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TJ Jerke, Forum News Service, Published January 29 2013

North Dakota Legislature: Unemployment benefits for locked-out workers considered

BISMARCK – After 31 years as a teacher, Sen. Phillip Murphy, D-Portland, said if he were locked out of his job “it would rock my world.”

Murphy’s sentiments on Tuesday in front of the Senate Industry, Business and Labor Committee are strongly felt by the 420 North Dakota employees who continue to be locked out from their jobs at American Crystal Sugar in Hillsboro and Drayton, unable to receive a paycheck or unemployment benefits.

A handful of those locked-out employees addressed the issue with lawmakers during the first hearing of Senate Bill 2224, sponsored by Sen. Murphy, which would clarify current law and extend unemployment insurance benefits to an individual that has been locked out and prevented from working.

“I was raised to help those in need. It seems consistent with my heritage and the nature of the people of this state to give a helping hand to those relocating and adjusting to a very harsh condition” Murphy said. “I care about the people affected and I ask you to do the same.”

North Dakota’s Supreme Court is pondering a decision regarding the issue of whether locked-out employees should receive unemployment benefits. The issue came to light after the Crystal Sugar lockout that resulted after contract negotiations between the company and the sugar workers’ union broke down.

Current state law does not grant benefits to individuals that may be unemployed after striking, so the argument is whether locked-out workers qualify for benefits, since they did not strike.

Daniel Phillips, lead attorney for the locked-out employees, said the Unemployment Compensation Act focuses on an individual that is fired without a good cause from the employer and a lockout is clearly an individual that wants to continue working, but the employer keeps them from doing so.

“To prevent locked out employees from getting unemployment benefits really turns the act upside down by allowing the employer to prevent the employee from working and yet prohibit the employees from being awarded (benefits),” he said.

Gayln Olson, president of the union local representing Crystal workers, told the committee he has been unable to afford mortgage payments on his seven-bedroom farmhouse and has moved his six-member family into a three-bedroom home since he has not received any benefits.

He said the lack of benefits has created hardships for the workers and their loved ones, “especially the children.”

“Those employer-funded benefits are being held back because of an interpretation of the state code,” he said. “That’s not right.”

Union workers have rejected a contract offer from the company multiple times.

According to Darren Brostrom, director of unemployment insurance with Job Service North Dakota, 21 states allow unemployment insurance benefits to locked out workers, 20 states do not allow benefits and nine have provisions that could allow locked-out workers benefits.

One concern many states consider is the financial impact of allowing benefit payments to locked out workers.

Employers pay into a state unemployment fund, and a lockout could result in the employer paying more to the locked-out workers than what was paid into the fund, potentially impacting the statewide tax rates.

“When this occurs, all employers within the state receive a higher tax rate to account for the drawdown of the unemployment insurance trust fund.”

Brostrom said in the case of Crystal Sugar, if the company were paying unemployment benefits, it would have resulted in a 0.06 percent across-the-table increase, or $16.74 per employee, for the other businesses paying into the fund during the 26-week period an unemployed worker can collect insurance benefits.

The Greater North Dakota Chamber was the only body that stood in opposition to the bill.

Jon Godfread, vice president of governmental relations for the chamber, told the committee North Dakota’s unemployment insurance laws, “provide adequate and temporary financial assistance to employees who become unemployed through no fault of their own.”

He said the chamber, “supports the true use of unemployment insurance, which is a safety net for people in-between employment”

No committee action was taken on the bill.

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