More than 400 American Crystal Sugar workers in North Dakota who are locked out in a contract dispute are eligible for unemployment benefits, the state Supreme Court said in a ruling issued Tuesday.

The decision reverses a lower court’s ruling that said the workers were ineligible for benefits from Job Service North Dakota because state law prohibits unemployment insurance for workers involved in labor disputes.

John Riskey, a spokesman for the Bakery, Confectionery, Tobacco Workers and Grain Millers union, said the ruling will mean “quite a bit” for the 420 locked-out workers in North Dakota.

“To be locked out by Crystal Sugar as they have, all these families without anything, most of them scraping by to put food on the table, it’s going to mean a lot,” Riskey said.

Nearly 1,300 American Crystal Sugar workers in North Dakota and Minnesota have been locked out since Aug. 1, 2011, after their union rejected the Moorhead-based cooperative’s proposed contract.

In Minnesota, workers were eligible to collect unemployment benefits because they had been locked out by the company. However, those benefits began expiring last summer and were totally exhausted by October.

Crystal Sugar, the nation’s largest beet sugar producer, has three Minnesota plants, in Moorhead, Crookston and East Grand Forks. It has two more on the North Dakota side of the Red River Valley.

Two of the five justices on the North Dakota Supreme Court voted against the decision to allow the jobless benefits.

But the sugar mill workers’ attorney had argued that the “labor dispute” language referred to situations in which the workers withheld labor, which was not the case with the Crystal Sugar workers who wanted to work but were locked out, he said.

Darren Brostrom, Job Service North Dakota’s unemployment insurance director, did not immediately return a message seeking comment. He had said previously that if the court ruled in favor of the workers, they would get $4 million or more in benefits.

Brian Ingulsrud, American Crystal’s vice president for administration, said the company was not directly involved in the case and has moved on with new employees.

“It’s a matter between the state of North Dakota and locked-out employees,” he said.


Star Tribune staff writer Mike Hughlett contributed to this report.