15. Labor Disputes

Baggett v. Riverside Osteopathic Hospital – 15.37

Baggett v. Riverside Osteopathic Hospital
Digest No. 15.37

Section 421.29(8)(a)(i)

Cite as: Baggett v Riverside Osteopathic Hospital, unpublished opinion of the Wayne County Circuit Court, issued February 19, 1999 (Docket No. 98-820404-AE).

Appeal pending: No
Claimant: Shelby Baggett, et al.
: Riverside Osteopathic Hospital
Docket no.: 98-820404-AE
Date of decision: February 19, 1999

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HOLDING: Claimants who were on strike had not been “permanently displaced,” and therefore a labor dispute was the cause of their unemployment, which disqualified claimants for benefits under Section 29(8)(a)(i) of the MES Act.

FACTS: Claimants went on strike May 24, 1990 and returned to work on October 19, 1990. After July 8, 1990, the employer began hiring employees who subsequently became “permanent” employees. From the date the strike began to the end of the strike, positions for the striking employees were available upon their return. Claimants were returned to their positions after the strike. During the strike, claimants applied for unemployment benefits. The Board of Review determined claimants disqualified for benefits.

DECISION: The circuit court affirmed the Board of Review’s decision, which found the claimant to be disqualified for benefits due under Section 29(8)(a)(i) of the MES Act.

RATIONALE: Section 29(8) of the MES Act reads in relevant part: “(a) An individual is disqualified from receiving benefits for a week in which the individual’s total or partial unemployment is due to either of the following: (i) A labor dispute in active progress at the place at which the individual is or was last employed, or a shutdown or start-up operation caused by that labor dispute.” The circuit court read the Michigan Supreme Court case of Plymouth Stamping v Lipshu, 436 Mich 1 (1990), to suggest that Section 29(8) means, “If there is a position open for a striking worker, he/she is ineligible for unemployment benefits.” But, if claimants were permanently displaced then the labor dispute would no longer be the cause of their unemployment, and the claimants would thus be eligible for benefits. Here, the circuit court determined that the striking employees had permanent positions to return to and and that those employees were, in fact, returned to those positions at the end of the strike. Further, these positions were available to claimants throughout the strike. Thus, the Board of Review’s conclusion that claimants were not permanently displaced was supported by substantial evidence.

Digest Author: Adam Kleven, Michigan Law, Class of 2018
Digest Updated: 3/27/2016

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

Alexander v. A.P. Parts Manufacturing Co. – 15.36

Alexander v. A.P. Parts Manufacturing Co.
Digest No. 15.36

Section 421.29(8)

Cite as: Alexander v AP Parts Manufacturing Co., unpublished per curiam opinion of the Court of Appeals, issued February  23, 1996 (Docket No. 168700).

Appeal pending: No
Claimant: David J. Alexander, Louise Anderson, Charles Arndt, Bruce Berthiaume, Wyatt Boyer, Robert Beuchel, Paul Chomas, George Clark, Richard Courtney, Cheryl Dehate, Dean Fenwick, George Fittig, and Jacob Gotfryd
Employer: A.P. Parts Manufacturing Company
Date of decision: February 23, 1996

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HOLDING: Court applied the deferential standard to the decision of the MESC Board of Review. Reversed the Circuit Court opinion and reinstated the MESC Board of Review’s decision. There exists substantial evidence on the whole record to support the board of review’s conclusion that the labor dispute was connected with the lockout. Ruling of the board of review is supported by competent, material, and substantial evidence on the whole record.

FACTS: Employer manufactures parts for the automobile and heavy truck industry and employed approximately 206 union employees and 75 nonunion employees. In October 1989, employer hired 10-12 additional employees and began to operate two shifts .In December 1989 employer issued a “WARN” letter advising its employees that some employees may be laid off if a new collective bargaining agreement was reached on or about February 8, 1990 (the date the then existing one was set to expire). On February 5, 1990, when employer determined it had sufficient inventory in the warehouse, it laid off the 10-12 nonunion employees it had hired in Oct 1989. On February 8, 1990, immediately after union employees rejected the collective bargaining agreement that the employer had proposed, the employer announced that its operation would be shut down for the next two working days due to an “inventory adjustment”. On February 13, 1990 the employer announced a “lockout” that affected all union employees. Claimants immediately began to picket. Union employees rejected a third proposal and employer ended the lockout by notifying its employees to return to work. However, 75 employees were laid off one additional week due to “lack of work”.


  • Determined that claimants were disqualified from receiving unemployment compensation because their temporary unemployment was related to a labor dispute (and the state must remain neutral in labor disputes).
  • In an evidentiary hearing, an MESC referee rejected the employer’s claim that the lockout was related to a labor dispute and hence found that claimants were entitled to unemployment benefits.

MESC Board of Review:

  • Reversed the decision of the referee two-to-one.
  • Concluded that:
    • (1) employers had “warehoused” its product in order to improve its bargaining position in the event of a labor dispute, and
    • (2) claimants were disqualified from receiving benefits under MCL 421.29(8) because the labor dispute that developed was a substantial contributing factor to the lockout.

Circuit Court

  • Reversed the ruling of the board of review

DECISION: Circuit court erred in reversing the decision of the MESC Board of Review.

RATIONALE: “Substantial evidence” means more than a mere scintilla but less than a preponderance of the evidence. So long as the MESC Board of Review selected between two reasonable positions, the judiciary must accord deference to administrative expertise and refrain from substituting its own judgment for that of the administrative agency. Court applied the deferential standard to the decision of the MESC Board of Review.

Digest author: Katrien Wilmots, Michigan Law, Class of 2017
Digest updated: 3/30/2016

10. Voluntary Leaving

Degi v Varano Glass Co – 10.19

Degi v Varano Glass Co
Digest no. 10.19

Section 29(1)(a) and 29(8)

Cite as: Degi v Varano Glass Co, 158 Mich App 695 (1987).

Appeal pending: No
Claimant: Paul G. Degi
Employer: Varano Glass Company
Docket no.: B84 09066 97679W
Date of decision: January 27, 1987

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COURT OF APPEALS HOLDING: Where an employer has promised additional compensation to a claimant for taking on new duties, the employer’s failure to provide that additional compensation constitutes good cause attributable to the employer. A worker, who is not acting in concert with other employees and is discharged after protesting wages, hours, or working conditions is not engaged in a labor dispute.

FACTS: Claimant worked in the employer’s flat glass department. On his own claimant had acquired skills in making beveled and stained glass. The employer decided to start an art glass department. Claimant agreed to work there. An increase in claimant’s wages was discussed. Claimant had a proposed employment contract prepared and presented it to the employer. Claimant spent 2 months performing tasks related to art glass work but did not receive a wage increase. Claimant advised the employer he would not continue in the art glass department without a contract. The employer advised him to continue working in the art glass department or punch out. Claimant punched out and did not return.

DECISION: Claimant is not disqualified for voluntarily leaving his employment since he had good cause attributable to the employer for leaving.

RATIONALE: “On the facts of this case, a reasonably prudent person would be justified in giving up employment. The employer’s activity would motivate the average able-bodied and qualified worker to give up his or her employment in such a situation.”

“We conclude that a worker who is not acting in concert with other employees, but rather who is individually protesting wages, hours and working conditions to his employer and who is summarily discharged, is not engaged in a “labor dispute” as that phrase is used in Section 29()[sic]. To hold otherwise would be to unduly broaden the commonly understood meaning of the phrase ‘labor dispute'”.

Digest Author: Board of Review (original digest here)
Digest Updated: 11/90

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

12. Misconduct

Cassar v MESC – 12.04

Cassar v MESC
Digest no. 12.04

Section 29(1)(b)

Cite as: Cassar v MESC, 343 Mich 380 (1955).

Appeal pending: No
Claimant: Francis J. Cassar, et al.
Employer: Precision Manufacturing Co.
Docket no.: B2 5713 14896
Date of decision: October 3, 1955

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SUPREME COURT HOLDING: (1) Participation in an unauthorized work stoppage, in violation of a union contract, is misconduct. (2) Inefficiency is not misconduct, but wilful disregard of an employer’s interest is.

FACTS: All eight claimants took part in an unauthorized work

stoppage precipitated by the discharge of their local union president. They were discharged for refusal to return to work.

DECISION: The claimants were discharged for misconduct.

RATIONALE: The Court adopted the following definition of misconduct from Boynton Cab Co v Neubeck, et al., 237 Wis 249 (1941): “[T]he term ‘misconduct’ … is limited to conduct evincing such wilful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligation to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion are not to be deemed ‘misconduct’ within the meaning of the statute.”

The Court stated: “Plaintiffs have barred themselves from receiving what they might have obtained had they refrained from indulging in conduct designed to be prejudicial to the rights of their employer.”

Digest Author:  Board of Review (original digest here)
Digest Updated: 11/90