Ohio Bureau of Employment Services v. Hodory

Background

Leonard Hodory was a millwright apprentice at a United States Steel plant in Youngstown when a nationwide coal miners’ strike at company-owned mines reduced fuel and shut the plant. He was furloughed on November 12, 1974, applied for Ohio unemployment benefits, and was denied under an Ohio law that disqualified workers whose unemployment was ‘‘due to a labor dispute’’ at employer-owned premises. Hodory filed a class action under federal law claiming the Ohio rule conflicted with federal unemployment statutes and violated the Fourteenth Amendment. A three-judge District Court held abstention unnecessary, certified a class of about 1,250 steelworkers, and ruled the statute unconstitutional as applied.

Reasoning

The Supreme Court first rejected arguments that the federal court should have abstained from deciding the case. It then examined whether federal law preempted the Ohio disqualification, reviewing the Social Security Act, its history, draft federal bills, and earlier cases, and concluded federal statutes did not forbid the state rule. Applying ordinary equal protection review, the Court explained the statute did not affect a fundamental right or suspect class and thus needed only a rational relation to a legitimate state interest. The Court accepted state rationales: distinguishing employer lockouts from union strikes for contribution and bargaining reasons, and protecting the fiscal integrity of the unemployment fund. On that basis the Court reversed the District Court and upheld the Ohio rule as rational.

Real world impact

The ruling means states may deny benefits to workers furloughed because of labor disputes at employer-owned facilities, affecting steelworkers furloughed during the coal strike and similar situations. Employers’ contribution rates and bargaining leverage may be affected. The opinion noted a December 1975 Ohio amendment that might have changed eligibility for later furloughs but was not retroactive.