Tennessee, Coal, Iron R. Co. v. Martin , 33 Ala. App. 502 ( 1948 )

The appellant, Tennessee Coal, Iron Railroad Company, is engaged in the production of steel in Jefferson County, Alabama, where it operates a large steel industry.

The production of steel requires that raw materials limestone, ore and coal be assembled and processed. The ore furnishes the iron content. Coal is one of fuel for heating in the reduction and limestone is a flux.

The ore, and the coal after conversion into coke and the flux is processed through a blast furnace producing pig iron which is in turn processed in the open hearth furnace into steel ingots, which is later processed through various mills and converted into steel products.

The company sells no ore, coal, coke or limestone or pig iron as such. The mining and transportation of the ore, coal and limestone, and their conversion into pig iron are all a part of one operation designed to accomplish but one thing, namely, the production of steel ingots. Each operation is necessary and essential to the production of steel ingots, and if any operation is interrupted, all related operations are vitally affected.

The various units of the industry are located at different places. The ore mines are in one place. The coal mines in another. Limestone is quarried in still another locality. The furnaces are located roughly near the center of territory from whence the raw materials are obtained. These units are connected by a standard gauged railroad operated by the company and the result of their collective functioning is the production of steel ingots.

Employees engaged in mining coal are affiliated with the United Mine Workers of America (A. F. of L.), the certified bargaining agent for the coal miners. Employees engaged in mining ore belong to the International Union of Mine, Mill and Smelter Workers (C. I. O.). Employees working in the furnaces and mills are members of the United Steel Workers of America (C. I. O.). Employees who operate the railroad are members of different railroad unions. The labor organizations are separate and distinct organizations and act independently in representing their members. For instance the United Mine Workers negotiate a contract relating to wages, hours and working conditions of coal miners. The ore miners have a contract relating to workmen mining ore, and the Steel Workers negotiate a contract for the steel workers.

From January 21st to February 18, 1946, the Steel Workers and the ore miners were on a strike. The Coal Miners did not participate in the strike, nor were they responsible in any degree for the strike that directly and effectively prevented the operation of the coal mines and other units of the industry.

Burney Martin and the other appellees, coal miners, were idle during the period mentioned due directly to said strike. They filed claims for unemployment compensation under Title 26 of the Code of Alabama of 1940. Their claims were denied by the Director of Industrial Relations, who was overruled by a majority of the Board of Appeals, which was in turn sustained by the trial court on a trial de novo, where the claims were allowed. That ruling is now here for review.

This case was ably argued on submission and counsel for the respective parties have shown commendable industry in presenting in the respective briefs all available precedent and treatises that shed light on the controversy.

Counsel have reviewed Department of Industrial Relations v. Pesnell, 29 Ala. App. 528, 199 So. 720, certiorari denied240 Ala. 257, 199 So. 726; Department of Industrial Relations v. Drummond, 30 Ala. App. 78, 1 So.2d 395; Id., 241 Ala. 142,1 So.2d 402; and Badgett v. Department of Industrial Relations,30 Ala. App. 457, 10 So.2d 872; 243 Ala. 538, 10 So.2d 880; and counsel for appellees insist that the claimant was disqualified in the Pesnell and Badgett cases because the claimant in each of these cases also participated in the labor dispute, and that the ruling in the Drummond case was that a labor dispute in which the claimant does not participate does not disqualify the claimant; it is earnestly insisted here that this case is ruled by the Drummond case.

The Alabama Unemployment Compensation Law was amended and revised in 1939. Prior to that amendment the Pesnell case had been decided in the circuit court of Jefferson County, Alabama, and the claim allowed. This decision was rendered on July 22, 1939. Following that decision in the trial court the Legislature of Alabama saw fit to amend the Alabama Unemployment Compensation Law by an Act which was approved on September 21, 1939, Acts 1939, page 721, which is now codified as Section 214, subd. A. Title 26 of the Alabama Code of 1940. This Section relates to the disqualification of an individual for benefits for total or partial unemployment which reads as follows:

"Section 214. Disqualification for benefits. — An individual shall be disqualified for benefits for total or partial unemployment: —

"A. For any week in which his total or partial unemployment is directly due to a labor dispute still in active progress in the establishment in which he is or was last employed; for the purposes of this section only, the term 'labor dispute' includes any controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. This definition shall not relate to a dispute between an individual worker and his employer."

The parties to this appeal seem to be in accord to the effect that the section quoted requires the existence of five separate and distinct conditions to disqualify a workman suffering involuntary unemployment from benefits for total or partial unemployment, namely, (1) the unemployment must be directly due, (2) to a labor dispute, (3) in active progress, (4) in the establishment, (5) in which he was last employed.

The language employed in the Act seems designed for that purpose.

The parties also seem to be in accord that the strike above referred to was a labor dispute within the meaning of said section. The evidence shows clearly that the sole cause of claimant's unemployment was the strike above referred to and that there was no intervening cause such as was found to be present in the Drummond case. It is therefore quite clear that the unemployment was directly due to that labor dispute and that the labor dispute was in active progress at the time of claimant's unemployment.

There is serious difference between the parties as to whether or not the labor dispute was in progress "in the establishment" in which the claimant was employed, but there is no dispute that if the facilities above described were an "establishment" within the meaning of the Act that the claimant was employed in the coal mining unit above referred to.

The insistence of the appellant is that the statute was amended to disqualify a claimant whose unemployment was directly due to a labor dispute in active progress without regard to whether the claimant participated in the dispute.

The appellees insist that the statute should be construed to mean that a labor dispute in which the claimant does not participate does not disqualify the claimant.

Apparently there are two schools of thought concerning unemployment compensation legislation. One school maintains that such legislation should protect the worker against loss of employment brought about by economic conditions; the other believes that compensation should be paid whenever there is unemployment, whatever the cause may be, other than voluntary act of the unemployed. Both schools of thought have succeeded in having their ideas enacted into the law in various jurisdictions.

The responsibility for legislation of this kind rests with the Legislature. The courts are not concerned with the wisdom of the law nor is the court authorized by construction to make the law cover cases not provided for by the law itself.

We are of the opinion that the Legislature has said in plain and unambiguous terms in the language quoted that if the unemployment is directly due to a labor dispute in active progress in the establishment in which the employee was last employed, that the State fund shall not be called upon to make payments. Had the Legislature intended that the employee must participate in the dispute or benefit by it or finance it in order to be disqualified it could have so provided. Its omission in this respect is significant and we know of no authority in this court to supply omissions that were apparently designedly made by the Legislature in enacting the statutes quoted. After all, the question of qualification or disqualification is a matter for the Legislature. The whole system of unemployment compensation is statutory in origin. Without a statute on the subject no right to compensation exists. We must, therefore, conclude that when the Legislature omitted any reference to participation in the labor dispute mentioned in the statute the Legislature never intended to make participation in the dispute a condition to disqualification of the claimant.

This conclusion leaves but one other question for consideration and that is, whether or not the labor dispute was in active progress "in the establishment" in which the claimant was last employed. So far as we have been able to find there are no decisions of this court, or the Supreme Court of Alabama, defining the word "establishment" as it is employed in the statute quoted. This portion of the Act seems to be patterned after a similar law in the State of Wisconsin. In such circumstances the Wisconsin case of Spielmann v. Industrial Commission, 236 Wis. 240, 295 N.W. 1, defining the word "establishment" as used in the Wisconsin statute, may be looked to. We are of the opinion that an establishment may consist of one or more units and that the facilities for making steel employed by the Tennessee company to that end constitutes the "establishment" within the purview of the Act. See also, General Motors Corporation v. Mulquin, et al., 134 Conn. 118,55 A.2d 732.

Judgment of the Circuit Court allowing the claims of appellees is reversed and a judgment here rendered denying said claims.

Extended opinion by BRICKEN, Presiding Judge. The above opinion was written as the opinion of the court. My colleagues, however, differ with that part of the opinion in which it was stated that the facilities for making steel by the Tennessee Company, including the coal mines, constitute an "establishment" within the provisions of the Act. I dissent from this holding of my colleagues.

The testimony in this case shows without dispute that all of the units of the Tennessee Company's facilities for making steel are completely integrated and the operation of all of them are closely synchronized and coordinated.

The testimony shows that the operations of the company are planned a year in advance and are based upon the amount of steel ingots to be produced per month. A schedule of operations for the coal mines, ore mines, limestone quarries, blast furnaces, open hearth furnaces, and railroad transportation system is made up at that time in order that the proper amount of raw materials may be produced and delivered by the rail transportation system at the proper time and to the proper place in order to produce the required tonnage of steel ingots.

A meeting was held each month at which were present representatives from the coal mines, ore mines, blast furnaces and rail transportation department. This meeting was held to discuss the problems of each department and to plan close coordination of each to schedule the production for each department.

Once a week a meeting was held at which were present representatives from each of these departments to plan the operations for the next week. The meeting was presided over by the Vice President in charge of operations. There was determined which blast furnaces would operate the following week, how much coke would be needed, how much ore would be needed and how much coal would be required. The schedule of each of the mines and quarries for the next week was determined and the schedule of operations of the rail transportation department was set to deliver at the exact time needed for daily production the amount of raw materials needed.

Without dispute, the coal produced in the Tennessee Company's mines was metallurgical coal. All of the coal produced with the exception of that used in boilers was used by that company in the production of coke, which, in turn, was used in the production of steel. The arrangement of the coal mines of the Tennessee Company was such that no coal could be stored at the mines. As the coal was brought to the surface, it was loaded into the company's own coal cars and taken directly to the coke plant over the company's own railroad facilities. There were no transportation facilities at the coal mines except the rail transportation system of the company. This was due to the fact that the plan of operation of the company was that the coal, as soon as it was washed at the coal mines, was to be transported directly to the coke plant.

Unless the transportation system could function and transport the coal to the coke works as soon as it was washed, then the coal mines could not operate. This part of the transportation system was as much a part of the coal mines as the tipples, the hoist, the mine cars and tracks.

A strike, such as occurred in this case, by the employees of the rail transportation would and did cause a complete shut down of the coal mines just as effectually as would a strike by the employees who transport the coal from the bottom of the mines to the surface. A strike by the employees at the coke works, whose duty it was to unload the coal as it comes from the coal mines and to charge it into the coke ovens, would close down the coal mines just as effectually as would a strike of the employees whose duty it was to load the coal at the mines into coal cars. A strike of the rail transportation employees and of the coke oven employees would also close down the blast furnaces, the open hearth furnaces, and the ore mines, because they could not operate unless coal was transported to the coke ovens, made into coke, and carried to and charged into the blast furnaces with ore from the ore mines. It takes all of these units to make the establishment for the production of steel. The various units were so coordinated that none could operate unless the others also operated. The blast furnaces could not operate unless the ore and coke were produced and delivered when necessary to charge the furnaces. The coke ovens could not produce the coke unless the coal was delivered. The coal mines could not operate unless the rail transportation department operated, so as to transport to the coke works regularly car by car the coal as it came to the surface, was washed and loaded into the coal car.

In my opinion, all of these units of the steel making facilities of the Tennessee Company were thoroughly integrated and operations coordinated to the end and purpose of producing steel and together they constituted an "establishment" within the purview of the statute.

My colleagues refuse to follow the decisions of the Supreme Courts of Wisconsin and Michigan on the theory that, "The relative recency of the law and the paucity of judicial decisions thereon create historical nuances rather than historical facts, which are of only small import in a historical interpretation of the true purpose of the act." In my opinion the history of unemployment compensation acts shows clearly that the decisions of the Supreme Courts of Wisconsin and Michigan cited above are sound and should be followed by this court.

The first unemployment compensation law was the British National Insurance Act of 1911, which is set out in Vol. 49, Law Reports, 1-2 Geo. V. C. p. 424; Section 87 of that Act disqualifies for benefits any workman who has become unemployed by reason of a stoppage of work due to a trade dispute at the "factory, workshop, or other premises" at which he is employed. The section then concludes as follows: "Where separate branches of work which are commonly carried on as separate businesses in separate premises are in any case carried on in separate departments on the same premises, each of those departments shall, for the purpose of this provision, be deemed to be a separate factory or separate premises, as the case may be." In 1924 this law was amended by inserting in it a provision relieving from the disqualification clause in the event the claimant of benefits "proves that he is not participating in or financing or directly interested in the trade dispute which caused the stoppage of work and that he does not belong to a grade or class of workers members of which are participating in or financing or directly interested in the dispute." British Unemployment Insurance Act 1924. Vol. 62, Law Reports, C. 30, p. 168.

The law was further amended in 1935, broadening its scope in many respects but retaining verbatim the disqualification clause of the 1911 Act and the provision of the 1924 amendment as to exceptions to the disqualification clause.

In the United States the first unemployment Act was adopted in Wisconsin in 1932. It was based largely upon the British Act of 1924, but eliminated from the disqualification clause the words "factory, workshop or other premises" and substituted the single word "establishment." It also omitted entirely the provisions relieving from the disqualification clause in the event the employee or members of his grade or class of workers did not participate in or finance, or were not directly interested in the labor dispute, and omitted entirely the "separate branch" provision.

Upon passage of the Federal Act in 1935, the Social Security Board prepared a proposed draft for adoption by the States. This draft was based very largely upon the British Act of 1924, as amended. It contained almost verbatim the disqualification clause of the British Act, including the provisions relieving an employee from the disqualification clause in the event he or members of his grade or class of workers did not participate in or finance the labor dispute and the "separate branch" provision.

A number of States of the United States adopted almost verbatim the suggested draft prepared by the Social Security Board, including the provision relieving from the disqualification clause and the "separate branch" provision.

When the Alabama Legislature adopted its Unemployment Compensation Act in 1935, it patterned that act very largely on the Social Security draft, which was based upon the British Acts. The Alabama Legislature, however, patterned its disqualification clause after the Wisconsin Act, and like Wisconsin omitted entirely the provision relieving from the disqualification clause in the event the employee did not participate in or finance or was not interested in the labor dispute and also, like Wisconsin, used the single word "establishment" and omitted the "separate branch" provision.

It is significant that the Alabama Legislature while adopting most of the Social Security Board's draft, omitted those provisions of that draft which relieved employees not at fault from the labor dispute disqualification clause, and omitted the "separate branch" provision.

It is familiar law that where a Legislature adopts in substance a statute of another State or country but omits a proviso attached to that statute, the statute as adopted will be construed as excluding the matter in the proviso. This has been clearly held by the Supreme Court of Alabama in the case of Howell's Mining Co. v. Gray, Chief Mining Inspector,148 Ala. 535, 42 So. 448.

The responsibility for legislation of this kind rests with the Legislature. The courts are not concerned with the wisdom of the law, nor is the court authorized by construction to make the law cover cases not provided by the law itself.

The cases cited by my colleagues are not in conflict with this opinion or with the decisions of the Supreme Courts of Wisconsin and Michigan.

In the case of Walgreen Co. v. Murphy, 386 Ill. 32,53 N.E.2d 390, 392, a strike occurred in a warehouse operated by the Walgreen Company. The striking employees filed claims for unemployment benefits. They contended that the warehouse was only one unit in an establishment which included some 240 retail stores and that since these retail stores continued to operate, there was no "stoppage of work" in the establishment within the meaning of that term as used in the Illinois Act. The Supreme Court of Illinois held that it was not necessary in order for striking employees to be disqualified from benefits that the employer's operations in all their ramifications should be completely shut down. On the question of the establishment, the court said:

"For the year ending September 30, 1941, net sales of the warehouse aggregated approximately $23,000,000. Of this total, about $13,000,000 represented sales to retail stores of the company and the greater part of the remainder to other retail customers. The warehouse employs an average of 350 employees. It maintains and keeps its own records. The warehouse employs its own watchmen, engineers and maintenance crew. Other drug warehouses in the metropolitan area commonly operate as separate businesses. Retail drug stores in the Chicago area generally operate without a warehouse. The company's retail stores could operate if the warehouse ceased doing business. Similarly, the warehouse could continue to operate if the company's stores ceased operations. The retail stores continued normal operations during the strike and, apparently, could have continued to do so indefinitely. The relationship between the warehouse and the retail stores is no closer functionally than exists between independent drug wholesalers and their retail customers."

On this finding the court held that the warehouse was an establishment separate from the retail stores and that this was true specially in view of the fact that the Illinois Act contained the "separate branch" provision, which was omitted by the Alabama Legislature from our Act. There can be no quarrel with the court's conclusion, but it has no application to a situation of closely integrated operations such as we have in the present case, where one could not operate if others closed.

In the case of Phillips, Inc. v. Walling, 324 U.S. 490, 491,65 S.Ct. 807, 89 L.Ed. 1095, 157 A.L.R. 876, cited by my colleagues, the Supreme Court of the United States held that the exemption from the Fair Labor Standards Act of employees engaged in a retail establishment did not exempt employees of a warehouse whose business was entirely wholesale and was interstate. The Supreme Court of the United States pointed out that the congressional debate on which they based their decision showed conclusively that Congress, when it placed in this Act the exemption of employees of a "retail establishment" had in mind small individual stores, filling stations and separate purely retail outlets chiefly located near State boundaries. This is also pointed out in the later decision of the Supreme Court of the United States in Roland Electrical Co. v. Walling, 326 U.S. 657, 66 S.Ct. 413, 419, 90 L.Ed. 383. As the Supreme Court said in this later decision, "There never was an intent expressed to exempt retailers other than the local merchants of the type dealing with the ultimate consumer." It is clear from reading these decisions and from the Act itself that the exemption contained in the Fair Labor Standards Act was not intended to exempt employees engaged in wholesale activities, which are a part of interstate commerce. The cases growing out of construction of the words "retail establishment" under the Fair Labor Standards Act are entirely inapplicable here.

For reasons stated, I do not concur in the opinion of my colleagues in holding that the steel making facilities of the Tennessee Company are not in "an establishment" within the purview of our statute.