WV Supreme Court Denies Unemployment Compensation Benefits to Striking Employees
March 15, 2018
Earlier this week, the Supreme Court of Appeals of West Virginia applied the plain meaning of the labor dispute disqualification provisions of the unemployment compensation statute to determine whether striking employees properly received benefits. In Verizon Services Corp. v. Board of Review, a unanimous opinion authored by Justice Loughry, the Supreme Court reversed a circuit court decision and remanded the case with instructions to enter an order denying the striking employees’ (“claimants”) applications for unemployment compensation benefits. This is the first appellate decision in West Virginia where an employer has prevailed on the “stoppage of work” issue.
This case arose out of a nationwide strike by Verizon’s union employees in the spring of 2016. During this strike, Verizon’s Clarksburg call center closed and did not operate. The claimants did not perform any work or receive any wages during the strike. The calls that were answered by the Clarksburg call center were automatically routed to call centers in other states. Verizon used managers and contract workers to perform the work of its union employees at those other call centers.
The primary issue in this appeal was whether the claimants were disqualified from receiving unemployment compensation benefits under West Virginia Code § 21A-6-3(4). That statute provided that an individual was disqualified from receiving benefits “[f]or a week in which his or her total or partial 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 or she was last employed[.]”
On appeal, Verizon argued that the lower tribunals erred by considering its nationwide operations rather than focusing on its operations at the Clarksburg call center to decide whether there was a “stoppage of work.” Specifically, Verizon asserted that the determination of whether a stoppage of work existed “because of a labor dispute at the factory, establishment or other premises at which he or she was last employed” refers to a claimant’s individual site of employment and not the employer’s entire operation. The Supreme Court adopted Verizon’s position reasoning that the plain language of this phrase must be afforded its common, ordinary and accepted meaning, and be given effect. The Court also noted that this result was consistent with the geographic focus of its prior unemployment cases, along with cases from other jurisdictions considering the same statutory language. Therefore, the Court held that the phrase “factory, establishment or other premises at which he or she was last employed in West Virginia Code § 21A-6-3(4) (2012) means the distinct geographical location where the claimant was last employed prior to the labor dispute.”
Applying this legal principle to the undisputed facts, the Supreme Court found that the lower tribunals erred by considering Verizon’s nationwide operations to determine whether a “stoppage of work” occurred during the strike. The Court further found that there was a substantial curtailment of Verizon’s operations at the Clarksburg call center during the strike. The facility completely ceased to operate for the entire period of the strike as no employees worked at the facility, no products were sold, no services were rendered, and no revenue was generated. Accordingly, the circuit court’s order was reversed.
Subsequent to the Verizon strike, the West Virginia Legislature amended the labor dispute disqualification provisions of the unemployment compensation statute during the 2017 general session. West Virginia Code § 21A-6-3(4) now provides that an individual is disqualified from receiving unemployment benefits “[f]or any week or portion thereof in which he or she did not work as a result of . . . [a] strike or other bona fide labor dispute which caused him or her to leave or lose his or her employment[.]” Although the Verizon decision was decided under the prior version of the statute, it signals that tribunals must apply the plain terms of the statute in determining whether employees are disqualified from receiving unemployment compensation benefits when they go on strike. This, in turn, will affect future labor negotiations as union employees will no longer be able to count on receiving unemployment compensation benefits to help subsidize their strikes.