Family Services, et al. DECISION AND JUDGMENT

Appellee/Cross-Appellant Decided: March 4, 2016

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Robert E. Dezort and William E. Blackie, for appellant/cross-appellee.

Mike DeWine, Ohio Attorney General, and Eric A. Baum, Managing Attorney, for appellee/cross-appellant.

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PIETRYKOWSKI, J.

{¶ 1} This is an appeal and cross-appeal of the judgment of the Erie County Court of Common Pleas, affirming the decision of the Unemployment Compensation Review Commission, which disallowed an appeal from the hearing officer’s award of unemployment compensation benefits to 86 employees of appellant/cross-appellee, U.S. Tsubaki, Inc. (“UST”). For the reasons that follow, we affirm, in part, and reverse, in part.

I. Facts and Procedural Background

{¶ 2} The background facts are not in dispute. UST operates a manufacturing plant in Sandusky, Ohio, that employs approximately 125 workers, 94 of whom are members of the International Association of Machinists and Aerospace Workers.

{¶ 3} On January 30, 2011, a three-year collective bargaining agreement was set to expire. Prior to that deadline, management and the union negotiating team reached a tentative agreement. However, that agreement was voted down by the union members, and a separate vote was held to go on strike beginning January 31, 2011, at midnight. Third shift workers reported for work at 11:00 p.m. on January 30, 2011, worked for one hour, then began to strike. Negotiations continued, and a second tentative agreement was reached on February 10, 2011. However, this agreement was also rejected by the union membership. At no time did either UST or the union offer to continue employment under the terms of the recently expired collective bargaining agreement.

{¶ 4} Initially following the strike, UST attempted to maintain its operations with its management and supervisory employees along with workers from some of its other facilities. After some time, UST could no longer maintain its operations in this fashion, and it made the decision to hire replacement workers. An advertisement was placed in the local newspaper seeking workers. The ad did not specify whether the employment was permanent or temporary. On February 18, 2011, the first replacement workers were hired. For the next several days, UST hired approximately seven to nine workers per day. At the time of the unemployment compensation hearing on March 14, 2011, 72 replacement workers were on UST’s payroll.

{¶ 5} At the hearing, Thomas Barton, a senior vice president of UST, testified that the replacement workers were permanent replacements, specifying that they were directly hired by UST and that they displaced the striking employees. However, he stated that if any striking worker offered to return to work under the terms and conditions of the expired contract, UST would allow them to come back for one of the positions still available. Barton testified that of the 88 original positions,1 there may be fewer than 16 still available as UST has realized through an operational analysis that it may be able to reduce the total head count. At the time of the hearing, no striking worker had crossed the picket line or offered to return to work.

{¶ 6} Barton further testified that UST never advised the union or any striking employee that he or she would not be able to continue working under the terms and conditions of the expired contract, nor did UST verbally, or in writing, notify the union or any striking employee that he or she had been permanently replaced or that his or her job no longer existed. Barton continued, testifying that no striking employee has been

1 Although there were 94 union members, approximately six of them were on disability or some other type of leave, resulting in only 88 positions.

terminated since the work stoppage began, and that there are still positions available that could be filled by qualified striking employees.

{¶ 7} Following Barton’s testimony, three documents were entered into evidence.

The first and second documents were the first and second tentative agreements, respectively. The third document was a tally sheet that tracked how many replacement workers were hired each day beginning on February 18, 2011. No other evidence or testimony was presented at the hearing.

{¶ 8} On March 24, 2011, the hearing officer entered his decision, finding that the claiming employees were unemployed due to a labor dispute other than a lockout beginning on January 31, 2011, but that UST severed the labor dispute as the cause of the unemployment on February 18, 2011, when it began hiring permanent replacement workers. In reaching its conclusion, the hearing officer took official notice of an advertisement placed in the local newspaper, and relied on such notice, coupled with the testimony from the hearing in the presence of nearly two dozen claimants, to find that the intent was to permanently replace the striking employees beginning on February 18, 2011. The hearing officer commented that “Any other interpretation would be tantamount to approval of a legal fiction.” Therefore, the hearing officer concluded that the claimants were entitled to unemployment compensation benefits beginning February 18, 2011.

{¶ 9} UST appealed the hearing officer’s decision to the Unemployment Compensation Review Commission, which disallowed the appeal after a review of the entire record.

{¶ 10} UST then filed an administrative appeal in the Erie County Court of Common Pleas. In the trial court, UST argued that the Commission’s decision was unlawful, unreasonable, and against the manifest weight of the evidence. As support for its argument, UST cited the lack of any notice sent to the union or to the striking employees, notifying them that they were terminated, that their positions were permanently filled, or that UST intended to hire permanent replacements. Furthermore, UST relied on the testimony from the hearing that there has been work available since the beginning of the strike, and that positions still existed which could be filled by qualified striking employees.

{¶ 11} Appellees/cross-appellants, the Director of the Ohio Department of Job and Family Services and the 86 claimants (collectively referred to as “ODJFS”), argued that the issue of notice was secondary to the issue of intent, and the intent of UST to permanently replace the striking employees was clear. ODJFS further argued that sufficient notice was given to the striking employees through newspaper advertisements and articles.

{¶ 12} On review, the trial court affirmed, in part, and reversed, in part, the decision of the Commission. The court reasoned that written notice to striking employees that they are being terminated is not a required element to find that the employees are entitled to unemployment compensation. However, the court also rejected the notion that notice is unimportant, finding that it is a critical factor that “illuminates the employer’s intent to permanently replace the striking worker and sever the employment relationship. Notice may also shed light on whether the employee has any volition in returning to work.”

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U.S. Tsubaki, Inc. v. Dir., Ohio Dept. of Job & Family Servs., 2016 Ohio 851 (Ohio Ct. App. 2016).

2016 Ohio 851 (U.S. Tsubaki, Inc. v. Dir., Ohio Dept. of Job & Family Servs.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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