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Mortensen v. Board of Review

March 26, 1956


On appeal from Superior Court, Appellate Division.

For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Burling, Jacobs and Brennan. For reversal -- None. The opinion of the court was delivered by William J. Brennan, Jr., J.


[21 NJ Page 243] Appellants, 341 employees at the Hoboken Yard of Bethlehem Steel Company, Shipbuilding Division, were allowed certification, 20 N.J. 139 (1955), to review a judgment of the Superior Court, Appellate Division, 37 N.J. Super. 236, affirming a determination by the Board of Review, Division of Employment Security. The determination by the Board of Review was that the appellants were disqualified for unemployment compensation benefits by reason of N.J.S.A. 43:21-5(d) which provides that a claimant shall be disqualified for benefits "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; * * *."

The claims related to the period between July 23, 1954 and September 27, 1954, when the company and the claimants' union, Industrial Union of Marine and Shipbuilding Workers, CIO, were negotiating the renewal of a collective bargaining agreement which by its terms expired on June 23, 1954. The Union had served a notice in April terminating the contract, but on June 23 gave the company a letter stating that if bargaining "will continue in good faith" the union "will not call on our members to strike at your Yards prior to July 23, 1954, nor without giving you 15 calendar days' written notice of our intention to do so." Collective bargaining continued, but when agreement was not reached by July 7, the union notified the company of its intention to call a strike effective July 23 unless agreement was reached by that date.

Agreement was not reached by July 23, but no strike in fact occurred on that date or at any other time before the differences were composed in a new contract made September 18, effective September 27 following ratification by the union membership.

The operations which continued at the yard throughout the period from July 23 to September 27 were in substantially lesser volume than would otherwise have been the case. The company repairs ships there either on a "bid" or a "negotiated" basis. "Bid" jobs, about 20% of the total, usually require the company's agreement to demurrage provisions which specify a penalty for each day's delay beyond the specified completion date. "Negotiated" jobs, the remaining 80% of the total, are jobs as to which the compensation to be received by the company is determined in negotiations carried on after the work is completed.

The Board of Review found that the diminished work volume which occasioned the claimants' unemployment resulted from the strike threat of July 7 because "(a) The employer refused to accept ship repair work on which it was required to guarantee a delivery date, incurring a penalty

if it failed to meet that date. * * * (b) Other work was withheld by customers [those on a negotiated basis], without any action by the employer because the customers knew that a strike might occur and feared that their work might be delayed."

The Appellate Division concluded that "substantial evidence was presented at the hearings from which both of the findings were justified and we discern no reason for a full de novo excursion into that field." 37 N.J. Super., at page 241. Our own examination of the record satisfies us that this conclusion was right. It may therefore be taken that a "stoppage of work" in the form of a diminution of the volume of work which would otherwise have been available at the yard came about for the two reasons found by the Board of Review, and further that the actions both of the company and its customers which produced the diminution are to be attributed to the strike threat of July 7 and the resultant uncertainty throughout the period whether or how long the workers would remain on the job. If, in that circumstance, such stoppage was occasioned by a "labor dispute" the disqualification follows although the diminution in volume represents work withheld by the company's customers. The contrary conclusion of the Alabama court in Gulf Atlantic Warehouse Co. v. Bennett, 36 Ala. App. 33, 51 So. 2 d 544 (Ct. App. 1951), relied upon by appellants, rests upon the requirement of the statute of that state of a showing that the stoppage was "directly" due to the dispute, a provision not appearing in our statute and which we will not imply. Gerber v. Board, etc., New Jersey Dept. of Labor and Industry, 36 N.J. Super. 322 (App. Div. 1955), affirmed 20 N.J. 561 (1956).

But appellants insist that a stoppage of work which does not exist because of a strike or lockout is not a stoppage of work which exists "because of a labor dispute" within the meaning of section 5(d). Appellants admit that their contention is answered, in language at least, adversely to them in the opinion of the Appellate ...

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