BISMARCK, N.D. -- North Dakota's Supreme Court was asked for the first time Tuesday to interpret whether a 30-year-old state labor law should allow locked-out workers at American Crystal Sugar Co. to draw unemployment checks.


The argument hinges on a North Dakota law that says workers are not entitled to unemployment benefits if they are out of a job "due to a strike, sympathy strike, or a claimant's work stoppage dispute of any kind which exists because of a labor dispute."

A lawyer for the Moorhead, Minn.-based sugar beet processor contended during Supreme Court arguments on Tuesday that the "labor dispute" language would prohibit unemployment payments for a lockout or strike. Attorney Paul Zech said the reasoning would prevail even if a company insisted on wage cuts as part of contract talks.

"The courts do not, and never have, wanted to inject themselves into deciding what the (merits) are of any particular individual's position in federally governed collective bargaining," Zech said.

The workers' attorney, Dan Phillips, said the "labor dispute" language specifically referred only to situations where employees deliberately withhold their labor. In Crystal's case, the company locked out employees who wanted to work, Phillips said.

"None of these unemployed individuals are out because of their behavior. The employer chose to keep them out," Phillips said.

The high court will make its ruling later. Should the Supreme Court rule in the workers' favor, they could get $4 million or more in benefits, said Darren Brostrom, the agency's unemployment insurance director.

Job Service says about 400 of the company's North Dakota workers are affected by the case.



"These workers were forced to go on welfare. They were forced to go out and get food stamps, and they were forced to depend on charity of their churches and their local union brothers and sisters," he said. "That is precisely why we have unemployment insurance."

Brian Ingulsrud, American Crystal's vice president for administration, said Tuesday the fall sugar beet harvest and processing was going smoothly, and that the replacement employees were "doing a fabulous job." American Crystal also has processing factories in East Grand Forks, Crookston and Moorhead in Minnesota.


"Our offer is still out there, and I think it's a very good offer," he said.

A small group of locked-out workers attended Tuesday's arguments at the North Dakota Capitol. Gayln Olson, president of Local 372G of the Bakery, Confectionery, Tobacco Workers and Grain Millers International union in Hillsboro, said union workers showed up at the Hillsboro plant the morning the lockout began, willing to work.

"We think it's kind of unfair, basically, because never once did we ever not want to work. We wanted to work under the (former) contract, and continue with negotiating, and the company chose to lock us out," Olson said. "We're here to see that we get a fair shake."