Ruling may bring $4 million in unemployment benefits for locked-out American Crystal workers in ND

BISMARCK - A divided North Dakota Supreme Court handed locked-out American Crystal Sugar workers a victory with a decision Tuesday that they are entitled to unemployment benefits.

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BISMARCK - A divided North Dakota Supreme Court handed locked-out American Crystal Sugar workers a victory with a decision Tuesday that they are entitled to unemployment benefits.

The 3-2 decision, following months of deliberation on arguments presented Sept. 18, could mean a payout of about $4 million to North Dakota workers who have been locked out since Aug. 1, 2011, under a dispute over a new contract.

Job Service North Dakota, which manages the unemployment program, had determined that the workers were not eligible for benefits. Judge Steven Marquart upheld the decision on appeal in Traill County District Court.

The Supreme Court decision reverses that action and sends the claims back for determination of benefits due each North Dakota worker, a process that likely will take weeks.

Representatives of the locked-out American Crystal workers applauded the decision, welcome news for workers who have been away from their jobs for 1½years.


"I think we need to have a little celebration," said John Riskey, a local union president who was driving to Drayton on Tuesday evening to talk with other union leaders about their next step in light of the decision. "I guess justice has been served."

Alecia Heiser, a former lab and utility worker at the Drayton plant who was at the meeting Tuesday night, said that while details were in short supply, it gave her a renewed sense of hope. Heiser said she found full-time work briefly at a restaurant in Drayton after the lockout but had since been forced into part-time work there and at other businesses.

"Very exciting," she said of the decision. "I'm glad things are turning around."

Many workers and their families have experienced hardships resulting from the involuntary work stoppage, said Daniel Phillips, the Fargo lawyer who represented the workers.

"Now this is a salve over a very raw sore, but it's still a very nice salve," he said.

"I have heard tears to overjoyed," Phillips added, referring to workers' reaction to the favorable decision. "They're all very happy with the outcome."

Workers still hope to return to the negotiating table with American Crystal to resume contract talks "to stop the hurt on the workers," Riskey said.

The union has voted four times to reject American Crystal's contract offer. In the most recent vote, on Dec. 1, 63 percent of voting members were opposed.


An executive for American Crystal Sugar said the company was operating well with replacement workers and had little to say about the Supreme Court decision.

"There's not a whole lot we can say because that's a matter between them [the union] and the state," said Brian Ingulsrud, American Crystal's vice president of administration.

In general, he said, the news did not affect the company's stance on contract renegotiation with the union. "I think that we've moved on as a company," he said. "We've moved on with normal business operations with new employees ... things are going well."

Maren Daley, director of Job Service North Dakota, said benefit amounts likely will range considerably among workers, depending on their wages and whether payouts are offset by earnings from other work.

"It's going to vary quite a bit," she said. "On the high side, it could be approximately $4 million," she added, referring to the total.

Unemployment benefits in North Dakota are up to 50 percent of wages for up to 26 weeks. That could translate into up to $400 a week, for a total of up to $10,400 per worker, Daley said.

Between 200 and 250 workers signed on as claimants in the lawsuit, Phillips said. The total number affected by the decision could be from 250 to 300, he and Daley estimated.

Because Job Service decided North Dakota workers were ineligible for unemployment benefits, the paperwork to determine benefit levels has not yet been collected.


"Now we have to back up and get all that," Daley said. "We're starting today," she said shortly after the decision was issued Tuesday.

It was not clear immediately how long it would take to determine benefits for all of the workers, although Daley said she thought the claims would be resolved in a period of "weeks."

"I'm inclined to think it's going to go relatively smoothly," she said.

Job Service will be in contact with workers, individually and working with the union. The claims will be handled by the agency's central claims office in Bismarck, not at local Job Service offices, she said.

As of Tuesday afternoon, North Dakota's unemployment insurance fund had a balance of $135 million, Daley said, adding that

$4 million in benefit payments would not pose any problems for the fund.

"It's not going to be a significant hit to the trust fund," she said. "The trust fund is very solid."

The decision was not a complete surprise given the long deliberation, Daley said. She noted the split decision.

Justice Carol Ronning Kapsner wrote for the majority and was joined by Justice Mary Muehler Maring and Justice Daniel Crothers, who wrote a separate concurring opinion. Chief Justice Geral VandeWalle and Justice Dale Sandstrom dissented.

The crux of the case centered on the factors that make workers ineligible for unemployment benefits under North Dakota law.

The law specifies that workers are not eligible for benefits when left out of work in strikes, sympathy strikes or work stoppage disputes.

The workers argued that the reasons for denying unemployment benefits all involve voluntary stoppages on the part of workers, a situation they argued didn't apply in the company's lockout.

"A lockout is clearly an employer's action, not an employee's action," Phillips said. "It was not voluntary."

Because of the split verdict, and the differences among the justices even on the majority, the decision in the American Crystal Sugar case might not be broadly applicable in the future, he said.

More worrisome, because the North Dakota Legislature is in session, lawmakers could pass a law negating the effect of Tuesday's decision, Phillips said.

"I'm very happy with the outcome," he said. However, he added, "I don't know how long this decision is going to matter."

Readers can reach Forum reporters Patrick Springer at (701) 241-5522 and Emily Welker at (701) 241-5541

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