Manuel FEDERICO; Ronald E. Baird; Dean A. Cummings; Richard L. Goodnight; James A. Hall; Lee Higginbotham; Larry H. Hubler; Gale L. Donnelly; Elery H. Mefford; Donald K. Mefford; John A. Lauro; Floyd J. Mansfield; Theodore Jimenez; Leonard H. Johnson; Richard W. Lanter; Orson J. Matteson; Dortin M. Thompson; Barry J. Todd; Harvey A. Williams; Jose E. Romo; Robert L. Saul; Joseph H. Marcus; Larry E. Owen; Ronald L. Owen; Rudolph L. Palomino; David Scheibley; Louis Siefford; George S. Sims; Ronald W. Stockley; and Eugene Romero, Petitioners/Cross-Respondents, v. BRANNAN SAND & GRAVEL CO., Respondent/Cross-Petitioner, and The Industrial Claim Appeals Office of the State of Colorado and the Division of Employment and Training for the Colorado Department of Labor and Employment; and Pedro Leal, Respondents/Cross-Respondents.
No. 88SC587.
Supreme Court of Colorado, En Banc.
March 19, 1990.
788 P.2d 1268
Fogel, Keating and Wagner, P.C., Scott Meiklejohn and David R. Struthers, Denver, for petitioner/cross-respondent Richard W. Lanter.
Bradley, Campbell & Carney, P.C., Jim Michael Hansen, Earl K. Madsen and K. Preston Oade, Jr., Golden, for respondent/cross-petitioner Brannan Sand & Gravel Co.
Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Richard H. Forman, Sol. Gen., and John August Lizza, Asst. Atty. Gen., Denver, for respondents/cross-respondents Indus. Claim Appeals Office of the State of Colo. and Div.
Pedro Leal, respondent/cross-respondent pro se.
Justice ERICKSON delivered the Opinion of the Court.
In this consolidated unemployment compensation case involving a number of employees, respondent Brannan Sand and Gravel Company (Brannan) appealed decisions of the Industrial Claim Appeals Panel (Panel) that set aside in part hearing officer orders denying unemployment compensation to the employee-petitioners (claimants). The court of appeals consolidated the appeals and, in Brannan Sand & Gravel Co. v. Industrial Claim Appeals Office, 762 P.2d 771 (Colo. App. 1988), held that the Panel improperly substituted its own findings of fact for those of the hearing officer and set aside the Panel‘s orders. We granted certiorari and now affirm the court of appeals and return this case to the court of appeals with directions.
I.
The claimants were members of a local union employed by Brannan pursuant to a collective bargaining agreement entered into by Brannan and the union. The agreement expired on June 30, 1985, and Brannan and the union had failed to negotiate another agreement when the union called a strike against Brannan on July 3, 1985. The claimants participated in the strike and refused to report to their jobs with Brannan. On July 3, 1985, Brannan notified the claimants of their possible replacement in a letter which provided:
For those employees who wish to work and return to work, employment is available. If you choose not to return to work, it will be necessary to seek a permanent replacement for you. Needless to say, if such a replacement is hired before you make an unconditional offer to return to work, you will not have a job with us at that time.
By July 20, 1985, the claimants had not returned to work and Brannan had hired
The claimants filed claims for unemployment benefits. The deputy awarded the claimants compensation and Brannan appealed the awards to the hearing officer.1 The hearing officer made the following pertinent findings: (1) the labor dispute between the union and Brannan was ongoing at the time of the hearing and none of the claimants had been formally discharged; (2) Brannan hired replacement workers for trucks that had previously been assigned to the claimants, but other trucks were available; and (3) although Brannan could not put all of the claimants to work, it did have positions available for some of the claimants if they chose to return. The hearing officer concluded that the claimants were not eligible for unemployment benefits since their unemployment was due to the labor dispute and that Brannan had not discharged the claimants and had positions available at the time of the hearing.
The claimants appealed to the Industrial Claim Appeals Office.2 The Panel upheld the denial of benefits to the claimants for the period from July 3 to July 20, 1985. However, the Panel found that the claimants had been permanently replaced as of July 20, 1985 and were entitled to unemployment benefits from that date.
Brannan appealed. The court of appeals, relying on Clark v. Colorado State University, 762 P.2d 698 (Colo. App. 1988), found that
The claimants petitioned for certiorari review of that part of the court of appeals decision that set aside the Panel‘s orders. Brannan cross-petitioned for certiorari review of the court of appeals conclusion that a striking employee need not offer to return to work and be refused employment in order to be eligible for unemployment benefits. In granting certiorari, we elected to review the issues raised in both the petition and the cross-petition.
II.
The Employment Security Act, title 8, articles 70 to 82 of the Colorado Revised Statutes, was enacted to protect workers who become unemployed through no fault of their own from financial hardship.
The question of what causes a permanent replacement to occur has been addressed by a number of courts. One line of authority holds that an employee must abandon the labor dispute, unconditionally offer to return to work and be refused employment by the employer to be terminated as a result of permanent replacement. See, e.g., Four Queens, Inc. v. Board of Review, — Nev. —, 769 P.2d 49 (1989). Other courts have held that an employee‘s unemployment is no longer due to the labor dispute if that employee has been permanently replaced, and do not require the employee to offer to return to work and thereafter be refused. See, e.g., Baugh v. United Tel. Co., 54 Ohio St. 2d 419, 377 N.E.2d 766 (1978).
The court of appeals held that the determination of whether the employer-employee relationship has been severed as the result of permanent replacement of the employee is a question of fact to be determined under the circumstances of each case and that an offer to return to work and a refusal thereof is not a prerequisite to a finding of termination. Brannan Sand & Gravel Co., 762 P.2d at 774-75. We agree. This conclusion comports with both the policies underlying
III.
We must determine the standard of review that the Industrial Claim Appeals Panel must employ when reviewing the decision of the hearing officer. In Clark v. Colorado State University, 762 P.2d 698 (Colo. App. 1988), the court of appeals held that
Prior to 1986, the Industrial Commission was vested with the ultimate factfinding authority with regard to unemployment compensation matters. Id. at 679. Pursuant to the Employment Security Act, the Industrial Commission was empowered to conduct a de novo review of hearing officer decisions, was authorized to make its own findings of fact, and was allowed to apply its special expertise and knowledge of unemployment compensation matters. Ch. 39, sec. 1, § 8-74-104, 1976 Colo. Sess. Laws 354, 355; Clark, 762 P.2d at 699. The provisions of the State Administrative Procedure Act, sections 24-4-101 to -108,
The Employment Security Act was amended in 1986, substantially changing the administrative review provisions of the Employment Security Act. The Industrial Commission was abolished.
IV.
The court of appeals set aside the Panel‘s orders on the grounds that the Panel applied an improper standard of review and substituted its own findings of fact for those of the hearing officer.
The findings of evidentiary fact, as distinguished from ultimate conclusions of fact, made by the administrative law judge or the hearing officer shall not be set aside by the agency on review of the initial decision unless such findings of evidentiary fact are contrary to the weight of the evidence.
The issue, which the court of appeals did not address, is whether the hearing officer‘s findings constituted evidentiary facts or ultimate conclusions of fact.
Evidentiary facts are the raw historical data underlying the controversy. Lee v. State Bd. of Dental Examiners, 654 P.2d 839, 843 (Colo. 1982); Womack v. Industrial Comm‘n, 168 Colo. 364, 371, 451 P.2d 761, 764 (1969). Ultimate conclusions of fact, on the other hand, are conclusions of law or mixed questions of law and fact that are based on evidentiary facts and determine the rights and liabilities of the parties. Lee, 654 P.2d at 844. The distinction between evidentiary fact and ultimate conclusion of fact is not always clear, but an ultimate conclusion of fact is as a general rule phrased in the language of the controlling statute or legal standard. See Lee, 654 P.2d at 844.
V.
We conclude that an employee involved in a labor dispute is entitled to unemployment compensation benefits when the employer-employee relation has been terminated with respect to that employee. The employer-employee relationship can be terminated by the permanent replacement of the employee. The question of whether an employee has been permanently replaced is a question of evidentiary fact that cannot be set aside by the Panel on review of a decision of a hearing officer unless such a finding is contrary to the weight of the evidence in the record. See Krantz v. Kelran Constructors, Inc., 669 P.2d 1049 (Colo. App. 1983). The court of appeals correctly set aside the orders of the Panel in part since the Panel utilized an improper standard of review in modifying the decisions of the hearing officer. Accordingly, we affirm the court of appeals and return this case to the court of appeals with directions to remand to the Industrial Claim Appeals Panel. Upon remand, the Panel shall return the cases of the individual claimants to the hearing officer for proceedings consistent with this opinion.
Justice MULLARKEY concurs in part and dissents in part.
Justice MULLARKEY concurring in part and dissenting in part:
I agree with the majority that the Administrative Procedure Act (APA) standard of review applies to the Industrial Claim Appeals Panel (panel) when it reviews a hearing officer‘s decision in an unemployment compensation matter. I respectfully dissent, however, from the majority‘s application of that standard in this case.
The findings of evidentiary fact, as distinguished from ultimate conclusions of fact, made by the administrative law judge or the hearing officer shall not be set aside by the agency on review of the initial decision unless such findings of evidentiary fact are contrary to the weight of the evidence.
The distinction which the statute draws between findings of evidentiary fact and ultimate conclusions of fact often is difficult to apply. See, e.g., Baca v. Helm, 682 P.2d 474 (Colo. 1984) (depending on circumstances, causation may be either an ultimate fact or an evidentiary fact). The importance of the statutory classification is that it determines whether the hearing officer or the agency has discretion over the
First, in determining the proper scope of the panel‘s review in this case, we must consider
An individual is ineligible for unemployment compensation benefits for any week with respect to which the division finds that his total or partial unemployment is due to a strike or labor dispute....
Under the statute, then, the ultimate legal issue before the hearing officer and the panel was whether the claimants’ unemployment was “due to a strike or labor dispute.” In Pierce v. Industrial Commission, 38 Colo. App. 85, 553 P.2d 402 (1976), the court held that pursuant to
The majority does not dispute that the question of whether a claimant‘s unemployment is “due to a strike or labor dispute” is a question of ultimate fact, but distinguishes that question from the issue of whether the claimants had been permanent-ly replaced on the basis that an ultimate fact is a “general rule phrased in the language of the controlling statute or legal standard.” Maj. op. at 1272. However, I disagree that merely because the question of whether the claimants have been permanently replaced is not specifically phrased by the statute the issue is not one of “ultimate fact.” By deciding the question of whether the claimants have been permanently replaced, the hearing officer resolves the ultimate question of whether the claimant‘s unemployment was “due to a strike or labor dispute.” The court of appeals’ decision in Pierce in effect made “permanent replacement” coextensive with the statutory eligibility requirement that a claimant‘s unemployment not be “due to a strike or labor dispute.” The majority does not suggest that the hearing officer was free to find that, although the employees had been “permanently replaced,” their unemployment was “due to a strike or labor dispute.” Thus, a finding of permanent replacement determines the employee‘s eligibility for benefits. It is dispositive.
Second, under the relevant legal standards adopted by this and other courts, the question of whether the claimants were permanently replaced is one of ultimate fact. Evidentiary facts are the detailed factual or historical findings upon which a legal determination rests. Lee v. State Bd. of Dental Examiners, 654 P.2d 839 (Colo. 1982). Findings of ultimate fact, as distinguished from raw evidentiary fact, involve a conclusion of law or at least a determination of a mixed question of law and fact and settle the rights of the parties. Id., at 844. Evidentiary facts are based on the evidence presented at the hearing. Ultimate facts are conclusions acquired through reflection and reasoning based upon evidentiary facts and are necessary in order that a determination of the rights of the parties can become a question of law. Baca, 682 P.2d at 479 (Neighbors, J., concurring). See also Woodbury Daily Times Co. v. Los Angeles Times---Washington Post News Serv., 616 F. Supp. 502, 505 (D.N.J. 1985), aff‘d, 791 F.2d 924 (3d Cir. 1986) (ultimate fact is a mixture of fact and
All parties here agree that (1) a labor dispute existed; (2) that the employer sent a letter to the workers telling them to return to work or be replaced; (3) that the employer has hired replacements; and (4) that although certain positions remain open, there are insufficient positions to hire even a majority of the employees. These are the evidentiary facts. They are the detailed historical findings upon which the legal determination must rest, developed through the evidence presented before the hearing officer. Only a question of ultimate fact remains: whether, under these evidentiary facts, the claimants’ unemployment is “due to a strike or labor dispute” or whether they have been permanently replaced. This question of ultimate fact must be resolved through reflection and reasoning based upon the evidence and “informed by legal principles and policies.” Woodbury Daily Times, 616 F. Supp. at 505. Further, the resolution of this question determines the rights of the parties. See Lee, 654 P.2d at 844. When considered in this light, it becomes clear that the question of “permanent replacement” must be characterized as one of ultimate fact properly subject to review by the panel. Because I believe that the panel properly found that the claimants were permanently replaced, I would reverse the decision of the court of appeals. For the foregoing reasons I respectfully dissent from the majority‘s decision upholding the court of appeals’ reversal of the panel.
Notes
The findings of evidentiary fact, as distinguished from ultimate conclusions of fact, made by the administrative law judge or the hearing officer shall not be set aside by the agency on review of the initial decision unless such findings of evidentiary fact are contrary to the weight of the evidence.
On July 13, 1985, the employer sent a letter to the strikers explaining that work was available should they decide to return, but replacements were being hired and strikers would lose jobs unless they returned to work before such a replacement was hired. With the exception of a few strikers, the workers did not return to work and did not cross the picket line. They were reluctant to return due to the loss and/or reduction of union benefits. Replacements were hired and the employer‘s operation continued. These replacements were assigned to trucks that the strikers were normally assigned to. However, the employer did have and does have other trucks available. At no time was the claimant formally terminated. Work continues to be available to the claimant.