Work Stoppage and Unemployment Benefits

Work Stoppage and Unemployment Benefits

Pennsylvania unemployment law denies unemployment benefits to employees who are out of work due to a “stoppage of work which exists because of a labor dispute.” An exception to the denial of benefits occurs when the employer creates a “lock out.” An employer can be found to have created a lock out, even when the employees chose to strike.

Recently, over 1,000 nurses and allied health services workers at a Pennsylvania university hospital system struggled over the rights of workers and their families to tuition benefits. Over a period of several years, the University changed its tuition policies. Eventually, the nurses and workers union brought an unfair labor practice charge against the University, claiming that its changes to the tuition policies violated their contracts and amounted to an unfair labor practice. The Pennsylvania Labor Relations Board sided with the union, found that the University had engaged in unfair labor practices and ordered the University to restore benefits and make reimbursements to affected employees.

The University disagreed with the Board and appealed. The union responded by initiating a work stoppage, or strike, with picket lines. After nearly a month, a settlement was negotiated, the University dropped its appeal and the workers returned to work, with a new contract and agreed-upon tuition benefits.

Despite the fact that the union initiated the work stoppage, the employees won their subsequent claims for unemployment benefits during the strike because the court found that the work stoppage was actually a lock out by the University. To decide whether a work stoppage is a lockout, the courts focus on who disrupted the “status quo.” The University’s significant changes to the tuition policy amounted to a change in the status quo, and thus the union’s decision to strike qualified as an employer lock out. The court emphasized that the union’s willingness to continue to work despite a series of changes to the tuition policies, and the University’s decision to appeal the finding of unfair labor practices factored heavily in the determination that a lock out occurred.

The University may have avoided a lock out finding if it had restored the tuition benefits temporarily during its appeal. The workers benefited from their union’s willingness to continue to work, despite the tuition policy changes, for a lengthy period of time before striking. Workers who are hopeful of receiving unemployment benefits during work stoppage periods should carefully consider whether the union or the employer is closest to the previous status quo, as unemployment benefits are solidly based on that analysis.

 Cite

Temple University Health System v. Unemployment Comp. Bd., 67 A3d 1272 (Pa. Cmwlth. 2013)