Federal Aviation Administration v. Montana State Department of Labor & Industry

NO. 83-470
IN THE SUPREME COURT OF THE STATE OF ?lOMTANA
1984
FEDERAL AVIATION ADMINISTRATION,
Petitioner and Respondent,
THE MONTANA STATE DEPARTMENT OF LABOR
and INDUSTRY: and 24 members of the
Professional Air Traffic Controllers'
Organization,
Respondents and Appellants.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Henry Loble, Judge presiding.
COUNSEL OF RECORD:
For Appellants :
Norman H. Grosfield argued for PATCO, Utick, Grosfield
& Uda, Helena, Montana
R. Scott Currey, Dept. of Labor & Industry, Helena,
Montana
For Respondent:
Allen R McKenzie, Asst. U.S. Attorney introduces Karl
.
B. Lewis who argued for FAA, Butte, Montana
Submitted: June 12, 1984
Decided: August 15, 1984
405 ; : ;Ya4
Filed:
Clerk
1 Justice L.C. Gulbrandson delivered the Opinion of the
Court.
This case comes on appeal from an 3rder of the
District Court of the First Judicial District, Lewis and
Clark County, reversing a. decision of the Board of Labor
Appeals which had granted twenty-four members of the
Professional Air Traffic Controllers' Organization (PATCO)
unemployment benefits. We affirm.
The terms of the PATCO members' employment were
governed by a nation-wide collective bargaining agreement
between PATCO and the Federal Aviation Administration (FAA).
After the collective bargaining agreement expired in I'larch,
1981, negotiations concerning a new contract ensued between
PATCO and the FAA, and on June 22, a tentative
agreement was negotiated. However, PATCO members did not
ratify the agreement and bargaining for a new labor contract
began again. When an agreement could not be reached, PATCO
members withheld their services from employment beginning
August 3, 1981.
A11 members of PATCO, at the time they were hired by
the FAA, had signed affidavits that generally provided as
follows: That the member had not participated in any strike
against the government of the United States or any agency
thereof, and would not so participate while an employee of
the government of the United States or any agency thereof.
Various members of PATCO were warned that they should
not strike or withhold their services, and a restraining
order was issued against PATCO personnel in Washington D.C.
In addition, the President of the United States ordered, in
a televised statement, that the PATCO members should return
to work within forty-eight hours or they would be subject to
discharge. On August 3, 1981, the chief air traffic control
operators at Billings, Great Falls and Helena called the
PATCO members and requested they report for work as
scheduled. On August 4, 1981, the Regional Office of the
FAA in Denver, Colorado, sent each Montana employee a
telegram and directed them to return to work. Shortly
thereafter, all members of PATCO who withheld their services
were terminated from employment with the FAA.
Subsequent to their termination from employment,
twenty-four Montana members of PATCO sought state
unemployment benefits. On December 2, 1981, certain appeals
referees sustained the determinations of various
administrative deputies who had found the PATCO members were
disqualified to receive benefits under the Montana
Unemployment Insurance Act (the Act) because they were
discharged for misconduct connected with their work.
Specifically, the appeals referees found that each PATCO
member was discharged by the FAA for violating 5 U.S.C.A.
section 7311 (1980) and 18 U.S.C.A. section 1918 (1970) and
concluded that the PATCO members were disqualified from
unemployment compensation under section 39-51-2303, MCA,
(discharge due to misconduct). Thereafter, the PATCO
members appealed the referees' decision to the Board of
Labor Appeals (the Board).
On February 3, 1982, the Board reversed the decision
of the appeals referees and granted the PATCO members
unemployment benefits. Relying on Continental Oil Co. v.
Board of Labor Appeals (1978), 178 Mont. 143, 582 P.2d 1236,
the Board found that since the PATCO members' strike was
part of an overall labor dispute they left their jobs
because of a labor dispute and were not discharged for
misconduct. The Board stated that "[tlhe fact that the
strike was in violation of Federal law does not terminate
the strike itself from the flow of the other events in this
dispute much as a 'wildcat' strike in the private sector
would violate a 'no strike' labor agreement and civil
injunctive relief to the employer." The Board concluded
that section 39-51-2305, MCA, (disqualification when
unemployment due to stoppage of work), rather than section
39-51-2303, MCA, (discharge due to misconduct), was the
proper statutory provision under which to consider the issue
of the PATCO members' eligibility for unemployment benefits.
On March 19, 1983, the FAA appealed the decision of
the Board to the District Court. On September 8, 1983, the
District Court reversed the decision of the Board and found
that the PATCO members were disqualified from receiving
unemployment compensation because they had been discharged
for misconduct. Noting the PATCO strike was in violation of
federal law, the District Court rejected the Board's
interpretation and application of Continental Oil, supra,
since that case did not involve an illegal strike.
From the District Court's decision reversing the
Board, the Department of Labor and Industry and the PATCO
members appeal to this Court.
The two statutory provisions pertinent to this appeal
are as follows:
"................................ n f o r
39-51-2303. Disqualificatio
discharge due to misconduct. An indi-
vidual shall be disqualified for benefits
if he has been discharged:
"(1) for misconduct connected with his
work or affecting his employment until 2n
individual has performed services, other
than self-employment, for which
remuneration is received equal to or in
excess of eight times his weekly benefit
amount subsequent to the week in which
the act causing the disqualification
occurred.
"(2) for gross misconduct connected with
his work or cornmitted on the employer's
premises, as determined by the
department, for a period of 12 months.
"39-51-2305. D i s q u a l i f i c a t i o n w h e n
.................................
unemployment due to stoppage of work.
-------------
( 1 ) Effective April 1 , 1977, an
individual shall b e disqualified for
benefits for any week with respect to
which the department finds that his total
unemployment is due to a stoppage of work
which exists because of a labor dispute
at the factory, establishment, or other
premises at which he is or was last
employed, "...
The definition of misconduct generally accepted in
most jurisdictions and adopted by this Court in Gaunce v.
Board of Labor Appeals (1974), 164 Mont. 445, 448, 524 P.2d
1108, 1110, was set forth in Boynton Cab Co. v. Neubeck
(1941), 237 Wis. 249, 296 N.W. 636. In Boynton Cab Co., the
court held that the term "misconduct" referred to conduct
evincing such a willful or wanton disregard for an
employer's interest as is found in the deliberate violation
or disregard of standards of behavior which the employer has
the right to expect of his employees or in negligence of
such a degree or recurrence as to manifest equal
culpability, wrongful intent, or evil design.
Appellants rely on Claim of Heitzenrater (1966), 19
N.Y.2d 1, 224 N.E.2d 72, in arguing that the PATCO members'
strike did not constitute misconduct as defined in Boynton
Cab Co. and Gaunce. In Claim of Heitzenrater, the New York
court held that employees who participated in a strike in
violation of the no-strike clause of a private contractual
agreement were not guilty of misconduct and were therefore
entitled to receive compensation under the striker-benefit
provisions of the statute. The New York court initially
noted that the mere existence of a strike or other
industrial controversy does not necessarily preclude a
finding of misconduct. However, the court stated that in
disputes arising out of private contractual agreements, a
finding of misconduct would require the resolution of
factual issues as we11 as complicated questions of labor
law, and that such matters "are best left to agencies
especially qualified to deal with them, namely the Federal
and State Labor Boards and labor arbitrators," rather than
the individuals administering the unemployment compensation
laws. Claim of Neitzenrater, supra, 19 N.Y.2d at 7, 224
N.E.2d at 75-76.
However, the New York court subsequently held that in
situations where the Legislature has specifically prohibited
strikes or other concerted activity, an employee's violation
of that proscription constitutes misconduct as a matter of
law. Rodriguez v. Presbyterian Hospital (1973), 32 N.Y.2d
577, 582, 300 N.E.2d 418, 420. In Rodriguez, a hospital
employee participated in a strike that had been expressly
declared unlawful by statute because of the need to protect
the public from the disruption of essential services in the
area of health and hospital administration. The Rodriguez
court noted that the traditional reluctance of the
Legislature to intervene in the realm of employment
relations was overridden in this case by a compelling need
to ensure the public safety in the critical area of health
care. Given this important legislative purpose, the
Rodriguez court held that violation of the statutory mandate
prohibiting strikes amounted to "legislatively defined"
misconduct. Rodriguez, supra, 32 N.Y.2d at 582, 300 N.E.2d
at 419. Unlike violations of a private collective
bargaining agreement, the legislation prohibiting strikes
involved no complex issues of labor law because "the
Legislature itself resolved all such issues by explicitly
proscribing and expressly stamping as unlawful strikes and
work stoppages by . . . public employees ..." Rodriguez,
supra, 32 N.Y.2d at 582, 300 N.E.2d at 420. The Rodriguez
court concluded that the actions of an employee in violating
the statutory prohibition against striking fell squarely
within the misconduct provisions of the New York
unemployment compensation statutory scheme. Rodriguez,
supra, 32 N.Y.2d at 582-583, 300 N.E.2d at 420.
In the case at bar, this Court must consider the same
issue as was presented in Rodriguez, specifically, whether
participation in an unlawful strike constitutes misconduct
as a matter of law. The facts reveal that a strike occurred
whicli is unlawful according to the provisions of 5 U.S.C.A.
section 7311 (1980) and 18 U.S.C.A. section 1918 (1970).
In Ranone v. Board of Review (1984), No. 82-368-M.P.,
116 LRRM 2134, 2136-37, the Rhode Island court considered
whether PATCO members, discharged from federal employment
for engaging in the same illegal strike of August 3, 1981,
were ineligible for unemployment compensation. The Rhode
Island court stated:
"We find persuasive the reasoning of the
Rodriquez court in holding that the
misconduct provision disqualifies an
employee from benefits when the
unemployment resulted because of an
unlawful strike. Here, the federal air
traffic controllers acted in violation of
the congressional mandate that expressly
prohibits strikes by federal employees.
5 U.S.C.A. section 7311. That statutory
prohibition and the criminal sanctions
provided pursuant thereto evince an
unequivocal congressional intent to
prevent the disruption of public services
in order to 'ensure that the machinery of
the Federal Government continues to
function at a 11 times without
interference.' United Federation of
Postal Clerks v. Blount, 325 F. Supp. 879,
884, 76 LRRM 2932 (D.D.C. 1971)."
We agree with the Rhode Island court's application of
Rodriguez and hold that the misconduct provision of
Montana's Unemployment Insurance Act applies to the PATCO
strike and disqualifies the PATCO members from benefits
because the unemployment resulted from an unlawful strike.
The PATCO members engaged in conduct which was, at least, in
deliberate disregard of the employer's interests and of the
standards of behavior the employer had the right to expect
of its employees. Gaunce, supra, 164 Mont. at 448.
We therefore hold that the actions of the PATCO
members in engaging in a prohibited strike constituted
misconduct under Montana law and the District Court did not
err in holding that the PATCO members were disqualified for
unemployment benefits under section 39-51-2303
gCA*
Affirmed.
W e concur:
Chief J u s t i c e
-_
_-
I.
Justices
Mr. Justice John C. Sheehy, dissenting:
Let us first be clear about what this case involves.
This decision does not mean the discharged air controllers
will not receive unemployment benefits. They have already
received them, and we all recognize the impossibility of
recovering the benefits from the individual air controllers.
What the majority has done is agree that the already
hard-pressed state unemployment insurance fund will reimburse
the FAA for the cost of the benefits. Thus will the FAA
escape fiscal responsibility for the ills which the federal
government brought down on all of us by its refusal to
correct the intolerable working conditions to which it had
subjected and does now subject the controllers at our
airports. We ought to put the responsibility for the
payment, not on the employers of this state, but on the feds
who indeed were more interested in breaking labor than
protecting our air safety.
In the six years I have served the Court, I have been
accorded the opportunity to write some far-reaching
decisions, and to disagree with others equally far-reaching.
In most of them, however, I saw where the Court could pride
itself as a fair arbiter in deciding between the individual
and the sometimes overwelming use of power by officials,
better termed by Hamlet as "the insolence of office." Today
I am not proud. My Court has called workers guilty of
misconduct for obeying the call of their national union to
strike. My stomach turns at this. Helpless in the power
struggle, the air controllers chose to support each other in
their cry for better working conditions. Misconduct? We
should rather admire the courage it took to give up their
jobs and benefits rather then bend their necks to their
would-be masters.
I do not exaggerate the abusive working conditions that
led the controllers to their choice. In the Wall Street
Journal of July 5, 1984, on page 10, there is quoted in part
a letter to the FAA's administrator from the chairman of Pan
American Airlines which states:
"The air traffic controller problem has gone from
bad--to worse--to horrible--to intolerable. [Pan
Am is] now experiencing more frequent and more
substantial delays in clear, optimum conditions
than we were incurring during severe conditions a
few months ago."
In the Billings Gazette, Tuesday, July 10, 1984, page
7B, one finds the Associated Press story concerning the
increase in the number of flight delays in and out of major
airports which causes scheduling and arrival troubles for the
airlines. The airlines blame the Federal- Aviation
.Administration for the over-burdened air traffic control
system. The FAA, which cannot now blame the new 2j.r
controllers it brought into position, blames the airlines.
Here is a paragraph, three years after the strike, to dampen
your soaring spirit:
"The government's air traffic control system is
still recovering from the strike three years ago
when 11,400 controllers were fired. The FAA is
1,000 controllers short of what it considers full
strength, and many of the current controllers are
inexperienced."
We ought to place misconduct where it properly should
lie, on the administration that brought this alarming
condition about. We ought to recognize that the air
controllers had the right in 1981 to the same principle that
we applaud in the Declaration of Independence, that "when a
long train of abuses and usurpations, pursuing invaria.b,-y
the
same object, evinces a design to reduce them under a.bsolute
despotism, it is their right, it is their duty, to throw off
such government and to provide new guards for their future
security."
We should not succumb, as most of government has, to
government by Gallup Poll.
The statute on misconduct, section 39-51-2303, MCA, wa.s
never intended by the legislature to apply to unemployment
caused by labor dispute. Misconduct in the sense of that
statute refers to individual fraud, theft, vandalism, and
other acts which bring about a firing because of those acts
against the employer. The only statute we have applicable to
a labor dispute is section 39-51-2305(l), MCA. In City of
Bill-ings v. State Board of Labor Appeals (Mont. 1983), 663
P.2d 1167, 1174, 40 St.Rep. 648, 655, we said concerning the
labor disputes statute:
"In examining the statute, note that the inclusion
of the phrase 'stoppage of work' by the legislature
is not intended to be a synonym for 'strike' or
'lockout.' If the legislature meant that a
striking or locked out employee would be
disqualified for benefits, it had to only eliminate
the phrase 'stoppage of work' so as to make the
section read that the individual is disqualified
for benefits if his total unemployment is 'because
of a labor dispute at the factory.' When the
legislature inserted the words 'due to a stoppage
of work,' it meant that the factor to be considered
in connection with disqualification meant more than
that the individual claimant was on strike, or
locked out in a labor dispute. There may be a
labor dispute and yet no stoppage of work.
Montana has aligned itself with the majority of
courts holding on the question that the phrase
'stoppage of work, ' refers to the employer's
operations rather than to the individual employee's
work (citing authority.) This so called 'American
rule' allows strikers to collect benefits so long
as their activities have not substantially
curtailed the productive operations of their
employer. (Citing authority. "
City of Billings, supra, and other cases (Continental
Oil Company v. Board of Labor Appeals (1978), 178 Mont. 143,
582 P.2d 1236; Decker Coal v. Employment Security Division of
923
Montana (Mont. 1983), 667 P.2d BHL, - St.Rep. ) , have
indicated our interpretation of the unemployment compensation
benefits statutes as to leave the matter of labor disputes to
the legislature and to the parties, and to determine the
rights of workers to unemployment insurance benefits solely
upon the provisions of section 39-51-2305(l) when a labor
dispute is involved. The majority without discussion has
departed from that position.
I would affirm the Board of Labor Appeals that no
stoppage of work had occurred and that the air controllers
were entitled to the benefits which they received. The
effect would be to tell the FAA that it and not Montana
employers must hear the burden of its intransigence.
e3 k
Justice
Mr. Justice Frank B. Morrison, Jr.:
I concur in the dissent of Mr. Justice Sheehy.
I join i n t h e d i s s e n t of M r . J u s t i c e Sheehy.