Alexander v. A.P. Parts Manufacturing Co. – 15.36

Alexander v. A.P. Parts Manufacturing Co.
Digest No. 15.36

Section 421.29(8)

Cite as: Alexander v. A.P. Parts Manufacturing Co., unpublished per curiam opinion of the Court of Appeals, issued February  23, 1996 (Docket No. 168700).

Appeal pending: No
Claimant: David J. Alexander, Louise Anderson, Charles Arndt, Bruce Berthiaume, Wyatt Boyer, Robert Beuchel, Paul Chomas, George Clark, Richard Courtney, Cheryl Dehate, Dean Fenwick, George Fittig, and Jacob Gotfryd
Employer: A.P. Parts Manufacturing Company
Date of decision: February 23, 1996

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HOLDING: Court applied the deferential standard to the decision of the MESC Board of Review. Reversed the Circuit Court opinion and reinstated the MESC Board of Review’s decision. There exists substantial evidence on the whole record to support the board of review’s conclusion that the labor dispute was connected with the lockout. Ruling of the board of review is supported by competent, material, and substantial evidence on the whole record.

FACTS: Employer manufactures parts for the automobile and heavy truck industry and employed approximately 206 union employees and 75 nonunion employees. In October 1989, employer hired 10-12 additional employees and began to operate two shifts .In December 1989 employer issued a “WARN” letter advising its employees that some employees may be laid off if a new collective bargaining agreement was reached on or about February 8, 1990 (the date the then existing one was set to expire). On February 5, 1990, when employer determined it had sufficient inventory in the warehouse, it laid off the 10-12 nonunion employees it had hired in Oct 1989. On February 8, 1990, immediately after union employees rejected the collective bargaining agreement that the employer had proposed, the employer announced that its operation would be shut down for the next two working days due to an “inventory adjustment”. On February 13, 1990 the employer announced a “lockout” that affected all union employees. Claimants immediately began to picket. Union employees rejected a third proposal and employer ended the lockout by notifying its employees to return to work. However, 75 employees were laid off one additional week due to “lack of work”.

MESC:

  • Determined that claimants were disqualified from receiving unemployment compensation because their temporary unemployment was related to a labor dispute (and the state must remain neutral in labor disputes).
  • In an evidentiary hearing, an MESC referee rejected the employer’s claim that the lockout was related to a labor dispute and hence found that claimants were entitled to unemployment benefits.

MESC Board of Review:

  • Reversed the decision of the referee two-to-one.
  • Concluded that:
    • (1) employers had “warehoused” its product in order to improve its bargaining position in the event of a labor dispute, and
    • (2) claimants were disqualified from receiving benefits under MCL 421.29(8) because the labor dispute that developed was a substantial contributing factor to the lockout.

Circuit Court

  • Reversed the ruling of the board of review

 

DECISION: Circuit court erred in reversing the decision of the MESC Board of Review.

RATIONALE: “Substantial evidence” means more than a mere scintilla but less than a preponderance of the evidence. So long as the MESC Board of Review selected between two reasonable positions, the judiciary must accord deference to administrative expertise and refrain from substituting its own judgment for that of the administrative agency. Court applied the deferential standard to the decision of the MESC Board of Review.

Digest author: Katrien Wilmots, Michigan Law, Class of 2017
Digest updated: 3/30/2016