The Supreme Court ruled 6 to 3 yesterday that the states are free to pay strikers unemployment compensation, which is financed largely by their employers.
The justices upheld a New York state law under which strikers, after an eight-week waiting period, can collect benefits Currently, only one other state, Rhode Island, has a similar statute.
According to a Labor Department specialist, however, 30 other states, including Maryland, pay benefits to workers who are involuntarily idled by a strike and who are actively seeking full-time jobs elsewhere. Virginia and the District of Columbia do not pay unemployment compensation to workers idled by a labor dispute.
The key issue in the case was whether Congress, in enacting the National Labor Relations Act in 1935, the year in which the New York law also was adopted, implicitly intended to prohibit unemployment compensation to strikers.
The 2nd U.S. Circuit Court of Appeals, upholding the New York law, found that Congress had no such intent, and was affirmed yesterday. By contrast, the 1st U.S. Circuit Court of Appeals did find such an intent and consequently invalidated the Rhode Island law.
The test of the New York law arose from a 1971 nationwide strike against the American Telephone & Telegraph Co. by the Communications Workers of America (AFL-CIO), which represents about 70 percent of the nonmanagement employes of the Bell System and its affiliates.
For most AT&T workers, the strike lasted only one week. In New York state, however, the 38,000 CWA members employed by the Bell System remained on strike for seven months.
During the five months following the eight-week waiting period, about 33,000 of the strikers collected benefits at an average rate of $75 a week each, for a total of more than $49 million, although the National Labor Relations Board held that they were striking illegally.
The New York Telephone Co. sued. A federal judge, saying that the law may substantially affect workers' willingness to strike and the duration of their walkout, ruled for the employer but was reversed.
In the Supreme Court, the company complained of the use of unemployment benefits "as a strike weapon to complement or replace the unions' own strike funds." And the Chamber of Commerce of the United States said that the states, by shortening the waiting period for benefits and increasing their size, could "easily crush employer resistance to strikes."
But New York state argued that the long strike had benefited the company by reducing its net payout for wages by $86 million. Moreover, the contract that resulted was nearly identical to the company's original proposal, the state said. Finally, it pointed out, strikes in New York are of shorter average duration than elsewhere.
Justice John Paul Stevens announced the judgment of the Supreme Court. His opinion, joined by only two other justices, Bryon R. White and William H. Rehnquist, said that Congress did not intend to preempt a state's power to pay unemployment compensation to strikers.
In separate opinions, Justices William J. Brennan Jr. and Harry A. Blackmun, who was joined by Justice Thurgood Marshall, agreed with the result and thus completed the six-member majority.
Justice Lewis F. Powell Jr. wrote a dissenting opinion in which he said that the decision "substantially alters," in New York, "the balance of advantage between management and labor prescribed by the National Labor Relations Act." Chief Justice Warren E. Burger and Justice Potter Stewart signed his opinion.