Thomas v. Department of Labor, Licensing, & Regulation

KENNEY, Judge. The Board of Appeals of the Department of Labor, Licensing, and Regulation denied the separate claims of Jeanine Thomas and Luanne Sudbrook (collectively, “appellants”), for unemployment benefits, concluding that appellants were ineligible under Maryland Code (1991, 1999 Repl. Vol.), § 8-909 of the Labor and Employment Article (“L.E.”). The Circuit Court for Baltimore County consolidated appellants’ petitions for judicial review, and affirmed the denial of benefits.

Appellants present two questions for our review, which we have slightly reworded as follows: I. Are school bus drivers employed by a county board of education, who have worked for the first of two consecutive academic years or terms and who have a reasonable assurance of performing such work in the forthcoming academic year or term, employed by an “educational institution,” thereby rendering them ineligible for benefits for unemployment occurring between the successive academic years or terms under L.E. § 8-909?

II

Does L.E. § 8-909 violate the Equal Protection Clause of the Fourteenth Amendment and Article 24 of the Maryland Declaration of Rights by unlawfully discriminating between those school bus drivers employed by the Maryland public school system and those drivers servicing public schools but employed by private contractors? For the following reasons, we answer “yes” to the first question and “no” to the second. Therefore, we shall affirm the judgment of the circuit court. ⁶⁵⁴ FACTUAL AND PROCEDURAL HISTORY Labor and Employment § 8-909 governs unemployment benefits payable to employees of governmental, charitable, educational, and religious organizations and provides, in pertinent part: (a) In general. — Subject to the provisions of this section, benefits based on service in covered employment under §§ 8-208(a) and 8 — 212(c) of this title shall be payable in the same amount, on the same terms, and subject to the same conditions as benefits payable on the basis of other service in covered employment. * * * (c) Same — Services performed in other capacities. — (1) With respect to services performed for an educational institution in any capacity other than instructional, research, or principal administrative, benefits may not be paid on the basis of the services for any week of unemployment that begins during a period between 2 successive academic years or terms. (2) This subsection applies to any individual who: (i) performs the services described in this subsection in the first of 2 academic years or terms; and (ii) has a reasonable assurance that the individual will perform the services in the second of the 2 successive academic years or terms; and (ii) has a reasonable assurance that the individual will perform the services in the second of the 2 successive academic years or terms.

(8) Before July 1 of each year, each educational institution shall provide the Department with the name and Social Security number of each individual who has a reasonable assurance of performing covered employment described under this subsection in the next academic year. (4) If an individual whose name and Social Security number are required to be submitted to the Department under paragraph (3) of this subsection is not given an opportunity to perform the services for the educational institution for ⁶⁵⁵ the next successive year or term, the individual shall be eligible for benefits retroactively if the individual: (1) files a timely claim for each week; (ii) was denied benefits solely under this subsection; and (iii) is otherwise eligible for benefits. (d) Same — Vacations and holidays. — (1) With respect to services described in subsections (b) and (c) of this section, an individual may not be eligible for benefits based on the services for any week that begins during an established and customary vacation period or holiday recess. (2) This subsection applies to any individual who: (1) performs the services in the period immediately before the vacation period or holiday recess; and (ii) has a reasonable assurance that the individual will perform the services in the period immediately following the vacation period or holiday recess.

(e) Educational service agencies. — (1) In this subsection, “educational service agency” means a governmental entity that is established and operated exclusively to provide educational service to one or more educational institutions. (2) If any service described in subsection (b) and (c) of this section is performed by an individual in an educational institution while in the employ of an educational service agency, the individual is subject to subsections (b), (c), and subsection (d) of this section and benefits may not be paid if not allowed under subsection (b), (c), or (d) of this section. (f) Services on behalf of educational institutions. — If any service described in subsection (a) of this section is provided by an individual to or on behalf of an educational institution, the individual is subject to subsections (b), (c), and (d) of this section and benefits may not be paid if not allowed under subsections (b), (c), and (d) of this section. “Educational institution” is defined as “an institution that offers participants, students, or trainees an organized course of study or training that is academic, technical, trade-oriented, or preparatory for gainful employment in a recognized occupa ⁶⁵⁶ tion” and includes “an institution of higher education.” L.E. § 8-101(n). Both Thomas and Sudbrook were employed as school bus drivers by the Baltimore County Board of Education (“the Board”) for the 2003-04 academic year, essentially on a ten-month basis.

At the end of the academic year, Thomas and Sudbrook were each mailed a letter regarding their continued employment with the Board and requesting their route preferences for the next academic term. Appellants both responded to that letter, indicating their desire to return to work the following term and to retain their same respective routes as the prior academic year. A. Jeanine Thomas Thomas’s last day of work was June 17, 2004, the last day of the regular academic term. On July 25, 2004, she filed a claim for unemployment insurance benefits with the Department of Labor, Licensing, and Regulation (“the Department”), claiming that she was temporarily laid-off from work for ten weeks or less.

Her claim was denied by a Claims Specialist from the Department on August 16, 2004, because, as an employee of an educational institution under L.E. § 8-909(c) and having obtained a reasonable assurance of performing covered employment in the next academic term, she was ineligible for benefits. Thomas appealed to a Hearing Examiner, and a hearing on her claim was held on September 15, 2004. The Hearing Examiner denied Thomas’s claim, finding her ineligible under L.E. § 8-909(e). When Thomas appealed the Hearing Examiner’s decision to the Board of Appeals of the Department, the Board of Appeals adopted the Hearing Examiner’s findings and recommendations.

Afterwards, Thomas petitioned for judicial review in the Circuit Court for Baltimore County. B. Luann Sudbrook. Following the conclusion of the 2003-2004 regular academic year, the Board afforded Sudbrook work as a private contractor during the summer of 2004. Her final day of employment was July 30, 2004, and, on August 11, 2004, she filed a claim ⁶⁵⁷ for unemployment benefits.

A Department Claims specialist determined that L.E. § 8-909(c) applied to Sudbrook’s claim and denied her benefits. In a hearing before the Hearing Examiner, Sudbrook argued that L.E. § 8-909(c) unfairly discriminated against her because school bus drivers employed by private contractors were eligible for benefits during the break between academic terms, while those drivers employed by the Board were not. Unpersuaded, the Hearing Examiner denied Sudbrook’s claim on September 19, 2004. When the Board of Appeals adopted the findings and conclusions of the Hearing Examiner, Sudbrook petitioned the Circuit Court for Baltimore County for judicial review.

Her case was consolidated with Thomas’s petition. C. Proceedings in the Circuit Court. Following a hearing, the circuit court affirmed the decision of the Board of Appeals. It found that both Thomas and Sudbrook were ineligible for benefits under L.E. § 8-909(c).

This timely appeal followed. STANDARD OF REVIEW The standard of judicial review of a decision of the Board of Appeals is governed by L.E. § 8-512(d), which provides: (d) Scope of Review. — In a judicial proceeding under this section, findings of fact of the Board of Appeals are conclusive and the jurisdiction of the court is confined to questions of law if: (1) the findings of fact are supported by evidence that is competent, material, and substantial in view of the entire record; and (2) there is no fraud. “Under this statute, the reviewing court shall determine only: ‘(1) the legality of the decision and (2) whether there was substantial evidence from the record as a whole to support the decision.’ ” Department of Labor, Licensing, & Regulation v. Hider, 349 Md. 71, 77-78 , 706 A.2d 1073 (1998) (quoting Baltimore Lutheran High Sch. Ass’n v. Employment ⁶⁵⁸ Sec. Admin., 302 Md. 649, 662 , 490 A.2d 701 (1985)). We “ ‘may not reject a decision of the Board supported by substantial evidence unless that decision is wrong as a matter of law.’” Hernandez v. Dep’t of Labor, Licensing, & Regulation, 122 Md.App. 19, 23 , 711 A.2d 243 (1998) (quoting Hider, 349 Md. at 78 , 706 A.2d 1073 ). “The test for determining whether the Board’s findings of fact are supported by substantial evidence is whether reasoning minds could reach the same conclusion from the facts relied upon by the Board.” Hider, 349 Md. at 78 , 706 A.2d 1073 (citing Baltimore Lutheran, 302 Md. at 661-662 , 490 A.2d 701 ).

DISCUSSION I. Appellants concede that they performed services for the Board for at least one academic term immediately prior to the period for which they seek unemployment benefits and that they had obtained a reasonable assurance of performing such services in the second of the two successive academic terms. But, according to appellants, L.E. § 8-909(c) does not render them ineligible for unemployment benefits because they are not employed by an “educational institution” as defined by L.E. § 8-101(n). Appellants, who are employed by the Board, argue that “a school board, as opposed to an individual school, is not itself an educational institution. Rather it is an organization through which educational institutions, i.e., individual schools, are regulated.” Therefore, appellants “did not ‘render services for an educational institution’ and are not barred from receiving benefits under the plain meaning of [L.E.] § 8-909(c).” The Department and the Board argue that the plain language of the statute and the purported purpose of the disqualification provisions clearly indicate that the Board is an “educational institution.” And, because appellants had a reasonable assurance of continued employment, L.E. § 8-909(c) rendered them ineligible for unemployment benefits. ⁶⁵⁹ The Court of Appeals “has stated many times ‘that the cardinal rule of statutory construction is to ascertain and effectuate legislative intention.’ ” State v. Green, 367 Md. 61, 81 , 785 A.2d 1275 (2001) (quoting Mayor of Baltimore v. Chase, 360 Md. 121, 128 , 756 A.2d 987 (2000)).

When we interpret a statute, our starting point is always the text of the statute. Adamson v. Corr. Med. Servs., Inc., 359 Md. 238, 251 , 753 A.2d 501 (2000). “[I]f the plain meaning of the statutory language is clear and unambiguous, and consistent with both the broad purposes of the legislation, and the specific purpose of the provision being interpreted, our inquiry is at an end.” Breitenbach v. N.B. Handy Co., 366 Md. 467, 473 , 784 A.2d 569 (2001).

The plain meaning rule is “elastic, rather than cast in stone[,]” and if “persuasive evidence exists outside the plain text of the statute, we do not turn a blind eye to it.” Adamson, 359 Md. at 251 , 753 A.2d 501 (citing Kaczorowski v. Mayor of Baltimore, 309 Md. 505, 513-14 , 525 A.2d 628 (1987)). “[I]n determining a statute’s meaning, courts may consider the context in which a statute appears, including related statutes and legislative history.” Ridge Heating, Air Conditioning & Plumbing v. Brennen, 366 Md. 336, 350-51 , 783 A.2d 691 (2001). We often look to the legislative history, an agency’s interpretation of the statute, and other sources for a more complete understanding of what the General Assembly intended when it enacted particular legislation. See Harris v. State, 331 Md. 137, 146 , 626 A.2d 946 (1993). “We may also consider the particular problem or problems the legislature was addressing, and the objective it sought to attain.” Sinai Hosp. of Baltimore, Inc. v. Dep’t of Employment and Training, 309 Md. 28, 40 , 522 A.2d 382 (1987). “This enables us to put the statute in controversy in its proper context and thereby avoid unreasonable or illogical results that defy common sense.” Adamson, 359 Md. at 252 , 753 A.2d 501 . “In the context of unemployment insurance law, because of its remedial nature, its provisions are liberally construed in favor of eligibility for benefits.” Department of ⁶⁶⁰ Econ. & Employment Dev. v. Taylor, 108 Md.App. 250, 268 , 671 A.2d 523 (1996) (citing Sinai Hosp., 309 Md. at 40 , 522 A.2d 382 ). Accordingly, “provisions that disqualify claimants from receiving benefits are construed narrowly.” Id.

Initially, we recognize that, in order to qualify for federal funding for this State’s unemployment insurance program and for private employer’s in Maryland to be eligible for federal tax credits for unemployment contributions, Maryland’s unemployment compensation laws must comply with the standards set forth in the Federal Unemployment Tax Act of 1954 (“FUTA”), codified at 26 U.S.C. §§ 3301-3311 (1997). Through the 1970 amendments to FUTA, for the first time states were required to pay unemployment compensation to otherwise eligible employees of institutions of higher learning. See generally S.Rep. No. 91-752 (1970), reprinted in 91st Cong., 2nd Sess., 1970 U.S.Code.Cong. & Admin.News. 3606.

Under the 1970 amendments, however, “faculty, research, and administrative employees of institutions of higher education were not considered unemployed during the summer vacation if they had a contract to resume work after the summer vacation.” Id. at 3609, 3617-18 . The ineligibility provision sought to exclude those employees “who can plan for temporary unemployment and thus do not truly suffer from economic insecurity.” Maribeth Wilt-Seibert, Unemployment Compensation for Employees of Educational Institutions: How State Courts Have Created Variations on Federally Mandated Statutory Language, 29 U. Mich. J.L. Reform 585 , 588 (1996) (citing Haynes v. Pennsylvania, 65 Pa.Cmwlth. 541 , 442 A.2d 1232, 1233 (1982)). In 1976, FUTA was again amended to render professional employees of elementary and secondary educational institutions ineligible for unemployment benefits for unemployment occurring between academic terms, where such employees had a reasonable assurance of returning to work in the successive academic term.

Unemployment Compensation Amendments of 1976, Pub.L. No. 94-556 § 115 , 90 Stat. 2667 (1976). As the United States Court of Appeals for the Seventh Circuit ex ⁶⁶¹ plained in Chicago Teachers Union v. Johnson, 639 F.2d 353 (7th Cir.1980): The period excluded under 26 U.S.C. § 3304 , Part A, s 203(b) was intended to be that period characteristic to the educational profession and within the expectation of the teachers. The legislative history surrounding this section shows that it intended for all professional educational workers to be treated the same during the summer break: “In the absence of this prohibition, a number of states have indicated that they find no provision in their laws by which they can deny emergency assistance to professional educational workers who are only temporarily unemployed during this period. Payment of such emergency assistance to workers who have contracts for the succeeding school term would be contrary to the treatment of their counterparts in institutions of higher education, who are covered under regular unemployment insurance.

In Public Law 91-373, Congress mandated that college and university teachers, researchers, and administrators with contracts for both terms be denied benefits with respect to the periods between terms.” Id. at 357 (quoting S.Rep. No. 94-208, 94th Cong. 1st Sess. 5-6, reprinted in (1975) U.S.Code Cong. & Admin.News 377, 382). In addition, states were permitted to deny “benefits based on services performed for educational institutions to nonprofessional school employees during periods between academic years or terms if there [wa]s a reasonable assurance that the individual w[ould] be employed by the educational institution in the forthcoming academic year.” H.R. Conf. Rep. 94-1745 (reprinted in 94th Cong., 2nd Sess., 1976 U.S.Code.Cong. & Admin.News 6032, 6035-36).

See also Patricia C. Kussmann, Right to Unemployment Compensation or Social Security Benefits of Teacher or Other School Employee, 33 A.L.R. 5th 643 § 2(a) (1995). FUTA was amended in 1977 to permit states to extend the ineligibility provisions applicable to nonprofessional school employees to vacation periods. Emergen ⁶⁶² cy Unemployment Compensation Extension Act of 1977, Pub.L. No. 95-19, § 302 , 91 Stat. 39 , 44 (1977). The ineligibility provision applicable to professional and nonprofessional school employees was also extended to apply to employees of “educational service agencies.” Id.

The Senate Report concerning the 1977 amendments stated, in relevant part: Public Law 94-566 required States to cover virtually all State and local government employees under their unemployment compensation programs. Because of the special work patterns of school employees, this legislation required that benefits not be paid during regular vacation periods to teachers who have a reasonable expectation of reemployment at the end of the vacation. Nonprofessional school employees could, at State option, be excluded from benefits during vacation periods on the same basis. As the statute was drawn, however, these exclusions apply only to individuals who are actually employed by educational institutions.

In a number of States there are separate State agencies set up to provide specialized services to many schools. For example, such agencies may provide driver education and audiovisual services to all schools in the State and employees of these agencies may travel from school to school providing these services. Since such employees are in every respect the equivalent of school personnel and follow the same work and vacation patterns, it seems appropriate to apply the same