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Ford Motor Co. v. New Jersey Department of Labor and Industry

Decided: November 6, 1950.


On appeal from the Appellate Division of the Superior Court, whose opinion is reported in 7 N.J. Super. 30.

For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Wachenfeld, Burling and Ackerson. For reversal -- Justices Case and Oliphant. The opinion of the court was delivered by Heher, J.


The issue here is whether certain employees of the Ford Motor Company at its New Jersey assembly plants in Edgewater and Metuchen are by force of R.S. 43:21-5 (d) disqualified for unemployment compensation for the period from May 11, 1949, to and including June 7, 1949, when the New Jersey plants were shut down; and this, in turn, depends upon whether the work stoppage resulted from a labor dispute at the "factory, establishment, or other premises at which" the workmen were "last employed," for there is such disqualification in that event unless the workmen come within the provisions of subdivisions (1) and (2) of that section.

The Appellate Division of the Superior Court sustained an allowance of benefits to the respondent John Kiernan, an employee of Ford at its Edgewater plant at the time in question, and the respondent George Bohacs, then employed at its Metuchen plant; and on Ford's motion this court certified the cause for appeal. Some 4,000 of Ford's New Jersey employees are in the same category.

The essential inquiry concerns the meaning of the phrase "factory, establishment, or other premises." By the cited section of the statute, the individual is disqualified for benefits --

"(d) For any week with respect to which it is found that his 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 is or was last employed; provided, that this subsection shall not apply if it is shown that: (1) He is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work; and (2) He does not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute; provided, that if in any case in which (1) or (2) above applies separate branches of work which are commonly conducted as separate businesses in separate premises are conducted in separate departments of the same premises, each such department shall, for the purposes of this subsection, be deemed to be a separate factory, establishment, or other premises."

Ford is a Delaware corporation engaged in the manufacture and sale of Ford, Mercury and Lincoln automobiles. Its principal office and manufacturing plant are located at Dearborn, Michigan. There, it manufactures the "major parts" which are assembled into automobiles at its various assembly plants; and there it also maintains a central department for the purchase of parts which it does not itself manufacture, 60% of the whole, which are first shipped to Michigan and thence to the assembly plants. These assembly plants, it is said, are maintained to secure the benefit of the more favorable freight rates for the shipment of parts as compared with shipping charges for the completed unit. The Metuchen plant is used exclusively for the assembling of parts shipped from Dearborn into automobiles; the Edgewater plant is devoted to the same use, but there trucks are also boxed for export and a stock of parts and accessories is kept for dealers.

The Company also has factories and assembly plants abroad. Its operative units are grouped into seven "divisions." Two divisions are primarily concerned with the assembly process; one division operates a depot for automobile parts and accessories; another division manages the Company's business in foreign countries; and three divisions fabricate, manufacture and ship automobile parts to the assembly plants. The Metuchen plant is one of four plants comprising the Lincoln-Mercury

Division; the Edgewater plant is one of fifteen plants constituting the Ford Assembly Division. The General Production Division includes the "Rouge," a term applied to Ford's multiple plant at Dearborn.

The plant managers at Edgewater and Metuchen exercise no control over production quotas. Automobile parts are shipped from Dearborn pursuant to production schedules established for such plants by the Dearborn office of the Company. The local plant management has no control over the shipment of parts; nor is it authorized to procure parts from sources other than Ford's Dearborn plant. The shipment of parts from Dearborn is made on a schedule which affords not more than a six- or seven-day supply at these assembly plants. The local plants are under the direction and control of the central executive office at Dearborn. The automobiles assembled at Edgewater and Metuchen are sold by the sales division of Ford in New York City. The funds needed to defray the operating expenses of these local plants, including payrolls, are forwarded weekly by the Dearborn office. There is one merit rating and unemployment compensation account with the State of New Jersey for these two assembly plants. This is in keeping with R.S. 43:21-19(g). The hiring and dismissal of employees are within the province of the local plant management, although subject to the approval of the Dearborn office. In a word, it is said that all the local assembly plants "are closely integrated with the Michigan plants and form one production system centered in Dearborn, Michigan."

All New Jersey employees of Ford, with minor exceptions, are members of the local union of International Union, United Automobile, Aircraft and Agricultural Implement Workers of America, CIO, known as UAW-CIO, No. 906 at Edgewater and No. 980 at Metuchen, pursuant to closed-shop provisions of the master labor contract with the Union. Membership in the local union constitutes membership in International. Loss of ...

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