Administrative Law: 

Bethany M. Whitmarsh, LeClairRyan Providence, R.I.
Experienced litigator represented clients in a wide range of financial service and real estate litigation.

No. 2017-0362, September 28, 2018

Reversed and reinstated in part.

  • Whether an employee strike alone constitutes a “stoppage of work” such that it disqualifies employees from unemployment benefits.

Petitioners, Northern New England Telephone Operations, LLC and FairPoint Logistics (collectively “FairPoint”), constitute a regulated telecommunications company providing services to residential, commercial and wholesale customers.  FairPoint and Claimants, represented by two unions, attempted to negotiate a new agreement when their collective bargaining agreements expired. The parties were unsuccessful and FairPoint instituted its final proposed terms and conditions upon Claimants, which resulted in approximately 650 New Hampshire union workers striking for a period of approximately four months. During this time, certain union workers received strike pay.

As a result of the strike, Claimants applied for unemployment benefits. Claimants’ applications originally were denied by NHES on the grounds that the unemployment was due to a “stoppage at work” resulting from a labor dispute; such a stoppage of work resulted in disqualification for unemployment benefits. RSA 282-A:36.  Claimants appealed to the NHES appeal tribunal.

The appeal tribunal agreed that Claimants were not entitled to benefits due to the stoppage of work and provided alternative bases for its decision. First, it considered Claimants’ election to stop working itself sufficient to establish a “stoppage of work” pursuant to RSA 282-A:36 and alternatively, even if “stoppage of work” required substantial negative impact on the employer’s business, then the strike in this case satisfied such a requirement. The tribunal also found the strike pay to be deductible wages resulting in a statutory reduction in benefits.

Claimants moved the NHES commissioner to reopen the case and pursuant to the commissioner’s review, he found there to be mistakes of law in the tribunal’s decision and allowed the case to be reopened and reviewed de novo by a second tribunal.  The second tribunal found that the strike did not result in a “stoppage of work” and so Claimants were entitled to benefits, but still that the strike pay constituted deductible wages.

FairPoint and Claimants appealed to the appellate board, which concluded that the commissioner properly reopened the first tribunal’s decision based on a mistake of law regarding the definition of “stoppage of work,” agreed that FairPoint failed to establish that the strike caused a “stoppage of work,” and reversed the decision regarding the deductibility of the strike pay. FairPoint appealed this final decision of the NHES.

On appeal, the court found that the commissioner erred in reopening the first tribunal’s decision because, although the strike itself did not constitute a “stoppage of work,” the tribunal’s alternative consideration of the impact of the strike on FairPoint’s business did reach the proper conclusion that there was a “stoppage of work.” The court rejected FairPoint’s argument that the commissioner could only reopen a case where there was a mistake of fact, not a mistake of law. Instead, the court determined that the first tribunal’s ruling did not constitute a mistake of law because the “substantial curtailment of operations standard” is the correct standard to determinate whether or not there is a “stoppage of work.” The court agreed with the tribunal that FairPoint met this standard by showing that the strike had a significant impact on its business.

As a result, the court concluded that Claimants engaged in a stoppage of work that disqualified them from receiving unemployment benefits. Finally, since Claimants were not entitled to benefits, the court did not need to consider whether the strike pay constituted deductible wages. The court reversed the appellate board’s decision and reinstated the first appeal tribunal’s decision in part.

 

Daniel E. Will, Arthur Telegen and Timothy J. Buckley, Devine, Millimet & Branch, Manchester, for petitioners; Peter J. Perroni, Nolan Perroni, North Chelmsford, Massachusetts, for Claimants represented by International Brotherhood of Electrical Workers, Local 2320, AFL-CIO, James A.W. Shaw, Segal Roitman, Boston, Massachusetts, for Claimants represented by Communications Workers of America, Local 1400, Gordon J. MacDonald, attorney general, Laura E.B. Lombard, senior assistant attorney general, for the New Hampshire Department of Employment Security.