41. UI Eligibility during a Labor Dispute

An individual may be disqualified from receiving UI benefits if unemployment is due to a “stoppage of work” because of a labor dispute. G.L. c. 151A, § 25(b). In order for there to be a stoppage of work, operations must be “substantially curtailed.” How much disruption is required to constitute a substantial curtailment is a fact-specific inquiry; there is no percentage threshold or numerical formula. Boguszewksi v. Comm'r of the Dep’t of Emp't & Training, 410 Mass. 337, 338, 572 N.E.2d 554, 555 (1991) (“stoppage of work” occurred where two thirds of employees of a public electric utility ceased to work during a 4-week strike); Hertz Corp. v. Acting Dir. of the Div. of Emp't & Training, 437 Mass. 295, 297, 771 N.E.2d 153, 155-56 (2002) (no decrease in rentals or revenue); Reed Nat. Corp. v. Dir. of the Div. of Emp't Sec., 393 Mass. 721, 473 N.E.2d 190 (1985) (25% drop in operations at only one plant did not constitute substantial curtailment); Westinghouse Broadcasting Co., Inc. v. Dir. of the Div. of Emp't Sec., 378 Mass. 51, 389 N.E.2d 410 (1979); Adomaitis v. Dir. of the Div. of Emp't Sec., 334 Mass. 520, 136 N.E.2d 259 (1956).

The employer has the burden of proving that its operations have been substantially curtailed. Verizon New England, Inc. v. Massachusetts Exec. Office of Labor & Workforce Dev., 87 Mass. App. Ct. 1126, 31 N.E.3d 1192, 2 (Table), further review denied, 472 Mass. 1110 (2015). In Verizon New England, the Court upheld the DUA’s ruling that striking Verizon workers were entitled to UI benefits because the strike had not caused a substantial curtailment in Verizon’s operations.  The Court rejected Verizon’s contention that the DUA erred by requiring Verizon to prove a substantial curtailment of its operations since all the information relevant to that inquiry was in Verizon’s possession, and since the finding of a “stoppage of work” is an exception to the usual rule of awarding UI. The Court affirmed the Board of Review’s decision.  M-63772 – M-69116 (4/24/13) (Key).  The Board found that the burden of proving a work stoppage also lies with the employer. The employer failed to establish a work stoppage where revenue declined less than two percent and then employer managed to perform between 80 and 98 percent of its business. Id; see also BR-M-1001, M-1003 (2/28/22) (Employer bears burden of demonstrating by substantial and credible evidence that the claimants’ strike caused a substantial curtailment of the bargaining unit work performed by the striking employees; if it cannot show that bargaining unit work was substantially curtailed, it must demonstrate that the strike measurably and substantially disrupted the work of the non-bargaining unit work force).

However, the burden is on the claimants to prove that they fall within the exceptions to the provisions of the statute denying UI eligibility when unemployment results from a stoppage of work due to a labor dispute. General Electric Co. v. Dir. of the Div. of Emp't Sec, 349 Mass. 358, 208 N.E.2d 234 (1965). This bar does not apply if the claimant did not, as an individual or as a member of a group, participate in, finance, or have a direct interest in the labor dispute (notwithstanding the payment of union dues). G.L. c. 151A, § 25(b)(1), (2). However, even if an individual is not a member of a union participating in the strike, the requirement of “direct interest” is met if the outcome will either favorably or adversely affect the individual’s wages, hours, or conditions of work. Wheeler v. Dir. of the Div. of Emp't Sec., 347 Mass. 730, 200 N.E.2d 272 (1964). If the "direct interest" test is met, the bar to UI benefits does not apply before the strike begins if the individual is involuntarily unemployed during contract negotiations, nor does it apply after the strike has ended if the individual is not recalled within one week of the end of the strike. G.L. c. 151A § 25(b).

If there has been a “lockout”—i.e., either a physical shut-down of a plant or a communication by the employer to its employees that there will be no more work until the end of the labor dispute—individuals are eligible for UI benefits whether or not there has been a stoppage of work, as long as they are willing to work under the terms of the existing or expired contract pending the negotiation of a new contract. The employer can prevent payment of UI under these circumstances only if it demonstrates by a preponderance of the evidence that the lockout is in response to damage or threats of damage by bargaining-unit members with express or implied approval of the union’s officers, that the employer has taken reasonable measures to prevent such damage, and that such efforts have been unsuccessful. G.L. c. 151A, § 25 (b)(4), ¶ 2.

Legislation enacted at the end of 2018 provides that employees who are locked out and who have exhausted all other state or federal UI benefits are eligible for up to 26 times their weekly benefit amount or until the lockout has ended, whichever period of time is shorter. St. 2018, c. 338, amending G.L. c. 151A, § 25 (b)(4) and adding G.L. c. 151A, § 30(d).