15. Labor Disputes

Empire Iron Mining Partnership v Orhanen – 15.40

Empire Iron Mining Partnership v Orhanen
Digest No. 15.40

Section 421.29(8)(b)

Cite as: Empire Iron Mining P’ship v Orhanen, 455 Mich 410; 565 NW2d 844 (1997).

Court: Michigan Supreme Court
Appeal pending:No
Claimant: Orhanen, et. al.
Employer: Empire Iron Mining Partnership
Date of decision: July 29, 1997

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HOLDING: Workers who obtain interim employment from one or more employers for at least two consecutive weeks during a strike are not barred from requalification under Section 29(8)(b). There is no subjective “good faith” requirement imposed on Section 29(8)(b).

FACTS: Sixteen employees were on strike for four months in 1990. They each obtained interim employment for at least two weeks from one or more employers and earned wages equal to or greater than their benefit rate. When laid off from these interim jobs these workers applied for unemployment benefits.

DECISION: Working for multiple employers does not disqualify claimants involved in a labor dispute from meeting the requalification requirements in Section 29(8)(b), and there is no subjective good faith requirement in that section.

RATIONALE: Section 29(8) states that a worker is disqualified from receiving benefits if his or her unemployment is caused by a labor dispute. However, under part (b) of that Section, a worker may become re-qualified for benefits “if the individual performs services in employment with an employer in at least 2 consecutive weeks. . . [and] earns wages in each of those weeks in an amount equal to or greater than the individual’s actual or potential weekly benefit rate.”

The Michigan Supreme Court decided that, given the remedial purpose of the MESA, “we follow the primary rule of statutory construction for cases interpreting the MESA: a “liberal” construction to afford coverage and a “strict” construction to effect disqualification.” To explain its liberal statutory interpretation of Section 29(8)(b), the Court further stated that the “MESA was enacted primarily for the benefit of persons involuntarily unemployed. Its purpose is to lighten the burden of economic insecurity on those who become unemployed through no fault of their own.” Therefore, the Court decided, “an employer” under the requalification provision in Section 29(8)(b) could mean multiple employers.

The Court also declined Empire Iron’s request to read a subjective good faith requirement into the statute. The statutory requirements for requalification are objective and the MESA does not contemplate investigation of a claimant’s subjective motivation. “Given the remedial purpose of the [MESA] and the potential to overload the system if subjective criteria were adopted, we will not tread where the Legislature has refused to go. Inquiry into the subjective elements of an employee’s employment is outside the bounds of the act.”

Digest author: Sarah Harper, Michigan Law, Class of 2017 (View original digest)
Digest updated: December 26, 2017

15. Labor Disputes

Trombley v. St. Francis Hospital – 15.39

Trombley v. St. Francis Hospital
Digest No. 15.39

Section 421.29(8)

Cite as: Trombley v St Francis Hospital, unpublished opinion of the Michigan Court of Appeals, issued September 20, 1983 (Docket No. 64505).

Appeal pending: No
Claimant: Peggy L. Trombley
Employer: St. Francis Hospital
Date of decision: September 20, 1983

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HOLDING: A claimant who receives a letter informing him that his job has been permanently replaced while he is striking against his employer is still disqualified from benefits under MCL 421.29(8) because a permanent replacement letter, absent other evidence, does not constitute an immediate discharge.

FACTS: Plaintiffs consist of 120 employees of St. Francis Hospital, including Trombley. These employees were all members of the American Federation of State, County, and Municipal Employees (“AFSCME”) union. The employees’ contracts with St Francis Hospital expired on February 28, 1978. Negotiations for new contacts began in December of 1978, but no new agreement was reached.

Due to the failed negotiations, AFSCME sent the hospital a notice of the union’s intent to strike. Approximately 185 AFSCME employees commenced a strike against St. Francis. On the first day of the strike, the hospital administrator sent each striking employee a letter stating the hospital would seek temporary and permanent replacement employees if the strike did not subside. The employees maintained their strike, so St. Francis began hiring permanent replacements. When a replacement was obtained, an employee would receive a form letter stating they were permanently replaced. By the end of the strike, 99 AFSCME employees who participated in the strike were permanently replaced while 62 were not. These individuals sought unemployment compensation benefits for the time spent unemployed during the strike.

The Agency issued an initial determination disqualifying all striking employees from benefits under MCL 421.29(8). Shortly after, the Agency issued a redetermination permitting only employees who were permanently replaced to seek benefits.

An ALJ reversed the Agency’s redetermination and found that all employees were entitled to benefits. The MESC Board of Review reversed the ALJ’s decision and reinstated the initial redetermination, granting benefits to only the employees who were permanently replaced. The Delta County Circuit Court found all the AFSCME employees disqualified from benefits.

DECISION: The Court of Appeals affirmed the Delta County Circuit Court’s decision that all employees, regardless if they were permanently replaced or not, were disqualified from benefits under MCL 421.29(8).

RATIONALE: The employees who were not permanently replaced are disqualified under MCL 421.29(8)(a)(i), which forbids an employee from collecting unemployment when the employee participates in “a labor dispute in active progress at the place at which the individual is or was last employed.” Because the employees were engaged in a labor dispute which was “a substantial, contributing cause of their unemployment,” they were not eligible for benefits.

The employees who were permanently replaced argued that the letter from the hospital to individually replaced employees during the strike constituted a discharge. Since they were discharged, the employees argued the labor dispute disqualification under MCL 421.29(8) did not apply to them because the employees who were permanently replaced no longer worked for the hospital. The Court of Appeals denied this argument because the record did “not support a factual finding that those employees who received a permanent replacement letter were discharged as of the date of the letter.” The Court noted this is not a “per se rule that a permanent replacement letter, by itself, can never constitute a discharge.”

For the above reasons, the Court of Appeals denied all employees the benefits they sought under MCL 421.29(8).

Digest author: Sean Higgins, Michigan Law, Class of 2017
Digest updated: November 26, 2017