# Petition for a Writ of Certiorari — Kansas City Star Co. v. Department of Industry, Labor, & Human Relations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_0265%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for a Writ of Certiorari - **Published:** January 1, 1974 - **Citation:** 419 U.S. 870 ## Text —e ere ae Ger oe at | “ ec oS ee AUG S 1974 JRCLERK | In the Supreme Court of the United States OCTOBER TERM, 1974 No. . 74 -%3 4 THE KANSAS CITY STAR COMPANY, FLAMBEAU PAPER COMPANY DIVISION, Petitioner, vs. DEPARTMENT OF INDUSTRY, LADOR AND HUMAN RELATIONS, ET AL.., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE WISCONSIN SUPREME COURT RUSSELL W. BAKER 1006 Grand Kansas City, Missouri 64106 Attorney for Petitioner Of Counsel: ALLAN L. BIoFF LEONARD SINGER Watson, Ess, MARSHALL & ENGGAS 1006 Grand Kansas City, Missouri 64106 E. L. Menpennatt, INnc., 926 Cherry Street, Kansas City, Mo. 64106, 421-8030 * Bs eseene rreere garner Tg a OP ee ee so! EPPA SPe er ee RAR is aly ME eee SUBJECT INDEX Reference to the Opinions Below ............... NS Constitutional Provision Involved ..... Statutes Involved .................................... Arguments Advanced in Support of Reasons for Allow- ance of Writ of Certiorari to the Wisconsin Supreme SIE ie aibcsibiaiicenecins AUTHORITIES CITED Almacs, Inc. v. Hackett, 312 F.Supp. 964 (D.R.I. 1970) American Ship Building Co. v. Labor Board, 380 U:S. a ar IIE" illest hin cionadl I cantssiaivnlelidbisetacnernasetiadens.Lskniain, Dow Chemical Co. v. Taylor, 97 F.R.D. 105 (E.D.Mich. tee ge EES SEES, NON UEEEE eee Francis v. Davidson, 340 F.Supp. 351 (D.Md.), aff'd per curiam, 409 U.S. 904 (1972) Garner v. Teamsters Unicon, 346 U.S. 485, 500 (1953) .. Grinnell Corp. v. Hackett, 475 F.2d 449 (1st Cir.), cert. Gen. 414 U.S. 858, B79 (1973) ncn cccceccscesecnccesecscennoneese H. K. Porter Co. v. Labor Board, 397 U.S. 99 (1970) .... ITT Lamp Division v. Minter, 435 F.2d 989 (1st Cir. 1970), cert. den. 402 U.S. 933, reh. den. 404 U.S. 874 | gt SAUER A EF pane CORRE OE Nn ee a Labor Board v. Insurance Agents’ International Union, 361 U.S. 477 (1960) H LAT OMT Re wf LAL AIT FT PE URINE IE BT HSN PRAT IRINA YP EN hte Saati. th catia, Ce SEEM eiiiktiesieiee it Lascaris v. Wyman, 31 N.Y.2d 386, 82 LRRM 2634 ho nel A ee Ne RELA Local 24, Teamsters Union v. Oliver, 358 U.S. 283 (1959) Local 174, Teamsters Union v. Lucas Flour Co., 369 U.S. ste sexu edhe RD SAAT OG RE Re Nash v. Florida Industrial Commission, 389 U.S. 235 Jad ee ee COT, CT eae, Ra aeay Russo v. Kirby, 453 F.2d 548 (aa Cor. 1971) .......... . Super Tire Engineering Co. v. McCorkle, ........ US. .. 85 LRRM 2913 (1974) cece eccccceecceeeeceeeeeee Textile Workers Union v. Lincoln Mills, 353 U.S. 488 RD: arteries diseectonsiciensbacppetefcinpeanscoecdaaiasnasceenc.. 10 12 13 14 10 11 re eae) In the Supreme Court of the United States OCTOBER TERM, 1974 Pe ke THE KANSAS CITY STAR COMPANY, FLAMBEAU PAPER COMPANY DIVISION, Petitioner, vs. DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELA- TIONS and WILLIAM A. ABEL, GEORGE J. BABLICK, KENNETH L. BALCZEWSKI, FRANK T. BAROKA, JAMES ; A. BAROKA, MELVIN K. BEHREANDT, DONALD N. E BLACK, ORVIL G. BLACK, EUGENE L. BOLAND, CHARLES = M. BOLZ, CALLIS H. BORNE, EARL E. BOROWSKI, A DENNIS D. BOURGARD, LESTER R. BOURGARD, ROBERT J. BRADLE, ANTON D. BRAUNREITER, JOSEPH A. BRIM- : STEIN, DOLORES H. BRUNS, JAMES E. BUKBEY, MILES g T. CHRISTIANSON, GARY A. COOLEY, RICHARD C. COOLEY, ARTHUR C. DANE, WALTER W. DILLON, ERVIN H. ENGEL, LARRY R. ERICKSON, DARRELL G. FALSTAD, VERNON L. FALSTAD, JAMES J. FENZL, LAWRENCE P. FENZL, A. H. FLEISCHFRESSER, DONA E. FRANKE, LOUIS A. FRANKE, RAYMOND J. FRAN CZ, WIL- LIAM G. GIERMAN, EDWARD L. GRUBER, LEONARD W. GRUBER, CHARLES A. GUSTAFSON, PATRICIA A. HAM- MOND, EDWARD R. HANSON, ROBERT A. HANSON, ROBERT K. HEIN, TOM E. HEISLER, ALFRED E. HERBST. ARTHUR J. HERBST, CLARENCE E. HERBST, DELMAR J. HERBST, DONALD A. HERBST, JAMES E. HERBST, ROBERT K. HERBST, STEPHEN A. HERBST, BERNARD J. HILGART, EDWIN S. HILGART, ELMER C. HILGART, MICHAEL R. HILGART, LAWRENCE J. HILGART, PAT- RICK J. HILGART. RICHARD T. HILGART, RONALD W. HILGART, THOMAS W. HILGART, VERNON L. HILGART, FRANK J. HIRTREITER, FREDERICK HIRTREITER, CARLIN J. HOFFMAN, WILLIAM J. HOFFMAN, DURWOOD L. HOGUE, RONALD D. HOGUE, TRAVIS R. HOSEY, JAMES R. HOTH, MICHAEL J. HUGHES, CHARLES A’ JAGLINSKI, NICHOLAS C. JAROSINSKI, LAWRENCE J. JOHNSON, HAROLD E. JOHNSTON, KENNETH G. KEILY, SYLVIUS G. KELNHOFER, JOHN M. KINNEAR, WARREN A. KIRSTEN, GARY L. KNOTTS, OTTO L. KOENIG, LOUIS F. KOLLER, JAMES L. KOSHAK, BERNIE F. KOTKE, GEORGE L. KOZAK, JR., JAMES A. KRONBERGER, RAY- BC oe ahr SMART PRY aS a uae Set BA MEGAMI to MOND J. KRONBERGER, THEODORE L. KRONBERGER, THOMAS J. KRONBERGER, WILLIAM F. KRONBERGER, BERNICE Y. KUNDINGER, EUGENE A. KUNDINGER, JAMES A. KUNDINGFR, CAROLINE D. KUSE, ANNA M. LA MERE, GENE E. LANNIGAN, FRANK J. LAPP, FRED- ERICK M. LENZEN, RICHARD J. LITTLE, EDWARD J. LIZAK, WILLIAM J. LUCAS, THOMAS L. MADER, ELMER J. MARTIN, BYRON F. MC CORISON, JOHN H. MC CUE, RONALD G. MEYER, ARNOLD M. MICHALSKI, GEORGE F. MICHALSKI, GLENN L. MORGAN, HERBERT D. MOR- GAN, DONALD E. MURPHY, ERLAND V. NESSMAN, JOSEPH R. NIEBAUER, RONALD W. NIEBAUER, RICHARD W. NORTHROP, THEODORE J. OBERNBERGER, CLAYTON R. OLSON, RICHARD C. OLSON, FRANK J. OSWALD, DALE L. PACKARD, VERNON E. PALACHECK, FRANK C. PALECEK, GUST L. PALECEK, MONTE J. PASSER, EDWARD H. PETERSON, LARRY J. PETERSON , REGINALD E. PETERSON, LEON E. PODREZ, THOMAS J. POHLE, RICHARD F. PREISSNER, ISABEL PRITZL, JAMES J. PRITZL, ALVAN W. RADLINGER, JR., JOHN J. RAD- LINGER, JOSEPH G. RADLINGER, MIKE R. RADLINGER, EMERON O. REAS, RAYMOND R. ROMINSKE, PAUL A. ROSE, JR., GLEN D. SCHERWINSKI, HOWARD E. SCHERWINSKI, JEROME E. SCHERWINSKI, HENRY P. SCHMIDT, RICHARD J. SCHMIDT, GEORGE ‘W. SCHNEI- DER, RONALD J. SCHOCH, HERBERT H. SCHULTZ, JR., ROBERT -L. SCHULTZ, JOSEPH A. SEIDL, JOHN D. SEVERT, RAYMOND M. SKAWINSKI, GERLAD R. SLACK, WILLIAM F. SLACK, SR., JAMES W. SMETAK, THOMAS A. SMITH, VERNA I. STEINER, HARLAN J. STULL, HERSHAL H. STURM, ROBERT E. SUTHERLAND, JEROME P. SZYMIK, ROGER M. SZYMIK, JAMES A. THIBEDEAU, NEIL W. THIBEDEAU, ANTHONY C. THIER, JEROME A. THIER, GEORGE W. THOMS, ELAINE J. TONEY, DAVID A. TREML, GEORGE A. TREML, LAWRENCE A. TREML, MICHAEL A. VUCHETICH, GENE D. WALKER, GORDON D. WALKER, JAMES D. WALKER, HERMAN R. WART- GOW, CLARENCE L. WATLAND, DENNIS W. WEGNER, ROBERT W. WEGNER, ERWIN M. WEIBERG, DONALD L. WEIMER, JERALD F. WEINBERGER, JOSEPH C. WEISS, GERALD R. BURHANS, ARTHUR °.. CARLSON, HAROLD J. CHRISTIAN, GUY M. CHRISTIANSON, ROY A. DAR- ROW, LAWRENCE H. DRAXLER, DONALD A. ENGEL, MAX A. ERNST, JOE B. FISCHER, ROGER L. FLEMING, 3 CHARLES L. FUHRMAN, FRANK J. FURTAK, EARL FRANKE, EARL W. FREDRICK, JAMES R. GAVIN, ALFRED A. GELINA, RICHARD A. GLAESER, ROBERT Q. GLAESER, KENNETH L. GOETHLICH, MARTIN A. GOTZ, EDMOND H. GRIFFIN, EDWARD G. GRUBER, ROBERT J. GRUBER, ROBERT J. HAMANN, KENNETH HAMMOND, MERTON C. HANISH, LAWRENCE A. HANNS, GEORGE F. HARD- GINSKI, WILLIAM R. HELBERG, FOREST E. HERBST, LEONARD W. HERBST, FRED W. HILGART, JOHN M. HILGART, ROBERT C. HILGART, WILLIAM A. HILGART, EDWARD HODEN, RONALD J. HOEFFERLE, RUDOLPH J. HOEFFERLE, QUENTIN J. HOTH, PATRICK D. HUGHES, RAYMOND W. JEMIOLA, JOHN H. KARL, ALLAN F. KEILY, DAVID W. KINNEAR, WILLIAM J. KOLAR, JOSEPH J. KOLONKO, CHARLES C. KOTKE, GOTLIEB F. KOTKE, PETER G. KRONBERGER, CLARENCE J. KUN- DINGER, ELMER =. KUNDINGER, DELMAR H. KLEIN, BERNARD C. LANGNER, ROBERT D. LA VOIE, DONALD G. LEITL, JAMES LA VALLEY, DONALD E. LIEBELT, WILLIAM J. LITTLE, ARNOLD L. LOULA, JOHN O. LUHTALA, CHARLES W. MADER, GEORGE R. MARTIN, KEITH F. MC CARDELL, MICHAEL P. MC KEUN, WILLIAM C. MERTEN, DAVID R. MESSERSCHMIDT, CHARLES A. MEYER, ANDREW A. MICHALSKI, ROBERT J. MICHAL- SKI, THOMAS A. MICHALSKI, EDWARD J. MILLER, THOMAS E. MOCKLER, DENNIS E. MORGAN, TOM R. MORGAN, JOHN J. MOORE, DALE F. MROTEK, ALFRED H. MYERS, ROBERT W. NORDALL, FRED J. OSWALD, JOHN A. PALECEK, JOHN J. PALECEK, JR., LLOYD C. PALECEK, WILLIAM J. PALECEK, RAYMOND P. PETER- SON, ALFRED ¢. POHLE, KENNETH F. PRITZL, RONALD M. RADLINGER, JAMES J. RATHSACK, DOUGLAS R. REAS, HOWARDL A. RICHTER, HAROLD F. RISSUE, RICH- ARD D. ROBERTS, DAVID D. ROSE, ARTHUR R. SCHMIDT, EUGENE A. SCHNEIDER, HARRY W. SCHONDELMAIER, OSCAR H. SCHRADER, PAUL SEDOVIC, JERRY A. SET- TERMAN, LAWRENCE R. SETTERMAN, LAWRENCE M. SINGER, FLOYD M. SLACK, KENNETH J. SLACK, RUS- SELL G. SLACK, HERMAN A. SPRANGER, JERALD A. STEINER, GEORGE L. STRIEGEL, JR. ROMAN F-. STUEBER, VACLAV J. SVEHLA, VICTOR SZYMIK, ERWIN F. TAFT, BERNARD VAN DEN HEUVEL, FRANK R. WAGNER, RAYMOND F. WALLNER, SYLVESTER W. WALLNER, OSCAR W. WARDENSKY, HAROLD W. WAR- REN, WILLIAM WARTGOW, WALTER WASKO, JR., NORMAN L. WEHRMAN, DENNIS C. WEIK, WILLIAM D. WEIK, HENRY WEINBERGER, RONALD W. WEINBERGER, WILLIAM J. WEINBERGER, JOSEPH A. WEIS, EDWARD W. WESTPHAL, DANIEL H. WHITING, RAYMOND J. WOODIE, ROBERT J. WOODIE, ERNEST F. YUNK, JAMES W. YUNK, JAMES A. ZIERER, DAVID wW. ZOESCH, EUGENE R. ZOESCH, WILLIAM A. ZCESCH, GUNNAR R. REBNE, Respondents. SNEED LYE ATPL OS | TTA ROA PRPS RA rn MH TR TRS Spe yom Baciow: SAMAR IM NSLS By 4 PETITION FOR A WRIT OF CERTIORARI TO THE WISCONSIN SUPREME COURT Petitioner prays that a Writ of Certiorari issue to re- view the judgment and opinion of the Supreme Court of Wisconsin dated October 30, 1973. REFERENCE TO THE OPINIONS BELOW The following court opinions and judgments, some of which have been reported, have issued in this case: 1. The unreported Judgment and Memorandum of Decision of t::e Circuit Court of Dane County, Wis- consin, were entered September 25, 1972 and are printed in the Appendix beginning at p. A21; 2. The opinion and judgment of the Supreme Court of Wisconsin is reported at 60 Wis.2d 591, 211 N.W.2d 488 (October 30, 1973) and is printed in the Appendix beginning at p. A50; | 3. The unreported decision of the Wisconsin Su- preme Court granting Petitioner’s motion for rehear- ing was entered January 18, 1974 and is printed in the Appendix beginning at p. A64; and 4. The opinion and judgment of the Wisconsin Supreme Court “denying rehearing” is reported at oan Wis.2d ......... 217 N.W.2d 666 (May 8, 1974) and is printed in the Appendix beginning at p. A65. JURISDICTION The judgment of the Supreme Court of Wisconsin was entered on October 30, 1973. After Petitioner’s motion for rehearing was granted on January 18, 1974, the Supreme 5 Court of Wisconsin entered an order “denying the motion for rehearing” on May 8, 1974. The jurisdiction of this Court is invoked pursuant to 28 U.S.C. §§1257(3) and 2101(c). QUESTION PRESENTED FOR REViEW Does Wisconsin’s economic support of union members who are unemployed because of a labor dispute over their terms and conditions of employment violate and frustrate the federally mandated process of free and voluntary col- lective bargaining which requires that union and employer must rely only on their respective resources when engaging in lawful economic warfare? CONSTITUTIONAL PROVISION INVOLVED Article VI, Paragraph 2: “The Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the Supreme Law of the Land; and the Judges in every State shall be bound thereby, any thing in the Constitution or laws of any State to the con- trary notwithstanding.” STATUTES INYOLVED The pertinent provisions of: 1. Wisconsin Unemployment Reserves and Compen- sation Act, as amended, Chapter 108, Wis.R.Stats. (App. pp. A72-A87); particularly $108.04 (10), which provides: J OETA TNS PRES RT errr Buvteowrenccs: ST 6 “Labor dispute. An employee who has left (or par- tially or totally lost) his employment with an em- ploying unit because of a strike or other bona fide la- bor 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.” 2. The National Labor Relations Act, as amended, 29 U.S.C.A. $141, et seq. (App. pp. A87-A91). STATEMENT OF THE CASE Pursuant to Section 1' of the then existing labor con- tract between Petitioner? and the Unions,’ the Unions noti- fied Petitioner on May 10, 1971' of their desire to “open our present labor agreement with your company to negoti- ate changes, wages and other monetary items and working conditions”. Thereafter, there were many bargaining ses- sions between the parties. During these negotiating meet- ings, the positions of Petitioner and the Unions hardened with respect to the Unions’ enormous economic demands and with respect to Petitioner’s proposals for crucial modi- fications of contractual work ruies. Finally, on July 25, the Unions’ members voted 210 to 4 reject Petitioner’s fina] 1. See App. pp. A24-A25. 2. Petitioner is The Kansas City Star Company, Flambeau Paper Company Division. 3. Local 119, Pulp Sulphite and Paper Mill Workers and Local 445, Paper Makers and Paper Workers Unions will be re- ferred to as the “Unions”. The Unions negotiate jointly with Pe- titioner. “Individual Respondents” are claimants for unemploy- ment compensation who were employees in the units represented by the Unions. 4. All dates are in 197] unless otherwise designated. contract proposal and between July 26 and July 28 the membership voted 219 to 19 to strike Petitioner. On August 5 the Unions presented contract termina- tion notices to Petitioner, pursuant to Section 1 of the la- bor contract. At this time Petitioner and the Unions were at an impasse in their intense and ongoing labor dispute over the terms and conditions of a new labor agreement. Thirty days after service of the termination notices, the Unions would-be free to strike. Aware of the time necessary to “wind down” a paper mill before it can cease operations without damage to materials or supplies, Petitioner decided to meet the Unions’ strike threat directly by preparing the mill for a temporary shutdown and by advising its customers and suppliers that Petitioner would cease business temporarily because of the labor dispute. Following this strategy, Petitioner reasoned, would enable it to avoid conceding its bargain- ing goals while blunting the Unions’ most devastating weapon: a strike for which Petitioner was not prepared. Thus, on August 6 and 7 Petitioner suspended its orders for supplies and on August 10 Petitioner notified its cus- tomers that it was curtailing the acceptance of orders. In addition, Petitioner began the long process of prepar- ing the mill machinery for the temporary cessation of pro- duction. It was in these circumstances that on August 19, after Petitioner had embargoed incoming supplies, turned its customers over to its competitors, and commenced the sequential shutdown of operations that the Unions sought to withdraw their contract termination notices “unless or until a new termination is sent or full agreement reached on a new contract.” Faced with the imposition of wage controls on August 15, 1971, the Unions, on August 19, 1971, wanted to suddenly reverse their bargaining strategy and Se | ~ Pores 8 withdraw the termination notices—probably to wait to re- sume bargaining if and when the wage freeze would end. Petitioner advised the Unions that, under the contract, the Unions could not unilaterally withdraw the contract termination notices. But Petitioner counterproposed that it would accept the Unions’ offer of withdrawal if the termination notices would not be reinstated within a fixed time. At the same time Petitioner made two new al- ternative proposals for a contract settlement. The Unions rejected Petitioner’s counterproposals both with respect to the matter of the contract termination notices and with respect to the new contract proposals. Because of the disputes between it and the Unions concern- ing the terms of a new labor contract and the Unions’ pro- posed withdrawal of the termination notices, Petitioner continued its preparation for shutdown. As a result of Petitioner’s shutdown of its: mill due to the labor dispute, its employees temporarily lost their employment. The employees claimed unemployment compensation, but the Department’s* Deputy charged with the initial investiga- tion and determination of such claims, denied the unemploy- ment compensation claim. Subsequently, the Individual Respondents appealed the Deputy’s decision to the Department. The Department re- versed the Deputy’s award and granted unemployment com- pensation to the gndividual Respondents. The Depart- ment’s award.was, in turn, reversed on Petitioner’s appeal to the Circuit Court of Dane County. The Circuit Court held that the Individual Respondents were not entitled to unemployment compensation. On both Individual Re- 5. “Department” is the Respondent Wisconsin Department of Industry, Labor and Human Relations; a Commission within the Department is the state agency invested with power to make the final determination cf unemployment compensation claims. 9 spondent’s and the Department’s appeal, the Supreme Court of Wisconsin reversed the Circuit Court and awarded the benefits to Individual Respondents. The Wisconsin Su- preme Court granted Petitioner’s motion for rehearing but denied it any relief after argument on rehearing. As a result, union members engaged in a labor dispute over their terms and conditions of employment with Petitioner were paid unemployment compensation. The federal question sought to be reviewed was raised in the courts below in the following manner, and by the following methods: 1. In Petitioner’s complaint in the Circuit Court of Dane County, Wisconsin (App. pp. A91-A93); 2. In Petitioner’s Brief in the Circuit Court of Dane County, Wisconsin (App. p. A93); 3. In the Brief of Amicus Curiae (Wisconsin Manufacturers’ Association) in the Cireuit Court of Dane County, Wisconsin (App. pp. A93-A96); 4. In Petitioner’s principal Brief as Respondent in the Wisconsin Supreme Court (App. p. A97); 5. In the Brief of Amicus Curiae (Wisconsin Manufacturers’ Association) in the Wisconsin Supreme Court (App. pp. A97-A101); and 6. In Petitioner’s Brief in Support of Motion for Rehearing in the Wisconsin Supreme Court (App. p. A101). Neither the Circuit Court nor the Supreme Court passed directly on the federal issues thus raised, although, in the dissenting opinion on rehearing in the Wisconsin Su- preme Court, three Justices stated, in part: Rewer OLA CRS ry i . ” 10 “The Commission’s ruling in this case violated this mandate of ‘neutrality’ [of the State in labor dis- putes] and, in effect, required the employer [Peti- tioner] to contribute financial support to this labor dispute. If such a change is to be made in the law, it is the duty and concern of the legislature.” (App. p. A71). ARGUMENTS ADVANCED IN SUPPORT OF REASONS FOR ALLOWANCE OF WRIT OF CERTIORARI TO THE WISCONSIN SUPREME COURT In the instant case the Wisconsin state agency and the Wisconsin courts have ordered the payment of unem- ployment compensation to employees who were tempo- rarily unemployed due to a labor dispute over their terms and conditions of employment, Notwithstanding the in- creasing amount of recurring litigation over the issue of publicly financed economic aid to persons unemployed due to their involvement in labor disputes,® the Court has not decided this matter of utmost significance. On the last occasion on which the issue was before the Court, it indicated that it should resolve the “challenge to state policies that have had their impact and that continue in force, unabated and unreviewed. The judiciary must not close the door to the resolu- LRRM 2634 (1973); Dow Chemical Co. v. Taylor, 57 F.R.D. 105 (E.D.Mich. 1972); and Almacs, Ine. v. Hackett, 312 F.Supp. 964 (D.R.I. 1970). 11 tion of the important questicns these concrete disputes present.” Super Tire Engineering Co. v. McCorkle, US. , 85 LRRM 2913, 2918 (1974). The instant case arises free of the obstacles of moot- ness or other procedural deficiencies. It squarely presents the important issue as to whether a State agency may apply the State’s unemployment compensation laws in der- ogation of federal law favoring free collective bargaining by supporting one party in the bargaining. The Wisconsin Supreme Court's order effectively decided this federal ques- tion of substance not heretofore decided by this Court; the order is probably not in accord with either applicable decisions of this Court or the federal substantive labor law controlling under the Supremacy Clause of the Constitution. Thus, it is imperative that the Court review and decide the propriety of State economic aid to Unions during a labor dispute. The payment of public economic aid, as desirable as that may be in other circumstances, to persons unemployed because of a labor dispute is in derogation of the policies and purposes of the National Labor Relations Act, as amended, as well as the substantive law which this Court has directed to be fashioned from the policy of the national labor laws. Textile Workers Union v. Lincoln Mills, 353 U.S. 488 (1957). As has often been emphasized: “The goal of federal labor policy, as expressed in the Wagner and Taft-Hartley Acts, is the promotion of collective bargaining; to encourage the employer and the representative of the employees to establish, through collective negotiating their own charter for the ordering of industrial relations, and thereby to minimize industrial strife. [citing cases]” Local 24, Teamsters Union v. Oliver, 358 U.S. 283, 295 (1959). VEN AGH Vere ARREST RENE NETS Sk hs retqeseeee nen: Bivaisicssrac SE nie Ce aN aC RY Me 12 Not only has the “Congress intended that the parties should have wide latitude in their negotiations, unrestricted by governmental power to regulate the substantive solution of their differences”, but it has also recognized that: “[t]he presence of economic weapons in reserve, and their actual exercise on occasion by the parties, is part and parcel of the system that the Wagner and Taft-Hartley Acts have recognized.” Labor Board v. Insurance Agents’ international Union, 361 U.S. 477, 488-489 (1960). Economic power is clearly an integral part—possibly unde- sirable but nevertheless fundamental—of the process of collective bargaining. The Labor Board is primarily re- sponsible for defining the federal labor policy and even it is not allowed to aid or weaken the lawful economic strength of either party in a labor dispute: “if the Board could regulate the choice of economic weapons that may be used as part of collective bar- gaining, it would be in a position to exercise consider- able influence upon the substantive terms which the parties contract. As the parties own devices become more limited, the Government might have to enter even more directly into the negotiation of collective agreements. Our labor policy is not presently erected on a foundation of government control of the results of negotiations. See S.Rep. No. 105, 8th Cong., Ist Sess. p. 2. Nor does it contain a charter for the National Labor Relations Board to act at large in equal- izing disparities of bargaining power between em- ployer and union.” Labor Board v. Insurance Agents’ International Union, supra, 361 U.S. at 490. t wie cams Boaalituae Spawn Aces Dersciwercas... miei ha eral dey ea ar uae MDE ee A26 The next bargaining session was July 16th. In the meantime the Employer had estimated that to meet the Unions’ wage demands would cost $500,000 the first year and an additional $360,000 the second year. At the July 16th meeting each side made some concessions but were still far apart on the major issues. The Unions would not agree to any of the six changes in work rules asked by the Employer, and the Employer made it clear they would have to be accepted or the Employer would not continue its wage and fringe benefits package it had offered. Draxler, president of one of the two Union Locals, then stated to the Employer representatives that a Union meet- ing would be arranged for contract rejection and a strike vote and asked, “How would you like that?” (Tr. 30). Sherman, assistant general manager of the Flambeau Paper Company Division, who headed the Employer’s bar- gaining team, replied that “We were making a great effort to negotiate a contract.” (Tr. 30). Another meeting was scheduled for July 23rd. At this meeting the Unions reduced the demanded wage increase for the second year from 32 to 28 cents per hour (Tr. 32) and the Employer increased its wage offer from 6 to 6 and ‘4 per cent for the first year and from 20 to 22 cents per hour for the second year. (Tr. 33). Sherman, after making this wage counter proposal, asked if this was interesting enough so that “we” should continue by giving further items in the Employer’s proposal (Tr. 53). The Union representatives replied that this wage proposal was en- tirely unacceptable, closed their books, picked up their papers and filed out of the meeting (Tr. 34). No further meeting was then scheduled. The Unions on July 26th notified the Employer that at a joint meeting of the Union membership the last proposals of the Employer were rejected by a vote of 210 to 4 (Ex. ace 7 A27 8) and on July 27th the Unions had taken a strike vote and had voted 291 to 19 to strike (Tr. 36). On August 2nd the Employer sent a letter to all of its pulp wood suppliers that the threat of a strike against the paper mill “looms larger every day,” and that unless an ‘agreement was reached soon, it would be necessary to place an embargo on pulp wood deliveries. (Ex. 16; Tr. 58-59). The Employer realized that the suppliers would be harmed financially if they planned to fill orders that would be sub- sequently rejected. (Tr. 59). A federal mediator stepped into the picture and a meeting between the parties was held August 5th. Both the Unions and the Employer adhered to their previous positions (Tr. 38). The Unions asked for time to caucus and at 20 minutes to 6:00 p.m. handed Sherman a contract termination notice. (Tr. 39). This notice (Ex. 10) was addressed to Sherman, signed by officials of both Unions, and read as follows: “Pursuant to provisions of Section 2, of our cur- ‘ent Labor Agreement between the Flambeau Paper Company and Park Falls Local 119 of the International Brotherhood of Pulp, Sulphite and Paper Mill Work- ers, we wish to notify you that we do hereby terminate this agreement. “We will be glad to meet with you any time dur- ing the 30 day period to try to resolve our differences.” The following letter (Ex. 11) was sent to the Unions by the Employer on August 6th: “We are in receipt of your letter of August 5, notifying our Company that you have terminated the Labor Contract under the provisions of Section 2. uh, 4 4 4 3 4 | ‘ 4 3 i ) i ; £ a ee ne ee A28 “As a result of this action on the part of the Union, all offers heretofore made by the Company in connec- tion with our current labor negotiations is hereby withdrawn. “During the thirty-day interim period, if it is your desire to meet with the Company Bargaining Commit- tee, please contact Mr. Walter Sherman.” On that same day the Employer sent a Notice of Pulp- wood Embargo to all of its pulpwood suppliers (Ex. 17; Tr. 41, 62) and issued a news release which Was read over Radio Station WNBI. The release stated: “After notification by the concerned unions of a termination in the labor agreement, Norman Hoefferle, General Manager of the Flambeau Paper Company in Park Falls, announced that the orderly winding down of paper making in the face of an inevitable strike will begin with a pulpwood embargo. This embargo will cause the discontinuance of any loading of pulp- wood cars for the Flambeau Paper Mill after 6: 00 p.m. on Monday, August 9th. Truck delivered pulpwood will be accepted at the Flambeau Yard through Tues- day, August 10th. The Yard will be closed to trucks after 4:00 p.m. on August 10th. Mr. Hoefferle stated that the unions have voted to strike and can do so after 30 days of the offical notice which was received Thursday afternoon, August 5. All contract proposals put forth by the management of Flambeau Paper have been withdrawn, and at this time, negotiations can be resumed at the request of the unions.” (Exh. 18; Tr. 64). On August 7, 1971, the Employer sent letters to all of its suppliers of raw materials (sulphur, chlorine, etc.) with whom it had blanket orders stating that it was “declaring ~ dr eee annem eRe eNO amnenneeme tons romt ens A29 a moratorium” on all incoming shipments and advising that all shipments should be “suspended” after August 9th (Exhs. 19 and 20; Tr. 41, 64,65). After August 9, no new ; orders were placed by the Employer for any raw materials. (Tr. 65). ; On August 10th the Empleyer sent over 300 letters (Ex. 21) to customers advising them that the Employer was faced with a strike September 5th and stating no fur- ther orders for cut size papers could be accepted, but was making every effort to fill its present commitments for delivery (Tr. 41, 66). No new orders were accepted after August 10th for paper which would have to be manufac- tured. (Tr. 67). The inevitable and almost immediate re- sult was to cause virtually all of the Employer’s customers to place their new orders with other paper mills as evi- denced by the fact that normal new orders of 5200 tons : per month declined to 487 tons in September and to 207 tons for October up to October 25th, the date of the hear- ing before the examiner (Tr. 68). On August 15th President Nixon issued Executive Or- der No. 11615 (Ex. 23) stabilizing or freezing prices and wages for 90 days and establishing the Cost of Living Council to develop and make recommendations to the President for policies and mechanisms to curtail inflation- ary prices and wages after the expiration of the 90 day period. On August 19th a meeting 2f representatives of the Employer and the Unions was held at ‘he instigation of the federal mediator. At this meeting the Union repre- sentatives handed to Sherman two letters, one from each Union, dated August 18th (Exs. 12 and 13). The first paragraph of each letter referred to the previous letters of August 5th serving notice of contract termination and the second paragraph read as follows: SON ty bot — aes 2? had A30 “In light of President Nixon’s ninety day freeze on wages and prices, this letter will serve as a with- drawal of that terminatior. notice and of our desire to continue to work under the terms of the existing agreement, unless, or until, a new termination is sent or full agreement reached on a new contract.” aS HRs The Employer representatives then caucused, made Xeroxed copies of these two letters, and drafted a letter in response (Ex. 14) dated August 19th. On returning to the meeting Sherman handed back to the Union represen- tatives their letters attempting to withdraw their contract termination netices (Exs. 12 and 13) and read the Em- ployer’s response thereto (Ex. 14) and delivered copies of the same (Tr. 44). The text of Exhibit 14 is: “We are in receipt of your notice of August 18, wherein you wish to withdraw your notice of termi- nation of contract, dated August 5. Dora. daniels Bea BRAN Ec et ae, hai “We can find no provision in the present labor Contract which would authorize the withdrawal of termination notice after once being tendered. NOAA Ret chanel Soe “We will accept the withdrawal notice, provided we have your guarantee in writing that it will not be reinstated prior to one year from the date of notice of withdrawal. ey a “The reason for the Company’s position on this point, is that we have already begun winding down our operation, and we have turned down many orders in anticipation of an impending strike, and this places us in a very untenable position as far as our customers are concerned, and our ability to be a firm supplier of their needs. It is almost impossible for us to continue to insure the customer of our reliability if we are faced with a reinstatement of termination notice, at the whim of the Union. AOI EF Dit ta A31 “It is essential that we have this one year guaran- tee for our continued operation.” By August 19th the Employer’s “winding down” pro- cess was well advanced. Even if it had immediately started on the 19th “winding up” again it had lost two weeks of orders which would have resulted in some down time in September (Tr. 74-75). However, this was not the reason which motivated the employer in refusing to accept the Unions’ withdrawal of notices of contract termi- nation without an assurance that notices of termination would not again be given within a one year period. That reason was the adverse effect on the Employer’s business if one or more notices of termination were again given by the Unions within the space of a year (Tr. 79, 116). The effect on the Employer’s business would be catastrophic for it would seriously impair, if not completely destroy, the Employer’s reputation as a firm and reliable source of supply to its customers (Tr. 71, 79, 108, 113). After reading Exhibit '4 at the August 19th meeting the Employer offered to extend the existing contract for a period of one year which the Unions rejected (Tr. 45). Shank, vice-president of one of the two International Unions verbally assured the Employer that the Unions would not strike during the 90 day freeze (Tr. 124). The Unions inquired what other proposal the Employer had (Tr. 45). The Employer then submitted a draft of a pro- posed two year contract (Ex. 15) which the Unions re- jected (Tz. 45-46). After the August 19th meeting the Employer con- tinued its winding down operations. In a winding down procedure certain portions of the mil] are shut down ahead of others when the last product passes through (Tr. 151). The first lay-off occurred on September 2nd of 23 or 24 employees and on September 3rd 22 or 23 more were laid Site EXGnP Se se Sg A FER LA OORT Ie TTS, | en = a * PLE in A age ‘ er saah v4 CCNA ONG m A DION AA ROT CAN 2 UIP RED OAS ELIE oe bn A32 off (Tr. 154). The remainder of the work force continued to work through September 3rd so that the mill closed down on September 4th with no one working that day (Tr. 155). On September 10th negotiations were resumed at the request of the federal mediator between the Unions and the Employer which was the first meeting between them subsequent to that of August 19th (Tr. 82-83). Proposals and counter proposals were exchanged. Further bargain- ing sessions were held September 28th and 30th, and Octo- ber Ist, 5th, 6th, 15th, 18th, 19th, 20th and 22nd (Tr. 90). While not part of the record, the Employer’s brief states that the parties agreed on the terms of a new agreement December 11, 1971. THE MATERIAL PORTIONS OF THE DEPARTMENT’S DECISION In view of the issues presented by the briefs submitted the Court deems the following to be the material portions of the department’s decision: “The Commission does not consider that the em- ployes lost their employment with the employer be- cause of a bona fide labor dispute within the intent and meaning of section 108.04(10).” “In view of the fact that the employer had assur- ance on August 18, 1971, that no strike would take place as previously threatened, the employer’s actions in continuing to ‘wind down’ its business operations and to lay off all cf its production employes on Sep- tember 2 and 3 were not required, necessary or war- ranted business decisions on the part of the employer. A33 “Since the employer terminated the employment of the employes solely because of economic worries over the preservation of its relations with its suppliers and its customers, this was a business judgment and did not constitute a ‘bona fide labor dispute’ as con- templated by section 108.04(10). Accordingly, the employes lost their employment as a result of the em- ployer’s actions in shutting down the plant. This ac- tion in effect was a layoff which was not as a result of a bona fide labor dispute. See Barrett v. Wasson Coal Co. (1949), 404 Ill. 11, 87 N.E. 2d 769. “The Commission therefore finds that each of the employes lost his employment with the employer in week 36 of 1971 but that such employment was not lost because of a bona fide labor dispute in active progress in the establishment in which he is or was employed, within the meaning of section 108.04 (10) of the Wis- consin Statutes.” THE ISSUES PRESENTED In the view of the Court the briefs of the parties ne- cessitate consideration of these issues: 1. What is the scope of the Court’s power to re- view the above-quoted portions of the department’s decision? 2. Did a bona fide labor dispute exist within the meaning of Sec. 108.04(10), Stats., at the time the Em- ployer closed down its paper mill? 3. If Issue 2 is decided in the affirmative, did the defendant employees lose their employment because of such bona fide labor dispute? 4. Assuming September 4th as the contract ter- mination date, was there a premature lockout which prevented there being a bona fide labor dispute? = RST N LOA AOA ELI LM ea aera en Re ee —— NoPE Msi pr EPR barsy A34 Issue 2 will be subdivided for consideration into the following subdivisions: (a) Definition of a bona fide labor dispute. (b) Interpretation of Unions’ notice to terminate con- tract. (c) Effect of the Unions’ attempted withdrawal of contract termination notices. (d) Nature of dispute that existed between Employer and Unions at the time of closing of the mill. (e) Does the reasonableness of Employer’s position taken during the dispute effect bona fide char- acter of the dispute? SCOPE OF COURT’S POWER OF REVIEW The department’s brief asserts that the material de- termination of the department in its decision that the em- ployees did not lose their employment by reason of a bona fide labor dispute constitutes findings of fact supported by credible evidence and therefore the Court has no power to review the same. The brief makes it clear that this argument embraces both the determination that the ex- isting dispute between the Employer and the Unions was not a bona fide labor dispute and the holding that the em- ployees did not lose their employment because of such dis- pute. There is here no dispute with respect to any of the material facts. In such a situation if but one inference can reasonably be drawn from such undisputed facts, a question of law is presented and the finding of the depart- ment to the contrary is not binding on the reviewing court; but, if more than one inference can reasonably be drawn, then the finding of the department is conclusive. Van Roy LAA ATER IE. EL A35 v. Industrial Comm. (1958), 5 Wis. 2d 416, 425, 92 N.W. 2d 818; Schmidlkofer v. Industrial Comm. (1953), 265 Wis. 535, 538, 61 N.W. 2d 862. It is this rule which delineates the Court’s scope of review in this action. EXISTENCE OF A BONA FIDE LABOR DISPUTE (a) Definition Sec. 108.04 (10), Stats., provides: “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) em- ployer’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.” (Italics added.) Over thirty years ago the Wisconsin Supreme Court defined a “labor dispute” for purposes of Chapter 108, Stats., as “any controversy concerning . . . employment relationships, or any other controversy arising out of the respective interests of employer and employee...” Spiel- mann v. Industrial Commission, 236 Wis. 240, 295 N.W. 1, 6 (1940). This definition is in accord with familiar statu- tory definitions and with case authority of other jurisdic- tions. 29 U.S.C.A. Secs. 52, 152(9); 28 ALR 2d 287, 297 and cases cited therein. The words “bona fide” prefixing the words “labor dispute” in Sec. 108.04(10) refer to the existence of an actual, as opposed to a pretextual, labor dispute and is designed to prevent an employer from avoiding his obliga- tion under the law by fabricating a labor dispute and end- ing the employment of employees in connection therewith. pal Hai cau Shite aNG ASD RAL \ coe DU pea ag aoe A36 This has been the position of the department. Cargill, Inc., Wis. Ind. Comm., 62-A-437 (1962); C. Hennecke Co., Wis. Ind. Comm., 59-A-100 (1959); Builders’ Company, Wis. Ind. Comm., 56-A-457 (1956). The legislature did not want an employer to be able to resist the payment of unemploy- ment compensation where the labor dispute existed solely by the employer’s own manufacture. “Bona fide” means good faith so the test is usually whether the employer acted in good faith in maintaining that a labor dispute existed. See Cody v. Industrial Commission, 1960 Dig. Wis. U:C. Cases 161 (Cir. Ct. 1939). Perlberg v. Odanah Iron Co. v. Industrial Commission, 1960 Dig. Wis. U.C. Cases 169 (Cir. Ct. 1955). Before applying these definitions to the facts of this case it is necessary to analyze the Unions’ notice to termi- nate the contract and its subsequent attempt to withdraw the same, as these play an important role as to whether a bona fide labor dispute existed at the time of the mill shutdown. (b) Interpretation of Unions’ Notice to Terminate Contract. At the oral argument before the Court counsel for the employees contended that the Unions’ notice to terminate the contract (Ex. 10) was ineffective because it stated no termination date since an effective notice to terminate could be given more than 30 days prior to the intended ter- mination date. However, this notice must be interpreted in the light of the provisions of Section 2 (a) of the existing contract (Ex. 3). That section provided for termination after the expiration date of July 31, 1971, by either party giving the other written notice of not less than 30 days. The second paragraph of the Unions’ notice stated, “We will be glad to meet with you any time during the 30 day period to try to resolve our differences.” The Employer’s 3 | LOLI LAOREET SN ERE A ELE AEE lh TS 0B og A37 letter in response dated August 6, 1971 (Ex. 11) stated, “During the thirty-day interim period, if it is your desire to meet with the Company Bargaining Committee, please contact Mr. Walter Sherman.” Thus both sides understood the effective date of termination to be 30 days from August Sth which was September 4th. The Court, therefore, deems it clear that this is the interpretation which must be placed upon the Unions’ notice to terminate. The notice says nothing about a strike and, therefore, in itself is not to be interpreted as a notice that a strike would take place at the termination of the contract on Sep- tember 4th. This does not mean that the Employer did not have good cause to believe a strike would then take place and to take the steps of “winding down” its mill operations during the period of August 5th to 19th. (c) Effect of Unions’ Attempted Withdrawal of Contract Termination Notice The department’s decision makes it clear that the de- pariment considered that the Unions had the right to uni- laterally withdraw on August 19th their prior notice of termination of the collective bargaining contract. Because none of the briefs of able counsel cite any law on this question the Court assumes it is an open question in Wisconsin. ; The reason why the question has been argued to this Court appears to be the decision in A. J. Sweet, Inc. v. Industrial Comm. (1962), 16 Wis. 2d 98, 114, N.W. 2d 141, 145 N.W. 2d 853. There the employees were locked out by the employer during negotiations for a new bargaining con- tract. Both the Commission and the Circuit Court deter- mined that the loss of work by the claimant employees was not due to a bona fide labor dispute because the lock- out violated an implied no strike and no lockout provision a NS Bieamniarenicons RAW Nes ae eNO Dhaba Ht eS aacd RPA of the existing contract. The Supreme Court, without ex- pressly deciding the issue of whether a strike or lockout in violation of a no strike or no lockout provision of a labor contract would prevent there being a bona fide labor dis- pute, reversed on the ground there was no implied no strike and no lockout provision in the contract. However, it is logical that, where an employer does lock out his em- ployees in knowing violation of a no strike and no lockout contract clause, he does not act in good faith and there is no bona fide labor dispute within the meaning of Sec. 108.04(10), Stats. The decision in the A. J. Sweet, Inc. Case is certainly open to that implication as there are cited at page 108 a Circuit Court decision and an Appeal Tri- bunal decision so holding. The Unions gave their notice of termination of con- tract because it would put them in @ position to strike, as the Unions’ membership had already authorized the strike by an overwhelming vote in favor. Without the contract being terminated they could not legally strike because Section 14 contained a no strike and no lockout prohibition. They clearly deemed it advantageous to them to so termi- nate the contract so that they would use a strike or threat of strike to gain their large wage increase demands. Then the President’s 90 day wage freeze intervened and they deemed it to their advantage to attempt to withdraw their termination notice. The Employer in the meantime had acted to its prejudice upon the termination notice and had started to wind down its operations and had notified its customers and suppliers tu that effect. It had lost at least two weeks of orders and there is every likelihood some customers had placed orders elsewhere. The Employer deemed it to be to its advantage not to accede to the at- tempted withdrawal unless it could be assured that the Unions would not repeat the notice of termination proce- dure for at least a year. The Employer feared the effect A39 it would have on its reputation with its customers as a firm source of supply if it were forced in so short a period of less than a year to give customers notice of another im- pending closing of its plant and refusal of orders. The Unions refused the Employer’s proposal and negotiations were at an impasse as a result of what transpired at the August 19th meeting. It is the conclusion of the Court that one party to a contract who has given notice of termination effective 30 days hence cannot unilaterally withdraw such termination notice without the consent of the other party who has acted upon reliance of such notice of termination. Furthermore, even if the law should ultimately be de- termined to be otherwise, this Court would not hold that the Employer acted in bad faith in assuming that the ter- mination notice could not be unilaterally withdrawn when the law was as uncertain on the point as it was here. (d) Nature of Dispute that Existed Between Employer and Unions at Time of Closing of Mill The fact that the parties did not meet between August 19th and the shutdown of the mill on September 4th, or that there was in effect a Presidential order freezing wages for 90 days, does not blot out the labor dispute which ex- isted as of September 4th. The parties were far apart on the terms of a new labor contract on issues other than wages. For example, the Unions had not acceded to any of the more important changes in work rules demanded by the employer. In addition to the impasse that existed prior to the August 19th meeting, new disputed issues developed at that meeting. These were whether the Unions had the right without the Employer’s consent to withdraw their notice terminating the collective bargaining contract, and the demand of the Employer that it would not accept such CS Pe Tet : f re Oe Ey Ce ee ee A40 withdrawal unless the Unions agreed that no further ter- mination of contract notices would be given for a one year period, which the Unions refused to accede to. Certainly the matter of when parties to a labor contract can give notices terminating the contract is an issue in collective bargaining which makes a dispute over such issue a labor dispute. This is especially true when upon the termination of contract the Unions would be put in a position to strike. There is an implication in the department’s decision that it considered the Presidentiai 90 day freeze on wage increases, together with the Unions’ verbal assurance that they would not strike during those 90 days, as obliterating any labor dispute between the parties. This just was not so. The Employer was vitally concerned with not having to go through another winding down process involving notifying customers and suppliers of an impending close- down of operations any time in a year period, not just a 90 day period. Undoubtedly the Unions had as deep a concern for not tieing their hands against striking for a year period, thus giving up their most effective weapon in negotiating the terms of a new contract. The Court deems it advisable, in view of arguments advanced to it, to comment with respect to the statutory words “or other bona fide labor dispute in active progress” of Sec. 108.04 (19), Stats. A lockout legally resorted to by an employer in good faith as a weapon to gain objec- tives from the union in a labor dispute constitutes a “bona fide labor dispute in active progress” so long as it retains its original character. There existed no basis upon the undisputed evidence in this case for a determination that a labor dispute did not exist between the parties as of September 4, 1971, when the Employer’s mil] closed down. Further, no basis exists for contending that this was a pretextual and not an actual labor dispute. Cael Ae he hes Oe a Oe ee ee es A4l (e) Does the Reasonableness of the Employer’s Position Effect the Bona Fide Nature of the Dispute? The department took the unusual course in its deci- sion of passing on the reasonableness of the Employer's position in the labor dispute by stating: “In view of the fact that the employer had assur- ance on August 18, 1971, that no strike would take place as previously threatened, the employer’s actions in continuing to ‘wind down’ its business operations and to lay off all of its production employes on Sep- tember 2 and 3 were not required, necessary or war- ranted business decisions on the part of the employer.” This constitutes a sharp break from the past position taken by the department (formerly the Industrial Com- mission) even since the enactment of the Wisconsin Un- employment Compensation Act, that the legislative policy underlying this Act was for the State to maintain a posi- tion of neutrality in labor disputes in administering it. In Marathon Electric Mfg. Corp. v. Industrial Comm. (1955), 269 Wis. 394, 69 N.W. 2d 573, 70 N.W. 2d 576, the Wiscon- sin Supreme Court quoted this extract from the Commis- sion’s brief (at p. 405): “Since the enactment of the first unemployment compensation law in 1931 the law has contained a pro- vision suspending eligibility of workers unemployed because of a strike or a bona fide labor dispute. The labor dispute provision constitutes a ‘neutrality act’ which the legislature inserted into the Act. It is to be borne in mind that the unemployment compensa- tion act was prepared by representatives of labor and management and the public. In designing this legis- lation, it was the fear of both employer and employe representatives that payment of unemployment com- eRe tm oa a! i zz wad not the function of this court.’® In Kessler y. Industrial Comm." this court explained: “(Where the evidentiary facts are not in dispute but permit of different inferences the drawing of one of such inferences is a finding of fact within the prov- ince of the Industrial Commission. Gant v. Industrial Comm. (1953), 263 Wis, 64, 56 N. W. 2d 525. This court has held, however, . . . that if the evidentiary facts are not in dispute and permit of Only one reasonable inference, the drawing of that inference is a question of law and not of fact... .” The Department made lengthy findings, which we have already quoted, amplifying its determination that 8. (1969), 43 Wis.2d 528, 547, 169 N. W.2d 73. 9. Baez vy. ILHR Department (1968), 40 Wis.2d 581, 585, 162 N. W. 2d 576; Fitzgerald v. Globe-Union, Inc. (1967), 35 Wis.2d 332, 337, 151 N. W. 2d 136. 10. (1965), 27 Wis.2d 398, 400, 134 N. w. 2d 412. edule ia Bay babes UO ae AAA os ne A62 “The Commission does not consider that the employees lost their employment with the employer because of a bona fide labor dispute within the intent and meaning of section 108.04 (10).” Although there is a dispute on the record as to whether or not the employer was given notice that there would be no renewal of the termuination notice while the price and wage freeze was in effect, there was clearly evidence that the employer was given oral assurance of this. This is a factual determination which is within the Department’s re- sponsibility to make. The Department, having decided that the termination notice had been withdrawn, could have determined as a matter of fact that the layoffs were not while a bona fide labor dispute was in progress but were by way of a layoff for economic reasons, In concluding that the loss of employment in this case was not due to a bona fide labor dispute, the Department relied heavily on Barrett v. Wasson Coal Co." In Barrett, an Illinois coal mine was closed down pending negotiations of a new contract and the employer tried to defeat the employees’ claim of unemployment benefits by asserting sec. 7 (d) of the Illinois Unemployment Compensation Act (Ill. Rev. Stat. 1947, ch. 48, par. 223). This was a labor dispute exception similar to sec. 108.04 (10), Stats. The owner of the mine claimed he refused to sign the la- bor centract because he did not understand its terms. Mowever, during negotiations, the owner explained, “ ‘I can’t operate until the government lets me know for sure what I am going to get for the coal.’”"?_ The Division of Unemployment Compensation found, and the Supreme Court of Illinois agreed, that “. . . there was no labor dis- 11. (1949), 404 Ill. 11, 87 N. E. 2d 769. 12. Id. at page 14. A63 pute. ... There was no dispute concerning hours or t :;ms of employment about which the parties were trying to agree.”"* The loss of employment in that case was not because of a labor dispute but because the government’s policy on coal had not been clearly established, a circum- Stance beyond the control of both parties. In the present case, the immediate cause of the lack of jobs was the rapid decline in orders for paper and the general winding down of Operations by the employer. Customers and suppliers were notified and operations were wound down. With the attendant decrease in orders and general business at the paper mill, soon there was no work to be done. The plant was shut down. Although there is no evidence here which indicates the employer had an independent reason, such as the governmental policy regarding coal in Barrett, for closing its paper mill, from the record as a whole the De- partment could find that a bona fide labor dispute did not exist at the time of the layoff and the layoffs were for business reasons, the reasons being the kind designed to give rise to legitimate unemployment compensation claims within the framework of the Wisconsin Unemployment Compensztion Law’. By the Court—Judgment reversed. ROBERT W. HANSEN (concurring). When their former employer closed down the paper plant in which they had been working, the former employees applied for unemployment compensation benefits for the weeks of joblessuess that followed the permanent closing of their former place of employment. Even if a labor dispute was involved in the management decision to close the plant down, the former employees are entitled to unemploy- ment compensation benefits under sec. 108.04(10), Stats., except “. . . for any week in which such . . . bona fide labor dispute is in active progress in the establishment . . .” 13. Id. at pages 16, 17. ow saioaniiaab tesdnlesschadeat il chibatadsabeppeetaisies as Te ee ey eee ee A64 in which they were employed. [Emphasis supplied.] With the plant permanently closed, there was no labor dispute left, much less one in active progress. There was no em- ployer or employees to do the disputing. There was only a former employer and its former employees. There were no wages, hours or working conditions about which to dispute. Payroll and positions ended when the piant closed down. Whatever its reasons for so doing, when management permanently closed down the paper plant, any disagree- ment with its former employees was interred along with the plant operations. The state agency holding that the former employees are entitled to unemployment compen- sation benefits is upheld solely for the reason that a permanently closed mill or factory cannot have a labor dispute in active progress any more than a corpse can have a toothache. I am authorized to state that Mr. Justice Bruce F. Beil- fuss and Mr. Justice Connor T. Hansen join in this con- DECISION OF THE WISCONSIN SUPREME COURT ON MOTION FOR REHEARING THE KANSAS CITY STAR CO. v. DEPT. OF INDUSTRY, LABOR AND HUMAN RELATIONS et al., #259 On the motion for rehearing herein, IT IS ORDERED that additional briefs be submitted on the following ques- tion and on such further issues as counsel deems appropri- ate: Did the unions have a right to withdraw the employ- ment agreement termination notice that was given? Printed briefs shall be filed as follows: Respondents on or before February 18, 1974: Appellants Reply on or before March 10, 1974; Respondents reply on or before March 20, 1974. A65 OPINION OF THE WISCONSIN SUPREME COURT ON REHEARING (Filed May 8, 1974) No. 259 August Term, 1973 STATE OF WISCONSIN : IN SUPREME COURT The Kansas City Star Co., Flambeau Paper Co. Division, Respondent, Vv Dept. of IL&HR, William A. Abel, etal, Appellants. PER CURIAM (on motion for rehearing). The em- ployment -ontract did not spell out the terms of the right of the Union to withdraw its termination notice, nor the existence of a right of the Union to reinstate that notice prior to the ending date of the contract. In the absence of a specific provision in the contract as to the right to withdraw a termination notice, the Department found that the Union withdrew its termination notice and the Depart- ment further found that as to the subsequent layoffs there was then no bona fide labor dispute in progress. These findings were supported by credible evidence as discussed in our Original opinion. We do not reach the question now raised for the first time by the employer asserting estoppel as to either the “Department” or the Union. Estoppel was not asserted before the Department nor was there any point made of it either in the record before the Department or in the trial court. eT e Tee oe ey Ses A66 ROBERT W. HANSEN (concurring’in denial of mo- tion for rehearing). In A. J. Sweet, Inc. v. Industrial Comm. (1961), 16 Wis. 2d 98, 114 N.W. 2d 141, 114 N.W. 2d 853, this court considered whether a loss of work by claimant employees due to lockout or plant shutdown by an em- ployer constituted a bona fide labor dispute under sec. 108.04(10) of the state unemployment compensation act. On the issue of whether a labor dispute was bona fide within the meaning of the statute, this court in Sweet held that “. . . resolving this issue involves the construction of the agreement between the parties... .” (Id. at page 105.) In Sweet, this court found that the collective bargaining contracts between the parties “. . . contained no express language prohibiting either strikes or lockouts during their term... .” (Id. at page 106.) The court-held that the contracts contained no express provision or im- plied promise that “. . . the employers would not utilize the device of a lockout... .” (Id. at page 110.) It neces- sarily followed, the court concluded, that the claimant employees’ loss of time from work was “. . . due to a bona fide labor dispute within the meaning of sec. 108.04 (10), Stats.” (Id. at page 110.) In the case before us, the ex- isting agreement between employer and employees ex- pressly provided that: “The Company agrees that there will be no lockouts during the period of this Agreement.” (labor agreement, page 20.) The employees’ organization had filed, pursuant to the agreement, a termination of agreement notice. Subsequentiy and prior to the lockout, the labor group withdrew that notice, stating: “In light of President Nixon’s ninety day freeze of wages and prices, this letter will serve as a withdrawal of that termination notice and of our desire to continue to work under the terms of the existing agreement, . . .” until a new agree- ment was reached or new termination notice sent. Un- der the ruling in Sweet, the writer would on this set of ean eaten: A78 2. The employer has no place of business in the United States, but: a. The employer is an individual who is a resi- dent of Wisconsin; or b. The employer is a corporation which is or- ganized under the laws of Wisconsin; or c. The empioyer is a partnership or a trust and the number of the partners or trustees who are resi- dents of Wisconsin is greater than the number who are residents of any one other state; or 3. None of the criteria of subds. 1 and 2 is met but the employer has elected coverage in Wisconsin or, the employer having failed to elect coverage in any state, the individual has filed a claim for benefits, based on such service, under this chapter. (do) 1. An “American employer”, for purposes of par. (dn), means a person who is: a. An individual who is a resident of the United States; or b. A partnership if two-thirds or more of the partners are residents of the United States; or «. A trust, if all the trustees are residents of the United States; or d. A corporation organized under the laws of the United States or of any state. 2. For the purposes of par. (dn), the term “United States” includes the states, the District of Columbia, and the commonwealth of Puerto Rico. (e) In determining whether an individual’s entire services shall be deemed “employment” subject to this chapter, under pars. (b), (c), (d), (dm) and (dn), the " * we armen ee ae eee ee Cw. » > ae A79 department may determine and redetermine the individu- al’s status hereunder for such reasonable periods as it deems advisable, and may refund (as paid by mistake) any contributions which have been paid hereunder with re- spect to services duly covered under any other unemploy- ment compensation law. (f) The term “employment”, as applied to work for a governmental unit; except as such unit duly elects other- wise with the department’s approval, shall not include: 1. Employment as an elected or appointed public officer; 2. Employment, of a professional or consulting nature, paid on a per diem or retainer basis; 3. Employment of an individual receiving work relief or work training as part of an unemployment work-relief or work-training program assisted or fi- nanced in whole or in part by any federal agency or an agency of a state or political subdivision thereof; 4. Employment, by an educational institution, other than an institution of higher education, sup- ported wholly or substantially from public funds, of any person as a teacher in such institution; 5. Employment directly by the state fair during its active duration (including the week before and the week after the fair); or employment by the Wiscon- sin National Guard directly and solely in connection with its summer training camps or for emergencies; or employment directly by the department of natural resources for emergency fire fighting; 6. Employment by a governmental unit other than in a hospital or institution of higher education in a given week, for the removal of snow or ice or for pereees hse Sa ha A A le AC INU wma nnn VS ISNNENN ENN ERASE A80 work connected with floods, of an individual who has worked for such governmental unit in 6 or less of the 52 weeks preceding the given week; 7. Service solely as a school crossing guard; 8. Part-time or occasional service in recreational activities; 9. Past service in a regular annual school-year position except in a hospital or institution of higher education (other than teaching) by an individual who still (when claiming benefits) has status therein as a school-year employe; 11. Part-time or occasional service or work by visually handicapped persons performed in the work- shop for the blind. * = 7 (12) Week. “Week” means calendar week, starting Sunday and ending Saturday; but, where an employe starts a working shift on a given Saturday, all his hours and pay for that shift shall be counted in the calendar week which includes that Saturday. (18) Eligibility. An employe shall be deemed “eli- gible” for benefits of any given week of his unemploy- ment unless he is disqualified by a specific provision of this chapter from receiving benefits for such week of un- employment, and shall be deemed “ineligible” for any week ‘o which such a disqualification applies. * * * (21) Undefined Terms. Any word or phrase used in this chapter and not specifically defined herein shall be interpreted in accordance with the common and approved EP mt et _eo7 0 ALLELE DEAT CON GA PE PIO ee re nn \ A81 usage thereof and in accordance with other accepted rules of statutory construction. No legislative enactment shall control the meaning or interpretation of any such word or phrase, unless such enactment specifically refers to this chapter or is specifically referred to in this chapter. .- + *# 108.03 PAYMENT OF BENEFITS. (1) Benefits shall be paid to each unemployed and eligible employee from his employer's account, under the conditions and in the amounts stated in (or approved by the department pur- suant to) this chapter, and at such times, at such places, and in such manner as the department may from time to time approve or prescribe. (2) The benefit liability of each employer's account shall begin to accrue under s. 108.06 in the ‘first week com- pleted on or after the first day of that caléndar year within which his contributions first began to accrue under this chapter. J (3) When an employer, after due notice of a benefit claim against his account, has conceded liability thereun- der or has failed to file the required report thereon or has failed to raise any eligibility issue thereunder, any bene- fits allowed under any resulting benefit determination shall be promptly paid; and any issue thereafter raised by the employer shall not affect benefits already. paid. 108.04. ELIGIBILITY FOR BENEFITS. (5) DISCHARGE FOR MISCONDUCT. An em- ploye’s eligibility, for benefits based on those credit weeks then accrued with #espect to an employing unit, shall be barred for any week of unemployment completed after he ° has been discharged by the employing unit for misconduct —EooOooeeereeer cP A. SOAR Pan OVE i 0 St TE AOS Bai LE ON, - a A82 connected witth his employment; provided, moreover, that such employe shall be deemed ineligible for benefits (from other previous employer accounts) for the week in which such discharge occurred and for the 3 next following weeks. (6) DISCIPLINARY SUSPENSION. As to an em- ploye’s weeks of unemployment by reason of a disciplinary suspension by a given employer, the employe shall be in- eligible for benefits as follows: (a) If the suspension was for misconduct connected with his employment, he shall be ineligible from the given employer’s account for each such week and ineligible from other previous employer accounts for the first 3 such weeks. * * {b) If the suspension was for other good cause con- nected with his employment, he shail be ineligible for the first 3 such weeks. * * * (9) PROTECTION OF LABOR STANDARDS. Bene- fits shall not be denied under this chapter to any other- wise eligible individual for refusing to accept new work under any of the following conditions: (a) If the position offered is vacant due directly to a strike, lockout, or other labor dispute; (b) If the wages, hours or other conditions of the work offered are substantially less favorable to the indi- vidual than those prevailing for similar work in the lo- cality; (c) Ifasa condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organi- zation. A83 (10) LABOR DISPUTE. An employe who has left (or partially or totally lost) his employment with an em- ploying 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 em- ployed. (10m) Labor Dispute Progress. If the active prog- ress of such a strike or other bona fide labor dispute ends on a Sunday, it shall not be deemed under sub. (10) to be in active progress in the calendar week beginning on that Sunday as to any employe who did not normally work on Sundays in such, establishment. *. * *£ 108.146 UNEMPLOYMENT RESERVE FUND. (1) For the purpose of carrying out the provisions of this chapter there is established a fund to be known as the “Unemployment Reserve Fund”, to be administered by the department without liability on the part of the state be- yond the amount of the fund. This fund shall consist of all contributions and moneys paid into and received by the fund pursuant to this chapter and of properties and securities acquired by and through the use of moneys be- longing to the fund. (2) (a) A separate employer’s account shall be main- tained by the department as to each employer contribut- ing to said fund. (b) Each employer’s account shall be credited with all his contributions paid into the fund, and shall be charged with all benefits duly paid from the fund to his empioyes based on their past employment by him, except as other- wise specified in this chapter. REE IP AIOE POO Me A OR ee A84 (c) Any reference in this chapter to eligibility for, or to payment of, benefits ‘from an employer’s account”, or any similar reference, shall mean benefits payable or paid from the fund based on past employment by the em- ployer in question. * * *& (d) The fund shaii be mingied and undivided, and nothing in this chapter shall be construed to grant to any employer or employee any prior claim or right to any part of the fund. (e) Benefits to be “charged” against a given employ- er’s account shall be so charged as of the date shown by the check coverig such benefits; and such check shall be promptly mailed and shall, in determining the experience or status of such account for contribution purposes, be deemed “‘paid” on said date. 7. * *# 108.18 CONTRIBUTIONS TO THE FUND. (1) TOTAL RATE. (a) Each employer shall pay contributions to the fund for each calendar year at what- ever rate on his payroll for that year duly applies to him pursuant to this section. (b) An employer’s contributions shali be credited to his account in the fund, but only after any solvency con- tribution paid or payable by him or deducted from his ac- count under subs. (8) and (9) has been credited to the fund’s balancing account (currently, as of the date when paid or deducted). (2) INITIAL RATES. (a) An employer’s contribu- tion rate shall be 2.7% on his payroll for each of the first 3 calendar years with respect to which contributions are credited to his account, except a= additional contributions apply under this section, AD DO aly A85 (b) As to each of those first 3 calendar years, if the employer’s payroll for any such year was $20,000 or more. he shall be required to pay an additional contribution at the rate of 1.3 per cent on that calendar year’s payrol!, within 60 days after notice from the department that such additional contribution is payable, if his account: __ 1. At the close of that calendar year was overdrawn (on a cash basis, with the benefits paid and charged to the account exceeding the contributions paid and credited thereto, through said close of year); or 2. As of the next June 30 computation date was over- drawn (with a negative reserve percentage). (8) SOLVENCY CONTRIBUTIONS. Each emplovy- er’s solvency contribution for each period of a calendar year shall be figured by applying the solvency rate de- termined for that year under sub. (9) to his payroll for that period and shall be payable to the fund’s balancing account by the due-date of his contribution report, as fol- lows: (a) If the employer’s reserve percentage is zero or more or sub, (2) (a) applies to him, the department shall deduct his solvency contribution (figured at the solvency rate, on his relevant payroli) from his current contribu- tions and/or (if necessary) from his account, except to the extent that he elects otherwise by paying some or all of his solvency contribution in addition to his other contri- butions by the due-date of his contribution report. (b) If the employer’s reserve percentage is less than zero and sub, (2) (a) does not apply to him, his solvency contribution (figured at the solvency rate, on his relevant payroll) shall, without limitation by sub. (5), be added to and payable with his other contributions. err Pe Deere rere ser) Torr eeeunemete meer He om RAINE eo re perenne pee ne A86 (9) SOLVENCY RATES. (a) The solvency rate for 1965 shall be 0.25%. (b) The solvency rate required for each subsequent calendar year shall depend on the extent to wich the net balance of the fund’s balancing account at the close of the preceding July falls short of the adequacy leve] then re- quired, and shall be determined by the fund’s treasurer pursuant to this subsection, (c) The adequacy level required for the fund’s bal- ancing account shall be: 1. $15 million at the close of July 1965. 2. $18 million at the close of July 1966. 3. At the close of each subsequent July, the amount which equals 0.4% of the gross wages paid by all employ- ers in the immediately preceding calendar year, as deter- mined pursuant to par. (h). (d) The fund’s treasurer shal] determine the net bal- ance of the fund’s balancing account, at the close of each July, after deducting the debit balances of any employer accounts then overdrawn and any positive balance of any government unit, and after crediting any benefit payments reimbursable by any government unit. (e) He shall subtract that net balance from the rele- vant adequacy level required by par. (c), to determine the “deficiency amount” for the balancing account at the close of July. (f) He shall then compare that deficiency amount with the aggregate payrolls (for the preceding czlendar year) determined under par. (h), to figure th Aves 7 - re Ae TITS STIY LYRE TR Sg TS ORS --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_0265%3A1. Public record. Not legal advice.