MEMCO v. Maryland Employment Sec. Administration, 17

• Decision Date: 01 July 1977
• Docket Number: No. 17,17
• Parties: MEMCO et al. v. MARYLAND EMPLOYMENT SECURITY ADMINISTRATION et al.
• Court: Maryland Court of Appeals

Page 536

280 Md. 536

375 A.2d 1086

MEMCO et al. v. MARYLAND EMPLOYMENT SECURITY ADMINISTRATION et al.

No. 17.

Court of Appeals of Maryland.

July 1, 1977.

Kenneth F. Hickey, Washington, D.C. (Richard C. Hotvedt, Robert A. Dufek and Morgan, Lewis & Bockius, Washington, D.C. and John A. Buchanan, Sasscer, Clagett, Channing & Bucher, Upper Marlboro, on the brief), for appellants.

Joel J. Rabin, Asst. Atty. Gen., Baltimore (Francis B. Burch, Atty. Gen. and Lois F. Lapidus, Asst. Atty. Gen., Baltimore, on the brief), for Employment Sec. Administration.

Robert E. Paul, Arlington, Va. (Spelman, Eisenberg, Paul & Wagner, Arlington, Va., and Browne L. Kooken and Dukes & Troese, Landover, on the brief), for Amalgamated Meat Cutters Local 593.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and ORTH, JJ.

DIGGES, Judge.

Subsection 6(e) of the Maryland Unemployment Insurance Law provides in general that an individual shall be disqualified from receiving benefits if his unemployment is the result of a work stoppage caused by a labor dispute other than a lockout. Md. Code (1957, 1969 Repl.Vol.), Art. 95A. In the present action we are asked to determine whether certain union employees should have been denied unemployment benefits based on the labor dispute disqualification, and, secondarily, whether the subsection's exception for locked out employees is preempted by federal labor law. We conclude that, under the circumstances of this case, the claimants are not disqualified from receiving compensation inasmuch as the cause of the work stoppage was a lockout and not some other type of labor dispute. Moreover, because the operation of subsection 6(e) only remotely affects the balance between management and labor in collective bargaining, if it impacts upon that equilibrium at all, there is no impermissible conflict with federal policy.

The present case arose following a stoppage of work in connection with a collective bargaining contract dispute between members of appellee Amalgamated Meat Cutters and Allied Workers of North America, Local 593, AFL-CIO, and the District of Columbia Food Employers Labor Relations Association (FELRA). ¹ The facts, submitted to the Board of Appeals of the Maryland Employment Security Administration (also an appellee) by joint stipulation of appellant MEMCO ² and appellee Local 593, are relatively uncomplicated. FELRA member companies and Local 593 have, over the past several years, negotiated a number of collective bargaining agreements covering meat department employees, including an agreement entered into in 1972 which was effective from September 17 of that year to September 15, 1973. Approximately three months prior to the expiration of this contract, the union notified FELRA that it wished to reopen the 1972-73 agreement and negotiate a new one. Thereafter, negotiations commenced and continued through the middle of October, during which time representatives of Local 593 stated that if FELRA did not agree to its demands, the union had selected Giant Food, Inc., for strike action. In reply, FELRA informed Local 593 that a strike against any one of FELRA's members would be treated as a strike against the entire association.

As the reader of this opinion might have anticipated, FELRA did not accede to the union's demands, and the union rejected FELRA's contract offer. On October 21, Local 593 held two general meetings at which the entire local membership voted to strike all area Giant stores; however, the meat department employees of the other six FELRA member companies were specifically instructed by the union to report to work as scheduled. At 6:15 a.m. on October 22, Local 593 went on strike at Giant's stores in the Washington, D.C., metropolitan area, but some, if not all, employees of the other FELRA stores reported to their jobs as usual. That afternoon, store managers of the six FELRA members which were not struck told their meat department employees to leave work and not to report until further notice; moreover, some Local 593 employees who reported during the afternoon were not permitted to work. ³ The strike and shutdown continued through October 28, 1973, at which time the general membership of Local 593 ratified an agreement which had been reached between the representatives of FELRA and the union.

Claiming to be entitled to compensation for the week they were without work, numerous employees of FELRA members applied to the Department of Employment and Social Services for unemployment compensation, but were denied benefits on the ground that their unemployment was "due to a stoppage of work" existing because of a "labor dispute . . . under Section 6(e) of the Maryland Unemployment Insurance Law." Eighteen of these claimants, none of whom are Giant employees, appealed that administrative determination to the Board of Appeals. The board reversed the initial denial, stating that the shutdown engaged in by FELRA members constituted a "lockout" within the meaning of the pertinent exception to the labor dispute disqualification provision of the unemployment insurance statute. FELRA members appealed that adverse decision to the Circuit Court for Prince George's County. There, Judge James F. Couch, Jr., concluded "that the use of the phrase 'other than a lockout' in the statute, without any qualifications, means exactly what it says, that if there is a lockout then the employee . . . is entitled to his unemployment compensation." MEMCO subsequently filed an appeal to the Court of Special Appeals, but we granted certiorari before that court considered the case. Since we agree with the conclusion of Judge Couch and reject the appellant's contention with respect to federal preemption, we shall affirm the judgment of the Circuit Court for Prince George's County.

Before commencing our discourse on subsection 6(e), we pause momentarily to mention that pursuant to subsection 7(h) the findings of fact of the Board of Appeals, in the absence of fraud, are conclusive so long as they are supported by evidence, and judicial review is confined solely to questions of law. Code (1957, 1969 Repl.Vol., 1976 Cum.Supp.), Art. 95A, § 7(h); see, e.g., Allen v. CORE Target City Y. Prog., 275 Md. 69, 74, 338 A.2d 237, 241 (1975) (citing cases). In the present case, the Board of Appeals made five "findings of fact":

A. That the collective bargaining agreement between the Employer and the Union expired on September 15, 1973.

B. It further finds that the Employers were members of an association known as FELRA (Food Employers Labor Relations Association), and who were negotiating with the Claimants' bargaining unit to establish a new agreement.

C. It further finds that on October 22, 1973, the Union membership established a picket line at, and thereafter, struck the stores of one of the members of the association.

D. It further finds that subsequent to that action, that members of this Union who were employed at stores not struck were informed by store management that there would be no further work for them, and that this action by the Employers amounted to a lockout.

E. It further finds that there was not any labor dispute between the Employers and the Claimants herein involved.

Findings A, B, and C, as well as all but the last clause of D, are in accord with the facts as stipulated by the parties; however, MEMCO asserts, and we agree, that the last clause of D and all of finding E are legal conclusions. See Philco Corp. v. Unemployment Comp. Bd. of Review, 430 Pa. 101, 242 A.2d 454, 456 n. 2 (1968). Consequently, we are not bound under subsection 7(h) by the board's conclusions in D and E merely because they are labeled "findings of fact." Rather, our jurisdiction extends to a plenary consideration of whether the Board of Appeals erred, as a matter of law, when it found that the claimants were not disqualified from receiving benefits under the labor dispute disqualification provision.

I. Statutory Construction

With that standard of review in mind, we turn to the statutory language in controversy. Pursuant to subsection 6(e) as amended by Chapter 153 of the Laws of 1966, an individual is disqualified for 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, provided that this subsection shall not apply if it is shown to the satisfaction of the Executive Director that

(1) He is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work; and

(2) He does not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute; provided, that if in any case separate branches of work which are commonly conducted as separate businesses in separate premises are conducted in separate departments of the same premises, each such department shall, for the purposes of this subsection, be deemed to be a separate factory, establishment, or other premises. ((Emphasis added.))

Notwithstanding the apparent clarity of the language italicized above, the appellant nevertheless argues that in the present action, the claimants should be disqualified from receiving benefits. MEMCO contends, as we understand it, that the labor dispute disqualification must be interpreted in light of "the mechanics of multi-employer collective bargaining," and in the context of "the overall objective of the unemployment compensation statute." In essence, MEMCO proceeds on the premise that the claimants' unemployment was voluntarily caused inasmuch as the employees' strike, constituting a labor dispute at every FELRA place of employment, "preexisted and...