Arkansas Oklahoma Gas Corp. v. Director, Arkansas Employment Security Department

John E. Jennings, Judge. Arkansas Oklahoma Gas Corporation appeals the Board of Review’s decision that its former employee, Delores Gross, was eligible for unemployment compensation benefits even though she had been made an offer of employment. In awarding benefits, the Board found that the job offered Ms. Gross was unsuitable because accepting it would effectively require her to resign from a labor union. We agree with appellant that the Board’s decision is contrary to the law, and we reverse and remand. Ms. Gross had been employed by appellant for twenty-one years and was a union member of Teamsters Local 373, which had negotiated a collective bargaining agreement with appellant. For nineteen years, Ms. Gross worked as a meter reader, a job that is classified as a union “bargaining unit” position. In 1999, she became a dispatcher, which was also a bargaining unit position, but she was disqualified from that job after eight months due to unsatisfactory performance. Thereafter, she accepted a job from appellant in the “GPS” program where she was responsible for locating and charting customer meters on a map. This job was a temporary position that would come to an end when the project was completed. Although this job was a non-union, or a “non-bargaining unit” position, Ms. Gross was considered “on loan” from the union in this temporary assignment, which allowed her to retain job-bidding rights for bargaining unit positions without losing her years of seniority. The GPS position expired on September 11, 2001. Ms. Gross had not bid on any of the thirty-five bargaining unit positions that had become available during the eighteen months she worked in the GPS program. When the GPS assignment ended, there were no bargaining unit positions open. Appellant offered Ms. Gross a job as an overdue bill collector, a non-bargaining unit position. This job came with a pay increase of two cents an hour and provided other employee benefits, including participation in the company’s 401 (k) plan. Ms. Gross declined to take this job. She explained that, because it was non-union, she would be left without union protection such that she could be fired without cause and without recourse to union grievance procedures. Taking the job would also result in the loss of her seniority in the job-bidding process. Although she would remain eligible to bid on bargaining unit positions within the company, she would not be hired for the job if another union employee with greater seniority bid on the position. The fundamental purpose of our employment security law is to aid those persons who find themselves unemployed through no fault of their own. Ark. Code Ann. § 11-10-102(3) (Repl. 2002). In keeping with that purpose, an individual is disqualified for benefits if he fails without good cause to accept available suitable work when offered. Ark. Code Ann. § 11-10-515(a)(1)(B) (Repl. 2002). The law further provides that a prospective job is not suitable, “if as a 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 organization.” Ark. Code Ann. § 1 l-10-515(d)(3) (Repl. 2002). The Board in this case found that the job as collector was unsuitable because accepting it with the. loss of seniority and union protection was tantamount to requiring Ms. Gross to resign from the union. The issue is controlled by the supreme court’s decision in Thornbrough v. Stewart, 232 Ark. 53, 334 S.W.2d 699 (1960). There, the claimant was an unemployed union member who refused to accept non-union work because his union might fine or expel him for taking a job that paid less than the union scale. The court rejected the claimant’s argument that he had good cause to refuse the job or that he was protected from disqualification under the provision of the statute, cited above, that is now codified as Ark. Code Ann. § 9-10-515 (d)(3). The court held that the threat of sanction by union rules did not render the job unsuitable under the statute and that the claimant forfeited his right to receive unemployment compensation by refusing to accept the job. In so holding, the court accepted the view that the statute did not intend union-made rules to determine the suitability of offered employment. Because it was a case of first impression, the Thornbrough court reviewed decisions from other jurisdictions in adopting what it called the “universally” accepted rule. The court particularly relied on the reasoning in Chambers v. Owens-Ames-Kimball Co., 67 N.E.2d 439 (Ohio 1946). There the worker had been a union member for twenty-seven years, and when unemployed he declined a non-union job because it might have resulted in disciplinary action by his union. The worker argued that the Ohio statute, which is similar to our own, did not bar benefits to an unemployed worker who refuses employment which might result in the denial of his right to retain union membership because of prospective disciplinary action by the union. The court disagreed, saying: Furthermore, the interpretation of appellee would make the operative effect of a refusal to work depend entirely on the whim or caprice of an organization to which the applicant for unemployment compensation might belong. . . . Under such an interpretation, the right of the applicant for unemployment compensation would not be fixed or determined by the provisions of the statute but by rules adopted by organizations in which the applicant has membership. Such interpretation of the statute, and as a consequence its administration in conformity to such interpretation, is clearly untenable. Id. at 442. The court also determined that the word “condition” used in the statute should not be interpreted to mean the “result” of accepting employment, but that the term meant “requirement” and referred to restrictions contained in the offer of employment made by the employer. Finally, the court observed that an award of benefits to a union worker who refuses an otherwise suitable, but non-union job, would discriminate against non-union workers who would be disqualified for refusing to accept the same job: Under appellee’s interpretation of the statute, an unemployed nonunion workman would be obliged to accept the same job which the appellee refused to accept and would be required to work without right to participate in the unemployment compensation benefits. On the other hand, the appellee could refuse to accept the same job at the same wages and by reason of such refusal qualify himself to receive benefits as an unemployed workman. In our view, such an interpretation of the statute would not permit it to operate in a constitutional manner. It would result in discrimination and injustice. The law must do justice. There can be no valid classification of persons based upon membership or nonmembership in a labor organization, which would operate to differentiate rights to receive benefits under the unemployment compensation statute. Id. at 443. The Thornbrough court also cited with approval the decision in Barclay White Co. v. Unemployment Compensation Board of Review, 50 A.2d 336 (Pa. 1947). In that case, the worker had been a union member for over thirty years, and he refused non-union employment because taking the job might have subjected him to suspension or expulsion from the union and would result in the loss of all membership advantages, including sickness, old age, and death benefits. As in Chambers, supra, the court concluded that the language “condition of being employed” refers to a condition, made in the offer of employment by the employer, requiring the prospective employee to resign from a labor organization. In denying benefits, the court stated: The public policy of the Commonwealth does encourage membership in labor organizations but retention of membership therein is not a surrender to circumstances of the kind and quality which will turn voluntary unemployment into involuntary employment. It would do great violence to the clear and unequivocal wording of the statute to hold that a labor union or any other organization can control payments of unemployment benefits to its members by merely forbidding them to work at wages less than those set by it, or with certain persons, or at certain places, or under certain conditions. If eligibility under such conditions is to be added to the Act, that must be done by the legislature, and not the Courts. ... To hold otherwise is the equivalent of saying that a union may adopt its own definition of suitable work and determine, by rule and bylaw, what does and does not constitute good cause for refusing referred employment. Id. at 341. The court in Thornbrough also relied on the decision in Bigger v. Unemployment Compensation Commission, 53 A.2d 761 (Del. 1947). There, the claimant refused a non-union job because his union forbid its members from working at non-union jobs under possible penalty of expulsion. The court disagreed with the claimant’s argument that accepting the job was the equivalent of requiring him to resign from the union. The court observed: In the body of the Act, the Legislature has defined with some care the standards for determining who is entitled to benefits from the reserve fund created. Nothing in the Act suggests that a union or a group of employers or any one else may add to, or subtract from the standards laid down by the Act itself. From what has been said, it is clear that the Legislature had no thought of strengthening or of weakening the power of unions. Its purpose was to protect all workmen involuntarily employed. Membership in a union gives an individual no greater rights under the Act than he otherwise has. Likewise, a group of individuals cannot secure higher privileges merely by adopting a rule which binds themselves to a certain course of conduct. We cannot agree with a theory which would have the effect of substituting a union rule for a statutory requirement. If a man wants to benefit by the Act, he must comply with its provisions; his unemployment is not involuntary if he refuses a job without good cause; good cause means those reasons contained in the Act. Id. at 564-565. The rule espoused by these courts and the court in Thornbrough remains the majority view. See Wentz Heating & Air Conditioning Co. v. Kiene, 274 N.W.2d 547 (Neb. 1979); Adams v. Auchter Co., 339 So. 2d 623 (Fla. 1976); In re Beatty, 210 S.E.2d 193 (N.C. 1974); Miville v. Maine Employment Security Comm’n, 219 A.2d 752 (Me. 1966); Norman v. Employment Security Agency, 356 P.2d 913 (Idaho 1960); State Department of Industrial Relations v. Harbin, 365 So.2d 313 (Ala. Civ. App. 1978); Lemelin v. Administrator, 242 A.2d 786 (Conn. Super. Ct. 1968). Accord Brown v. Division of Employment Security, 973 S.W.2d 199 (Mo. Ct. App. 1998). In addition, the same rule applies where there is a collective-bargaining agreement negotiated between the employer and labor union. In Norman v. Employment Security Agency, 356 P.2d 913 (Idaho 1960), the court accepted the reasoning of its appeals examiner who said: To permit work to be deemed unsuitable because of the provisions of such a [union] contract would be to allow unions and employers to dictate the conditions under which the Agency would or would not pay benefits. The matter of a union-negotiated contract is one of concern to the employer and the union. No union contracts can amend the law of the State of Idaho so as to grant its members privileges not contemplated by the law. Id. at 918. See also In re Beatty, 210 S.E.2d 193 (N.C. 1974); Mills v. Mississippi Employment Security Comm’n, 89 So. 2d 727 (Miss. 1956). In the case at bar, Ms. Gross rejected the offer of nonunion employment because of the loss of union protection and seniority. The loss of these privileges, whether by union rule or a provision in a collective-bargaining agreement, does not provide good cause for rejecting the job and does not render the offered employment unsuitable. Otherwise, there is no evidence in the record that she was required by appellant to resign from the union before accepting the job as collector. On the contrary, the evidence was that she remained eligible to bid on union positions while holding this job. While we are entirely in agreement with the dissenting judges’ view of the importance of our fidelity to the standard of review in these cases, we need only say that the substantial-evidence standard is applicable only when the issue is one of fact. The rule has no application when the issue is one of law, as it is in the case at bar. There was testimony from Ms. Gross that being a collector was a less than desirable job. Because the Board made no finding on the issue of suitability generally, we remand for a decision on this issue. Hays v. Director, 251 Ark. 659, 473 S.W.2d 926 (1971). Reversed and remanded. Pittman, Robbins, Bird, Vaught, and Roaf, JJ., agree. Hart, Griffen, and Neal, JJ., dissent.