The opinion
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
ATI Flat Rolled Products LLC, : CASES CONSOLIDATED
Petitioner :
:
v. : Nos. 226-230 C.D. 2024
: &
Unemployment Compensation : 232-252 C.D. 2024
Board of Review, :
Respondent :
Allegheny Technologies Incorporated, :
Petitioner :
:
v. : No. 231 C.D. 2024
:
Unemployment Compensation :
Board of Review, :
Respondent : Argued: February 4, 2025
BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge
HONORABLE STACY WALLACE, Judge (P.)
HONORABLE MATTHEW S. WOLF, Judge
OPINION BY JUDGE WOLF FILED: March 6, 2025
These 27 consolidated matters present a single question: whether a
work stoppage that began as a strike was converted into a lockout by the action of
the employer, thus rendering the striking employees not ineligible for unemployment
compensation (UC) benefits under Section 402(d) of the UC Law.1 Employer ATI
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(d).
Flat Rolled Products LLC (ATI)2 challenges 27 substantially similar decisions of the
UC Board of Review (Board) mailed February 1, 2024, affecting requests for UC
benefits made by the claimants in these matters (Claimants).3 Claimants are
represented by various locals of the United Steelworkers (Union or USW) under a
Collective Bargaining Agreement (CBA) between the Union and ATI. Claimants
requested UC benefits while out of work due to a strike the Union initiated after the
CBA’s term expired. During the strike, several Claimants requested loans against
their ATI-sponsored retirement savings accounts, as permitted in the CBA and
associated agreements. ATI denied those requests, citing past practice and
procedure. We conclude that the Board correctly determined that ATI changed the
status quo, thus converting the strike into a lockout and making Claimants eligible
for UC benefits. We thus affirm the Board’s decisions granting benefits.
ATI operates industrial facilities in western Pennsylvania at which
Claimants were or are employed as steelworkers. On behalf of Claimants and other
employees, the Union negotiated and entered into several related labor contracts with
ATI, which together form the CBA. The present version of the CBA was initially
in force from March 1, 2016, through February 29, 2020. The Union and ATI
extended the term of the CBA through February 28, 2021. When the CBA’s term
expired at the end of February 2021, the Union and ATI agreed that employees
2
We use ATI to refer to both the LLC and Allegheny Technologies, Inc., a related entity that
employs some of the Claimants in this matter.
3
Six particular Claimants participated below as representatives of all Claimants at particular
work locations of ATI. The representative Claimants are Randy Denman (USW Local 7139, No.
229 C.D. 2024); Lance Jablonski (USW Local 1196, No. 234 C.D. 2024); John Provenzano (USW
Local 1138-1, Nos. 240-241 C.D. 2024); Brenda Moran (USW Local 1138, No. 249 C.D. 2024);
Keith Beavers (USW Local 1138, Nos. 250-251 C.D. 2024); and Randall Freiss (USW Local 1217,
Nos. 230-231 C.D. 2024).
2
would continue working under the same terms and conditions while they attempted
to negotiate a successor CBA.
However, on March 26, 2021, the Union gave ATI notice of its intent
to terminate the extension of the CBA and commence a strike at 7:00 a.m. on March
30, 2021. The stated reason for the strike was that negotiations for a new CBA had
failed. ATI responded that it would maintain the status quo and current terms and
conditions of employment if the strike occurred. The strike began as scheduled on
March 30, 2021, and Claimants and all ATI employees covered by the CBA ceased
work.
In April 2021, while on strike, multiple Union members requested loans
against their 401(k) retirement accounts sponsored by ATI, which the relevant
401(k) plan (Plan) generally authorizes, as is stated in the Plan document referred to
in the CBA (Plan Document). ATI denied the requests for loans. On April 22, 2021,
a Union representative contacted ATI’s Director of Human Resources to request a
copy of ATI’s Plan documents, and alleged that some requests for loans had been
wrongfully denied. ATI’s personnel provided the requested documents but also
explained that they did not address loan eligibility because that was a matter of
administrative discretion, and ATI typically does not offer 401(k) loans to
employees who are on unpaid leave. The Union and ATI continued to correspond
regarding Claimants’ eligibility for 401(k) loans but did not resolve the dispute.
On July 13, 2021, the Union ratified a new labor agreement, including
a negotiated return to work. Claimants returned to work beginning July 19, 2021,
with all Claimants who intended to return4 having done so by July 26, 2021.
4
Some Claimants chose to quit their positions during the strike and thus did not return to work
when the strike ended. See, e.g., Certified Record (C.R.) at 349 (Board Decision regarding
(Footnote continued on next page…)
3
During the strike, Claimants had applied for UC benefits pursuant to
the UC Law. In Notices of Determination issued November 19, 2021, the
Department of Labor and Industry denied all Claimants UC benefits, reasoning that
they were on strike and thus ineligible for benefits under Section 402(d) of the UC
Law5 for weeks ending April 3, 2021, through July 31, 2021. All Claimants appealed
that determination.
UC Referee Anthony Kopetsky held a consolidated hearing on the
appeals on July 11-12, 2022. The Referee initially admitted various documents into
the record, including the expired CBA and the Plan Document. C.R. at 1245-46.
Section 18.01 of the CBA references the Plan Document, stating that “[p]ension
benefits are currently provided for pursuant to a separate agreement between [ATI]
and the Union.” Id. at 1315. Section 7.6 of the Plan Document makes employees
eligible for Plan loans and sets forth certain conditions on those loans.6 See
Claimant Michael Sawhook, noting that Mr. Sawhook “permanently quit his position on . . . June
30, 2021,” and finding him ineligible for UC benefits for that reason from July 3, 2021, onward).
5
Section 402(d) of the Law makes an employee “ineligible for compensation in any week . .
. [i]n which his unemployment is due to a stoppage of work, which exists because of a labor dispute
(other than a lock-out).” 43 P.S. § 802(d).
6
Section 7.6 of the Plan Document provides, in relevant part:
Loans.
(a) A Participant who is employed by [ATI] may apply for a loan in accordance
with Plan procedures from the Participant’s Account. . . . Loans may be subject to
a loan initiation fee.
(b) Each loan shall be in an initial principal amount of no less than $500. In no
event shall a loan exceed the lesser of one-half of a Participant's Account Balance
in his or her Accounts or $50,000.
(Footnote continued on next page…)
4
generally C.R. at 1381-1420 (Plan Document). Article IX of the Plan Document
contemplates a “Plan Administrator” who has “all powers necessary to effect the
terms of the Plan” and “complete discretionary authority to construe, interpret and
apply all of the terms of the Plan, including all matters relating to eligibility . . . and
any dispute of allegedly doubtful terms.” Id. at 1413. The parties also introduced
the summary plan description ATI provides to its employees. See C.R. at 1353-79.
(c) A loan shall be secured by the Account Balance in the Plan, which security shall
give the Trustee a first lien in such entire Account Balance (including all amounts
that become part of such Account Balance before the loan is repaid) to the extent
of the entire outstanding amount of such loan, unpaid interest thereon, and all costs
of collection.
(d) In the event of a default on the loan, any balance due on the loan shall
immediately be due and payable and shall be repaid out of the Participant's Account
Balance, and his or her Account Balance shall be reduced accordingly; provided,
however, that no recourse shall be available against his or her Account in the event
of a default until distribution of such Account is permitted by law.
(e) A Participant may apply for either of two types of loan, a general purpose loan
or a residential loan. General purpose loans must be repaid ratably over a period
not less than six months and not more than 60 months, and residential loans must
be repaid ratably over a period not less than 61 months and not more than 180
months. The amortization and interest rates shall be set by the Administrator in
accordance with [(the Employment Retirement Security Act of 1974, Pub. L. No.
93-406, 88 Stat. 829, as amended, 29 U.S.C. § 1002[-1461] (ERISA)] and
prevailing commercial conditions but shall in no event be less favorable to
Participants than comparable loans made to salaried employees under other
qualified Plans of the Employer.
(f) A Participant may have no more than three loans outstanding.
(g) A Participant who has separated from service may make arrangements through
the Administrator to continue to repay his or her loan.
(h) A Participant may make partial loan payoffs.
C.R. at 1404.
5
The summary states: “If you are an active employee and you have a Plan account of
at least $1,000, you may take out a loan. Employees who have retired or [were]
terminated are not eligible to request a loan since repayment is through payroll
deductions.” Id. at 1372. The summary is not controlling, and to the extent there is
any conflict with the Plan Document, the latter prevails. Id. at 1252.
Four of the six representative Claimants were present at the hearing,
and they presented the testimony of Rachael Davis, the Union employee who had
communicated with ATI regarding the Plan Document. Ms. Davis explained that
ATI’s 401(k) Plan is a tax-sheltered savings plan where the employee can save their
money, to which ATI contributes in some cases. C.R. at 1249. She stated that
individual steelworkers who have 401(k) accounts are participants in the Plan and
remain employees of ATI even when they are on strike or on a work stoppage. Id.
at 1251-52. She described her email exchange with Terry Brown, noting Mr. Brown
stated that ATI treats employees on unpaid leave as ineligible for loans against their
Plan accounts. Id. at 1251. Ms. Davis pointed out—and the emails introduced into
evidence confirm—that Mr. Brown conceded that the Plan Document itself does not
contain any restriction limiting loan eligibility to those in paid status. Id.; see id. at
1421-23. Ms. Davis explained that ERISA requires there to be a written document
controlling the Plan. Id.
On cross-examination, Ms. Davis admitted that she was not aware of
any cases where ATI has deviated from its practice of denying new Plan loans to
employees on unpaid status, and that she had no knowledge how many employees
had been denied Plan loans. Id. at 1254-55.
Employer presented, among other witnesses,7 the testimony of Terrance
7
Employers’ remaining witnesses testified regarding issues unrelated to those which ATI
challenges on appeal.
6
Brown, Senior Director of Human Resources for ATI, who also serves as ATI’s Plan
Administrator. Mr. Brown testified that there had never been a time when employees
on unpaid status of any kind were allowed to initiate a loan against their 401(k)
account. C.R. 1270, 1272, 1273. He stated that the reason for this was that loans
were paid back by automatic payroll deduction, and if there was no pay, the loan
would not be repaid. Id. at 1270-71. In support, Mr. Brown stated that the “Plan
procedures” referenced in Section 7.6(a) of the Plan Document do not allow for a
new loan to be initiated by an employee in unpaid status. Id. He testified that these
procedures were directions from ATI to a third party who administers the Plan. But
he conceded that there are no written “Plan procedures” that are available to
employees, “just sort of a working document between [] ATI and [the] third party.”
Id. at 1272. On cross-examination, Mr. Brown clarified that under the pre-2016
CBA and Plan, ATI applied the same practice of denying Plan loans for unpaid
employees.
On October 14, 2022, the Referee issued a series of decisions, including
ten representative decisions addressing ineligibility under Section 402(d) at separate
work locations, six individual decisions relating to Claimants who were on disability
leave at the time the strike commenced and joined it later, and seven individual
decisions relating to Claimants who voluntarily resigned employment during the
strike. In all decisions, the Referee found that the employees were not locked out of
the workplace by ATI, and he denied benefits pursuant to Section 402(d) of the UC
Law. The Referee specifically reasoned that ATI’s longstanding practice had been
to deny loans for employees in unpaid status, such that ATI did not convert the strike
into a lockout by continuing to follow that practice for Claimants. See, e.g., C.R. at
13-16. Claimants appealed to the Board.
7
The Board initially issued decisions in six of the appeals affirming the
Referee’s decision on August 28, 2023. However, on October 6, 2023, the Board
vacated those affirmances and thereafter, on February 1, 2024, the Board issued final
orders in each of these claims reversing the Referee’s decisions. The Board
concluded that, on or about April 22, 2021, the strike was converted to a lockout by
ATI’s unilateral action related to 401(k) loans, and Claimants were thus not
ineligible for benefits under Section 402(d). The Board made its own credibility
determinations in support of that decision and reasoned, in relevant part, as follows:
Section 7.6 of the Plan Document contains various
enumerated restrictions regarding who is eligible for a
loan. None of these enumerated restrictions state that
employees on an unpaid leave are ineligible for a loan.
While [ATI] may have previously denied loans to
Participants on unpaid leave based upon its interpretation
of the Plan Document, this amounts to no more than a past
practice which is not an express term of the expired CBA.
Therefore, it is not relevant in determining the status quo.
Even though its language is not controlling given the
existence of the Plan Document, in the Plan Summary that
[ATI] provided to Participants for informational purposes
only, it states that “[i]f you are an active employee and you
have a Plan account of at least $1,000, you may take out a
loan.” It only mentions employees who have retired or
were terminated as being ineligible to request a loan and
says nothing about employees on an unpaid leave.
[ATI’s witness Mr. Brown] testified that “Plan
procedures” referenced in Section 7.6(a) of the Plan
Document refers to administrative procedures that were
established with a third party that administers the [P]lan
on [ATI’s] behalf, and that those procedures do not allow
for new loans to Participants on unpaid leave. When asked
if these procedures were written down anywhere, [ATI’s]
witness testified[:] “Nothing that would be available to
participants. Just sort of a working document between
8
employer, ATI, and the third party.” [ATI], however, did
not provide a copy of this working document to the Union,
and did not submit a copy into evidence.
To the extent that the contents of a third-party agreement
that was never made available to the Union and was not
offered into evidence by [ATI], is relevant in determining
the express terms in the expired CBA, the Board does not
find credible the testimony of [Mr. Brown] that the express
terms in that document do not allow for new loans to
Participants on unpaid leave. Therefore, in reviewing the
express terms of the expired CBA and the Plan Document,
the Board concludes that [ATI] altered the status quo when
it refused to grant loans to striking Union members from
their 401(k) accounts in contravention of the express terms
of the Plan Document.
C.R. at 29. This appeal followed.
On appeal,8 ATI raises two issues. It first argues that the Board erred
in concluding that ATI disrupted the status quo by continuing the practice of denying
Plan loans to employees in unpaid status. In ATI’s view, no action by ATI converted
the strike into a lockout, so Claimants are ineligible under Section 402(d). Second,
though ATI concedes that the Board is the ultimate finder of fact, it claims the Board
erred in not crediting Mr. Brown’s testimony regarding Plan procedures because no
substantial evidence supported that credibility determination.
Under Section 402(d) of the UC Law, eligibility for benefits turns on
whether a work stoppage resulted from a lockout, or instead from some other labor
dispute (such as a strike). To make that distinction, we apply the following test
announced by our Supreme Court in Erie Forge & Steel Corp. (Vrotney) v.
Unemployment Compensation Board of Review, 163 A.2d 91 (Pa. 1960): “Have the
8
When reviewing decisions of the Board, we determine whether constitutional rights were
violated, whether an error of law was committed, and whether necessary findings of fact are
supported by substantial evidence. 2 Pa. C.S. § 704.
9
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 the contract negotiations?” Id. at 93. And “has the employer agreed
to permit work to continue . . . under the pre-existing terms and conditions?” Id. If
the employer does not so offer, it will have failed to “maintain the status quo,” and
“the resulting work stoppage constitutes a ‘lockout’” which does not disqualify the
employees from receiving UC benefits. Id. at 93-94.
Under that test, the “status quo” is “the last actual, peaceable and
lawful, non-contested status which preceded the controversy.” Miceli v.
Unemployment Comp. Bd. of Rev., 549 A.2d 113, 116 (Pa. 1988) (quoting Fairview
Sch. Dist. v. Unemployment Comp. Bd. of Rev., 454 A.2d 517, 520 (Pa. 1982)). But
our Supreme Court has limited the scope of what we and the Board can consider
when defining the status quo: we look only to “the pre-existing terms and conditions
of employment which . . . are embodied in the expired agreement,” and we may not
consider “the previous conduct of the parties.” Id. at 118. We would “err[] in
interpreting Miceli to permit the consideration of ‘past practices’ beyond the express
terms of the parties’ CBA in determining what constitutes the status quo.” Behers
v. Unemployment Comp. Bd. of Rev., 842 A.2d 359 (Pa. 2004). This “clear and
simple rule” is intended to promote speedy and efficient administrative resolution of
UC benefits disputes. Id.; see Greer v. Unemployment Comp. Bd. of Rev., 4 A.3d
733, 740 (Pa. Cmwlth. 2010).
Employer argues that the Board overread the rule announced in Miceli
and Behers, and it would distinguish those holdings as being limited to instances
where the past practice is inconsistent with the labor agreement, not merely absent
from it. Here, Employer claims that the past practice—denying Plan loans to
10
employees who are in an unpaid status—was not inconsistent with the CBA because
the Plan Document states that Plan loans are to be made under the plan procedures,
and the restriction was an established procedure. Employer adds that, when read as
a whole, the Plan Document does not guarantee Plan loans to all employees.
Employer also emphasizes the Plan Administrator’s “complete discretionary
authority” to administer the Plan. C.R. at 1413. In response, the Board notes
neither the CBA nor the Plan Document expressly establish any limit on Plan loans
related to unpaid status. The Board thus argues that to recognize such a limit as part
of the status quo would run afoul of the clear rule Behers emphasized. Claimants
make that same argument, and add that the Plan Document explicitly states that Plan
loans are secured by the Plan account balance, not an income stream, which means
that the rationale Mr. Brown expressed for denying loans to unpaid employees is
inconsistent with the express terms of the Plan Document and, by extension, the
CBA.
We agree with the Board and Claimants that this matter falls within the
clear rule our Supreme Court has reminded us to apply. In Miceli, union members
refused to perform overtime work. 549 A.2d at 114. The employer argued that
refusal changed the status quo because employees had voluntarily worked overtime
in the past. Id. at 117. Our Supreme Court rejected that argument, observing that
for the employees’ refusal of overtime to constitute a change to the status quo, “it
must be shown that required overtime work was part of the pre-existing terms and
conditions of employment under the expired bargaining agreements.” Id. at 118.
The Miceli court held that the fact of prior voluntary overtime work did not ensconce
mandatory overtime into the status quo, because “[t]he expired agreements provide
for voluntary overtime work which the individual employees were free to accept or
11
decline.” The express terms of the agreement simply were the status quo, and they
did not include mandatory overtime. Id.
In Behers, the employer changed the work schedules of employees. 842
A.2d at 367. The union argued—and this Court held—that the employer had altered
the status quo by upending its long-settled practices regarding employee hours. Our
high court reversed and reaffirmed Miceli’s clear rule. It held that because the CBA
expressly authorized employer to “(1) set starting and quitting times for its
employees; (2) make individual shift assignments; and (3) establish and change
schedules,” the employer’s changes to work hours were expressly authorized by the
CBA and were thus not a change to the lawful status quo. Id. The Behers court
reversed this Court’s reliance on the employer’s past practice because that practice
was “not memorialized in the parties’ written agreement.” Id. It warned that we
should not look to past practice to divine an unwritten status quo, as that would
“eviscerate the clear and simple rule articulated in Miceli.” Id. In Behers, like in
Miceli, the express terms of the agreement simply were the status quo, regardless of
past practice contrary to those terms.
Having been so warned, we must decline ATI’s invitation to “restrict
[Miceli and Behers] through curtailed readings of” those controlling decisions.
Behers, 842 A.2d at 367. Here, looking to the express terms of the CBA and the
Plan Document it incorporates—which are the only agreements we have on the
topic—we see nothing memorialized regarding a practice of restricting Plan loans to
employees who are receiving pay at the time they request the loan. The CBA
generally provides for the Plan, and the Plan Document authorizes employees to
obtain loans against their 401(k) accounts. The Plan Document imposes some
express limitations on loan eligibility: the loan balance must be of a certain amount,
12
it must satisfy a certain ratio with the employee’s 401(k) account balance, and the
employee is limited to no more than three loans. Nothing “memorialized in the
parties’ written agreements” states that receiving income is a requirement for loan
eligibility. Behers.
Mr. Brown’s testimony about the “plan procedures” does not change
this. The Plan procedures have apparently not been reduced to a writing, or if some
of them have been, it is only in a “working document” that was neither produced nor
introduced. Not only were those partly written procedures not memorialized in the
CBA or the Plan Document, but they were also not known to employees or the
Union, so they cannot have formed part of the parties’ agreements.9 Behers’ clear
rule leaves no room for an extra-record jurisprudence of notes. We must look only
at the agreements themselves, and they do not speak to the asserted practice or
procedure. If employers wish to rely on such procedures, they must, under Behers,
be fully negotiated and memorialized in the parties’ written agreements, which
entails that they are known to both parties. The procedures ATI invokes here were
not, so we cannot rely on them as part of the status quo. The same is true of the Plan
Administrator’s discretion. That discretion is only to “construe, interpret and apply”
the Plan Document’s terms, not to supplement them with procedures unknown to
employees and the Union. C.R. at 1413. We reject ATI’s suggestion that the Plan
Administrator’s contractual discretion somehow makes any after-adopted policy
part of the agreement, which would totally circumvent our Supreme Court’s Section
402(d) decisions. We must conclude, then, that ATI’s practice of denying loans to
9
ATI conceded at oral argument that the alleged plan procedures were never provided to
employees or the Union. To say the least, the Court is troubled by the contention that unwritten
or at best written-but-not-disclosed rules may be applied by a Plan Administrator who contends to
have absolute, final and unfettered discretion.
13
unpaid employees is not part of the status quo.
Finally, we address ATI’s argument that the Board erred in rejecting
Mr. Brown’s testimony as not credible. ATI argues that the Board’s credibility
determination was not supported by substantial evidence. This slightly misstates the
inquiry. As our Supreme Court has previously observed, this argument really “does
not involve a question of substantial evidence,” but rather is a challenge to the
Board’s exercise of its power to substitute its own credibility determinations for the
Referee’s, even when the Board has not directly observed the testimony at issue.
Peak v. Unemployment Comp. Bd. of Rev., 501 A.2d 1383, 1388 (Pa. 1985). The
Board has exactly that power, as long as its decisions are “subject to judicial review
on the substantial evidence test and [the Board is] required to explain its decision in
sufficient detail to permit meaningful appellate review.” Id. at 1389. Thus, we
review the entire decision under the substantial evidence test, but we review the
Board’s credibility determination only for adequacy of explanation. See Office of
Atty. Gen. v. Unemployment Comp. Bd. of Rev., 533 A.2d 1087, 1089 (Pa. Cmwlth.
1987) (citing Peak).
Here, the Board rejected a portion of Mr. Brown’s testimony—
regarding the established practice or policy of denying Plan loans to unpaid
workers—as not credible, even though it was uncontradicted, which it was free to
do. Russo v. Unemployment Comp. Bd. of Rev., 13 A.3d 1000, 1003 (Pa. Cmwlth.
2010). The Board explained that decision by referencing the written agreements of
record, which do not provide for that policy or practice explicitly. Thus, the Board
explained its credibility determination sufficiently that we can review it. Indeed, we
already have. As discussed supra, Mr. Brown’s testimony regarding ATI’s Plan
procedures does not overcome the absence of those practices from the express
14
written agreements, which must be our focus. We conclude that the Board did not
err in its credibility determination.
For the foregoing reasons, we hold that Claimants are not ineligible for
UC benefits under Section 402(d) of the UC Law because, for the time periods that
the Board addressed, the work stoppage resulted from ATI’s having altered the status
quo by refusing 401(k) loans to Claimants. We thus affirm the decision of the Board.
_____________________________________
MATTHEW S. WOLF, Judge
Judge Fizzano Cannon did not participate in this decision.
15
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
ATI Flat Rolled Products LLC, : CASES CONSOLIDATED
Petitioner :
:
v. : Nos. 226-230 C.D. 2024
: &
Unemployment Compensation : 232-252 C.D. 2024
Board of Review, :
Respondent :
Allegheny Technologies Incorporated, :
Petitioner :
:
v. : No. 231 C.D. 2024
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 6th day of March 2025, the determinations of the
Unemployment Compensation Board of Review mailed February 1, 2024, in the
above-captioned matters are AFFIRMED.
_____________________________________
MATTHEW S. WOLF, Judge