The Sixth District holds that proof that an employer terminated striking employees by replacing them with permanent replacements does not necessarily require written notice to the employees that they are permanently replaced, and therefore such employees became eligible for unemployment compensation on the date that the employer actually intended to, and began to, permanently replace them.
US Tsubaki, Inc. v. Ohio Dept. of Job & Family Servs, 2016 Ohio 851 (6th Dist.).
March 4, 2016
US Tsubaki operated a manufacturing plant with about 125 workers, 94 of whom were union members. A collective bargaining agreement expired on January 30, 2011, the members voted down a tentative agreement, and at midnight on January 31, 2011 began to strike. The employer decided to hire replacement workers and placed an advertisement, which did not specify whether the jobs would be permanent. By March 14, 2011, it had 72 replacement workers its payroll.
At an unemployment hearing, the employer testified that replacement workers were permanent, though any of the striking workers could return under the conditions of the expired contract for any of the 16 positions remaining available. At that time, no striking worker agreed to cross the picket line and return to work. The employer also testified that it had not notified the union or any striking employee that they had been permanently replaced or that their job no longer existed. The hearing officer concluded that that the claimants were unemployed due to a labor dispute other than a lockout beginning January 31, 2011, that the employer's intent was to permanent replace the striking employees beginning February 18, and that it severed the labor dispute on that date.
On appeal to the Erie County Court of Common Pleas, the employer argued that it had not sent any notice that the striking employees were permanent replaced, and that positions remained that could be filled by qualifying striking employees. The claimants responded that notice was secondary to intent and that the advertisements were sufficient notice. The court held that the notice was not required, but is still an important factor in illuminating the employer's intent. It reasoned that the advertisements were insufficient notice, but testimony by the employer given during the March 14, 2011 hearing was. As a result, the court found the employees eligible for benefits, but modified the date of eligibility from February 18 to March 14.
The Sixth District reviewed that R.C. 4141.29(D)(1)(a) provides that individuals are not eligible "(1) For any week with respect to which the director finds that: (a) The individual's unemployment was due to a labor dispute other than a lockout at any factory, establishment, or other premises located in this or any other state and owned or operated by the employer by which the individual is or was last employed; and for so long as the individual's unemployment is due to such labor dispute." The Ohio Supreme Court, in Baugh v. United Tel. Co. established the following regarding the effect of permanently replacing striking workers:
Where, during the course of a bona fide labor dispute, the employer terminates the employer-employee relationship through his affirmative action of replacing the striking employee, preventing any volition on the part of said employee to return to work, the employer thereby has severed the labor dispute as the proximate cause of unemployment, and the statutory disqualification provision, R.C. 4141.29(D)(1)(a), is inapplicable as a bar to the right to receive unemployment compensation benefits.
After Baugh, appellate courts struggeled with this concept, and as a result the Ohio Supreme Court issued another decision in M. Conley Co. v. Anderson that explained that:
The hiring of permanent replacement workers coupled with notice to striking workers that they have been replaced or that their positions have been permanently filled severs the employee relationship for purposes of R.C. 4141.29(D)(1)(a) and removes the disqualification to receive unemployment compensation benefits.
The Sixth District ultimately concluded that written notice is not the only method by which to prove termination. It concluded that the Hearing Officer's decision that the claimants were terminated on February 18 was supported but competent, credible evidence in the form of the employer's testimony, "that although a few positions remain open, nearly all of the striking employees' jobs have been permanently filled by replacement workers — a 'very good possibility' that fewer than 16 of 88 positions remained." Therefore, the Sixth District moved the eligibility date back to February 18, 2011.
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