Giant Food, Inc. v. Department of Labor, Licensing & Regulation

³⁶¹ 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, ³⁶² — 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: ³⁶³ “[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. ³⁶⁴ 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: ³⁶⁵ (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 1 ¹¹¹ 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)(l) modifies not only “labor dispute” but also “stoppage of work.” Thus, Giant reads § 8-1004(a)(l) 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 looked to ³⁶⁶ the specific workplaces of the claimants — the warehouse/distribution centers and manufacturing plants 2 — it would have necessarily determined that stoppages of work had occurred at those workplaces and that the workers were ineligible for benefits.

Preliminarily, there is some question as to whether Giant’s argument is properly before this Court. The appellees contend that Giant failed to argue to the Board of Appeals that the phrase “at the premises where the individual last was employed” modifies “stoppage of work,” or that the Board should consider only the specific workplaces of the claimants in determining if there was a stoppage of work. The appellees point out that, in a post-hearing memorandum, Giant urged the Board to “look[] to [its] entire operation to determine whether any of its major functions were substantially curtailed by the labor dispute.” From this, the appellees conclude that Giant’s argument has been waived. See generally Md. Rule 8-131(a).

Giant counters that it repeatedly urged the Board to consider what happened at the manufacturing plants and the warehouse/distribution centers. It contends that the quoted portion of the post-hearing memorandum was designed to direct the Board’s attention to those workplaces and not to convince the Board to look to its overall operations rather than the specific workplaces. Assuming without deciding that Giant’s characterization of its argument before the Board is the more accurate one and that the argument is preserved, we are satisfied that the Board properly construed § 8-1004(a)(l) and properly considered Giant’s operations as a whole in deciding that there was no stoppage of work. As the Court of Appeals has made clear, “ ‘[t]he cardinal rule of statutory construction is to ascertain and effectuate the actual intent of the [legislature.’” Hyle v. Motor Vehicle Admin., 348 Md. 143, 148, 702 A.2d 760 (1997) (citation omitted). “To determine the legislature’s intent, we ³⁶⁷ must look ‘ “ ‘first to the words of the statute, read in light of the full context in which they appear, and in light of external manifestations of intent or general purpose available through other evidence.’ ” ’ ” Id.

(citations omitted). “In interpreting a statute, ‘we construe the statute as a whole, interpreting each provision of the statute in the context of the entire statutory scheme.’ ” Id. at 149 , 702 A.2d 760 . “ ‘Punctuation may, when the meaning of the statute is uncertain, be looked to in ascertaining the real meaning, or, if the punctuation gives the statute a reasonable meaning apparently in accord with the legislative intent, it may be used as an additional argument for adopting the literal meaning of the words of the statute thus punctuated.’ ” Webb v. Mayor and City Council of Baltimore, 179 Md. 407, 409-10 , 19 A.2d 704 (1941) (citation omitted). The plain language of the statute convinces us that the Legislature did not intend for the phrase “at the premises where the individual last was employed” to modify “stoppage of work.” We conclude that the phrase modified the words “labor dispute,” which immediately preceded it. 3 See Sullivan ³⁶⁸ v. Dixon, 280 Md. 444, 451 , 373 A.2d 1245 (1977) (following “the generally recognized rule of statutory construction that a qualifying clause ordinarily is confined to the immediately preceding words or phrase — particularly in the absence of a comma before the qualifying clause ... ”). Section 8-1004(a)(1) was carefully crafted to disqualify from receiving benefits only those individuals whose unemployment resulted from a stoppage of work, where the stoppage of work was caused by a labor dispute that occurred at the premises where the individuals were last employed. Section 8-1004(b) provides a means for those individuals to show that even though the labor dispute occurred at the premises where they were last employed, they were not involved in the dispute and are therefore eligible for benefits.

As implicitly made clear by § 8-1004(a)(2), § 8-1004(a)(l) does not disqualify individuals whose unemployment resulted from a stoppage of work due to a labor dispute that occurred at premises other than those at which they were last employed. Giant’s reading of the statute to disqualify individuals whose unemployment resulted from a stoppage of work at the premises where they were last employed, due to a labor dispute at those same premises, ³⁶⁹ would leave in limbo the eligibility for benefits of those individuals whose unemployment is the result of a stoppage of work due to a labor dispute at some other premises. Our reading of the statute is consistent with “the remedial nature of unemployment compensation, from which flow the principles that such laws should be read liberally in favor of eligibility ____” Sinai Hosp. v. Dep’t of Employment and Training, 309 Md. 28, 40 , 522 A.2d 382 (1987). We are convinced, moreover, that the Board properly considered Giant’s operations as a whole in determining that there was no stoppage of work.

In Unemployment Benefits and the “Labor Dispute” Disqualification, 17 U. Chi. L.Rev. 294, 311 (1949-50), commentator Milton I. Shadur addressed the “troublesome” question of “whether benefits are payable during disputes which cause a substantial production drop in one department, though not in the entire plant.” Referring specifically to statutes such as § 8-1004(a), Shadur wrote that a majority of the states’ “stoppage of work” statutes provide that if “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 purpose of this subsection, be deemed to be a separate factory, establishment, or other premises.” The implication is that departments which are not “commonly conducted as separate businesses in separate premises” do not possess independent status for the purpose of determining disqualification. The test should thus be whether the stoppage was substantial in relation to the entire establishment’s production, not merely to that of the department in which the dispute occurred. This approach would be harmonious with the view that benefits should depend in part upon the likelihood of success of the employee’s strike. 17 U. Chi.

L.Rev.