Giant Food Inc. employees who took part in a strike three years ago may have to repay the state for about $1.4 million in unemployment insurance payments, a Maryland labor official said yesterday.
The state Department of Labor, Licensing and Regulation paid that amount to the workers during a strike that lasted from December 1996 to January 1997. Last week, the Maryland Court of Appeals ruled that the strike was a "stoppage of work" and consequently the 1,300 workers who participated were not entitled to unemployment benefits. The unions representing the workers had argued that the strike was not a stoppage of work because Giant continued operations.
The state agency may ask employees to pay back the state "a little at a time" or request that Giant deduct amounts from workers' paychecks, said Karen Napolitano, a spokeswoman for the state agency.
But other options include deferring payments until workers have another period of unemployment, or entirely waiving the payments. "It's still really early to be able to make a determination," Napolitano said.
Giant believes it is owed about $1 million of its payments into the state's unemployment-insurance pool. If the state decides to reimburse Giant, it could do so by reducing the retailer's unemployment-insurance tax rate, Napolitano said.
A Giant spokesman declined to comment on how the company should be repaid but said he was pleased by the court's ruling. "We felt all along that the lower courts had misinterpreted the law as to what constitutes work stoppage," spokesman Barry Scher said.
The court's decision last Thursday was a resounding victory not only for Landover-based Giant but also for a host of other unionized companies operating in Maryland, said Barbara Wilkins, vice president of government relations for the Maryland Chamber of Commerce.
"Strikers shouldn't be getting benefits," Wilkins said. "They talk about stoppage of work, but we really should be talking about denial of service. I think any business subject to strikes orchestrated by unions is happy about this decision."
But attorneys for the unions warned that employees statewide will have less protection when protesting their working conditions and wages. "It gives more power to the large employer," said Daniel Orfield, who represented Giant's unionized bakers.
Attorneys for Teamsters Local 639, which represents Giant truck drivers, had argued that there had been no "work stoppage" because the supermarket chain had continued to operate during the one-month strike. The Montgomery County Circuit Court and state Court of Special Appeals, as well as the state labor agency, had concurred.
But the Court of Appeals disagreed. "We hold that the term 'stoppage of work' refers to the substantial curtailment of work at each individual facility, premises or individual department within such a facility," Judge Dale R. Cathell wrote in the decision.
Phil Feaster, president of Teamsters Local 639, said the union would not be able to help employees make payments to the state. The union's bylaws forbid such payments, he said.
But "I don't think they'll have to pay it back," Feaster said. "I believe if there is any requirement that the money should be paid back, the state is responsible."
The state should either waive the requirement or deduct funds from any future unemployment payments, Feaster said. So, he said, "if you never go on unemployment, you don't have to worry."