GARDNER v. STATE (1959)

The question on this appeal is whether unemployment insurance benefits can be recovered by employees of restaurants which closed, without being struck, when other restaurants were closed by a strike. The Director of Employment denied claims filed by some 50 employees. They appealed. A referee took evidence and decided that the employees were entitled to benefits. On further appeal, the Unemployment Insurance Appeals Board, on the same record, found the employees ineligible for benefits. They brought this mandamus proceeding, which was submitted to the trial court on the record before the administrative body. The court adopted the findings of the referee, and issued peremptory writ requiring payment of benefits to the employees. Director and employers appeal.

The dispute which gave rise to this proceeding occurred in 1955. The local Joint Executive Board is a committee representing two unions of restaurant employees. Santa Clara County Restaurant Association, a group of employers, had some 70 members and some 44 ‘authorizing employers,’ for all of whom it acted in negotiation of collective bargaining agreements with the joint board. There were 700–800 restaurants in the area. Board and association had negotiated and executed contracts since 1951.

In 1953, there had been a strike against some members of the association. Although association representatives had stated that a strike against one would be deemed a strike against all, this strike continued for some 6 weeks before members of the association who had not been struck were asked by the association to close. There is conflict in the evidence as to the number of non-struck restaurants which then closed, the figures running from ‘less than 10’ to ‘70–80% effective.’ The strike ended the day following whatever closings did occur, but the evidence does not compel the inference drawn by the employers that the unions ‘capitulated.’ Some members of the association executed agreements with the unions during the course of the strike.

The 1955 dispute arose in the course of negotiations for modification of the 1953 agreement. On April 11, 1955, the unions voted strike authorization against the entire industry, but authorized the board to determine when and against whom the strike should be called. On April 25, the association voted to adopt the policy that a strike against one is a strike against all. Three days later the board was notified of this action. On May 25, the unions struck 9 or 10 restaurants. The association immediately advised its members, the authorizing employers, and some 425 other restaurants to close. There is sharp conflict as to the effectiveness of this move. There is evidence that only 35 actually closed, and other testimony that the closing was 70% effective. The association released two restaurants from the closing call for hardship reasons. The unions assert that some 30 restaurants signed separate agreements with the unions before settlement of the strike-lockout by agreement executed by association and board June 29.

Plaintiffs were union members and were employees of restaurants which closed although no strike was directly called against them. The claims are for unemployment insurance for the periods these establishments were so closed.

‘An individual is not eligible for unemployment compensation benefits, and on such benefit shall be payable to him, if he left his work because of a trade dispute.’ Unemp.Ins.Code, § 1262.

Literally read, this section might seem to bar plaintiffs' claims. However, it is clear that, ‘[f]airly interpreted, it was intended to disqualify those workers who voluntarily leave their work because of a trade dispute.’ Bodinson Mfg. Co. v. California Emp. Comm., 17 Cal.2d 321, 328, 109 P.2d 935, 940. The problem here is the application of this test of volition to union members who have authorized a strike against some employers, not their direct employers, in the face of employer claims that all employers will close if one or more are struck.

The question has arisen but once in this state. In that case (McKinley v. California Emp. etc. Com., 34 Cal.2d 239, at page 244, 209 P.2d 602, 606), the Supreme Court applied the ‘volitional test’ of Bodinson, saying that where unemployment of workers is ‘caused by their own action taken with full knowledge of its consequences' benefits cannot be recovered. As said in the concurring opinion (34 Cal.2d at page 248, 209 P.2d at page 609), the determinative factor was that ‘the union knew that a strike against one would be treated as a strike against all and they intended that the strike should be effective in obtaining concessions from all the employers.’ McKinley recognizes (34 Cal.2d at page 245, 209 P.2d at page 606) that the ‘volitional test itself is based upon a just analysis of a substantial subjective element.’ Application of the volitional test requires ‘a searching evaluation of the economic realities involved in a particular trade dispute, a study of the interplay of pressure and counterpressure by the contending factions, and a weighing of all the anterior events which have molded and inexorably evolved the pattern of resultant unemployment.’ Chrysler Corp. v. California Emp. etc. Com., 116 Cal.App.2d 8, 15–16, 253 P.2d 68, 72.

It seems obvious that the question whether the employees voluntarily left their work at the firms not struck by striking other employers is an issue of fact. The degree to which the strike of some caused the lockout of others, the foreseeability of that result, the intent of the parties, turn on evidence which here is in substantial conflict. Necessarily, inferences reasonably to be drawn from facts found upon contradictory evidence also play a large part in determination of the ultimate fact. In McKinley, this question did not arise, since that original proceeding was presented to the Supreme Court upon stipulated facts. The several opinions in that case, however, emphasize the factual nature of the issue in the differing weight given to the stipulated facts and the varying inferences drawn from them.

The issue being one of fact, it seems clear that it is for determination by the trial court. The Unemployment Insurance Appeals Board, which has statewide jurisdiction, does not have constitutional authority to make final determinations of fact. Thus the trial court, in such a case as this, exercises its independent judgment on the evidence. Thomas v. California Emp. Stab. Comm., 39 Cal.2d 501, 504, 247 P.2d 561. It follows that the only question before us is whether the evidence, viewed in the light most favorable to respondents, supports the findings of the trial court. Moran v. Board of Medical Examiners, 32 Cal.2d 301, 308, 309, 196 P.2d 20. It is the finding of the trial court, rather than that of the appeals board, which is to be sustained if supported by substantial evidence.

As shown in our discussion of the evidence, most of the relevant facts are in sharp dispute. The evidence would warrant findings in favor of the director and the employers. But there is ample evidence to support the contrary findings which the trial court made.

Judgment affirmed.

DRAPER, Justice.

KAUFMAN, P. J., and DOOLING, J., concur.