Wellborn Paint Mfg. Co. v. New Mexico Employment Sec. Dept.

• Decision Date: 10 July 1984
• Docket Number: No. 7487,7487
• Citation: 1984 NMCA 75,685 P.2d 389,101 N.M. 534
• Parties: WELLBORN PAINT MANUFACTURING COMPANY, a New Mexico corporation, Petitioner-Appellant, v. NEW MEXICO EMPLOYMENT SECURITY DEPARTMENT, Respondent-Appellee.
• Court: Court of Appeals of New Mexico

Page 389

685 P.2d 389

101 N.M. 534

WELLBORN PAINT MANUFACTURING COMPANY, a New Mexico corporation, Petitioner-Appellant, v. NEW MEXICO EMPLOYMENT SECURITY DEPARTMENT, Respondent-Appellee.

No. 7487.

Court of Appeals of New Mexico.

July 10, 1984.

Robert P. Tinnin, Jr., Jason W. Kent, Daymon B. Ely, Poole, Tinnin & Martin, P.C., Albuquerque, for petitioner-appellant

Paul Bardacke, Atty. Gen., Paul D. Campos, Asst. Atty. Gen., Albuquerque, for respondent-appellee.

OPINION

MINZNER, Judge.

Wellborn Paint Manufacturing Company ("Wellborn") appeals the district court's affirmance of a decision by the New Mexico Employment Security Department ("ESD"). ESD's decision declared certain employees of Wellborn eligible for benefits under the New Mexico Unemployment Compensation Act ("Act"), NMSA 1978, Sections 51-1-1 to -54 (Repl.Pamp.1983) for a period during which Wellborn instituted a lockout. We reverse.

Wellborn and union officials began negotiations in November 1982 to replace the collective bargaining agreement that would expire on January 5, 1983. By January 5, the parties had reached agreement on all contract issues except wages. On that date, Wellborn proposed what it characterized as its "last and final" wage increase offer. Union members rejected the proposal later the same day. Wellborn shut down the plant on January 6 for yearly maintenance work.

Wellborn sent a letter to its employees on January 11 advising them that it would institute a lockout on January 17 unless an agreement was reached. Wellborn officials testified that they preferred not to continue plant operations without a contract including a no-strike provision, primarily because they feared that the union might call a strike during the plant's busy season in the spring. The parties maintained contact during this period through an exchange of letters. Neither party changed its position and the parties did not reach a wage agreement, although each indicated a willingness to continue negotiating. Wellborn instituted the lockout on January 17. The employees then filed for unemployment compensation.

The ESD hearing officer concluded that the employees were not entitled to unemployment compensation, applying Section 51-1-7(D), because their unemployment was the result of a labor dispute. Section 51-1-7 provides, in relevant part, "An individual shall be disqualified for, and shall not be eligible to receive, benefits * * * for any week with respect to which the department finds that his unemployment is due to a labor dispute at the factory * * * * " He also found that negotiations were at an impasse and that the claimants were interested in the labor dispute.

The ESD Board of Review reversed, holding that the lockout was not a disqualifying labor dispute under the statute because the employees were exercising their legal right to bargain prior to the lockout and, since negotiations were not at an impasse, Wellborn was unilaterally responsible for the employees' unemployment. The district court, after independent review of the record, adopted findings and conclusions consistent with those of the Board.

Wellborn argues that the district court erred as a matter of law in holding that a lockout is not a labor dispute unless negotiations between the parties are at an impasse. Wellborn further contends that, even if the statute authorizes such an exception, the district court's finding that negotiations between the parties were not at an impasse is not supported by substantial evidence.

The question raised on appeal is one of first impression in New Mexico. Although the reviewing court generally may not substitute its judgment for that of the administrative decision-maker, it may correct the decision-maker's misapplication of the law. Conwell v. City of Albuquerque 97 N.M. 136, 637 P.2d 567 (1981). See also Mitchell v. Lovington Good Samaritan Center, Inc., 89 N.M. 575, 555 P.2d 696 (1976).

I. "UNEMPLOYMENT ... DUE TO A LABOR DISPUTE" AS INCLUDING LOCKOUTS WHETHER OR NOT NEGOTIATIONS HAVE REACHED AN IMPASSE.

The function of this court in construing a statute is to give effect to legislative intent. Salazar v. St. Vincent Hospital, 95 N.M. 150, 619 P.2d 826 (Ct.App.), rev'd in part on other grounds, 95 N.M. 147, 619 P.2d 823 (1980). Legislative intent is to be determined primarily by the language used. Santa Fe Downs, Inc. v. Bureau of Revenue, 85 N.M. 115, 509 P.2d 882 (Ct.App.1973). We must interpret the language as the legislature understood it when the statute was enacted.

The legislature passed the original Act in 1936. 1936 N.M.Laws (S.S.) Ch. 1. The general purpose of the Act is to relieve involuntary unemployment. Section 51-1-3. The Act calls for liberal construction to accomplish the remedial and humanitarian ends intended by the legislature. Parsons v. Employment Security Commission, 71 N.M. 405, 379 P.2d 57 (1963).

All states have unemployment compensation legislation, and each state has a specific disqualification provision barring from benefits workers unemployed due to labor disputes. Shadur, Unemployment Benefits and the "Labor Dispute" Disqualification, 17 U.Chi.L.Rev. 294 (1950).

Prior to 1979 our statute disqualified claimants whose "unemployment [is] due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed." See NMSA 1953, Sec. 59-9-5(d) (Supp.1975). In Albuquerque-Phoenix Express, Inc. v. Employment Security Commission, 88 N.M. 596, 544 P.2d 1161 (1975), the New Mexico Supreme Court interpreted this language as not disqualifying strikers when the strike did not stop work at the employer's premises. The court reasoned that the phrase "stoppage of work" referred to a stoppage of work by the employer rather than the employee. The 1979 amendment eliminated the phrase "stoppage of work." 1979 N.M.Laws Ch. 280, Sec. 14. Our statute, as a result of this amendment, is unique. See generally Annot., 62 A.L.R.3d 437 (1975).

Appellant has argued that the 1979 amendment evidences a legislative intent to broaden the exception. We agree. The language of the amendment, however, established a general phrase, "unemployment * * * due to a labor dispute," that must be applied to specific facts. At trial in the district court and on appeal, the parties have argued that the question for interpretation is whether the legislature intended to include all lockouts within the term "labor dispute" or only lockouts which result after the parties have reached an impasse in collective bargaining. We believe that this statement of the issue is too narrow: the entire phrase requires interpretation.

A. THE INCLUSION OF LOCKOUTS WITHIN THE TERM "LABOR DISPUTE."

It seems clear that the legislature intended to include a lockout within the term "labor dispute." The language of the particular provision within which the term appears, New Mexico case law interpreting the term in another context, and the interpretation given the term in other jurisdictions support this conclusion.

Although the legislature did not explicitly define "labor dispute" in Subsection (D) of the statute, in Subsection (C)(2)(a), directly preceding the provision in question, the legislature refers to "strike, lockout or other labor dispute." This is strong evidence of legislative intent to include lockouts as potentially disqualifying labor disputes for purposes of this statute. See In re North River Logging Co., 15 Wash.2d 204, 130 P.2d 64 (1942). See also Buchholz v. Cummins, 6 Ill.2d 382, 128 N.E.2d 900 (1955). Further, Section 308(E) of the ESD's own Rules and Regulations, dealing with the employer's duty to give notice of a labor dispute, also uses the phrase "strike, lockout or other labor dispute."

Our courts have been called upon to define "labor dispute" as used by the legislature in the context of NMSA 1978, Section 50-3-1, which restricts the situations in which our courts may issue permanent injunctions. In Pomonis v. Hotel, Restaurant & Bartenders Union, Local Union No. 716, 56 N.M. 56, 239 P.2d 1003 (1952), the court defined "labor dispute" as including " 'any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee.' " 56 N.M. at 61, 239 P.2d at 1006 (quoting the Norris-La Guardia Act, 29 U.S.C.S. Sec. 113(c) (Law.Co-op.1975)). See also Romero v. Journeymen Barbers, Hair Dressers, Cosmetologists and Proprietors International Union of America, Local Union No. 501, A.F. of L.-C.I.O., 63 N.M. 443, 321 P.2d 628 (1958); 29 U.S.C.S. Sec. 152 (Law.Co-op.1975). This definition of "labor dispute" is consistent with the way in which other courts have defined the term in disqualifying statutes. Buchholz; Gorecki v. State, 115 N.H. 120, 335 A.2d 647 (1975).

An employer's lockout may be a cessation of furnishing work to employees in an effort to obtain for the employer more desirable contract terms, or the suspension of operations by an employer resulting from a dispute with his employees over wages, hours, or working conditions. See BE-MAC Transport Co. v. Grabiec, 20 Ill.App.3d 345, 314 N.E.2d 242 (1974). When a term is not defined by statute, we will interpret the term in accordance with its usual and ordinary meaning unless a different intent is clearly indicated. McCurry v. City of Farmington, 97 N.M. 728, 643 P.2d 292 (Ct.App.1982). A lockout is potentially a labor dispute, given the ordinary and usual definitions of these terms. There is no clear indication in the statute of a different intent.

Finally, New Mexico follows the general rule that the court, in construing statutory law adopted from other countries, should look to the source for definitions and interpretation. Laughlin v. Laughlin, 49 N.M. 20, 155...