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Cite as: Newman v River Rouge Schools, unpublished opinion of the Court of Appeals, issued July 24, 2014 (Docket No. 314033).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

Vanderlaan v Tri-County Community Hospital – 4.25

Vanderlaan v Tri-County Community Hospital
Digest no. 4.25

Section 48(2)

Cite as: Vanderlaan v Tri-County Community Hosp, 209 Mich App 328 (1995).

Appeal pending: No
Claimant: James Vanderlaan
Employer: Tri-County Community Hospital
Docket no.: B91-00104-117753
Date of decision: March 20, 1995

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COURT OF APPEALS HOLDING: The MES Act does not require a contractual right to notice or payment in lieu of notice in order for monies received to be considered “amounts paid… in lieu of notice” thus rendering claimant ineligible for benefits.

FACTS: Claimant was discharged on June 14, 1990. Employee handbook provided that employer would give four weeks’ notice to terminate, but could instead, pay four weeks’ salary instead of notice. Claimant continued to receive regular pay checks for six weeks after he stopped working. The first four weeks were considered salary instead of notice by the employer and the last two were severance pay. The issue in this case was whether the four weeks pay were in lieu of notice and, therefore, remuneration. If so, claimant was not entitled to unemployment compensation for those weeks.

DECISION: Claimant received four weeks pay in lieu of notice (remuneration) following his termination and is ineligible for benefits.

RATIONALE: It is not necessary to prove a contractual right to notice in order to show pay in lieu of notice. The rules of statutory construction should be applied to give every word and phrase of Section 48(2) its plain and ordinary meaning. Contractual right is only one factor which may be considered in deciding whether or not claimant received remuneration. Other factors are employer’s custom or policy and employee’s expectation of payment.

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