Federico v. Brannan Sand & Gravel Co.
| Decision Date | 19 March 1990 |
| Docket Number | No. 88SC587,88SC587 |
| Citation | 788 P.2d 1268 |
| Parties | Manuel FEDERICO; Ronald E. Baird; Dean A. Cummings; Richard L. Goodnight; James A. Hall; Lee Higginbotham; Larry H. Hubler; Gale L. Donnelly; Elery H. Mefford; Donald K. Mefford; John A. Lauro; Floyd J. Mansfield; Theodore Jimenez; Leonard H. Johnson; Richard W. Lanter; Orson J. Matteson; Dorlin M. Thompson; Barry J. Todd; Harvey A. Williams; Jose E. Romo; Robert L. Saul; Joseph H. Marcus; Larry E. Owen; Ronald L. Owen; Rudolph L. Palomino; David Scheibley; Louis Siefford; George S. Sims; Ronald W. Stockley; and Eugene Romero, Petitioners/Cross-Respondents, v. BRANNAN SAND & GRAVEL CO., Respondent/Cross-Petitioner, and The Industrial Claim Appeals Office of the State of Colorado and the Division of Employment and Training for the Colorado Department of Labor and Employment; and Pedro Leal, Respondents/Cross-Respondents. |
| Court | Colorado Supreme Court |
Boyle & Tyburski, Susan J. Tyburski, Denver, for petitioners/cross-respondents Manual Federico, Ronald E. Baird, Dean A. Cummings, Richard L. Goodnight, James A. Hall, Lee Higginbotham, Larry H. Hubler, Gale L. Donnelly, Elery H. Mefford, Donald K. Mefford, John A. Lauro, Floyd J. Mansfield, Theodore Jimenez, Leonard H. Johnson, Orson J. Matteson, Dorlin M. Thompson, Barry J. Todd, Harvey A. Williams, Jose E. Romo, Robert L. Saul, Joseph H. Marcus, Larry E. Owen, Ronald L. Owen, Rudolph L. Palomino, David Scheibley, Louis Siefford, George S. Sims, Ronald W. Stockley and Eugene Romero.
Fogel, Keating and Wagner, P.C., Scott Meiklejohn and David R. Struthers, Denver, for petitioner/cross-respondent Richard W. Lanter.
Bradley, Campbell & Carney, P.C., Jim Michael Hansen, Earl K. Madsen and K. Preston Oade, Jr., Golden, for respondent/cross-petitioner Brannan Sand & Gravel Co.
Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Richard H. Forman, Sol. Gen., and John August Lizza, Asst. Atty. Gen., Denver, for respondents/cross-respondents Indus. Claim Appeals Office of the State of Colo. and Div. of Employment and Training for Colorado Dept. of Labor and Employment.
Pedro Leal, respondent/cross-respondent pro se.
In this consolidated unemployment compensation case involving a number of employees, respondent Brannan Sand and Gravel Company (Brannan) appealed decisions of the Industrial Claim Appeals Panel (Panel) that set aside in part hearing officer orders denying unemployment compensation to the employee-petitioners (claimants). The court of appeals consolidated the appeals and, in Brannan Sand & Gravel Co. v. Industrial Claim Appeals Office, 762 P.2d 771 (Colo.App.1988), held that the Panel improperly substituted its own findings of fact for those of the hearing officer and set aside the Panel's orders. We granted certiorari and now affirm the court of appeals and return this case to the court of appeals with directions.
The claimants were members of a local union employed by Brannan pursuant to a collective bargaining agreement entered into by Brannan and the union. The agreement expired on June 30, 1985, and Brannan and the union had failed to negotiate another agreement when the union called a strike against Brannan on July 3, 1985. The claimants participated in the strike and refused to report to their jobs with Brannan. On July 3, 1985, Brannan notified the claimants of their possible replacement in a letter which provided:
For those employees who wish to work and return to work, employment is available. If you choose not to return to work, it will be necessary to seek a permanent replacement for you. Needless to say, if such a replacement is hired before you make an unconditional offer to return to work, you will not have a job with us at that time.
By July 20, 1985, the claimants had not returned to work and Brannan had hired enough replacement workers to resume its normal operations.
The claimants filed claims for unemployment benefits. The deputy awarded the claimants compensation and Brannan appealed the awards to the hearing officer. 1 The hearing officer made the following pertinent findings: (1) the labor dispute between the union and Brannan was ongoing at the time of the hearing and none of the claimants had been formally discharged; (2) Brannan hired replacement workers for trucks that had previously been assigned to the claimants, but other trucks were available; and (3) although Brannan could not put all of the claimants to work, it did have positions available for some of the claimants if they chose to return. The hearing officer concluded that the claimants were not eligible for unemployment benefits since their unemployment was due to the labor dispute and that Brannan had not discharged the claimants and had positions available at the time of the hearing.
The claimants appealed to the Industrial Claim Appeals Office. 2 The Panel upheld the denial of benefits to the claimants for the period from July 3 to July 20, 1985. However, the Panel found that the claimants had been permanently replaced as of July 20, 1985 and were entitled to unemployment benefits from that date.
Brannan appealed. The court of appeals, relying on Clark v. Colorado State University, 762 P.2d 698 (Colo.App.1988), found that section 24-4-105(15)(b), 10A C.R.S. (1988) (State Administrative Procedure Act), provides the applicable standard of review of hearing officer decisions by the Industrial Claim Appeals Panel. 3 Brannan Sand & Gravel Co., 762 P.2d at 773. Since the Panel found that the claimants had been permanently replaced as of July 20, 1988, the court of appeals held that the Panel did not follow the appropriate standard of review. Id. In addition, the court of appeals found that the employer-employee relationship could be ended by the permanent replacement of a striking worker and, after permanent replacement, the employee would be eligible for unemployment benefits. Id. at 774. The court of appeals stated that whether an employee has been permanently replaced is a question of fact and that a claimant's offer to return to work is irrelevant to the determination of whether an employee has been permanently replaced. Id. at 774-75.
The claimants petitioned for certiorari review of that part of the court of appeals decision that set aside the Panel's orders. Brannan cross-petitioned for certiorari review of the court of appeals conclusion that a striking employee need not offer to return to work and be refused employment in order to be eligible for unemployment benefits. In granting certiorari, we elected to review the issues raised in both the petition and the cross-petition.
The Employment Security Act, title 8, articles 70 to 82 of the Colorado Revised Statutes, was enacted to protect workers who become unemployed through no fault of their own from financial hardship. Section 8-70-102, 3B C.R.S. (1986). Section 8-73-109, the strike disqualification statute, provides that "[a]n individual is ineligible for unemployment compensation benefits for any week with respect to which the division finds that his total or partial unemployment is due to a strike or labor dispute...." The statute expresses a legislative policy of neutrality in labor disputes and, in furtherance of this policy, does not require an employer to fund a strike against itself through unemployment compensation. See F.R. Orr Constr. Co. v. Industrial Comm'n, 188 Colo. 173, 183, 534 P.2d 785, 791 (1975). Throughout the duration of the labor dispute, the employer-employee relationship is suspended and the employee's unemployment is held to be "due to" the dispute. Sandoval v. Industrial Comm'n, 110 Colo. 108, 119, 130 P.2d 930, 935 (1942). However, once the employer-employee relationship is terminated, the employee's unemployment is no longer considered to be "due to" the dispute and the employee is eligible for unemployment benefits. Ruberoid Co. v. California Unemployment Ins. Appeals Bd., 59 Cal.2d 73, 76-77, 378 P.2d 102, 105-06, 27 Cal.Rptr. 878, 881-21 (1963). The relationship is terminated by the discharge of the employee, by the employee's acceptance of permanent employment with a different employer, or by the permanent replacement of the employee. Pierce v. Industrial Comm'n, 38 Colo.App. 85, 87-88, 553 P.2d 402, 404 (1976).
The question of what causes a permanent replacement to occur has been addressed by a number of courts. One line of authority holds that an employee must abandon the labor dispute, unconditionally offer to return to work and be refused employment by the employer to be terminated as a result of permanent replacement. See, e.g., Four Queens, Inc. v. Board of Review, 105 Nev. 53, 769 P.2d 49 (1989). Other courts have held that an employee's unemployment is no longer due to the labor dispute if that employee has been permanently replaced, and do not require the employee to offer to return to work and thereafter be refused. See, e.g., Baugh v. United Tel. Co., 54 Ohio St.2d 419, 377 N.E.2d 766 (1978).
The court of appeals held that the determination of whether the employer-employee relationship has been severed as the result of permanent replacement of the employee is a question of fact to be determined under the circumstances of each case and that an offer to return to work and a refusal thereof is not a prerequisite to a finding of termination. Brannan Sand & Gravel Co., 762 P.2d at 774-75. We agree. This conclusion comports with both the policies underlying section 8-73-109 and the policies underlying the Employment Security Act as a whole. While a striking employee is involved in a labor dispute, the state's policy of neutrality is furthered by the denial of unemployment compensation to the employee. However, after the employer-employee relationship is terminated for any of the reasons set forth in Pierce v. Industrial Commission, the policy of state neutrality in labor disputes is no longer implicated and the policies...
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...are not contrary to the weight of the evidence in the record, the ICAO does not alter them. See Federico v. Brannan Sand & Gravel Co., 788 P.2d 1268 (Colo. 1990). In fact, the ICAO applies this standard to affirm a large percentage of the appeals it considers. § 21.5.5—Appeal To The Court O......
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...are not contrary to the weight of the evidence in the record, the ICAO does not alter them. See Federico v. Brannan Sand & Gravel Co., 788 P.2d 1268 (Colo. 1990). In fact, the ICAO applies this standard to affirm a large percentage of the appeals it considers. § 21.5.5—Appeal To The Court O......