Giant v. Dept. of Labor

• Decision Date: 04 January 1999
• Docket Number: No. 201,201
• Citation: 722 A.2d 398,124 Md. App. 357
• Parties: GIANT FOOD, INC. v. DEPARTMENT OF LABOR, LICENSING AND REGULATION et al.
• Court: Court of Special Appeals of Maryland

722 A.2d 398

124 Md. App. 357

GIANT FOOD, INC. v. DEPARTMENT OF LABOR, LICENSING AND REGULATION et al.

No. 201, Sept. Term, 1998.

Court of Special Appeals of Maryland.

January 4, 1999.

Roger W. Titus (John A. Roberts and Venable, Baetjer and Howard, LLP, Rockville, Harry W. Burton, Francis X. Coonelly and Morgan, Lewis & Bockius, LLP, Washington, DC, on the brief), for appellant.

Matthew W. Boyle, Staff Atty. (J. Joseph Curran, Jr., Atty, Gen., Lynn M. Weiskittel, Asst. Atty, Gen., on the brief), Baltimore, for appellee, DLLR.

John R. Mooney, Mark J. Murphy and Mooney, Green, Baker and Saindon, P.C., on the brief, Washington, DC, for appellees, Teamster Locals #730, 246, 67 and 922.

Jonathan G. Axelrod, Barbara Kraft, Hugh J. Beins and Beins, Axelrod & Kraft, P.C., on the brief, Washington, DC, for appellees, Teamsters Local 639 and Teamsters Local 355.

Daniel G. Orfield and Zwerdling, Paul, Leibig, Kahn, Thompson & Wolly, P.C., on the brief, Washington, DC, for appellee, the Undersigned and Members of Bakers Local 118. Argued before EYLER, JOHN J. BISHOP (Ret., specially assigned) and ROBERT F. FISCHER (Ret., specially assigned), JJ.

ROBERT F. FISCHER, Judge, Retired, Specially Assigned.

In this appeal, Giant Food, Inc. ("Giant"), the appellant, challenges a determination by the Board of Appeals of the Department of Labor, Licensing and Regulation ("the Board of Appeals" or "the Board"), as affirmed by the Circuit Court for Montgomery County. The determination permits truck drivers who engaged in a strike against Giant from December 15, 1996 to January 18, 1997, as well as other workers who participated in a sympathy strike, to collect unemployment benefits. Appellees are the various claimants as well as the Board of Appeals.

FACTS

Giant operates 174 grocery stores in Maryland, Delaware, Pennsylvania, Virginia, New Jersey, and the District of Columbia. The stores are supplied primarily by way of Giant's two warehouse/distribution centers, one located in Landover, Maryland and the other located in Jessup, Maryland. Giant also operates its own beverage plant and ice cream plant in Jessup, its own dairy in Landover, and its own bakery in Silver Spring.

The evidence presented before the Board of Appeals established that Local 639 of the Teamsters Union represents the truck drivers who drive tractor trailers from the warehouse/distribution centers to the stores and who jockey trailers around inside Giant's facilities. It was local 639 that went on strike against Giant on December 15, 1996. Based on the facts before it, the Board determined that members of the following union locals "actively participated in the Local 639 strike, by refusing to come to work and/or picketing in sympathy with 639":

— Teamsters Local 730, which represents, among others, warehousemen, bakery sanitors, cafeteria and vending workers, ice plant workers, and salvage workers,

— Teamsters Local 67, which represents workers at the beverage plant,

— Teamsters Local 355, which represents truck drivers who deliver pharmaceuticals,

— Teamsters Local 922, which represents, among others, garage helpers and facility maintenance workers,

— Teamsters Local 246, which represents dairy workers, ice cream workers, bakery drivers, and depot workers,

— Local 1486 of the International Association of Machinists, which represents garage mechanics, and

— Local 118 of the Bakery, Confectionery and Tobacco Workers International Union, which represents the bakers at the Silver Spring bakery as well as the in-store bakers.

As a result of the strike, Giant was unable to supply its grocery stores by way of its warehouse/distribution centers. Instead, it used outside wholesalers and suppliers to stock the stores. The ice cream plant, beverage plant, and dairy were shut down for the duration of the strike. The bakery was closed initially but reopened after three weeks, when the bakery workers returned. Giant estimated that it lost about $4 million in manufacturing profits. The Board found that the evidence before it established that, during the period of the strike,

(1) Giant incurred increased costs of approximately $3.9 million [to replace goods it ordinarily manufactured] ...;

(2) Giant experienced an overall decrease in customer count that ranged from 6% to 10%, depending on how it is calculated...;

(3) Giant experienced a decrease in aggregate sales of food and drugs of 14.82%....

The Board nevertheless determined that Giant had failed to establish that a "stoppage of work" necessary to disqualify the strikers from receiving unemployment benefits had occurred. The circuit court affirmed and commented, inter alia,: "I cannot say that the Board who is charged with the responsibility of interpreting the law at first is clearly erroneous on the law, that one could not come to that result." The court added: "[T]he law has always been in administrative proceedings, that the gloss put on a statute by the administrator, unless it is clearly wrong, should be followed."

ISSUES

Giant contends that the circuit court erred in applying the clearly erroneous standard to the Board's determination and argues:

"I. The statutory disqualification of an individual from receiving unemployment benefits if `unemployment results from a stoppage of work ... that exists because of a labor dispute at the premises where the individual last was employed' requires only a substantial curtailment of operations of the employer at the [specific workplace] where the individual applicant for unemployment was last employed and not of overall operations of the employer at all locations, and

...

II. Even assuming that a curtailment of the overall operations of an employer is legally required for the statutory disqualification to apply, the lower court erred in upholding a determination by the Board of Appeals that there was not a substantial curtailment of Giant's overall operations as a result of the strike in question."

STANDARD OF REVIEW

Recently, in Consumer Protection Division v. Luskin's, Inc., 120 Md.App. 1, 22, 706 A.2d 102, cert. granted, 350 Md. 280, 711 A.2d 871 (1998), we reiterated:

Our role in reviewing the decision of an administrative agency "is precisely the same as that of the circuit court." ... We, therefore, do not evaluate the findings of fact and conclusions of law made by the circuit court. We review the administrative decision itself, ... and not the decision of the trial court ....

(Citations omitted.) Thus, whether the circuit court applied the wrong standard of review is of no consequence if our own review satisfies us that the Board's decision was proper.

In light of the expertise of administrative agencies, "`decisions of administrative agencies are prima facie correct,' ... and `carry with them the presumption of validity' ...." Bulluck v. Pelham Wood Apartments, 283 Md. 505, 513, 390 A.2d 1119 (1978) (citations omitted). A reviewing court "may substitute its own judgment for that of the agency when resolving questions of law." Luskin's, 120 Md.App. at 22-23, 706 A.2d 102. See also Ramsay, Scarlett & Co., Inc. v. Comptroller of the Treasury, 302 Md. 825, 837, 490 A.2d 1296 (1985). When the question is one of fact, however, judicial review

is narrow in scope and requires the exercise of restrained and disciplined judicial judgment. ... Where the agency's findings of fact are supported by substantial evidence, in the form either of direct proof or permissible inference, in the record before the agency, an appellate court may not substitute its judgment, even on the question of the appropriate inference to be drawn from the evidence, for that of the agency. ... Thus, if reasoning minds could reasonably reach the conclusion reached by the agency from the facts in the record, then it is based upon substantial evidence, and the court has no power to reject that conclusion. ...

Liberty Nursing Center, Inc. v. Dep't of Health and Mental Hygiene, 330 Md. 433, 442-43, 624 A.2d 941 (1993). The reviewing court also applies the substantial evidence test "when the only question is whether the [administrative agency], having a correct understanding of the law, properly applied the law to the facts." Supervisor of Assessments of Montgomery County v. Asbury Methodist Home, Inc., 313 Md. 614, 627, 547 A.2d 190 (1988).

DISCUSSION

I Scope of Stoppage of Work

Section 8-1004 (a) of the Labor and Employment Article provides in pertinent part:

(1) an individual who otherwise is eligible to receive benefits is disqualified from receiving benefits for each week for which the Secretary finds that unemployment results from a stoppage of work, other than a lockout, that exists because of a labor dispute at the premises[¹] where the individual last was employed; and

(2) if separate branches of work that usually are conducted as separate businesses in separate premises are conducted in separate departments on the same premises, each department shall be considered a separate premises for the purpose of this subsection.

Md. Lab. and Empl.Code Ann. § 8-1004(a) (1991 Repl.Vol.).

Giant contends that the phrase "at the premises where the individual last was employed" in § 8-1004(a)(1) modifies not only "labor dispute" but also "stoppage of work." Thus, Giant reads § 8-1004(a)(1) to state that an individual is ineligible for benefits if there was a "stoppage of work" at the "premises" where he was last employed. It further interprets "premises" to mean the specific workplace of the individual within the employer's enterprise. Giant concludes that § 8-1004 disallows benefits if there was a stoppage of work at the individual's specific workplace, even if the employer's business as a whole was not significantly affected. Giant points out that, in determining that Giant experienced no stoppage of work, the Board looked to Giant's operations as a whole and not to the specific workplaces of the workers who filed claims for unemployment benefits. Giant argues that had the Board...