Matter of Weis v. General Motors Corp., 20 N.Y.2d 262 (1967)

Employees laid off due to a lack of work caused by a strike at a separate, but related, establishment are eligible for unemployment benefits because the layoff is not a direct result of a labor dispute at their own establishment.

Summary

This case concerns General Motors (GM) employees at five New York plants who sought unemployment benefits during a nationwide strike. The New York Court of Appeals addressed whether these employees were barred from receiving benefits under New York Labor Law § 592(1), which suspends benefits for unemployment arising from a strike or industrial controversy “in the establishment in which he was employed.” The court held that employees at the Tonawanda plant were entitled to benefits for the period after local issues were settled, and employees at parts plants were eligible because their unemployment resulted from a lack of work, not a labor dispute at their own facilities. The court dismissed GM’s appeal, finding no substantial constitutional question directly involved.

Facts

General Motors and the United Automobile Workers (UAW) were negotiating a new contract. When the contract expired without a new agreement, a nationwide strike began on September 25, 1964. The strike affected multiple GM plants, including the Chevrolet assembly plant in Tonawanda, NY, and four other parts plants in New York. The Tonawanda plant also had local issues that were not resolved until October 26, after which the plant gradually resumed operations. The four parts plants continued to operate initially, but eventually had to curtail production and lay off workers because the strike at the assembly plants meant there was no place to ship the parts they manufactured.

Procedural History

The Industrial Commissioner granted unemployment benefits to the claimants. The Unemployment Insurance Referee and the Appeal Board upheld this decision. The Appellate Division affirmed the board’s determination. GM appealed to the New York Court of Appeals, arguing a constitutional violation based on federal preemption of labor-management relations.

Issue(s)

Whether the payment of unemployment benefits to GM employees whose unemployment was caused either by the time required to restart a plant after a local strike settlement, or by lack of work at parts plants due to a strike at assembly plants, interferes with GM’s ability to exert economic pressure on the union, thereby improperly intruding into a federally protected sphere.

Holding

No, because the unemployment at the Tonawanda plant after the local issues were settled was due to manufacturing conditions, not the labor dispute itself. Additionally, the unemployment at the parts plants was the result of a lack of work, not a labor dispute or lockout at those establishments.

Court’s Reasoning

The court reasoned that the Tonawanda employees were entitled to benefits for the period after the local issues were settled because their unemployment was due to the time required to resume full production, not the strike itself. Referencing Matter of George (Catherwood), 14 N.Y.2d 234, the court stated, “A strike ends when the workers stop striking and not at some later date when, because of the employer’s method of doing business, it is again ready for full production.”

Regarding the parts plants, the court determined that the layoffs were due to a lack of work, not a lockout or industrial controversy. The court cited American Ship Bldg. v. Labor Bd., 380 U.S. 300, 321, noting that “a lockout is the refusal by an employer to furnish available work to his regular employees.” The court emphasized that GM did not refuse available work; instead, the lack of demand for parts forced the layoffs. The court concluded that GM’s decision was “based solely on the exigencies of doing business” and “in no sense a labor relations tactic.” Because the unemployment was not directly related to a labor dispute in the employees’ own establishments, the court found that the payment of unemployment benefits did not interfere with GM’s bargaining position and thus did not intrude into a federally protected area. The court dismissed the appeal, finding no substantial constitutional question was directly involved in the case.