Crescent Chevrolet v. Iowa Dept. of Job Service, 87-836

• Decision Date: 21 September 1988
• Docket Number: No. 87-836,87-836
• Parties: CRESCENT CHEVROLET, Betts Cadillac, Des Moines AMC Jeep, Inc., Dewey Ford, Bob Brown Chevrolet, Inc., Ramsey Pontiac, Conway Buick-Opel, Inc., and Holmes Oldsmobile, Appellees, v. IOWA DEPARTMENT OF JOB SERVICE, Appellee, and Robert C. Mickles, et al., David G. Boucher, et al., Ronald L. Koons, et al., P.D. Allgood, et al., Steven P. Wirth, et al., Duane H. Frey, et al., D.V. Algreen, et al., and Michael W. Hutton, et al., Intervenors-Appellants.
• Court: Iowa Supreme Court

Page 148

429 N.W.2d 148

CRESCENT CHEVROLET, Betts Cadillac, Des Moines AMC Jeep, Inc., Dewey Ford, Bob Brown Chevrolet, Inc., Ramsey Pontiac, Conway Buick-Opel, Inc., and Holmes Oldsmobile, Appellees, v. IOWA DEPARTMENT OF JOB SERVICE, Appellee, and Robert C. Mickles, et al., David G. Boucher, et al., Ronald L. Koons, et al., P.D. Allgood, et al., Steven P. Wirth, et al., Duane H. Frey, et al., D.V. Algreen, et al., and Michael W. Hutton, et al., Intervenors-Appellants.

No. 87-836.

Supreme Court of Iowa.

Sept. 21, 1988.

Arthur C. Hedberg, Jr., and Mark T. Hedberg, Des Moines, for intervenors-appellants.

James R. Swanger and Jill Thompson Hansen of Brown, Winick, Graves, Donnelly, Baskerville & Schoenenbaum, Thomas M. Zurek of Mumford, Schrage & Zurek, and Michael Sellers, Des Moines, for appellees.

Blair H. Dewey and William C. Whitten, Des Moines, for appellee Iowa Dept. of Job Service.

Considered en banc.

SNELL, Justice.

This case contains the consolidated claims for unemployment compensation of 118 employees of several auto dealers doing business in the Des Moines area. These claimants established picket lines on January 9, 1983, after their union contracts expired and negotiations reached an impasse. The economic strike ended July 27, 1984.

The claimants, intervenors and appellants herein, were employed by their employers in various capacities, but primarily as mechanics and bodyshop workers. They work within a department established at the employer's place of business having separate management and separate accountability. These departments include new and used car departments, an accounting department, a service and a parts department. Separate accounting maintenance is performed to reflect the profitability or lack of it by the respective departments.

The petitioners-appellees are the employers involved in these claims. The Iowa Department of Job Service is the respondent. Our review is subject to the guidelines of our administrative procedure act. See Iowa Code § 17A.19 (1981).

I. The Facts.

The crux of this contested case is whether claimants were within the statutory provision which disqualifies individuals

[f]or any week with respect to which the division of job service finds that the individual's total or partial unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which the individual is or was last employed,....

Iowa Code § 96.5(4) (1981). Following the decision of a claims deputy which concluded they were disqualified from benefits by virtue of this subsection, claimants appealed to a department of job service hearing officer. A hearing was held on January 4, 1984. After a day of taking evidence, the hearing was set to be continued on January 23, 1984, due to time constraints. On January 5, however, the parties entered into the following stipulation:

The undersigned have agreed and do hereby stipulate, if approved by you as hearing officer, that the above-referred to matter should be submitted to you on the record as it presently stands. It is further stipulated that the continuance previously discussed is hereby rendered unnecessary and further that all the parties are waiving the right to furnish any further testimony or evidence and further waive closing arguments.

If you have any questions about this proposed procedure, please contact any one of the undersigned.

The hearing officer found from the record, as submitted, that a labor dispute had occurred on September 9, 1983, that resulted in picket lines being established at eight employers' premises. The officer also found that the machinists' union members (claimants herein) who were on strike were replaced by supervisory personnel and nonunion workers, and the premises where claimants were employed, continued to remain open and to operate. Based on these findings, the officer concluded that a "stoppage of work" did not exist. Consequently, claimants were entitled to benefits. Petitioners appealed to the appeal board.

The appeal board, notwithstanding the above-noted stipulation, remanded the case for the taking of further evidence on the stoppage of work issue. Following the remand, the appeal board determined the stoppage of work issue as to each individual petitioner. The board reversed the hearing officer's decision, found a stoppage of work as to each petitioner-employer, and remanded for further findings pertaining to the ending of the relevant labor dispute. Petitioners sought judicial review limited to the issue whether the appeal board employed the correct understanding of "stoppage of work." Following the claimants' petition in intervention, the district court affirmed the decision of the appeal board in part, reversed in part and remanded for the further taking of evidence.

II. The Appeal Board's Remand Order.

The claimants contend the appeal board erred in its initial remand of the claims for additional evidence on the stoppage of work issue. Without the additional evidence adduced on remand, claimants assert the record fails to show that a "stoppage of work" occurred. This contention relies upon the parties' stipulation and Iowa Code section 17A.10(2), which provides that "[t]he parties to a contested case proceeding may, by written stipulation representing an informed mutual consent, waive any provision of this chapter relating to such proceedings." In addition, claimants cite statutory authority relating to informal settlement and disposition of controversies. See Iowa Code §§ 17A.10(1), 17A.12(5) (1981). Clearly these latter authorities have little bearing on claimant's argument concerning the remand order, however, as neither an informal settlement nor an informal disposition was being attempted by the parties.

Moreover, we do not agree with the claimants' apparent belief that the statutory right which enables parties in contested cases to waive certain proceedings may be used to limit the statutory authority given the appeal board. On the appeal from the hearing officer, the board possessed all the power that inhered in the body making the initial determination. See Iowa Code § 17A.15(3) (1981). The person making the initial determination is under a statutory duty to "take the initiative to ascertain relevant information concerning the claim." Iowa Code § 96.6(2) (1981). In addition, the appeal board, in order to comply with its statutory duty "to hear and decide contested cases under chapter[ ] ... 96 ...," Iowa Code § 10A.601(1) (1981), is given the authority to "on its own motion ... direct the taking of additional evidence...." Iowa Code § 10A.601(4) (1981). We do not think that this authority, vested in the appeal board, is a provision which may be "waived" by the parties. See Mary R. v. B & R Corp., 149 Cal.App.3d 308, 317, 196 Cal.Rptr. 871, 876 (1983) (stipulation which, in effect, prohibits agency from performing its statutory obligations and functions will not be enforced). The appeal board operated within its authority in remanding for additional evidence.

III. The Stoppage of Work Issue.

A. The law. Petitioners-employers maintain the appeal board applied an incorrect understanding of the applicable definition of "stoppage of work." This, petitioners contend, is because the proper inquiry focuses not on the curtailment of the employers' operations, as the appeal board and district court believed, but rather on the employees' absence from work. In Meyer v. Iowa Department of Job Service, 385 N.W.2d 524, 526 (Iowa 1986), we held that the Department of Job Service correctly construed section 96.5(4) to disqualify unemployment compensation claimants whose labor dispute caused a substantial, though not a total, stoppage of the employer's work. Left unanswered in Meyer, is petitioner's claim herein, that any discontinuance of work by striking employees constitutes a disqualifying stoppage of work without consideration of the strike's effect on the employer.

The great majority of the courts which have resolved this issue have held that the disqualifying phrase "stoppage of work" refers to the employer's operations and not, as petitioners would have us hold, to the efforts of the individual employees. See, e.g., Twenty-eight (28) Members of Oil, Chemical and Atomic Workers Union, Local 1-1978 v. Employment Sec. Div., 659 P.2d 583, 591 (Alaska 1983); International Bhd. of Elec. Workers, Local 1357 v. Hawaiian Tel. Co., 713 P.2d 943 952 (Hawaii 1986); Aaron v. Review Bd., 440 N.E.2d 1, 3 (Ind.App.1982); City of Billings v. State of Montana Bd. of Labor Appeals, 204 Mont. 38, 49, 663 P.2d 1167, 1174 (1983); Anderson v. Board of Review, 737 P.2d 211, 214 (Utah 1987); Whitcomb v. Department of Employment and Training, 147 Vt. 525, 526, 520 A.2d 602, 603 (1986); Annotation, Construction of Phrase "Stoppage of Work" in Statutory Provision Denying Unemployment Compensation Benefits During Stoppage Resulting from Labor Dispute, 61 A.L.R.3d 693, 697 (1975). On the other hand support for petitioners' proffered interpretation is slight. See Board of Review v. Mid-Continent Petroleum Corp., 193 Okl. 36, 38, 141 P.2d 69, 71 (1943); Unemployment Compensation Bd. of Review v. Tickle, 19 Pa.Cmwlth. 550, 560, 339 A.2d 864, 869 (1975). Contrary to petitioners' contentions, our cases have not adopted this latter position. Neither Galvin v. Iowa Beef Processors, Inc., 261 N.W.2d 701 (Iowa 1978), Deer Manufacturing Co. v. Iowa Employment Security Commission, 249 Iowa 1066, 90 N.W.2d 750 (1958), nor Johnson v. Iowa Employment Security Commission, 239 Iowa 816, 32 N.W.2d 786 (1948), discuss or decide the point. See Meyer, 385 N.W.2d at 528-29 (Carter, J., dissenting).

Focusing on the level of the employer's operations has been labeled the "American Rule" by the United States Supreme Court. See New York Tel. Co. v. New York State Labor Dep't, 440 U.S. 519, 534, 99 S.Ct. 1328, 1338 n. 24, 59 L.Ed.2d 553, 565 n. 24 (1979). Many of the...