Bayly Manufacturing Company, a corporation,
Plaintiff in Error,
v.
The Department of
Employment of the State of Colorado, Frank B.
Van
Portfliet, Ray H. Brannaman and Truman C. Hall, as members of
the
Industrial Commission of the State of Colorado (Ex-Officio
Unemployment Compensation Commission of Colorado),
Alice M. Widener, et al.,
Defendants in Error.
No. 20570.
155 Colo. 433, 395 P.2d
216
Supreme
Court of Colorado,
En Banc.
Sept. 14, 1964.
Phelps, Hall & Smedley, Denver, for plaintiff in error.
Duke W. Dunbar, Atty. Gen., Frank E. Hickey, Deputy Atty. Gen.,
James D. McKevitt, Asst. Atty. Gen., Denver, for defendants in error
Department of Employment of State of Colorado, Frank B. Van
Portfliet, Ray H. Brannaman and Truman C. Hall, as members of
Industrial Commission of State of Colorado (Ex-Officio Unemployment
Compensation Commission of State of Colorado).
PRINGLE, Justice.
This writ of error is directed to a judgment of the district
court affirming awards of unemployment compensation benefits to
thirteen claimants who had been employees of plaintiff in error,
Bayly Manufacturing Company, hereinafter referred to as Bayly.
Bayly's contentions on this writ of error fall into two general
categories: (I) those concerning the constitutional issues, and (II)
those concerning the merits of the awards. We shall consider the
alleged errors in the same order.
I. The Constitutional Issues
Bayly hurls sweeping broadsides against the Employment Security
Act on constitutional grounds, against the Department of Employment
Security and the claimants. We view the Act as legislation intended
to "foster and make secure the independence (actual and felt) of the
individual, his dignity and autonomy, and his sense of economic
security. The ethical relation between society and the claimant is
that of obligee and obligor, not beggar and benefactor." Note:
Charity Versus Social Insurance in Unemployment Compensation Laws,
73 Yale L.J. 357, 362. It is in this perspective that we examine
Bayly's objections to the Employment Security Act on constitutional
grounds.
It is our view that in the present case Bayly has the standing
necessary to attack the constitutionality of the Employment Security
Act on only one of the issues it raises, and that is the contention
that CRS '53, 82-5-2 amounts to a deprivation of due process of law
in that benefits are paid out regardless of any appeal to the
courts. The pertinent language of the statute on this point is as
follows:
"* * * If a referee affirms a decision of
the deputy, or the commission affirms a decision of a
referee, allowing benefits, such benefits shall be paid
regardless of any appeal which may thereafter be taken, but
if such decision is finally reversed, no employer's account
shall be charged with benefits so paid."
In Cottrell Clothing Co. v. Teets, 139 Colo. 558, 342 P.2d
1016, the same objection now made by Bayly was held to be without
merit. The provision in question is designed to carry out the policy
of alleviating the evils of unemployment. The very essence of the
Act is its provision for the prompt payment of benefits to those
unemployed. Any substantial delay would defeat this purpose and
would bring back the very evil sought to be avoided. Withholding
benefits for long periods through the slow process of appeal to the
courts simply is not in harmony with the beneficent and remedial
purposes of the Act. Similar sentiments are expressed in
Abelleira v. District Court of Appeal, Third District, 17 Cal.2d
280, 109 P.2d 942, 132 A.L.R. 715; Matson Terminals v. California
Employment Commission, 24 Cal.2d 695, 151 P.2d 202; State ex
rel. Aikens v. Davis, 131 W.Va. 40, 45 S.E.2d 486. In reality,
the statute itself is sufficient answer to this argument, for it
provides that "if such decision is finally reversed, no employer's
account shall be charged with benefits so paid."
The remaining constitutional issues which Bayly raises are:
I. CRS '53, 85-2-6 and CRS '53, 82-3-9(1)(2) (3)
constitute an unlawful delegation of the power of the General
Assembly to the United States Congress;
II. CRS '53, 82-3-10 relating to reciprocal
interstate agreements violates the Constitution of Colorado in that
it (a) enables the department to pledge the faith and credit of the
state contrary to Article XI, Section 1; (b) enables the department
to contract debts by loan contrary to Article XI, Section 3; (c)
enables the department to create debts by agreement, not by law,
contrary to Article XI, Section 4; (d) constitutes an unlawful
delegation of legislative power to the department and to other
states.
The record before us is totally barren of any evidence which
would show how Bayly has been in any wise adversely affected by
these sections of the Act. It is manifest that this Court does not
overturn statutes presumptively valid on the strength of the
speculations and conjectures of counsel as to what might happen
under them. Since the present record fails to reflect that Bayly has
been in any way adversely affected by these sections of the statute,
it has no standing to question their constitutionality. Rinn v.
Bedford, 102 Colo. 475, 84 P.2d 827; Bunzel v. City of Golden,
150 Colo. 276, 372 P.2d 161. As is suggested by the cases cited, the
fact that Bayly chooses to call this aspect of its case an action
for declaratory judgment is of no moment, since it still must show
how it is affected by the operation of the statutes.
II. The Merits
The issues presented here on the merits are covered by CRS '53,
82-4-8, as amended, and CRS '53, 82-4-9, as amended, as those
sections read before the 1963 repeal and re-enactment with
amendments of Sec. 82-4-9.
The claimants were employed by Bayly as garment workers in its
Denver plant. Their wages were determined on a piecerate basis
established by union contract. Each claimant had developed, by
virtue of her many years of experience, a special skill in the
tacking or sewing of seams on a jean garment manufactured by Bayly
in its Denver plant. In December, 1960, Bayly terminated this
operation in Denver and transferred it to Greeley, which is some
distance from the Denver area.
Subsequent to the transfer of the jean operation to Greeley, some
of the claimants remained at the Denver plant, working at tacking or
sewing on overalls and coats, while the rest were laid off without
this opportunity being afforded to them at that time. Those of the
claimants who commenced work on overalls attempted to become
proficient over varying periods of time, but they all eventually
terminated their employment when it became apparent that they could
not make a wage comparable to their past earnings.
The record discloses that while the claimants had been earning
approximately $1.40 per hour to $2.00 and above per hour on the jean
operation, they could make only approximately $1.00 per hour on the
overalls operation, since they could not turn out as many pieces per
hour, and that in some cases Bayly itself was forced to make up the
difference so as to insure that the claimants would receive a
minimum wage rate of $1.00 per hour. The piece-work wage rate on the
overalls operation at Bayly's was the prevailing wage rate at other
garment manufacturing plants in the Denver area, and was in accord
with a union contract at Bayly's shop.
In April, 1961, Bayly made offers to rehire claimants to work on
overalls. While the precise date differed in each case, for our
purposes April 28 may be considered as the date of the offer. The
claimants refused to accept this offer. Bayly's chief contention is
that by their refusal to accept the offers of re-hire the claimants
disqualified themselves from receiving further benefits after that
date.
While counsel for both sides in their briefs and in oral argument
before this Court have taken the attitude that all thirteen
claimants stand in a similar position, we do not necessarily share
this view since the last day worked by each of the various claimants
was different.
Bayly contends that in awarding benefits the Department of
Employment Security and the Industrial Commission ignored the
requirements of CRS '53, 82-4-8, which are as follows:
"Eligibility conditions--penalty--Any
unemployed individual shall be eligible to receive benefits
with respect to any week only if the department finds that:
* * * * * *
"(3) He is able to work and is available
for all work deemed suitable pursuant to the provisions of
section 82-4-9.
* * * * * *
"(7) He is actively seeking work."
The pertinent provisions of CRS '53, 82-4-9,
referred to in CRS '53, 82-4-8(3), are as follows:
"Disqualification for misconduct.--(1)(a)
An individual shall be disqualified for benefits if the
department finds that such individual has, from the
beginning of his base period to the time of filing any valid
claim, left work voluntarily without good cause but under
extenuating circumstances, or left work to marry or because
of marital, parental, filial or other domestic obligation,
or became unemployed because of pregnancy, or been
discharged for misconduct connected with his work, or failed
without good cause either to apply for available suitable
work when so referred by the department or to accept
suitable work when offered him. (1960 Perm.Supp.)
"(2) In determining whether or not any
work is suitable for an individual, the degree of risk
involved to his health, safety, and morals, his physical
fitness and prior training, his experience and prior
earnings, his length of unemployment and prospects for
securing work in his customary occupation, and the distance
of the available local work from his residence, shall be
considered.
"(3) Notwithstanding any other provisions
of this chapter, no work shall be deemed suitable and
benefits shall not be denied under this chapter to any
otherwise eligible individual for refusing to accept new
work under any of the following conditions:
* * * * * *
"(b) if the wages, hours, or other
conditions of the work offered are substantially less
favorable to the individual than those prevailing for
similar work in the locality."
The findings of the referees in the cases before us, which were
adopted by the Industrial Commission as its findings, state, except
in two cases, that Bayly's offer of rehire was not for "suitable"
work because of the prior experience, training and earnings of the
claimants. In the case of claimant Hulin, the finding was that the
job offered would be injurious to her health. In the case of
claimant Cole the finding was that she refused the Bayly offer
because she had another job which would pay better wages and that
she was about to begin that job. Bayly contends that the mere fact
that the job offer was at a rate of pay which produced less earnings
per week than the claimants had earned in their previous jobs was
not sufficient to render the offer unsuitable.
The record does not disclose whether any other garment
manufacturer in the Denver area had an operation similar to the jean
operation which was discontinued by Bayly. If such operation did in
fact exist at other plants, none of the claimants attempted to seek
employment at such operation. The only fact disclosed in the record
with respect to wages at other garment manufacturing plants in the
Denver area is that the wage rate was similar to that which the
claimants would receive if they chose to work at Bayly's overalls
operation. The record also shows that the claimants' attempts to
gain other employment were primarily directed at work other than in
the garment industry at wages comparable to those they had received
from Bayly while employed at the jean operation and that these
attempts were unanimously unsuccessful up to the date of the offer
of re-hire.
It is clear that the beneficent purposes of the Act do not
include a guaranty that a job offer must be for wages equal to that
of the old job in order to be deemed as "suitable" work, but work at
a substantially lower wage should not be deemed "suitable" unless a
claimant has been given a reasonable period to compete in the labor
market for available jobs for which he has the skill at a rate of
pay commensurate with his prior earnings. Where the offer is for
work at a wage materially lower than the wage previously earned, the
claimant may be justified in refusing the offer while seeking
employment at a rate of pay commensurate with prior earning
capacity, but this right is not without qualification and the
claimant is entitled only to a reasonable opportunity to obtain work
for which he is fitted by experience and training at a wage rate
comparable to that for which he previously worked. The claimant may,
if he wishes, place restrictions related to his prior employment
upon the amount of wages he is willing to accept, but if the
restrictions imposed by him reduce his prospects for employment to
such an extent that he is no longer genuinely attached to the labor
market, he is no longer available for work. Work which may be deemed
"unsuitable" at the inception of the claimant's unemployment, and
for a reasonable time thereafter, because it pays less than his
prior earning capacity, may thereafter become "suitable" work when
consideration is given to the length of unemployment and the
prospects for obtaining customary work at his prior earning
capacity. What is a "reasonable time" is not rigid and inflexible
and it must initially be determined as a question of fact under the
peculiar circumstances of each individual case by the appropriate
agency. See Hallahan v. Riley, 94 N.H. 48, 45 A.2d 886;
Haug v. Unemployment Compensation Board of Review, 162 Pa.Super.
1, 56 A.2d 396; Pacific Mills v. Director of Division of
Employment Security, 322 Mass. 345, 77 N.E.2d 413; Dubkowski
v. Administrator, Unemployment Compensation Act, 150 Conn. 278,
188 A.2d 658; Sanders, Disqualification for Unemployment
Insurance, 8 Vand.L.Rev. 307, 328; Menard, Refusal of
Suitable Work, 55 Yale L.J. 134, 140; Freeman, Able to Work
and Available for Work, 55 Yale L.J. 123, 126.
In Hallahan v. Riley, supra, we find the following:
"* * * Although the applicant may
continue to refuse jobs paying a lower rate of compensation,
she must do so at her own expense rather than at the expense
of the unemployment fund. The cushion of security between
jobs provided by the statute was not designed to finance an
apparently hopeless quest for the claimant's old job or a
job paying equal wages. What length of time should be
regarded as sufficient to require this result is again a
question of fact with which we have no concern. The
statute specifically requires that consideration be given to
the factor of length of unemployment. * * *" (Emphasis
supplied.)
The Attorney General relies on Industrial Commission v. Brady,
128 Colo. 490, 263 P.2d 578, but that case is not controlling here.
In Brady the claimant, a journeyman painter, had been
receiving $2.39 per hour, working a forty hour week, with time and a
half for overtime. The claimant became unemployed in October, 1952.
On December 17, 1952 he declined an offer for work as a painter at
$2.00 per hour for a forty-eight hour week, without additional
compensation for overtime. This Court held that the claimant was
improperly disqualified from receiving benefits on the ground that
the prevailing wage for journeyman painters was $2.39 per hour and
that the offer of hire was therefore unsuitable. In the instant
case, there is no evidence whatever of a prevailing wage in the
Denver area for garment workers employed at a jean operation, if
there was any such operation in the area after Bayly discontinued
its jean operation. As has already been indicated, the only evidence
of a prevailing wage is that other garment manufacturers in the
Denver area reward their workers with compensation similar to that
which Bayly would pay for the jobs which it offered these claimants,
and that the wage offered is within the terms of the union contract
at the Bayly shop. It is obvious that under these circumstances
Industrial Commission v. Brady, supra, is not in point.
Bayly would have this Court hold as a matter of law that certain
of the claimants were not "actively seeking work" pursuant to CRS
'53, 82-4-8(7) and, therefore, should be declared ineligible for
benefits. This section of the Act is susceptible of several
interpretations. See Peterson, Unemployment Insurance in
Colorado--Eligibility and Disqualifications, 25 Rocky Mt. L.Rev.
180, 186. Ultimately, however, this concept is incapable of precise
definition and it is for the appropriate agency to make such a
determination after considering all the facts and circumstances in
each particular case. Guidice v. Board of Review of Division of
Employment Security, 14 N.J.Super. 335, 82 A.2d 206. Our review
of the record leads us to the belief that we cannot conclude as a
matter of law that the claimants were not "actively seeking work."
The finding of the Industrial Commission that the job offer to
Hulin was unsuitable because the job would be injurious to her
health finds support in the evidence and is, therefore, proper. The
finding with respect to Cole is also proper under the evidence.
The judgment with respect to the Hulin and Cole claims is
affirmed. The remainder of the judgment is reversed and the cause
remanded to the district court with directions to remand the matter
to the Industrial Commission for the purpose of determining whether
the length of unemployment of each of the claimants at the time of
the hearing afforded each of them a reasonable opportunity to secure
work in their customary occupation or at their customary wages.
Hall, J., not participating.
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