Newman v River Rouge Schools – 4.39

Newman v River Rouge Schools
Digest no. 4.39

Section 31, 48(2)

Cite as: Newman v River Rouge Schools, unpublished opinion of the Court of Appeals, issued July 24, 2014 (Docket No. 314033).

Appeal pending: 
Claimant: Joel A. Newman, et al.
Employer: River Rouge Schools
Docket no.: 12-005774-AE
Date of decision: July 24, 2014

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HOLDING: A rehiring agreement that agrees to provide back pay designated to a specific date may make a claimant ineligible to receive unemployment benefits beginning on that date, and any language in the agreement requiring claimant to reimburse the UIA for benefits received as of that date may be valid notwithstanding Section 31.

FACTS: Claimant worked for Employer as a teacher. At the end of the 2008/2009 school year, Claimant was sent a reasonable assurance letter for the upcoming year, but later in the summer was laid off effective August 6, 2009. Claimant’s last pay date was August 14, 2009, and Claimant immediately filed for unemployment benefits beginning the next day. Claimant collected benefits for the weeks ending August 22 and August 30, 2009, and the first few weeks in September.

After the Claimant’s union filed an unfair labor practice charge against Employer, Employer called Claimant back to work and agreed to provide Claimant with back pay. The agreement stipulated that the Claimant must reimburse the Agency “for any unemployment benefits that [he] received after what would have been the first day that the [Claimant was] scheduled to report for work.” Disagreement as to when the 2009/2010 school year began led to a dispute as to when the Employer-provided back pay made him whole, whether there was a period of time that Claimant was eligible for benefits, and whether Claimant must reimburse unemployment benefits received.

DECISION: The decision of the Circuit Court is affirmed, finding that Claimant must reimburse UIA for unemployment benefits received beginning the week ending August 22, 2009.

RATIONALE: There is no dispute that Claimant had the lawful right to collect benefits during the time he was laid off. However, in the agreement between Employer and Claimant, the back pay provided to Claimant was designated as dating back to August 15, 2009, which is the date Claimant allegedly began his period of unemployment. Because substantial evidence shows that both parties agreed that this date was “the beginning of their contract term” and back pay was calculated based on that date, Claimant does not qualify as unemployed as of that date. Additionally, this designation is lawful under the circumstances because nothing in Section 48(2) prohibits this practice, and Claimant does not argue that this back pay was insufficient to make him whole.

Claimant further argues that the agreement was invalid under Section 31 to the extent that Claimant agreed to waive or relinquish his rights to unemployment benefits properly received during the layoff period. This Court agrees that the agreement violates Section 31 on its face and is not valid to require Claimant to relinquish unemployment benefits properly received. However, as explained above, the agreement’s other terms find Claimant to be ineligible for benefits beginning August 15, 2009, and therefore it is not improper for Claimant to be required to relinquish unemployment benefits improperly received.

Digest Author: Jack Battaglia
Digest Updated: 8/14

Cross v Tri-Fecta, Inc – 10.121

Cross v Tri-Fecta, Inc
Digest no. 10.121

Section 29(1)(a)

Cite as: Cross v Tri-Fecta, Inc, Genesee Circuit Court, No. 12-98465-AE (June 27, 2013).

Appeal pending:
Claimant: Michelle H. Cross
Employer: Tri-Fecta, Inc.
Docket no.: 12-98465-AE
Date of decision: June 27, 2013

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CIRCUIT COURT HOLDING: When a claimant holds a part-time job and full-time job simultaneously, then voluntarily quits the part time position only to subsequently be terminated from her full-time position in a qualifying manner is not disqualified from unemployment benefits due to the voluntary quit of the part-time job.

FACTS: Claimant held two jobs simultaneously: a full-time position at Quality Roofing, and a part-time job as a waitress at Employer Tri-Fecta, Inc. Claimant left her job with Employer on April 10, 2009, leaving her with only her full-time position at Quality Roofing. However, shortly thereafter, she was let go from that job as well in a qualifying manner. Claimant applied for benefits, and a UIA determination found in her favor.

Employer appealed Claimant’s benefits, and the ALJ found in Employer’s favor due to an erroneous interpretation of the facts believing that Employer Tri-Fecta. was Claimant’s last employer. On appeal, MCAC noted the mistaken facts but still found for Employer because of voluntary termination from Employer Tri-Fecta. Claimant appealed to the Circuit Court.

DECISION: The MCAC decision is reversed, and Claimant is entitled to unemployment benefits.

RATIONALE: The court’s reasoning in this case is short and unusual, and provided here in its entirety: “In this case the factual findings of the ALJ cannot be determined to be conclusive. They were clearly in error. The Court further finds that the MCAC decision is in error. The MCAC reviews the findings and decisions of the ALJ. The decisions of the ALJ are to be accorded deference. Who can tell what the decision of the ALJ would have been had the ALJ known the facts as they really were? The Court finds that the review process in this case is entirely flawed. This Court has not been made aware of any appellate decision in the State of Michigan that upholds the results before me. The Court further finds the rationale and reasoning of the Kent County Circuit Court case cited by claimant to be persuasive. ”

Digest Author: Jack Battaglia
Digest Updated: 8/14

Voorhees v. Allegiance Health – 10.120

Voorhees v. Allegiance Health
Digest no. 10.120

Section 29(1)(a)

Cite as: Voorhees v Allegiance Health, Unpublished Opinion of the Jackson County Circuit Court, Issued March 29, 2013 (Docket No. 12-3123-AE).

Appeal pending: No
Claimant: Jennifer M. Voorhees
Employer: Allegiance Health
Docket no.: 12-3123-AE
Date of decision: March 29, 2013

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HOLDING: Claimant left her employment with good cause attributable to her employer and is not disqualified from benefits.

FACTS: Claimant had been working for Employer without any warnings for three years when there was an emergency drill that required employees to stay in the building, even though she was supposed to be at home and had childcare duties to tend to. When her husband called her supervisor, the supervisor told the entire office about the call, and told Claimant that her husband was abusive and that he drinks. After reporting this incident, Claimant received a number of bad reviews and discipline. Claimant’s doctor required that Claimant not go to work for three days due to the stress of this situation, and upon her return, Claimant was subjected to further bad reviews and discipline. The next day, Claimant quit her job.

Claimant applied for benefits, but UIA issued a redetermination finding that she was disqualified. On appeal, the ALJ found that she acted as “[a] reasonable, average, and otherwise qualified person in giving up her employment” and that there she had established through evidence that she was harassed following the emergency drill situation. Employer appealed, and the MCAC reversed the ALJ decision. Claimant timely appealed to the Circuit Court.

DECISION: The decision of the MCAC is reversed and the Claimant’s unemployment benefits are to restored as she left her employment with good cause attributable to her employer.

RATIONALE: Since Claimant had been employed for three years without receiving any written warnings, and she was written up for six separate issues on two occasions following her complaint regarding her supervisor, Claimant established that she was harassed. Because of this, a reasonable, average, and otherwise qualified worker would leave their employment.

Digest author: Nick Phillips
Digest updated: 8/14

Sheppard v Meijer Great Lakes Limited – 10.119

Sheppard v Meijer Great Lakes Limited
Digest no. 10.119

Section 29(1)(a)

Cite as: Sheppard v Meijer Great Lakes Limited, Unpublished Opinion of the Michigan Court of Appeals, Issued Dec. 20, 2012 (Docket No. 300681).

Appeal pending: No
Claimant: Linda M. Sheppard
Employer: Meijer Great Lakes Limited
Docket no.: 10-000383-AE
Date of decision: December 20, 2012

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HOLDING: Claimant did not leave voluntarily for the purposes of Section 29(1)(a) when she attempted to take a leave of absence, failed to follow the correct procedures, and was subsequently discharged by the Employer.

FACTS: Claimant worked for Employer and attempted to take a two-month leave of absence. She notified her supervisor that she would be doing so, and her supervisor testified that he informed her that she would need written approval from the store director before she could take such a leave. There was a miscommunication regarding the approval, with both parties believing the other had obtained the necessary authorization. Claimant left without authorization and was subsequently terminated from her employment.

Claimant applied for and began receiving unemployment benefits. Employer protested her claim, arguing that Claimant had voluntarily resigned. The UIA issued a redetermination stating that Claimant was not qualified for benefits due to misconduct. On appeal, the ALJ affirmed the decision, stating that because Sheppard did not receive approval to take the leave of absence before she left work, she was not qualified because of misconduct. Claimant appealed to the Board of Review, which affirmed the ALJ on the grounds that she abandoned her employment, and was disqualified based on Section 29(1)(a), the voluntary leaving provision, not the misconduct provision. Sheppard appealed to the Circuit Court, which did not determine whether Sheppard abandoned her employment, but affirmed the Board of Review decision. Finally, Sheppard applied for leave to appeal, which was denied by the Court of Appeals but subsequently granted by the Michigan Supreme Court.

DECISION: The Circuit Court erred when it affirmed the Board of Review’s determination that Claimant voluntarily quit. The Circuit Court’s decision is vacated and Claimant is not disqualified from benefits.

RATIONALE: In determining whether a claimant is disqualified from benefits under 29(1)(a), the Court must first determine whether she voluntarily left her job, or was discharged. If it is found the claimant did not voluntarily quit, “the inquiry ends” and the claimant “is entitled to unemployment compensation.”

The Court of Appeals has previously held that “when an employee requests a leave of absence, and the employer actually terminates the employee’s employment, that employee has not voluntarily quit.” A voluntary quit must be an intentional act, but here, the act to end employment was conducted by the employer. Since there was no evidence that Claimant voluntarily quit or did not report for work on a day that Meijer expected her to work, the Circuit Court erred as a matter of law in upholding the Board of Review determination that Claimant voluntarily quit.

Digest author: Nick Phillips
Digest updated: 8/14

Woods v. Associated Community Services – 4.38

Woods v. Associated Community Services
Digest no. 4.38

Section 48(1)

Cite as: Woods v Associated Community Services, Unpublished Opinion of the Wayne County Circuit Court, Issued October 30, 2012 (Docket No. 12-007632-AE).

Appeal pending: No
Claimant: Gina Woods
Employer: Associated Community Services
Docket no.: 12-007632-AE
Date of decision: October 30, 2012

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HOLDING: The Circuit Court upheld the Michigan Compensation Appellate Commission’s (MCAC) decision that there was insufficient evidence to find claimant not ineligible for unemployment benefits for the period between August 25 and September 30, 2010, and that there was sufficient evidence to find her eligible for benefits from September 30, 2010 to August 16, 2011.

FACTS: Claimant worked with Employer until she was confronted about her “incoherent phone behavior” which was the result of a medication that she was taking that made her drowsy. When the employer asked claimant for proof from her doctor of the medication, the doctor refused, citing privacy laws, and the claimant was only able to provide proof from her pharmacist. During the following week, claimant attempted to return to work multiple times, but was sent home.

Claimant applied for unemployment benefits, but the UIA denied her claim because the Employer told UIA that claimant had been on a leave of absence. The ALJ overturned this determination, as the ALJ found that claimant had neither requested a leave nor had her doctor suggested such a leave of absence. Thus, the ALJ found that she had not been permitted to perform her job duties on August 25, 2010, but had only been terminated from her employment as of September 30, 2010. Accordingly, the ALJ found that she had been eligible for benefits as of August 25, 2010. Further, the ALJ found that claimant had established good cause for her failure to timely file a request for redetermination of her eligibility. The MCAC confirmed the ALJ finding that claimant had not been ineligible for benefits during the period between August 25 and September 30, but issued an unclear ruling stating that Claimant was subject to the offset provision in Section 48(1).

DECISION: The Circuit Court affirmed the MCAC decision. Claimant is entitled to unemployment benefits for the period from September 30, 2010 and August 16, 2011, but is subject to the loss of remuneration provision between August 25, 2010 and September 30, 2010.

RATIONALE: Here, the Circuit Court merely took a supervisory role to review the MCAC decision. Section 48(1) provides that if remuneration is lost due to something other than the Employer’s failure to furnish full-time work, the person is not unemployed. The MCAC found Claimant to be on a leave of absence between August 25 and September 30, 2010, and thus subject to the offset provision, and the Circuit Court found that there was sufficient evidence to support this decision.

Digest author: Nick Phillips
Digest updated: 8/14

Lutz v Health/Tennis Corp of America – 10.112

Lutz v Health/Tennis Corp of America
Digest no. 10.112

Section 29(1)(a)

Cite as: Lutz v Health/Tennis Corp of America, unpublished opinion of the Employment Security Board of Review, issued July 29, 2011 (Docket No. B2010-18037-215694W).

Appeal pending: No
Claimant: Briana L. Lutz
Employer: Health/Tennis Corporation of America, Inc.
Docket no.:  B2010-18037-215694W
Date of decision: July 29, 2011

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HOLDING: Under Section 29(1)(a), a claimant will not be disqualified from receiving unemployment benefits when she leaves unsuitable employment within 60 days after the beginning of that work, as long as she has a benefit year in effect at the time she leaves the unsuitable employment.

FACTS:  Claimant voluntarily quit unsuitable part-time employment after 45 days of work. Claimant had a benefit year in effect at the time. ALJ found that Claimant was not eligible for benefits under Section 29(1)(a)(i) because Claimant did not have a benefit year in effect when she began the employment. Claimant appealed to the Board of Review.

DECISION: ALJ decision is reversed. Claimant is not disqualified for benefits under Section 29(1)(a)(i).

RATIONALE:  The Board of Review reversed the ALJ decision on the grounds that Section 29(1)(a)(i) merely requires a claimant to have a benefit year in effect when he or she leaves employment within 60 days of starting the employment. Contrary to the ALJ’s decision, nothing in the statute or the case law suggest that Claimant must have a benefit year in effect when he or she starts employment.

In his concurring opinion, Board Member Neal A. Young states that the Claimant took advantage of this exception since the burden of showing “unsuitable” employment is much easier to meet then showing “good cause attributable to the employer”. Young is concerned that this poses an inequitable burden on the hiring employer.  Young notes, however, that the Employer still has the option of requesting a redetermination under Section 29(3)(h) where the Employer could assert that the Claimant, while not disqualified, left work under “disqualifying circumstances” (i.e. without good cause attributable to the employer). In such cases, the UIA will transfer the charges for the Claimant’s benefit from the Employer’s account to the nonchargeable benefits account.

Digest Author: Chris Kang
Digest Student-Editor: Nick Phillips
Digest Updated: 8/14

Allen v. Agra Industries Insurance – 11.07

Allen v. Agra Industries Insurance
Digest no. 11.07

Sections 29(1)(a), 29(5)

Cite as: Allen v. Agra Industries Ins, 2009 BR 203891W (B2009-00698-RO1).

Appeal pending: No
Claimant: John V. Allen
Employer: Agra Industries Insurance
Docket no.: B 2009-00698-RO1-203891W
Date of decision: July 20, 2011

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HOLDING: Section 29(5) applies to preclude Claimant from being disqualified from benefits under Section 29(1)(a) even when the claimant voluntarily left “a Michigan job to accept work in another state” or “an out-of-state job to accept work in Michigan.”

FACTS:  Claimant lived in Gaastra, Michigan. On March 24, 2008, Claimant obtained a job with the Employer in Merrill, Wisconsin. The distance between two cities is approximately 100 miles. To ease the burden of the long commute, Claimant decided to maintain two households– keeping his home in Gaastra, while also renting an apartment in Merrill. Because of the financial burden of maintaining two households, Claimant sought employment closer to his home in Gaastra. Claimant eventually secured a new job in Kingsford, Michigan, and he resigned from the Employer’s job on September 22, 2008. Claimant was laid off from his new job after only 39 days. Claimant filed for unemployment benefits, but the UIA determined that Claimant is disqualified for benefits under Section 29(1)(a). Referee affirmed UIA’s determination. Claimant appealed to the Board of Review.

DECISION: The Board of Review reversed the Referee’s decision. The Claimant is not disqualified for benefits under Section 29(1)(a) because he satisfied the leaving to accept provision of Section 29(5).

RATIONALE: In Merren v. Employment Security Commission, 380 Mich. 240, 156 N.W.2d 524 (1968), the Michigan Supreme Court affirmed the appeal board’s decision to deny benefits to a claimant who quit a job with a Michigan employer to take a job with a Florida employer. The Michigan Court of Appeals subsequently upheld Merren in Roman Cleanser Company v. Murphy, 29 Mich. App. 155 (1970) when it denied benefits to a claimant who quit a job with a Michigan employer to take a job with a Kentucky employer. Both courts were concerned that Michigan employers will be unfairly penalized if they were forced to assume “the entire burden of having charged to its rating account the entire amount of benefits so paid to the [claimant]…” without any contribution from the out-of-state employers. Merren at 246. Relying on the above case law, the Referee below affirmed the UIA’s determination denying Claimant’s benefit.

The policy concerns expressed in the above case law, however, are now mooted by the 1972 amendments to the Federal Unemployment Tax Act (FUTA), 26 USC §3301 et seq., and the resulting Federal Regulations governing Interstate Arrangements for Combining Employment and Wages, 20 CFR 616.1 et seq. The FUTA and the resulting regulations now not only permit, but require the states to utilize its provisions to “collect” funds from out-of-state employers. Considering the lack of policy concern and the legislative intent behind the MES Act, the Board of Review holds that Section 29(5) of the Act should apply when even is the claimant had voluntarily left “a Michigan job to accept work in another state” or “an out-of-state job to accept work in Michigan.”

Digest Author:  Chris Kang
Digest Student-Editor: Nick Phillips
Digest Updated: 8/14