The state Court of Appeals ruled yesterday that more than 1,300 workers who participated or assisted in a one-month strike against Giant Food Inc. were not entitled to unemployment insurance.
In an opinion reversing two lower court rulings, the state's highest court ruled that, because the strike constituted a "stoppage of work," workers were disqualified from receiving unemployment benefits.
The decision marks a victory for Giant, the Landover-based subsidiary of Royal Ahold NV, the Netherlands-based international food retailer.
"We felt strongly about correcting what we thought was a misinterpretation of the law, and the Maryland Court of Appeals agreed with us," said Barry Scher, a Giant Foods spokesman.
The strike was from Dec. 15, 1996, to Jan. 18, 1997. Giant had argued that the action had closed warehouses in Jessup and Landover and had cost the company approximately $4 million.
Attorneys for Teamsters Local 639, which represents truckers who delivered products from the warehouses to 174 Giant Food stores, had contended that the strike did not amount to a work stoppage.
Union attorneys argued that Giant had relied on outside wholesalers and suppliers to deliver products directly to the stores, which Giant kept open throughout the strike.
The Board of Appeals of the state Department of Labor, Licensing and Regulation, Montgomery County Circuit Court, and the Court of Special Appeals ruled in the union's favor.
But the Court of Appeals disagreed. "Because operations ceased at the various premises in which the employees worked in this case, there was a 'stoppage of work' at each of those locations caused by the labor dispute in question," the appeals court ruled. "Thus, none of the employees are entitled to unemployment benefits."
"It's a disappointment," said Hugh Beins, an attorney who represented Local 639. "Where there's a strike, and the employer continues to operate, workers are entitled to unemployment benefits."
Officers of Local 639 were traveling yesterday and not available for comment.
Andrew Baida, an attorney for the Department of Labor, Licensing and Regulation, said the department had advanced the same argument as the union in previous proceedings.
"We're disappointed that the court took a different view," he said.
"This leaves 1,300 people without unemployment benefits for the time they didn't work during the strike against Giant."
The consequences of the ruling were not clear yesterday. If workers "were awarded benefits to which they were not eligible, that would create an overpayment for which they would be liable," said Matthew Boyle, another attorney who worked for the department on the case.
Beins, the union's attorney, said workers would not have to repay the benefits.
"If they have another period of unemployment, that money would be deducted from their future benefits," the lawyer said.
Another option, said Boyle, is for workers to individually seek a waiver of the requirements to re pay the benefits. "A lot of it centers on the lack of ability to repay those amounts," he said.