Appellee, an employee of United States Steel Corporation (USS)
at a plant in Ohio, was furloughed when the plant was shut down
because of a reduction in fuel supply resulting from a nationwide
strike of workers at USS's coal mines. Appellee applied to
appellant Ohio Bureau of Employment Services for unemployment
benefits, but his claim was disallowed under an Ohio statute that
disqualified a worker from such benefits if his unemployment was
"due to a labor dispute other than a lockout at any factory . . .
owned or operated by the employer by which he is or was last
employed." While appellee's request for reconsideration was pending
before the Board of Review, he filed a class action in Federal
District Court against appellants, the Bureau and its director, for
declaratory and injunctive relief, asserting that the Ohio statute
conflicted with certain provisions of the Social Security Act (SSA)
and that, as applied, it was irrational and had no valid public
purpose, in violation of the Due Process and Equal Protection
Clauses of the Fourteenth Amendment. Concluding that abstention was
not proper, the District Court held that the statute, as applied to
appellee and the class members, violated those Clauses.
Held:
1. Abstention is not required under either
Younger v.
Harris, 401 U. S. 37, or
Railroad Comm'n v. Pullman Co., 312 U.
S. 496. Pp.
431 U. S.
477-481.
(a) Where Ohio has concluded to submit the constitutional issue
to this Court for immediate resolution,
Younger principles
of equity and comity do not require this Court to refuse Ohio the
immediate adjudication it seeks. Pp.
431 U. S.
477-480.
(b) Nor is
Pullman abstention appropriate where the
possible benefits of abstention have become too speculative to
justify or require avoidance of the constitutional question. Pp.
431 U. S.
480-481.
2. The Ohio statute is neither in conflict with, nor is it
preempted by 42 U.S.C. § 503(a) (the provision of the SSA that
precludes the Secretary of Labor from certifying payment of federal
funds to state unemployment compensation programs unless state law
provides for such methods of administration as the Secretary finds
are "reasonably
Page 431 U. S. 472
calculated to insure full payment of unemployment compensation
when due"), or the Federal Unemployment Tax Act (FUTA). Pp.
431 U. S.
482-489.
3. The Ohio statute, which has a rational relation to a
legitimate state interest, is constitutional. Pp.
431 U. S.
489-493.
(a) The statute does not involve any discernible fundamental
interest or affect with particularity any protected class, and the
test of constitutionality, therefore, is whether the statute has a
rational relation to a legitimate state interest. P.
431 U. S.
489.
(b) In considering the constitutionality of the statute, this
Court must view its consequences not only for the recipient of the
benefits, but also for the contributors to the compensation fund,
and, although the system may provide only "rough justice" and a
rough form of state "neutrality" in labor disputes, the statute
cannot be said to be irrational, and the need for limitation of the
liability of the compensation fund is a legitimate state interest.
Pp.
431 U. S.
489-493.
408 F.
Supp. 1016, reversed.
BLACKMUN, J., delivered the opinion of the Court, in which all
Members joined except REHNQUIST, J., who took no part in the
consideration or decision of the case.
MR. JUSTICE BLACKMUN delivered the opinion of the Court.
This case presents a challenge to Ohio Rev.Code Ann. §
4141.29(D)(1)(a) (1973). That statute, at the times relevant
Page 431 U. S. 473
to this suit, imposed a disqualification for unemployment
benefits when the claimant's unemployment was "due to a labor
dispute other than a lockout at any factory . . . owned or operated
by the employer by which he is or was last employed." The challenge
is based on the Supremacy Clause and on the Due Process and Equal
Protection Clauses of the Fourteenth Amendment. The case also
raises questions concerning abstention.
I
In November, 1974, plaintiff-appellee, Leonard Paul Hodory, was
employed as a millwright apprentice with United States Steel
Corporation (USS) at its works in Youngstown, Ohio. The United Mine
Workers at that time were out on strike at coal mines owned by USS
and by Republic Steel Corporation throughout the country. These
company-owned mines supplied the fuel used in the operation of
manufacturing facilities of USS and Republic. As a result of the
strike, the fuel supply at the Youngstown plant was reduced. The
plant eventually was shut down, and appellee was furloughed on
November 12, 1974.
Hodory applied to appellant Ohio Bureau of Employment Services
for unemployment benefits. On January 3, 1975, he was notified by
the Bureau that his claim was disallowed under Ohio Rev.Code Ann. §
4141.29(D)(1)(a) (1973). That statute then provided that a worker
may not receive unemployment benefits if
"[h]is unemployment was due to a labor dispute other than a
lockout at any factory, establishment, or other premises located in
this or any other state and owned or operated by the employer by
which he is or was last employed; and for so long as his
unemployment is due to such labor dispute. [
Footnote 1]
Page 431 U. S. 474
The written notification to appellee recited:"
"A labor dispute started at coal mines owned and operated by
U.S. Steel Corporation, and claimant is unemployed because of this
labor dispute."
App. i. Other notifications to Hodory for subsequent
unemployment weeks contained similar recitals.
Id. at ii
and iii. Appellee promptly filed a request for reconsideration. In
accord with the provisions of Ohio Rev.Code Ann. § 4141.28 (G)
(1973), his request, along with a number of others, was referred on
March 7 to the Board of Review. [
Footnote 2]
Page 431 U. S. 475
Meanwhile, on January 27, Hodory filed a complaint in the United
States District Court for the Northern District of Ohio against the
Bureau and its director, Albert G. Giles. The complaint was based
on 42 U.S.C. § 1983, and sought declaratory and injunctive relief
on behalf of appellee and "all others similarly situated" who had
been or in the future would be denied benefits under §
4141.29(D)(1)(a). Record, Doc. 3, pp. 1 and 3. Hodory asserted,
among other things, that the Ohio statute was in conflict with §§
303(a)(1) and (3) of the Social Security Act of 1935, as amended,
42 U.S.C. §§ 503(a)(1) and (3), and that the statute as applied was
irrational, and had no valid public purpose, in violation of the
Due Process and Equal Protection Clauses of the Fourteenth
Amendment. [
Footnote 3] The
gravamen of Hodory's complaint was the assertion that the State may
not deny benefits to those who, like him, are unemployed under
circumstances where the unemployment is "not the fault of the
employee." A three-judge court was requested.
Appellants, in their answer, asserted, among other things, that
Hodory had failed to exhaust his state administrative remedies.
A three-judge court was convened. The case was tried on the
pleadings and interrogatories. In its opinion filed March 5, 1976,
408 F.
Supp. 1016, that court concluded that abstention was not
required, and would not be proper; that the action was properly
maintained as a class action; [
Footnote 4]
Page 431 U. S. 476
and that the appellants had failed to demonstrate a rational and
legitimate interest in discriminating against
"individuals who were unemployed through no fault of their own,
and neither participated in nor benefited from the labor dispute
involving another union and their employer."
Id. at 1022. The court then held that §
4141.29(D)(1)(a), as applied to Hodory and the class members,
violated the Equal Protection and Due Process Clauses.
The Bureau and its director took a direct appeal here pursuant
to 28 U.S.C. § 1253. In their jurisdictional statement, appellants
argued only that (1) the "labor dispute" disqualification provision
is not unconstitutional as applied to appellee and the class; (2)
the disqualification provision is not in conflict with the Social
Security Act; (3) a state system of unemployment compensation may
predicate disqualification upon any reasonable basis; and (4) USS
and Republic, as employers of the class members, were denied
substantive and procedural due process by the failure of the
District Court to order them joined as parties defendant. [
Footnote 5] Appellants made no claim
therein based on abstention. We noted probable jurisdiction. 429
U.S. 814 (1976).
A claim that the District Court should have abstained from
deciding the case has been raised, however, in the brief
amicus
curiae filed by the AFL-CIO. A like claim is at least
suggested
Page 431 U. S. 477
by Republic Steel. Brief as
Amicus Curiae 16-17. We
feel those claims merit consideration.
We follow the proper course for federal courts by considering
first whether abstention is required, then whether there is a
statutory ground of resolution, and finally, only if the challenge
persists, whether the statute violates the Constitution.
II
Abstention
There are, of course, two primary types of federal abstention.
The first, usually referred to as
Pullman abstention,
involves an inquiry focused on the possibility that the state
courts may interpret a challenged state statute so as to eliminate,
or at least to alter materially, the constitutional question
presented.
Railroad Comm'n v. Pullman Co., 312 U.
S. 496 (1941).
See Bellotti v. Baird,
428 U. S. 132
(1976). The second type is
Younger abstention, in which
the court is primarily concerned, in an equitable setting, with
considerations of comity and federalism, both as they relate to the
State's interest in pursuing an ongoing state proceeding, and as
they involve the ability of the state courts to consider federal
constitutional claims in that context.
Younger v. Harris,
401 U. S. 37
(1971).
See Huffman v. Pursue, Ltd., 420 U.
S. 592 (1975);
Juidice v. Vail, 430 U.
S. 327 (1977);
Trainor v. Hernandez, ante at
431 U. S. 448
(concurring opinion).
A. In the present case, appellants, who in effect are the State
of Ohio, argued before the District Court that appellee was free to
pursue his pending administrative appeal and have his
constitutional claim adjudicated in the Court of Common Pleas, and
that principles of comity therefore required abstention. [
Footnote 6] Although appellants in
their written submission
Page 431 U. S. 478
to that court cited
Pullman, the argument was clearly
to the effect that
Younger abstention should apply.
[
Footnote 7]
The District Court held that abstention was unwarranted. It
first asserted that, in
Gibson v. Berryhill, 411 U.
S. 564 (1973), this Court
"stated specifically that administrative remedies need not be
exhausted where the federal court plaintiff states a good cause of
action under 42 U.S.C. § 1983."
408 F. Supp. at 1019. [
Footnote
8] The court then stated that § 4141.29(D)(1)(a), "on its face,
would appear to except the plaintiff from unemployment benefits for
the period he was laid off due to coal miners' strike," and that
"the Employment Bureau has denied benefits to plaintiff . . .
solely on the basis of the challenged labor dispute
disqualification." 408 F. Supp. at 1019. The court held that
exhaustion of administrative remedies would be futile because the
administrative appeal process would not permit a challenge to the
constitutionality of the statute, and the Ohio courts had held the
statute to be constitutional.
Id. at 1019, and n. 1.
Although the court observed that
Huffman v. Pursue, Ltd.,
supra, broadened the
Younger doctrine "to include a
prohibition against federal court interference with certain ongoing
civil proceedings in the state
Page 431 U. S. 479
courts," 408 F. Supp. at 1019-1020, the court held that
Huffman "was limited to the enjoining of ongoing
state-initiated
judicial proceedings," 408 F. Supp. at
1020 (emphasis in original), and did not apply to a challenge to
administrative actions. Finally, the court held that abstention,
along the
Pullman line, "would not be proper in this case"
because the challenged statute is not an ambiguous one "involving
unsettled questions of state law which could be rendered
constitutionally inoffensive by a limiting construction in the
state courts." 408 F. Supp. at 1020. The court concluded that it
would be improper to require the appellee "to undertake three
administrative appeals" [
Footnote
9] before he could challenge the statute in state court "where,
moreover, the issue as to the constitutionality of the labor
dispute disqualification has apparently been settled."
Ibid.
In this Court, as has been noted, appellants have not argued
that
Younger requires a remand with directions to the
District Court to abstain, and at oral argument they resisted the
suggestion of such a remand. Tr. of Oral Arg. 9-10. Instead, it is
amicus Republic Steel that has made the suggestion.
Younger v. Harris reflects
"a system in which there is sensitivity to the legitimate
interests of both State and National Governments, and in which the
National Government, anxious though it may be to vindicate and
protect federal rights and federal interests, always endeavors to
do so in ways that will not unduly interfere with the legitimate
activities of the States."
401 U.S. at 44.
See Huffman v. Pursue, Ltd., 420 U.S.
at
420 U. S. 604;
Juidice v. Vail, 430 U.S. at
430 U. S. 334;
Trainor v. Hernandez, ante at
431 U. S.
441-443,
431 U. S.
445-446, and
id. at
431 U. S. 448
(concurring opinion).
Younger and these cited cases
express equitable principles of comity and federalism. They are
designed to allow the State an opportunity to "set its own
Page 431 U. S. 480
house in order" when the federal issue is already before a state
tribunal.
It may not be argued, however, that a federal court is compelled
to abstain in every such situation. If the State voluntarily
chooses to submit to a federal forum, principles of comity do not
demand that the federal court force the case back into the State's
own system. In the present case, Ohio either believes that the
District Court was correct in its analysis of abstention or, faced
with the prospect of lengthy administrative appeals followed by
equally protracted state judicial proceedings, now has concluded to
submit the constitutional issue to this Court for immediate
resolution. In either event, under these circumstances
Younger principles of equity and comity do not require
this Court to refuse Ohio the immediate adjudication it seeks.
[
Footnote 10]
B.
Amicus AFL-CIO argues that
Pullman
abstention is proper here. [
Footnote 11] The basis for the claimed applicability of
Pullman is found in the facts that there were other
steelworkers, at other Ohio facilities, laid off at the same time
as appellee and assertedly for the same reason, and yet they were
awarded unemployment compensation by the Bureau.
See Brief
for Appellants 3. Benefits were granted on the ground that the
company-owned coal mines did not supply a sufficient amount of fuel
to the plants there involved to effect a plant shut-down. [
Footnote 12]
Amicus argues
that, if appellee
Page 431 U. S. 481
were to pursue his administrative appeal, he might be granted
benefits on the same ground.
The problems with this approach, however, are several. First,
appellee did not press any such claim before the Bureau or on
administrative appeal, Tr. of Oral Arg. 9, and there is no
indication that a claimant may be awarded benefits on the basis of
a claim not made to the Bureau or Board of Review. Second, there is
no indication that the plant at which appellee worked is situated
similarly to the plants as to which benefits were granted. The
Bureau apparently applied a test under which the closing of a plant
was held not to be "due to" the labor dispute if the plant received
less than 500 of its coal from the employer's struck mines.
Id. at 7-8. There has been no claim or showing that the
50% test is unreasonable or improper and there has been no claim
that appellee's plant was not dependent on the struck mines for
more than 50% of its coal. What
amicus suggests is that
the court abstain on the basis of speculation that the unchallenged
facts may not be as the Bureau obviously saw them, or that the
Board might overturn an unchallenged standard of causation, or that
the Board might even come up with a hitherto unknown and unclaimed
reason for awarding benefits to appellee, such as a theory that,
because the coal strike was nationwide it was not "
at the
employers' mines.'" See Brief for AFL-CIO as
Amicus Curiae 8.
None of these suggestions is based on fact or solid legal
precedent. As has been noted,
Pullman abstention is an
equitable doctrine that comes into play when it appears that
abstention may eliminate or materially alter the constitutional
issue presented. There is a point, however, at which the possible
benefits of abstention become too speculative to justify or require
avoidance of the question presented. That point has been reached
and surpassed here. We conclude that
Pullman abstention is
not appropriate.
Page 431 U. S. 482
III
Preemption
Appellee argues that the Ohio statute is in conflict with, or
preempted by, certain provisions of the Social Security Act, 42
U.S.C. § 501
et seq., and the Federal Unemployment Tax
Act, 26 U.S.C. §§ 3301-3311. This argument was raised in the
District Court, but was not resolved there. It would have been
preferable, of course, for that court to have dealt with this
statutory issue first.
See Hagans v. Lavine, 415 U.
S. 528,
415 U. S.
543-545 (1974). The issue, however, entails no findings
of fact, and has been fully briefed here by both parties. We
therefore perceive no need to remand to the District Court, and we
proceed to decide the question.
Appellee points to two statutes as the source of his claimed
federal requirement that he be paid unemployment compensation. The
first is 42 U.S.C. § 503(a)(1), to the effect that the Secretary of
Labor shall make no certification for payment of federal funds to
state unemployment compensation programs unless state law provides
for such methods of administration "as are found by the Secretary
of Labor to be reasonably calculated to insure full payment of
unemployment compensation when due." Appellee's argument
necessarily is that payment is "due" him.
Appellee cites only a single page of the voluminous legislative
history of the Social Security Act in support of his assertion that
the Act forbids disqualification of persons laid off due to a labor
dispute at a related plant. That page contains the sentence: "To
serve its purposes, unemployment compensation must be paid only to
workers involuntarily unemployed." Report of the Committee on
Economic Security, as reprinted in Hearings on S. 1130 before the
Senate Committee on Finance, 74th Cong., 1st Sess., 1311, 1328
(1935).
The cited Report was one to the President of the United States
and became the cornerstone of the Social Security Act. On its face,
the quoted sentence may be said to give
Page 431 U. S. 483
some support to appellee's claim that "involuntariness" was
intended to be the key to eligibility. A reading of the entire
Report and consideration of the sentence in context, however, show
that Congress did not intend to require that the States give
coverage to every person involuntarily unemployed.
The Report recognized that federal definition of the scope of
coverage would probably prove easier to administer than
individualized state plans,
id. at 1323, but it
nonetheless recommended the form of unemployment compensation
scheme that exists today, namely, federal involvement primarily
through tax incentives to encourage state-run programs. The
Report's section entitled "Outline of Federal Act" concludes with
the statement:
"The plan for unemployment compensation that we suggest
contemplates that the States shall have broad freedom to set up the
type of unemployment compensation they wish. We believe that all
matters in which uniformity is not absolutely essential should be
left to the States. The Federal Government, however, should assist
the States in setting up their administrations and in the solution
of the problems they will encounter."
Id. at 1326.
See also id. at 1314.
Following this statement, the Report contains a section entitled
"Suggestions for State Legislation." It reads:
"
Benefits. -- The States should have freedom in
determining their own waiting periods, benefit rates, maximum
benefit periods, etc. We suggest caution lest they insert benefit
provisions in excess of collections in their laws. To arouse hopes
of benefits which cannot be fulfilled is invariably bad social and
governmental policy."
Id. at 1327.
This statement reflects two things. First, it reflects the
understanding that unemployment compensation schemes
Page 431 U. S. 484
generally do not grant full benefits immediately and
indefinitely, even to those involuntarily unemployed. The States
were expected to create waiting periods, benefit rates, and maximum
benefit periods, so as to bring the amount paid out in line with
receipts. Second, the statement reflects concern that the States
might grant eligibility greater than their funds could handle.
By way of advice on particular statutes, the Report's
"Suggestions" contains the following:
"
Willingness-to-work test. -- To serve its purposes,
unemployment compensation must be paid only to workers
involuntarily unemployed. The employees compensated must be both
able and willing to work and must be denied benefits if they refuse
to accept other suitable employment. Workers, however, should not
be required to accept positions with wage, hour, or working
conditions below the usual standard for the occupation or the
particular region, or outside of the State, or where their rights
of self-organization and collective bargaining would be interfered
with."
Id. at 1328. This, as has been noted, is the origin of
appellee's argument that all persons involuntarily unemployed were
intended to be compensated. Placed in context, however, it is clear
that the single sentence is only an expression of caution that
funds should not be dispensed too freely, and is not a direction
that funds must be dispensed.
Appellee's claim of support in the legislative history
accordingly fails. Indeed, that history shows, rather, that
Congress did not intend to restrict the ability of the States to
legislate with respect to persons in appellee's position.
See
also H.R.Rep. No. 615, 74th Cong., 1st Sess., 8-9 (1935);
S.Rep. No. 628, 74th Cong., 1st Sess., 12-13 (1935).
Appellee would find support in the "labor dispute
disqualification" contained in § 5(d) of draft bills issued by the
Social Security Board shortly after passage of the Social
Security
Page 431 U. S. 485
Act. Social Security Board, Draft Bills for State Unemployment
Compensation of Pooled Fund and Employer Reserve Account Types
(1936). [
Footnote 13]
Appellee argues that this proposed section evinced an intention
that "innocent" persons not be disqualified from unemployment
compensation. The Social Security Board, however, on the cover page
of the draft bills booklet explicitly stated:
"These drafts are merely suggestive. . . . Therefore, they
cannot properly be termed 'model' bills or even recommended bills.
This is in keeping with the policy of the Social Security Board of
recognizing that it is the final responsibility and the right of
each state to determine for itself just what type of legislation it
desires and how it shall be drafted."
We therefore are most reluctant to read implications of the
draft bills into the Social Security Act.
More important, however, appellee's argument fails on its face.
The draft bills themselves denied "innocents" certain compensation.
They did so not only in the various provisions
Page 431 U. S. 486
as to minimum time spent at the job, waiting periods, and
maximum benefits, but also in the labor dispute disqualification
itself. The labor dispute provisions are triggered by a dispute at
the same "establishment" and they disqualify any member of a "grade
or class of workers" any of whose members were interested in the
dispute. As the commentary and case law in jurisdictions that
adopted versions of the draft bills immediately recognized, this
division could serve to disqualify even a person who actively
opposed a strike, and could extend to persons laid off because of a
dispute at another plant owned by the same employer. [
Footnote 14]
The law that appellee challenges is different in form from the
draft bills, but we cannot say that it is qualitatively different.
We do not find in the draft bills any significant support for
appellee's argument that the Social Security Act forbids his
disqualification from benefits.
Appellee also claims support from this Court's decision in
California Human Resources Dept. v. Java, 402 U.
S. 121 (1971). In that case, the Court held that the
requirement of 42 U.S.C. § 503(a)(1) that payments be made "when
due" forbids suspension of payments during an appeal subsequent to
a full consideration on the merits. Appellee relies on the Court's
statement: "The objective of Congress was to provide a substitute
for wages lost during a period of unemployment not the fault of the
employee." 42 U.S. at
43 U. S. 130.
Appellee argues that this statement is a holding that the Act
forbids disqualification of persons in his position. We do not
agree. Nothing in
Java purported to define the class of
persons eligible
Page 431 U. S. 487
for benefits. The Court's sole concern there was with the
treatment of those who already had been determined under state law
to be eligible.
Finally, appellee argues that statements in the legislative
history of the Employment Security Amendments of 1970, 84 Stat.
695, indicate a congressional understanding that persons in his
position must not be disqualified. These statements (identical in
both House and Senate Reports) relate to the amendment prohibiting
States from canceling accumulated wage credits on grounds such as
an employee's change of jobs. [
Footnote 15] The statements are concerned with a
situation unrelated to the one in which appellee finds himself. To
the extent that they might be seen as shedding light on the area,
they are far from persuasive authority in appellee's favor, since
they recognize that the States continue to be free to disqualify a
claimant whose unemployment is due to a labor dispute "in the
worker's plant, etc."
Page 431 U. S. 488
As an alternative or addition to his argument based on the
Social Security Act, appellee urges that the Federal Unemployment
Tax Act, 26 U.S.C. §§ 331-3311, as amended, shows "congressional
intent to preempt the state, particularly with respect to the scope
of inclusiveness in the unemployment program." Brief for Appellee
13. We do not understand appellee to argue that the States are
preempted by the Federal Unemployment Tax Act from imposing any
sort of labor dispute disqualification. If total preemption is not
claimed, we find nothing in any of appellee's citations that would
show preemption in the particular area of concern to him. Indeed,
study of the various provisions cited shows that, when Congress
wished to impose or forbid a condition for compensation, it was
able to do so in explicit terms. [
Footnote 16] There are numerous examples, in addition to
the one set forth in n. 16, less related to labor disputes but
showing congressional ability to deal with specific aspects of
state plans. [
Footnote 17]
The fact that Congress has chosen not to legislate on the subject
of labor dispute disqualifications confirms our belief that neither
the
Page 431 U. S. 489
Social Security Act nor the Federal Unemployment Tax Act was
intended to restrict the States' freedom to legislate in this
area.
IV
Constitutionality
We come, then, to the question whether the Ohio labor dispute
disqualification provision is constitutional. The statute does not
involve any discernible fundamental interest or affect with
particularity any protected class. Appellee concedes that the test
of constitutionality, therefore, is whether the statute has a
rational relation to a legitimate state interest. Brief for
Appellee 29.
See New Orleans v. Dukes, 427 U.
S. 297 (1976). Our statement last Term in
Massachusetts Bd. of Retirement v. Murgia, 427 U.
S. 307 (1976), explains the analysis:
"We turn then to examine this state classification under the
rational basis standard. This inquiry employs a relatively relaxed
standard reflecting the Court's awareness that the drawing of lines
that create distinctions is peculiarly a legislative task and an
unavoidable one. Perfection in making the necessary classifications
is neither possible nor necessary
Dandridge v.
Williams, [
397 U.S.
471,]
397 U. S. 485 [(1970)]. Such
action by a legislature is presumed to be valid."
Id. at
427 U. S.
314.
Appellee challenges the statute only in its application to
persons in his situation. We find it difficult, however, to discern
the precise nature of the situation that appellee claims may not be
the subject of disqualification. His discussion focuses to a great
extent on his claim that he is "involuntarily unemployed," but he
cannot be arguing that no person involuntarily unemployed may be
disqualified, for he approves the draft bills' labor dispute
provision. Brief for Appellee 53. That provision, as discussed
above, would disqualify an involuntarily unemployed nonunion worker
who opposed a strike
Page 431 U. S. 490
but whose grade or class of workers nevertheless went out on
strike.
Appellee's claim of irrationality appears to be based, rather,
on his view of the statute's broad sweep, in that it disqualifies
an individual
"regardless of the geographical remoteness of the location of
the dispute, and regardless of any arguable actual, or imputable,
participation or direct interest in the dispute on the part of the
disqualified person. [
Footnote
18]"
Id. at 34. Appellee thus focuses on the interests of
the recipient of unemployment compensation.
The unemployment compensation statute, however, touches upon
more than just the recipient. It provides for the creation of a
fund produced by contributions from private employers. The rate of
an employer's contribution to the fund varies according to benefits
paid to that employer's eligible employees. Ohio Rev.Code Ann. §
4141.25 (1973). Any action with regard to disbursements from the
unemployment compensation fund thus will affect both the employer
and the fiscal integrity of the fund. Appellee in effect urges that
the Court consider only the needs of the employee seeking
compensation. The decision of the weight to be given the various
effects of the statute, however, is a legislative decision, and
appellee's position is contrary to the principle that
"the Fourteenth Amendment gives the federal courts no power to
impose upon the States their views of what constitutes wise
economic or social policy."
Dandridge v. Williams, 397 U.
S. 471,
397 U. S.
486
Page 431 U. S. 491
(1970). In considering the constitutionality of the statute,
therefore, the Court must view its consequences not only for the
recipient of benefits, but also for the contributors to the fund
and for the fiscal integrity of the fund.
Looking only at the face of the statute, an acceptable rationale
immediately appears. The disqualification is triggered by "a labor
dispute other than a lockout." In other words, if a union goes on
strike, the employer's contributions are not increased, but if the
employer locks employees out, all his employees thus put out of
work are compensated and the employer's contributions accordingly
are increased. Although one might say that this system provides
only "rough justice," its treatment of the employer is far from
irrational.
"If the classification has some 'reasonable basis,' it does not
offend the Constitution simply because the classification 'is not
made with mathematical nicety or because in practice it results in
some inequality.'
Lindsley v. Natural Carbonic Gas Co.,
220 U. S.
61,
220 U. S. 78."
Dandridge v. Williams, 397 U.S. at
397 U. S. 485.
The rationality of this treatment is, of course, independent of any
"innocence" of the workers collecting compensation.
Appellants assert three additional rationales for the
disqualification provision. First, they argue that granting
benefits to workers laid off due to a strike at a parent company's
subsidiary plant in effect would be subsidizing the union members.
Brief for Appellants 12. The District Court correctly rejected this
rationale, as applied to appellee and his class, because payments
to appellee would in no way directly subsidize the striking coal
miners, and the fact that appellee happened to be a member of a
union (other than the striking union) is not a legitimate reason,
standing alone, to deny him benefits. 408 F. Supp. at 1022. The
court continued:
"Moreover, close scrutiny of the reasons for the State's
classification reveals that what the state is actually
intending
Page 431 U. S. 492
to prevent is not the 'subsidizing' of unemployed
union
members per se, but the subsidizing of
union-initiated work stoppages."
(Emphasis in original.)
Ibid.
This statement of the State's purpose reflects its second
proffered justification, namely, that the granting of benefits
would place the employer at an unfair disadvantage in negotiations
with the unions. The District Court rejected this justification on
the grounds that payments of funds to the steelworkers
"could hardly be deemed to put the coal miners in a position to
refuse to negotiate with the steel companies until the companies
reached a financial crisis, thereby causing the companies to yield
to the unreasonable and economically unsound demands of the coal
miners to prevent bankruptcy."
Ibid. Although the District Court was reacting to
appellants' own hyperbole in speaking of financial crises and
bankruptcy, it must be recognized that effects less than pushing
the employer to bankruptcy may be rationally viewed as undesirable.
The employer's costs go up with every laid-off worker who is
qualified to collect unemployment. The only way for the employer to
stop these rising costs is to settle the strike so as to return the
employees to work. Qualification for unemployment compensation thus
acts as a lever increasing the pressures on an employer to settle a
strike. The State has chosen to leave this lever in existence for
situations in which the employer has locked out his employees, but
to eliminate it if the union has made the strike move. Regardless
of our views of the wisdom or lack of wisdom of this form of state
"neutrality" in labor disputes, we cannot say that the approach
taken by Ohio is irrational.
The third rationale offered by the State is its interest in
protecting the fiscal integrity of its compensation fund. This has
been a continuing concern of Congress and the States with regard to
unemployment compensation systems.
See Report
Page 431 U. S. 493
of the Committee on Economic Security, cited
supra at
431 U. S. 482;
Hearing on H.R. 6900 before the Senate Committee on Finance, 94th
Cong., 1st Sess. (1975). It is clear that protection of the fiscal
integrity of the fund is a legitimate concern of the State. We need
not consider whether it would be "rational" for the State to
protect the fund through a random means, such as elimination from
coverage of all persons with an odd number of letters in their
surnames. Here, the limitation of liability tracks the reasons
found rational above, and the need for such limitation
unquestionably provides the legitimate state interest required by
the equal protection equation.
The District Court's opinion contains a paragraph declaring
that, in addition to violating the Equal Protection Clause, the
disqualification denied appellee due process. 408 F. Supp. at 1022.
There is, however, no claim of denial of procedural due process,
cf. Mathews v. Eldridge, 424 U. S. 319
(1976), and we are unable to discern the basis for a claim that
appellee has been denied substantive due process.
The judgment of the District Court is reversed
It is so ordered.
MR. JUSTICE REHNQUIST took no part in the consideration or
decision of this case.
[
Footnote 1]
In December, 1975, § 4141.29(D)(1)(a) (1973), was amended to
read:
"(D) Notwithstanding division (A) of this section, no individual
may serve a waiting period or be paid benefits under the following
conditions:"
"(1) For any week with respect to which the administrator finds
that: '(a) His unemployment was due to a labor dispute other than a
lockout at any factory, establishment, or other premises located in
this or any other state and owned or operated by the employer by
which he is or was last employed; and for so long as his
unemployment is due to such labor dispute. No individual shall be
disqualified under this provision if: ( i) his employment was with
such employer at any factory, establishment, or premises located in
this state, owned or operated by such employer, other than the
factory, establishment, or premises at which the labor dispute
exists, if it is shown that he is not financing, participating in,
or directly interested in such labor dispute, or, (ii) his
employment was with an employer not involved in the labor dispute
but whose place of business was located within the same premises as
the employer engaged in the dispute, unless his employer is a
wholly owned subsidiary of the employer engaged in the dispute, or
unless he actively participates in or voluntarily stops work
because of such dispute. If it is established that the claimant was
laid off for an indefinite period and not recalled to work prior to
the dispute, or was separated by the employer prior to the dispute
for reasons other than the labor dispute, or that he obtained a
bona fide job with another employer while the dispute was
still in progress, such labor dispute shall not render the employee
ineligible for benefits.' Act (amended substitute Senate bill 173)
effective Dec. 2, 1975."
The amendment added subdivision(i). Thus it is possible that, if
appellee's furlough had been effected after December 2, 1975, he
would qualify for benefits. We are advised, however, that the
amendment is not retroactive. Tr. of Oral Arg. 16.
[
Footnote 2]
Appellants state that these referrals are still before the Board
of Review, but are stayed pending decision in this case. Brief for
Appellants 4.
[
Footnote 3]
At no point in this litigation has appellee claimed that §
4141.29(D)(1)(a) conflicts with or is preempted by any provision of
the National Labor Relations Act, 29 U.S.C. § 151
et seq.
We do not today consider or decide the relationship between that
Act and a statute such as § 4141.29(D)(1)(a).
[
Footnote 4]
The District Court determined, however, that the class as
defined by appellee in his complaint was overbroad. The court, in
its turn, defined the class as
"Hodory and approximately 1250 members of the United
Steelworkers in Ohio, who became unemployed through no fault of
their own, [and] were denied unemployment benefits by defendants
for a specific period of time because of the labor dispute
disqualification clause in § 4141.29(D)(1)(a), despite the fact
that they may have been qualified in all other respects to receive
the benefits."
408 F. Supp. at 1020. Members of this class included Hodory's
fellow workers at USS and also employees of Republic Steel who were
furloughed as a result of the strike at Republic's coal mines.
[
Footnote 5]
In view of our disposition of the case, we have no reason to
reach this constitutional claim. USS and Republic each sought to
intervene for purposes of taking an appeal here, and as parties in
this Court. These motions were denied.
See 429 U.S. 814
(1976).
[
Footnote 6]
Brief in Opposition to Jurisdiction (of the District Court),
Record, Doc. 8. The defendants-appellants explicitly stated that an
appeal would lie to the Court of Common Pleas.
Id. at 2.
It appears that the Board might give appellee's class claim special
treatment so as to render the Board's decision eligible for direct
review by the Supreme Court of Ohio. Ohio Rev.Code Ann. §
4141.28(N) (1973) (claims involving more than 500 persons). Neither
appellee nor appellants suggest, however, that the Board is
considering such action.
[
Footnote 7]
This is confirmed by the fact that
Younger abstention
was the sole abstention principle argued orally before the District
Court. Record, Doc. 35, pp. 5-12, 27-29, and 47-49.
[
Footnote 8]
In
Gibson v. Berryhill, this Court actually held,
however, that the
Younger rule "or the principles of
equity, comity, and federalism" for which it stands, 411 U.S. at
411 U. S. 575,
did not require the dismissal of that § 1983 suit in view of a
proceeding then pending before a state Board of Optometry, since it
was alleged, and the District Court there had concluded, that the
Board's bias rendered it incompetent to adjudicate the issues. 411
U.S. at
411 U. S.
575-577.
[
Footnote 9]
The nature of the three appeals is not made clear. It is
possible that a more expeditious route was available.
See
n 6,
supra.
[
Footnote 10]
In view of this conclusion, we need not and do not express any
view on whether the District Court erred in refusing to abstain on
Younger grounds.
[
Footnote 11]
Pullman abstention, where deference to the state
process may result in elimination or material alteration of the
constitutional issue, surely does not require that this Court defer
to the wishes of the parties concerning adjudication.
See
Railroad Comm'n v. Pullman Co., 312 U.
S. 496 (1941).
[
Footnote 12]
It appears that the steel companies have taken an appeal from
that ruling by the Bureau to the Board of Review, but decision of
that appeal has been withheld pending resolution of the instant
case.
See Brief for AFL-CIO as
Amicus Curiae 5 n.
3.
[
Footnote 13]
Section 5(d) of those bills provided that a claimant is
disqualified:
"For any week in which it is found by the commission that his
total or partial 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 to the satisfaction
of the commission 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;"
"and provided further that, if in any case 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."
[
Footnote 14]
See Fierst & Spector, Unemployment Compensation in
Labor Disputes, 49 Yale L.J. 461 (1940); Haggart, Unemployment
Compensation During Labor Disputes, 37 Neb.L.Rev. 668 (1958);
Shadur, Unemployment Benefits and the "Labor Dispute"
Disqualification, 17 U.Chi.L.Rev. 294 (1950); Comment, Labor
Dispute Disqualification Under the Ohio Unemployment Compensation
Act, 10 Ohio St.L.J. 238 (1949), and cases cited therein.
See
generally Annot., 63 A.L.R.3d 88 (1975).
[
Footnote 15]
The statements read:
"The provision [forbidding cancellation] would not restrict
State authority to prescribe the conditions under which a claimant
would be 'otherwise eligible.' For example, benefits are not now --
and would not under the proposal be -- paid for a week of
unemployment unless the claimant were available for work. It would
not prevent a State from specifying the conditions for
disqualification such as, for refusing suitable work, for voluntary
quitting, for unemployment due to a labor dispute in the worker's
plant, etc. . . ."
"
* * * *"
"Your [in the Senate report, this word is 'the'] committee
believes that the disqualification provisions of State unemployment
compensation laws should be devised so as to prevent benefit
payments to those responsible for their own unemployment, without
undermining the basic objective of the unemployment insurance
system -- to provide an income floor to those whose unemployment is
beyond their control. Severe disqualifications, particularly those
which cancel earned monetary entitlement, are not in harmony with
the basic purposes of an unemployment insurance system."
H.R.Rep. No. 91-612, pp. 119 (1969); S.Rep. No. 91-752, pp.
23-24 (1970).
[
Footnote 16]
See, for example, 26 U.S.C. § 3304(a)(5), which from
the start has provided:
"(5) compensation shall not be denied in such State to any
otherwise eligible individual for refusing to accept new work under
any of the following conditions:"
"(A) if the position offered is vacant due directly to a strike,
lockout, or other labor dispute;"
"(B) if the wages, hours, or other conditions of the work
offered are substantially less favorable to the individual than
those prevailing for similar work in the locality;"
"(C) if as a condition of being employed the individual would be
required to join a company union or to resign from or refrain from
joining any
bona fide labor organization."
[
Footnote 17]
See Employment Security Amendments of 1970, 84 Stat.
695; Emergency Unemployment Compensation Act of 1971, 85 Stat. 811;
Emergency Unemployment Compensation Act of 1974, 88 Stat. 1869;
Unemployment Compensation Amendments of 1976, 90 Stat. 2667.
[
Footnote 18]
Appellee also claims that § 4141.29(D)(1)(a) creates an
impermissible "irrebuttable presumption." This argument requires
two assumptions. First, appellee must assume that the only purpose
of the statute is to measure "innocence." Then he must assume that
the disqualification provision represents a presumption that any
person laid off due to a strike is not innocent. If the statute is
designed to serve any purpose other than measuring innocence,
appellee's implication of an irrebuttable presumption fails. As we
discuss below, the statute clearly has purposes other than
measuring the innocence of the disqualified worker.