Employment Sec. Administration v. Browning-Ferris, Inc.

• Decision Date: 11 January 1982
• Docket Number: INC,BROWNING-FERRI,No. 65,65
• Citation: 438 A.2d 1356,292 Md. 515
• Parties: EMPLOYMENT SECURITY ADMINISTRATION v.
• Court: Maryland Court of Appeals

Page 515

292 Md. 515

438 A.2d 1356

EMPLOYMENT SECURITY ADMINISTRATION v. BROWNING-FERRIS, INC.

No. 65.

Court of Appeals of Maryland.

Jan. 11, 1982.

Dorothy A. Beatty, Asst. Atty. Gen., Baltimore (Stephen H. Sachs, Atty. Gen. and Amy Scherr, Asst. Atty. Gen., Baltimore, on the brief), for appellant.

Benjamin E. Goldman, Washington, D. C. (Robert L. Bodansky, Jay P. Krupin and Feldman, Krieger, Sheehan, Goldman & Tish, Washington, D. C., on the brief), for appellee.

Argued before MURPHY, C. J., and SMITH, DIGGES, ^* ELDRIDGE, COLE, DAVIDSON, and RODOWSKY, JJ.

MURPHY, Chief Judge.

This case involves claims for unemployment benefits filed by a number of former employees of Browning-Ferris, Inc. (BFI) who, beginning July 6, 1979, participated in a strike against their employer as a result of a labor dispute. Primarily at issue is whether, under the Maryland Unemployment Insurance Law (the Act), Maryland Code (1957, 1979 Repl. Vol.), Art. 95A, the employees are disqualified from receiving unemployment benefits, even though the strike did not substantially curtail BFI's work operations. The answer to this question turns on the proper interpretation of a provision in § 6(e) of the Act relating to whether the claimants' unemployment was due "to a stoppage of work, other than a lockout, which exists because of a labor dispute ...."

I

The Act was passed by the General Assembly in 1936 to alleviate the consequences of widespread involuntary unemployment caused by the depression. Sec., Dep't of Human Res. v. Wilson, 286 Md. 639, 409 A.2d 713 (1979); Waters v. Unemployment Ins. Fund, 220 Md. 337, 152 A.2d 811 (1959); Saunders v. Unemp. Comp. Board, 188 Md. 677, 53 A.2d 579 (1947). Section 2 of Art. 95A entitled "Declaration of policy" recites that economic insecurity due to unemployment is a serious menace to the general welfare of the people; that legislation is required to prevent the spread of involuntary unemployment and to lighten its burden upon the unemployed worker and his family; that the achievement of security against involuntary unemployment requires the systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment; and that there must be "the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own." The Act, which is administered by the Employment Security Administration under the direction and supervision of an Executive Director and a Board of Appeals, requires employers to contribute to an Unemployment Insurance Fund in amounts calculated in accordance with various provisions of the law. The schedule of employee benefits payable from the Fund is determined by provisions set forth in § 3 of the Act. Section 4 of the Act outlines various conditions which must be met for an individual to be eligible for benefits. Subsection (a) requires that the individual register for work, and continue to report at an employment office in accordance with prescribed regulations; § 4(b) requires that the individual make a claim for benefits, again following prescribed regulations; § 4(c) requires, with some exceptions not here relevant, that an individual be "able to work" and "available for work"; and § 4(d) lists the minimum total wages which the individual must have earned in order to be eligible for benefits.

Section 6 provides that an individual "shall be disqualified for benefits" for various reasons: § 6(a)-for leaving work voluntarily without good cause; § 6(b)-where unemployment is due to the employee's discharge for gross misconduct connected with his work; § 6(c)-where unemployment is due to discharge or suspension as a disciplinary measure connected with the employee's work; § 6(d)-where the employee fails, without good cause, to apply for or accept available, suitable work.

Section 6(e) sets forth the conditions under which an employee who participated in a labor dispute is disqualified for unemployment benefits:

"For any week with respect to which the Executive Director finds that his unemployment is due to a stoppage of work, other than a lockout, which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed ...." ¹

II

The claimants, all members of a labor union, were employed by BFI in various capacities as truck drivers, heavy equipment operators and maintenance personnel. The collective bargaining agreement between the employees' union and BFI expired by its terms on July 1, 1979. Negotiations between the parties continued past the expiration date but no agreement had been reached by July 6, 1979. On that date a strike was authorized by the union membership and picketing of BFI's premises commenced.

After the strike began, claims for unemployment benefits under the Act were filed by the striking employees. A Special Examiner of the Employment Security Administration conducted a hearing on the employees' claims and concluded from the evidence that there had been some disruption of BFI's operations during the first two days of the strike but that thereafter "the Employer quickly returned to operations of 90 to 100% of prestrike activity" through utilization of management personnel, replacement employees and employees from other divisions of the company. The examiner found that by the end of August, 1979, all of the striking employees had been replaced and there was no longer work available for them at BFI's premises; that the claimants continued to strike and to picket the employer; and that the claimants did not actively seek other employment. The examiner held that the claimants were disqualified from receiving unemployment benefits under § 4(c) of the Act because they were not available for work and were not actively seeking employment, as required by that subsection. The examiner concluded that although the claimants were involved in a labor dispute, it did not culminate in a work stoppage at the employer's premises. He held that the claimants were not, therefore, disqualified from receiving benefits under § 6(e) of the Act "because there has not been a work stoppage at the premises of the Employer." The examiner said that the claimants, having been replaced by BFI, would become eligible for unemployment benefits once they made themselves available for full-time work and conducted an active search for work. The examiner explained that the claimants' unemployment "is not due to participation in a strike, but due to a lack of work (for them) at the premises of the Employer."

The Board of Appeals agreed with the examiner's factual findings and with his recommended disposition of the case. The Board concluded that while the claimants were disqualified from receiving unemployment benefits under § 4(c) of the Act, there must be "a substantial work stoppage at the premises at which the strikers were last employed in order to constitute a labor dispute within the meaning of Section 6(e) of the Law." Since the evidence showed that there was never a substantial work stoppage at BFI's premises, the Board held that the § 6(e) disqualification did not apply to the claimants.

On appeal to the Circuit Court for Montgomery County, BFI contended that the Board erred in determining that the striking employees were not disqualified for benefits under § 6(e). BFI maintained that the phrase "stoppage of work" in § 6(e) refers to cessation of work by the employee. It argued that the legislative declaration of policy, set forth in § 2 of the Act, in effect creates a general voluntariness disqualification which is incorporated into § 6(e), so that all employees who "voluntarily" stop work to participate in a strike are ineligible for unemployment benefits. The court (Sanders, J.), agreeing with BFI, held that the phrase "stoppage of work" as used in § 6(e) meant the cessation of work by the striking employees, and not by the employer. It said:

"The declaration of policy (Art. 95A, § 2) of the Law states that the public policy of this State is to provide unemployment insurance benefits for those persons unemployed through no fault of their own. Consistent with this declared policy are the provisions of § 6(e) previously cited, which deny such benefits to individuals whose unemployment is due to a stoppage of work which exists because of a labor dispute at the place of employment. The clear and unambiguous language of the statute denies benefits to those engaged in a labor dispute who choose not to work."

The court concluded that the striking employees were disqualified from receiving benefits under § 6(e) because they were involved in a labor dispute and voluntarily chose not to work. The Employment Security Administration appealed to the Court of Special Appeals. We granted certiorari prior to decision by that court to determine the proper construction of s6(e) of the Act.

III

Section 6(e) was patterned after a provision in the federal Social Security Draft Bill for unemployment compensation prepared by the Committee on Economic Security in 1936, as were the labor dispute disqualification provisions of thirty-three other states. ² As one commentator has noted:

"Like most other aspects of the Draft Bill, the stoppage of work requirement had its origin in the British Unemployment Insurance Acts. When this country's fifty-one statutes were adopted, the phrase had long since acquired a settled construction from the British Umpires as referring 'not to the cessation of the workman's labour, but to a stoppage of the work carried on in the factory, workshop or other premises at which the workman is employed.' " ³

In Saunders v. Unemp. Comp. Board, 188 Md. 677, 53 A.2d 579 (1947), we observed that these British Umpire decisions have precedential value because they are final, and because of the well-established rule that the construction of a copied statute, such as the British Unemployment Insurance Acts, is intended to be the...