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Cite as: Newman v River Rouge Schools, unpublished opinion of the Court of Appeals, issued July 24, 2014 (Docket No. 314033).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

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 Oct. 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

Ford Motor Co v Schmidt – 4.34

Ford Motor Co v Schmidt
Digest no. 4.34

Sections 27(b), 27(c)(3), 48(2)

Cite as: Ford Motor Co v Schmidt, unpublished opinion of the Monroe  County Circuit Court, issued May 19, 2009 (Docket No. 08-26479-AE).

Appeal pending: No
Claimant: Mark A. Schmidt
Employer: Ford Motor Company
Docket no.: 08-26479-AE
Date of decision: May 7, 2009

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HOLDING: When a claimant receives payment from the employer under a separation agreement, the claimant shall not be entitled to unemployment benefits if said payment amount exceeds 1.5 times the claimant’s weekly benefit amount.

FACTS: After approximately ten years of employment, Claimant agreed to termination as part of a “special termination of employment” program (STEP). Under the STEP agreement, Employer provided the Claimant with $100,000, distributed over twenty-three months. As part of the program, Claimant also agreed to release any and all rights of claims against the Employer.

After being laid off by a subsequent employer, Claimant filed for benefits. UIA found the Claimant ineligible for benefits, but ALJ reversed. The Board of Review held that, because the Employer paid the Claimant only during the first week of each month, Claimant is entitled to unemployment benefits for the remaining weeks of each month.  Employer appealed the decision.

DECISION: Board of Review’s decision is reversed, and the redetermination of the UIA is affirmed. Claimant’s income by way of the STEP agreement payments exceeds the maximum weekly amount entitling Claimant to receive unemployment benefits.

RATIONALE: Section 27(c)(3) provides that (1) a claimant who receives partial remuneration may not receive total benefits and earnings exceeding 1.5 times of the claimant’s weekly benefit amount; and (2) claimant’s benefit shall be reduce by $1 for each dollar of total benefits and earnings that exceed 1.5 times the individual’s weekly benefit amount. Where a termination agreement does not provide for specific pay periods, Section 48(2) provides that the period designated by the employer shall control. The STEP program did not provide for a specific allocation period of payments; rather, the employer provided only a general overall allocation period of 23 months. The court divided the total of the severance package by the number of weeks in 23 months and calculated that claimant received $1004 per week. This was more than 2.5 times the maximum weekly unemployment benefit amount authorized under Section 27(b)(1). Therefore, during this period of time, Claimant is not entitled to unemployment benefits.

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

Palmer-Sheffield v Northwest Airlines, Inc – 4.37

Palmer-Sheffield v Northwest Airlines
Digest no. 4.37

Section 48

Cite as: Palmer-Sheffield v Northwest Airlines, Inc, Unpublished Opinion of the Oakland County Circuit Court, Issued Dec. 13, 2005 (Docket No. 2004-065674-AE).

Appeal pending: No
Claimant: Remonda D. Palmer-Sheffield
Employer: Northwest Airlines, Inc.
Docket no.: 178151WH
Date of decision: December 13, 2005

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HOLDING: An employee cannot be denied benefits for going on voluntary leave when the voluntary leave is a disguised layoff due to lack of work.

FACTS: Claimant Palmer-Sheffield took voluntary leave from her employer, Northwest Airlines, in 2001 pursuant to a program that granted senior flight attendants leave in order to give junior flight attendants the opportunity to work. In 2001, the program stipulated that Northwest Airlines would not contest unemployment. The program was again offered in 2004, and appellant signed up, believing that employment would again not be contested, but Northwest Airlines had provided that it would contest unemployment. An ALJ hearing resulted in Claimant being denied benefits; Claimant submitted an Application for Rehearing, which was denied by the Board of Review. Claimant appealed to the Circuit Court.

DECISION: The Circuit Court reversed the Order Denying Application for Rehearing by the Board of Review.

RATIONALE: Pursuant to Section 48, “an individual shall neither be considered not unemployed nor on a leave of absence solely because the individual elects to be laid off, pursuant to an option provided under a collective bargaining agreement or written employer plan which permits such election, when there is a temporary layoff because of lack of work, and the employer has consented thereto.” The Court found that the appellant fit squarely into this definition, which was her argument that had been adopted from a dissenting opinion on the Board of Review.

Digest Author: Nick Phillips
Digest Updated: 8/14

Motycka v General Motors Corp – 4.32

Motycka v General Motors Corp
Digest no. 4.32

Section 48

Cite as: Motycka v General Motors Corp, 257 Mich App 578 (2003).

Appeal pending: No
Claimant: Marvin Motycka, et al.
Employer: General Motors Corporation
Docket no.: MUL1999-78153-RM1-155516W
Date of decision: July 17, 2003

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COURT OF APPEALS HOLDING: The phrase “leave of absence” as used in Section 48(3) denotes an authorized temporary release from work.

FACTS: Claimants were on a ‘pre-retirement leave’ for a two-year period as articulated in their collective bargaining agreement due to their plant closing. During the ‘pre-retirement leave,’ the claimants received 85% of their wages, retained health benefits, and accrued service credit towards retirement. At the conclusion of the two-year period, the claimants were required to retire.

DECISION: The claimants were not on a leave absence and were “unemployed.”

RATIONALE: “In American Telephone Co v ESC, 376 Mich 271, 279 (1965), our Supreme Court held that the normally accepted meaning of leave of absence was a temporary authorized release from work. GM suggests that American Telephone, supra, is distinguishable from the instant case because it construes a former section of the MES Act dealing with pregnancy leaves that has since been rescinded. However, GM fails to recognize that the Supreme Court reaffirmed the concept that a leave of absence is a temporary release from work in ESC v Vulcan Forging Co, 375 Mich 374, 379 (1965).” Motycka, at 583. The Court in Vulcan,supra, further held that a “leave of absence” is an “authorized temporary release from work for other an vacation purposes.”Motycka, at 583 quoting Vulcan, supra at 379.

Digest Author: Board of Review (original digest here)
Digest Updated:
11/04

Jackson v. General Motors Corp – 4.31

Jackson v. General Motors Corp
Digest no. 4.31

Sections 44, 48

Cite as: Jackson v General Motors Corp, Wayne Circuit Court, No. 01-119168-AE (July 8, 2002), lv den No. 242842 (Mich App January 13, 2003).

Appeal pending: No
Claimant: Willie Jackson, Jr., et al.
Employer: General Motors Corporation
Docket no.: MUL1999-57622 et al 154957
Date of decision: July 8, 2002

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CIRCUIT COURT HOLDING: Where the source of a one-time payment is a strike resolution agreement, absent which there was no expectation of receiving monies for the relevant period, the payments are bonuses, not wages, and are excluded from “remuneration” under Section 48(2).

FACTS: In August 1998 employees received special payments for the lay-off period of June 28, 1998 through July 3, 1998. Employer paid the monies as part of a strike settlement and attempted to allocate the monies to that period of time. The payments were to compensate employees laid off due to interruption in the flow of parts caused by the labor dispute at the struck facilities.

DECISION: Claimants are eligible for unemployment benefits for the lay-off period.

RATIONALE: Section 44 defines “remuneration” under the MES Act. Section 48(2) has a narrower scope, and addresses how to treat “lost remuneration,” i.e. remuneration that falls outside the course of ordinary pay. Under Section 48(2), bonuses do not qualify as remuneration. The court found the one-time payments were bonuses, not wages, as the source of entitlement was the agreement resolving the strike, and absent the agreement, the claimants had no expectation of receiving monies for the relevant period.

Section 44 speaks to remuneration in general. The court conceded the payments might appear to be “back pay.” However, the court decided that the specific language of Section 44 precluded such a finding in this case.

[NOTES: Section 48(2) was amended effective April 26, 2002, and no longer includes bonuses in its exclusions to remuneration. Section 44(1) was amended effective April 26, 2002, and now includes “back pay” as remuneration.]

Digest Author: Board of Review (original digest here)
Digest Updated:
11/04

Fletcher v Atrex Corp – 4.29

Fletcher v Atrex Corp
Digest no. 4.29

Sections 48, 44

Cite as: Fletcher v Atrex Corp, Macomb Circuit Court, No. 96-7137-AE (October 22, 1997).

Appeal pending: No
Claimants: Clare Fletcher
Employer: Color Custom Compounding, Inc., d/b/a Atrex Corporation
Docket no.: FSC 95-00061-136470W
Date of decision: October 22, 1997

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CIRCUIT COURT HOLDING: Where claimant spent her time performing services, though not paid for those services until after the fact, she was nonetheless employed and received remuneration.

FACTS: Claimant had a benefit year in effect in May 1992 when she began performing services for Universal Plastics. At that time, that employer was unable to offer her a paying job. Nonetheless, claimant continued to perform services until she was officially hired there August 1, 1992, at which time she informed the Agency that she was employed. After claimant was hired she was compensated retroactively for the services she performed between May and August 1992. When the Agency became aware of this a determination was issued holding claimant ineligible for the May – August period under Section 48.

DECISION: Claimant is ineligible for benefits for the period May 3, 1992, through July 11, 1992, under Section 48.

RATIONALE: Remuneration is compensation for personal services and is not limited by the statute as to when it is paid – it may be paid after the service is rendered and not in the form of an hourly or weekly rate. The substantial amounts claimant received in addition to her regular wages after she was hired were, in fact, remuneration for services rendered during the period in question.

Digest Author: Board of Review (original digest here)
Digest Updated:
7/99