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Circuit Court for Montgomery County Case: Civil No. 168553

IN THE COURT OF APPEALS OF MARYLAND No. 15 September Term, 1999

GIANT FOOD, INC.

v.

DEPARTMENT OF LABOR, LICENSING AND REGULATION et al.

Bell, C. J. Eldridge Rodowsky Raker Wilner Cathell Karwacki, Robert L. (retired, specially assigned), JJ.

Opinion by Cathell, J.

Filed: October 7, 1999

Giant Food, Inc., petitioner, appeals from a decision of the Court of Special Appeals affirming an administrative ruling that certain of petitioner's employees were entitled to unemployment benefits during a work stoppage caused by a strike from December 15, 1996 to January 18, 1997. We hold that the employees are not entitled to the unemployment benefits and shall reverse. I. Background Petitioner is a retail grocer which owns and operates two distribution and warehouse centers in Jessup, Maryland and Landover, Maryland. It also owns and operates a beverage plant and ice cream plant in Jessup, a dairy in Landover, and a bakery in Silver Spring, Maryland. Respondent Teamsters Local 639 consists of the truckers who deliver products from those two distribution and warehouse centers to all of petitioner's 174 stores in the Mid-Atlantic region. The strike at issue in this case began when the collective bargaining agreement between petitioner and respondent Teamsters Local 639 expired and the local went on strike. The remaining union locals appearing as respondents in this case assisted in the strike either by actively refusing to cross picket lines or engaging in "sympathy strikes."1 As a result of Those respondents are: (1) Teamsters Local 730, consisting of warehouseman and cardboard salvage workers at the warehouses, janitors at the bakery, employees at an ice plant operated by petitioner, and cafeteria staff at petitioner's corporate offices; (2) Teamsters Local 67, which represents employees at the beverage plant; (3) Teamsters Local 355, which represents truck drivers delivering pharmaceuticals to the retail stores; (4) Teamsters Local 922, consisting of cardboard salvagers, and garage and maintenance employees; (5) Teamsters Local 246, consisting of the employees at the dairy and ice cream plants, and truckers who deliver baked goods from the Silver Spring plant to the distribution centers and to the retail stores; (6) Bakery, Confectionary and Tobacco Workers International (continued...)
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the strike, petitioner's warehouse and distribution centers ceased operations as did the various manufacturing plants. Petitioner responded to the closings by having other

wholesalers and suppliers ship products directly to its retail stores. The record also reflects that they overstocked products in anticipation of the strike. Petitioner estimates that it lost approximately four million dollars in profits from the closing of the plants. The 1,346 employees participating or assisting in the strike applied for unemployment benefits for the period during which they were out of work. After a hearing, the Board of Appeals of the Department of Labor, Licensing, and Regulation (Board), also a respondent to this appeal, ruled that the employees were entitled to the benefits. On judicial review, the Circuit Court for Montgomery County affirmed. The Court of Special Appeals affirmed the circuit court. See generally Giant v. Department of Labor, Licensing & Reg., 124 Md. App. 357, 722 A.2d 398 (1999). II. Standard of Review Our review of an agency's decision "entails only an appraisal and evaluation of the agency's fact-finding and not an independent decision on the evidence." Catonsville Nursing Home, Inc. v. Loveman, 349 Md. 560, 569, 709 A.2d 749, 753 (1998); see Anderson v. Department of Pub. Safety & Correctional Servs., 330 Md. 187, 212, 623 A.2d 198, 210 (1993). When the agency is acting in a fact-finding or quasi-judicial capacity, we review its

(...continued) Union, Local 118, which represents employees in the Silver Spring bakery. Local 118 also represents bakery workers at the individual retail stores, who apparently were not involved in the strike. -2-

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decision to determine "whether the contested decision was rendered in an illegal, arbitrary, capricious, oppressive or fraudulent manner." Department of Natural Resources v.

Linchester Sand & Gravel Corp., 274 Md. 211, 224, 334 A.2d 514, 523 (1975); see Goodwich v. Nolan, 343 Md. 130, 148, 680 A.2d 1040, 1049 (1996); Weiner v. Maryland Ins. Admin., 337 Md. 181, 190, 652 A.2d 125, 129 (1995). When dealing with factual issues, "[w]e are also obligated to `review the agency's decision in the light most favorable to the agency,' since their decisions are prima facie correct and carry with them the presumption of validity." Catonsville Nursing Home, 349 Md. at 569, 709 A.2d at 753 (quoting Anderson, 330 Md. at 213, 623 A.2d at 210; Bulluck v. Pelham Wood Apts., 283 Md. 505, 513, 390 A.2d 1119, 1124 (1978)). We have noted that our review of an administrative agency's fact-finding decisions differs markedly from our review of the decision of a trial court: In the latter context the appellate court will search the record for evidence to support the judgment and will sustain the judgment for a reason plainly appearing on the record whether or not the reason was expressly relied upon by the trial court. However, in judicial review of agency action the court may not uphold the agency order unless it is sustainable on the agency's findings and for the reasons stated by the agency. United Steelworkers v. Bethlehem Steel Corp., 298 Md. 665, 679, 472 A.2d 62, 69 (1984). We have stated that, "[a] court's role is limited to determining if there is substantial evidence in the record as a whole to support the agency's findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law." United Parcel Serv., Inc. v. People's Counsel, 336 Md. 569, 577, 650 A.2d 226, 230 (1994), -3-

quoted in Bucktail, LLC v. County Council, 352 Md. 530, 552-53, 723 A.2d 440, 450 (1999); see also Prince George's County v. Brown, 334 Md. 650, 658, 640 A.2d 1142, 1146 (1994); Catonsville Nursing Home, 349 Md. at 569, 709 A.2d at 753 (quoting Insurance Comm'r v. Engelman, 345 Md. 402, 411, 692 A.2d 474, 479 (1997)); People's Counsel v. Maryland Marine Mfg. Co., 316 Md. 491, 497, 560 A.2d 32, 34-35 (1989). In the case sub judice, the factual determinations of the Board are generally not in contest. Thus, our review of the administrative agency's decision below is strictly concerned with whether their decision was based on proper legal standards. III. Analysis The issue before the Court, in general terms, is whether respondents were disqualified from receiving the requested unemployment benefits under Maryland Code (1991), section 8-1004 of the Labor and Employment Article. Section 8-1004 states: (a) Grounds for disqualification. -- Except as provided in subsection (b) of this section: (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 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 purposes of this subsection. (b) Exception. -- A disqualification under this section does not apply to an individual who satisfies the Secretary that the individual: -4-

(1) is not participating in, financing, or directly interested in the labor dispute that caused the stoppage of work; and (2) does not belong to a class or grade of workers that, immediately before the stoppage, had any members: (i) employed at the premises; and (ii) participating in, financing, or directly interested in the labor dispute. [Emphasis added.] More specifically, the parties debate whether the "stoppage of work" required by subsection (a)(1) must be "at the premises where the individual last was employed." The statute clearly requires there to be a "labor dispute" at the premises where the employees worked and there is no question in this case that there was a labor dispute at the various sites where petitioner's employees struck.2 Respondents, who interpret section 8-1004(a)(1) as not limiting the

The Bakers Union impliedly argues that there was no labor dispute at the premises where they worked. They argued to the Board that they were exempted from disqualification by section 8-1004(b). Despite their ruling that all of the claimants were entitled to benefits, the Board's opinion did address this issue: The non-[Local ]639 Claimants failed to prove that they met the exemption set out in [Labor & Employment Article],

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