This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Aircraft Mechanics Fraternal Association Members,
Northwest Airlines, Inc.,
Department of Employment
and Economic Development,
Filed September 12, 2006
Department of Employment and
File No. 1442705
Nicholas P. Granath, Seham, Seham, Metz & Petersen, LLP, 3050 Metro Drive, Suite 216, Minneapolis, Minnesota 55425 (for AMFA Members)
Timothy R. Thornton, Elizabeth M.
Brama, Briggs and Morgan, P.A., 2200 IDS Center,
Linda A. Holmes, Minnesota Department of Employment and Economic Development, 1st National Bank Building, 332 Minnesota Street, Suite E200, St. Paul, Minnesota 55101-1351; and
Frank E. Villaume, III, 550 City
Considered and decided by Worke, Presiding Judge; Willis, Judge; and Hudson, Judge.
U N P U B L I S H E D O P I N I O N
In these consolidated appeals, striking member technicians and inspectors challenge the decision by the unemployment-law judge (ULJ) affirming his earlier decision that they were disqualified from receiving unemployment benefits. The ULJ determined that a 25% pay reduction was insufficient to constitute a constructive lockout, under which the technicians and inspectors would have qualified for benefits. The employer, Northwest Airlines, Inc. challenges the decision by the ULJ affirming his earlier decision that the striking Aircraft Mechanics Fraternal Association cleaners and custodians were qualified to receive unemployment benefits, determining that a 25% pay reduction constituted a lockout as to the cleaners and custodians. Because we conclude that, under Sunstar Foods, Inc. v. Uhlendorf,310 N.W.2d 80 (Minn. 1981), the 25% pay cuts imposed on both the technicians and inspectors, as well as the cleaners and custodians, constituted a constructive lockout so as to entitle both groups to unemployment benefits, we affirm the ULJ’s decision with regard to the cleaners and custodians, but we reverse the ULJ’s decision with regard to the technicians and inspectors.
More than 1,600 AMFA members representing technicians and inspectors, as well as cleaners and custodians, established benefit accounts to obtain unemployment benefits with the Department of Employment and Economic Development. After department adjudicators made their decisions, appeals were taken. An unemployment-law judge (ULJ) held a consolidated hearing to consider the benefit claims of all of the AMFA members. But the ULJ issued separate decisions on the claims of the members of the two crafts. The ULJ’s decisions granted benefits to the cleaners and custodians, but denied benefits to the technicians and inspectors.
reconsideration, the ULJ modified his reasoning but reached the same
conclusions in both decisions. The ULJ
ruled that benefits applicants who stop working because of a labor dispute are
not eligible for benefits, unless an exception exists for applicants who stop
working because of a lockout. The ULJ determined
that, under Sunstar Foods, Inc. v. Uhlendorf, 310 N.W.2d 80 (
In review of a determination of eligibility for unemployment-compensation benefits, this court may affirm the unemployment-law judge’s decision, remand it for further proceedings, or reverse or modify it
if the substantial rights of the petitioner[s] may have been prejudiced because the findings, inferences, conclusion, or decision are:
(1) in violation of constitutional provisions;
(2) in excess of the statutory authority or jurisdiction of the department;
(3) made upon unlawful procedure;
(4) affected by other error of law;
(5) unsupported by substantial evidence in view of the entire record as submitted; or
(6) arbitrary or capricious.
Minn. Stat. § 268.105, subd. 7(d) (Supp. 2005).
Findings of the ULJ must be viewed
in the light most favorable to the decision. White v.
Metro. Med. Ctr., 332 N.W.2d 25, 26 (
As a preliminary matter, AMFA members
argue that the ULJ improperly refused to consider evidence that Northwest
eliminated jobs in the bargaining unit and that Northwest’s resumption of
operations with replacement workers affirmatively ended the status of the applicants
as employees who stopped working because of a labor dispute.
next address the ULJ’s determinations as to AMFA members’ eligibility for
unemployment benefits. A statutory
exception to ineligibility occurs if “the applicant stops working because of a
lockout.” Minn. Stat. § 268.085, subd.
13b(c)(2) (2004). Whether a lockout has
occurred is a question of fact. Sunstar
Foods, Inc. v. Uhlendorf, 310 N.W.2d 80, 83 (
The first dispute concerns whether there was an actual lockout of specific AMFA members who were asked to leave their work locations early on the day of the strike deadline. The ULJ determined, by implication, that no actual lockout of these employees occurred. We agree. The record establishes that Northwest had valid security concerns about vandalism and that the workers who were asked to leave early were not denied pay or benefits. See id. at 45 (rejecting actual-lockout assertion when employees were sent home with pay during a shift immediately before a strike, stating that the company’s actions “were not a refusal to furnish work to employees as a result of [a] labor dispute, but were only preliminary acts taken to avoid potential conflicts between supervisory employees brought in to perform the jobs of the employees whose strike date was imminent”).
Minnesota Supreme Court has recognized that, absent an actual lockout, a
constructive lockout may occur on “the unilateral imposition by an employer of
employment terms so unreasonable that the employees have no alternative but to
leave.” Sunstar,310 N.W.2d at 83. In Sunstar,
the supreme court upheld the Commissioner of Economic Security’s factual
determination that an employer’s unilateral imposition of pay cuts of 21% to 26%
operated as a constructive lockout, entitling employees who were members of a
striking bargaining unit to unemployment benefits.
resolving the issue of whether there was a constructive lockout, the supreme
court examined case law addressing whether a wage reduction gave an employee
good reason to leave employment, in which case an employee would not be
disqualified from receiving benefits. For
instance, in Scott v. Photo Ctr., Inc., 306
Sunstar, the ULJ found that Northwest
imposed 25% pay cuts on both AMFA craft groups but reached disparate results on
the issue of whether a constructive lockout occurred for each group. Citing the average wage paid to technicians
in the nationwide airline industry, the ULJ found that the 25% pay cut imposed
on the technicians and inspectors, who were generally paid at a higher level
than the average worker, was not so unreasonable as to leave those workers no
alternative but to leave. Accordingly,
the ULJ denied unemployment benefits. But
the ULJ determined that the same percentage pay cut imposed on the generally lower-paid
cleaners and custodians meant that they would be receiving “a substantial
amount less than the average paid
Sunstar abrogation claim
In its certiorari appeal of the ULJ’s
decision as to the cleaners and custodians, Northwest argues that recent changes
in the terms of the “good cause to quit” statute have abrogated Sunstar,
so that the ULJ erred in applying Sunstar
and analyzing wage reductionto
determine whether a constructive lockout occurred. In support of its position, Northwest notes
(a) A good reason caused by the employer for quitting is a reason:
(1) that is directly related to the employment and for which the employer is responsible;
(2) that is adverse to the worker; and
(3) that would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment.
(b) The analysis required in paragraph (a) must be applied to the specific facts of each case.
Minn. Stat. § 268.095, subd. 3 (2004).
points outthat in 2004, the
We reject Northwest’s analysis. First, in Sunstar, the supreme court examined law regarding whether an employee had good cause to quit. Sunstar, 310 N.W.2d at 84. At that time, the legislature had not yet codified a standard for good cause to quit. But following that reasoning, we look to the present statutory language to determine what constitutes good reason to quit and thus, the currently applicable standard for determining whether a constructive lockout occurred. The plain language of Minn. Stat. § 268.095, subd. 3, articulates the statutory standard: that a good reason to quit caused by the employer is “a reason . . . that would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment.” This definition, by its terms, does not exclude consideration of reductions in wages or benefits from a determination of reasons that would “compel an average reasonable worker to quit.”
ambiguity, we do not look beyond the plain language of a statute to discern
Railway Labor Act rights
Northwest next argues that the
ULJ’s application of Sunstar, a
private-employer case, contravened vested rights under the RLA, which
governs the rights of the parties in this dispute with an airline employer. See Hawaiian
Airlines, Inc. v. Norris, 512
Unilateral imposition of terms
Northwest maintains, challenging the ULJ’s decision in the custodians’ and cleaners’ case, that, even if Sunstar remains good law, a constructive lockout did not occur because Northwest did not unilaterally impose terms and conditions of employment. In Sunstar, after negotiations, union members voted to reject unilaterally imposed contract terms, established picket lines, and did not report for work. Sunstar, 310 N.W.2d at 82. Northwest attempts to distinguish Sunstar by arguing that, here, the terms and conditions became effective only after the prior bargaining agreement expired and AMFA members walked off the job. But under the RLA, the union was notified on August 19, 2005, of the terms that Northwest would impose if agreement was not reached by the time the cooling-off period expired. Therefore, those previously announced terms were imposed the next day, at the same time the walkout occurred. Northwest correctly points out that AMFA did not submit Northwest’s offers for membership consideration, but it is undisputed that the AMFA negotiating committee had authority to determine whether to submit an offer to the membership. Therefore, the ULJ did not err in ruling that Northwest unilaterally imposed lower wages as terms and conditions of employment.
also argues that company-imposed terms cannot become unreasonable absent breach
of an existing agreement and that no agreement was breached because after the
cooling-off period, the previous collective bargaining terms no longer bound
the parties. See, e.g., Moore,385
N.W.2d at 46 (holding that potential elimination of overtime work did not
amount to such a substantial change in circumstances so as to constitute a
lockout, indicating application of “good cause to quit” standard in cases where
there was “a substantial wage reduction, a reduction in benefits, or a breach
of an employment agreement,” and that in these cases, “the employer had
breached an actual promise or agreement to provide those benefits”) (citations omitted). But
Northwest challenges the ULJ’s determination that, under Sunstar, the 25% wage reduction, plus benefits reduction, constituted unreasonable terms so as to amount to a constructive lockout for the custodians and cleaners. AMFA members challenge the ULJ’s determination that the technicians and inspectors, with the same percentage wage and benefit cuts, were not subject to a constructive lockout. The ULJ grounded his differential determinations as to the two crafts by reasoning that a 25% pay cut for a more highly paid employee does not have the same effect as the same percent pay cut does on a lower-paid employee.
supreme court in Sunstar did not endorse a bright-line rule for
determining when unilaterally imposed terms are so unreasonable that they would
compel an average, reasonable worker to quit, but upheld the commissioner’s
determination that a 21% to 26% decrease in wages was sufficient to trigger the
application of the lockout rule. Sunstar, 310 N.W.2d at 85. The
current statute addressing good reason for quitting requires a fact-specific
It is undisputed that Northwest’s terms imposed on AMFA members of both crafts constituted 25% wage reductions, as well as benefit cuts. We agree with the ULJ that, under Sunstar, these substantial reductions were sufficient to amount to a lockout, entitling the custodians and cleaners to unemployment benefits. But we disagree with the ULJ’s analysis that, under the same percent wage reductions and benefit cuts, a lockout with respect to the technicians and inspectors did not occur.
the ULJ used different standards to weigh the impact of the wage reduction on
members of the two crafts. The ULJ
analyzed the impact of the 25% wage reduction on the technicians and inspectors
by comparing it to the average wage in the industry, but he analyzed the impact
on the custodians and cleaners by comparing it to the wage of the average
Second, the record shows that the highest-paid cleaners were paid approximately the same amount as the lowest-paid technicians. Thus, under the ULJ’s reasoning, even though both would be subject to the same wage cut, a cleaner or custodian would be entitled to unemployment benefits, while a technician or inspector would not. The ULJ based this differential result on the fact that a cleaner at that wage level would be near the top of the pay scale and have little chance for advancement, while a technician would be at the lower end of the pay scale and have greater chance for advancement. The ULJ also noted a lack of evidence that technicians were employed at the lower pay level. But this differential is logically inconsistent and does not produce an equitable result for employees of the two crafts who may have experienced the same wage and benefit loss. On this record, we conclude the ULJ’s determination that no constructive lockout occurred for the technicians and inspectors was arbitrary and capricious.
We therefore affirm the determination that the custodians and cleaners are eligible for unemployment benefits. But we conclude that the ULJ erred as a matter of law in determining that the technicians and inspectors were ineligible for benefits, and that determination is reversed.
Affirmed in part and reversed in part.