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Logan v. Manpower of Lansing, INC.

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Logan v. Manpower of Lansing, INC.

Section 29

Cite as: Logan v. Manpower of Lansing, INC., 874 N.W.2d 679 (Mich.App. 2014) (Docket No. 311167)

Appeal Pending: No

Claimant: Janice Logan

Employer: Manpower of Lansing, INC.

Docket no.: 311167

Date of decision: March 13, 2014

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Holding: The Court of Appeals held that claimant voluntarily left work without good cause attributable to the employer when she quit her employment at a temporary staffing agency to take part-time employment after being on medical leave.

Facts: Claimant began working for a temporary staffing agency, Manpower of Lansing, Inc. (“Manpower”) in April 2008. She was assigned to work part-time at Pennfield Animal Hospital (“Pennfield”). Claimant went on medical leave in August 2008. When claimant was ready to return to work in October 2008, she began working for Pennfield as a direct hire. The ALJ ruled that claimant was disqualified for benefits under MCL 421.29(1)(a) because “she abandoned her job with Manpower and took a part-time job with the client company.”

On appeal claimant asserted that she left Manpower to accept full-time work, which would implicate the exception in MCL 421.29(5) to the rule in MCL 421.29(1), which disqualifies a person from receiving benefits for voluntarily leaving work. On remand, the ALJ found that claimant quit her job with Manpower in order to accept permanent, part-time employment with Pennfield. The Calhoun Circuit Court affirmed.

Decision: The Court of Appeals affirmed the decision on the Circuit Court.

Rationale: The Court of Appeals found that “the statute [MCL 421.29(1)(a)] does not refer to work that is unconnected to the employer; instead, the work is linked to a particular employer unit or employing unit, and when the relationship with that particular employer or employing unit ends, the work at issues necessarily also ends.”

Additionally, the court declined “claimant’s invitation to view a temporary-staffing firm and its client as a ‘joint employer’ or a single ‘employing unit,’” because claimant could not show “how Manpower was an agent (or employee) of Pennfield or vice versa.”

Digest author: James C. Robinson

Digest updated: 2/15

Team Member Subsidiary v UIA – 2.26

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Team Member Subsidiary v UIA
Digest no. 2.26

Sections 22, 41

Cite as: Team Member Subsidiary v UIA, Unpublished Opinion of the Livingston County Circuit Court, Issued June 18, 2009 (Docket No. 08-23981-AV).

Appeal pending: No
Claimant: N/A
Employer: Team Member Subsidiary, LLC
Docket no.: L2007-00026-2971
Date of decision: June 18, 2009

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HOLDING: An employee leasing company will not be liable for unemployment tax purposes under Section 41 when it is a “captive employer” for purposes of Rule 190.

FACTS: Appellant was formed to provide human resources to and manage and report the payroll payments of Kitchen Suppliers, Inc. (KSI) as a business tax strategy. Pursuant to this strategy, it sought to be considered an Employee Leasing Company (ELC) which would only service KSI. The UIA determined that it did not meet the criteria to be a liable ELC under either its administrative rules or Section 41, and it would therefore not be recognized as an employer for unemployment purposes. Both the ALJ and the Board agreed with the UIA and determined that Appellant was a “captive employer” for the purposes of Rule 190, and was therefore not liable for unemployment taxes purposes.  After being denied a rehearing by the Board, Appellant appealed to the Circuit Court.

DECISION: The Circuit Court affirmed the decision of the Board of Review; Appellant is considered a “captive employer” under Rule 190 and therefore not an employer under Section 41 for unemployment tax purposes.

RATIONALE: Both parties agree that there was a “transfer of business” pursuant to 421.22(c), and therefore Appellant is an employer pursuant to 421.41(2)(b), which defines an employer as “[a]ny individual, legal entity, or employing unit described as a transferee in section 22(c).” According to the Court of Appeals, the evil that 421.41 “sought to combat… [is] to prevent the sliding scale employer contribution rate from being defeated by paper reorganizations which, in fact, change nothing.”

Appellant has stipulated that it is a “captive provider,” defined by Rule 190(1)(a) as an ELC “which limits itself to providing services and employees to only 1 client entity and… which does not hold itself out as available to provide leasing services to other client entities that do not share an ownership relationship with the employee leasing company.”  Further, an “employer” under section 41 is “responsible to pay unemployment taxes on the employees leased to the other entity” only if several conditions are met.  Appellant failed to meet conditions 2(d) and (f), which provide that there could be no more than 20% ownership between the ELC and the client entity, and that the ELC could not be a “captive employer.”

Notably, the Court was reluctant to affirm the Board, noting that the Appellant was relying on prior guidance by the UIA, and was not seeking to lower its unemployment tax rating, but only keep the tax rate that the former employer had paid.  The Court strongly hints that it would have decided the case differently if it was not bound to respect the decision of the ALJ.

Digest author: Nick Phillips
Digest updated: 8/14

Szypa v. Kasler Electric Company – 16.07

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Szypa v Kasler Electric Company
Digest no. 16.07

Sections 33 & 34

Cite as: Szypa v. Kasler Electric Company, 136 Mich. App. 116 (1984).

Appeal pending: No
Date of decision: July 9, 1984
Court: Court of Appeals of Michigan

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COURT OF APPEALS HOLDING: Where the notice of hearing limits itself to an issue, where neither party requests an adjournment for further development of additional issues, where the Board of Review does not remand for the taking of further testimony on such additional issues and, where a knowing and informed waiver of an adjournment of the referee hearing was not obtained from the parties, the decision of the referee must be limited to the issue contained in the notice of hearing.

FACTS: The Referee limited his decision to the issue contained in the notice of hearing which was voluntary leaving. Employer attempted to introduce evidence of claimant’s misconduct. Employer appealed to the Board of Review. The appeal did not mention the misconduct discharge issue. The Board of Review decided that claimant was discharged for misconduct connected with work. The Circuit Court reversed the Board of Review because the decision was based upon an issue not properly before the Board.

DECISION: The Referee’s decision was appropriate based upon the admissible evidence presented; and the decision of the Circuit Court reversing the Board of Review was correct.

RATIONALE: ” … if the notice of hearing does not place the parties on notice of an issue which is raised at the referee hearing the hearing shall either be adjourned for a reasonable time if requested by either party, or in any event, evidence shall not be taken on the issue nor a decision be made thereon unless a knowing and informed waiver of adjournment is obtained from the parties.

“The employer and the referee had the opportunity to adjourn the hearing to allow the employee to gather rebuttal evidence on the misconduct issue and they failed to do so. The Board had the authority to remand the case for further testimony and it failed to do so. The employee had the right to assume that the only issue before the referee was whether he had voluntarily quit … ”

EDITORS NOTE: Also see Rule 1410 of MCAC/MAHS Rules of Practice (R. 792.11410) which has been revised since Szypa. (SG – 06/16)

Digest Author: Board of Review (original digest here)
Digest Updated: 11/91

Sanders v MESC – 18.12

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Sanders v MESC
Digest no. 18.12

Section 62(b)

Cite as: Sanders v MESC, Wayne Circuit Court No. 287-132 (April 30, 1957).

Appeal pending: No
Claimant: Early Sanders
Employer: Chrysler Corporation
Docket no.: B56-769-18197
Date of decision: April 30, 1957

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CIRCUIT COURT HOLDING: The burden of establishing fraud by competent evidence rests with the MESC.

FACTS: The claimant received a telegram on Thursday to return to work that same day. Also that day he reported to an office of the Commission and obtained a benefit check for the previous week. The following week he again reported to the Commission and certified for benefits for the prior week despite having returned to work for part of that week.

DECISION: The finding of claimant fraud was upheld.

RATIONALE: The Commission’s agent testified the claimant was asked about his earnings in the week in question. She said she did not require the claimant to fill in the day of the week and it is conceivable that had she so required, the claimant would have changed his entries. But that is conjecture. The fact remains that the dates the claimant entered were wrong and that he had returned to work on the day he had received his previous benefit check.

The burden should be upon the Commission to establish that fraud was committed, and fraud should not be presumed but established by competent proof that persuades one that a proper inference may be drawn. For it must be conceded that the Commission could not be expected to secure an admission by a claimant that he had committed a fraud. So, to prove an intent to defraud an inference must be drawn from the facts themselves.

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

Section 18(d)(2)

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Section 18(d)(2)

“If at least 1 but fewer than all of the applicable quarterly reports of wages and contributions due with respect to the 12-month period ending on the computation date have been filed by an employer, the employer’s experience component shall be set so that his or her contribution rate for the calendar year affected shall be the rate set in accordance with section 19(a), and in addition a penalty of 3% of wages paid to an individual with respect to employment, subject to the taxable wage limit, shall be imposed on the employer. The commission shall calculate the rate using the information filed by the employer for the quarter or quarters reported. If none of the applicable quarterly reports of wages and contributions due with respect to the 12-month period ending on the computation date have been filed by an employer, the employer’s experience component shall be set so that the employer’s contribution rate for the calendar year affected shall be not less than the highest rate applicable to the number of years of the employer’s contribution liability in accordance with section 19(a), and in addition a penalty of 3% of wages paid to an individual with respect to employment, subject to the taxable wage limit, shall be imposed on the employer. An employer whose contribution rate and penalty have been determined under this section may have his or her contribution rate redetermined in accordance with section 19(a) and may have his or her penalty redetermined and removed if the employer files all of the missing reports not later than 30 days after the date of mailing of the notice of determination of contribution rate. An employer who files all of the missing reports after the 30 days but not later than 1 year after the date of mailing of the determination of contribution rate and penalty shall have his or her contribution rate redetermined in accordance with section 19(a) and shall have his or her penalty redetermined to 2%. However, if the commission finds that the employer had good cause for filing the missing reports after the 30-day period but within 1 year, the commission shall redetermine the employer’s contribution rate in accordance with section 19(a) and shall redetermine and remove the penalty. The commission may by rule prescribe good cause reasons for removing the penalty. Notwithstanding section 32a, if the employer files all of the missing reports after 1 year, good cause shall not be considered, but the employer’s contribution rate shall be redetermined in accordance with section 19(a) and the employer’s penalty shall remain at 3%. A penalty paid by an employer pursuant to this section shall not be credited to the employer’s experience account nor to the unemployment compensation fund. The penalty shall be credited to the interest and penalty account of the contingent fund. A contribution rate for a tax year may not be redetermined under this subsection if the missing reports for that year are received more than 3 years after the rate determination for the year is issued with respect to taxable years beginning on or after January 1, 1991.” from Michigan Legislature

Other Section 18(d)(2) cases