Meyer v. Iowa Department of Job Service , 385 N.W.2d 524 ( 1986 )

WOLLE, Justice.

Petitioners are three union plumbers who applied for unemployment compensation benefits while engaging in an economic strike against their employer Tri-State Mechanical Contractors (Tri-State). A final agency decision of the Iowa Department of Job Service (department), upheld on judicial review by the district court, determined that petitioners were disqualified from unemployment compensation benefits by reason of Iowa Code section 96.5(4) (1983) which in pertinent part provided:

An individual shall be disqualified for benefits:

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4. Labor disputes. For any • week with respect to which the department finds that his or her total or partial 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 or she is or was last employed [subject to two exceptions not involved here].

Petitioners contend that no stoppage of work occurred at their place of employment notwithstanding their participation in a strike for more favorable terms of employment than Tri-State had offered. Substantial evidence supports the department’s finding of a disqualifying work stoppage, and we therefore affirm.

Each of the petitioners was employed by Tri-State and working in accordance with the terms of a collective bargaining agreement which expired on April 30, 1983. Negotiations toward a new contract reached an impasse, and petitioners did not report for work on May 2, 1983, the next regular workday after the labor contract expired. Tri-State hired some replacement workers and continued operations to some extent, while petitioners picketed several work sites.

Petitioners applied for unemployment compensation benefits in June of 1983, but a claims deputy found them disqualified from receiving benefits by reason of the labor dispute provision, Iowa Code section 96.5(4) (1983). A contested case hearing was then held before an agency hearing officer in October of 1983, and evidence was presented concerning the eligibility of petitioners for unemployment benefits during the five months since the strike had begun.

At the time of the hearing, the three petitioners and four other union members had not returned to work for Tri-State because of the labor dispute, and they had participated during the strike in picketing one or more places where Tri-State was performing work. Tri-State’s president and general manager testified that the labor dispute was still in progress and that petitioners had not been permanently replaced. Although Tri-State began to advertise for replacement workers just prior to the expiration of its former labor agreement with the union, and had hired some replacements, he testified that petitioners could have come to work during the period of the strike had they chosen to do so. Questioned by the hearing examiner concerning the effect of the strike on work at Tri-State, the president and general manager further testified as follows:

Q. Is work being performed at TriState Mechanical Contractors now? A. Yes.

Q. To what extent? A. Clarify what you mean by what extent.

Q. What would be the percentage of your production? If you were 100 percent operating on May — or April 30, 1983 —A. Oh, we’re probably 25 percent to capacity.

Q. All right. And has it been greater or lesser than that during this period? A. It has varied, depends upon the workload.

Q. Was there an occasion after the picket line was established wherein no work was performed at all, any particular week? A. No.

The agency hearing officer found section 96.5(4) inapplicable to petitioners because the evidence did not establish that there had been a “stoppage of work.” The department’s appeal board, however, issued a final agency decision reversing the hearing officer’s determination and holding that petitioners were disqualified from benefits. It found:

Clearly, from the record, there was a labor dispute occurring on or after May 1, 1983 and the claimant[s were] involved in that labor dispute. It is clear from the record that there was a substantial' reduction or stoppage of work which was caused by that labor dispute.

The district court on judicial review upheld that final agency decision, concluding that the quoted findings were supported by substantial evidence in the record as a whole.

In this judicial review proceeding governed by Iowa Code section 17A.19, our primary function, like that of the district court, is to determine whether the agency action was either affected by an error of law or “unsupported by substantial evidence in the record made before the agency when that record is viewed as a whole.” Iowa Code § 17A.19(8)(e), (f) (1983); see Taylor v. Iowa Department of Job Service, 362 N.W.2d 534, 537 (Iowa 1985). We are limited to the record made before the agency and will affirm findings of fact in the final agency decision which are supported by substantial evidence. Higgins v. Iowa Department of Job Service, 350 N.W.2d 187, 190 (Iowa 1984); Messina v. Iowa Department of Job Service, 341 N.W.2d 52, 59 (Iowa 1983).

At the outset we are faced with the parties’ differing interpretations of controlling statutory language. Petitioners contend that the phrase “stoppage of work” in section 96.5(4) refers to a total curtailment in the employer’s business operations brought about by a labor dispute, not just a partial curtailment. Petitioners contend that there was no stoppage of work because Tri-State replaced the strikers with other employees and resumed its business operations. Tri-State and the department respond that a partial reduction in work, if substantial, is disqualifying, and the evidence supports the final agency decision holding that a substantial stoppage of work had occurred. Our resolution of those issues is dispositive of this appeal. We therefore do not address the further contention of Tri-State and the department that any discontinuance of work by striking employees may constitute a disqualifying stoppage of work without consideration of the strike’s effect on the employer. See generally Annot., 61 A.L.R.3d 693, 705 (1975).

Petitioners have cited no authorities supporting their contention that a partial stoppage of work is not disqualifying. Other jurisdictions with statutes similar to ours have held that the phrase “stoppage of work” refers to a substantial and not necessarily a total cessation of work. See, e.g., Mountain States Telephone & Telegraph Co. v. Sakrison, 71 Ariz. 219, 225, 225 P.2d 707, 711 (1950) (“by the term ‘stoppage of work’ is meant a substantial curtailment of operations”); Magner v. Kinney, 141 Neb. 122, 130-31, 2 N.W.2d 689, 693 (1942) (thirty percent reduction in business was substantial and disqualifying; court relied on decisions in New Jersey and Oregon denying unemployment benefits where production decreases were less than thirty percent). See generally Annot., 61 A.L.R.3d at 705-16 (cataloguing cases and noting that the extent of work curtailment which will constitute a disqualifying “work stoppage” is peculiarly a fact-bound determination). The department correctly construed section 96.5(4) to disqualify unemployment compensation claimants like these petitioners whose labor dispute caused a substantial, though not total, stoppage of the employer’s work.

We find in this record adequate support for the agency’s determination that there was a substantial curtailment of TriState’s work. Evidence supporting a final agency decision is substantial when a reasonable mind reviewing the entire record could accept it as adequate to reach the same findings. Roberts v. Iowa Department of Job Service, 356 N.W.2d 218, 221 (Iowa 1984). The only evidence concerning the extent of the stoppage of work was that given by Tri-State’s president and general manager; the petitioners presented no evidence to support their contention that Tri-State was working at full capacity. Although the employer’s post-strike production varied somewhat, depending on the work load, it was “twenty-five percent to capacity,” according to Tri-State’s principal managing officer. Petitioners contend that answer proved that Tri-State was working up to capacity, but we believe a more reasonable interpretation of the officer’s testimony, considered in context, is that work was proceeding at about one-fourth TriState’s pre-strike capacity. The officer was first asked to estimate Tri-State’s percentage of production using operations on April 30 for comparison. His answer— “twenty-five percent to capacity” — could reasonably be interpreted to mean that production had fallen to twenty-five percent of pre-strike capacity. That interpretation of the officer’s testimony is buttressed by his later undisputed testimony that the petitioners could have come to work had they chosen to do so rather than continuing their strike.

The agency reasonably concluded from the evidence presented at the contested case hearing that a substantial stoppage of work resulted from the ongoing labor dispute, disqualifying petitioners from receiving unemployment benefits.

The district court on judicial review correctly upheld that final agency decision.

AFFIRMED.

All Justices concur except CARTER, UH-LENHOPP, HARRIS and SCHULTZ, JJ., who dissent.