UIA v. Tear – 3.09

UIA v. Tear
Digest No. 3.09

Section 421.46

Cite as: Unemployment Insurance Agency v Tear, unpublished opinion of the State of Michigan Court of Appeals, issued December 10, 2015 (Docket No. 13-001038-AE).

Appeal pending: No
Claimant: Rachel Tear
Employer: N/A
Date of decision: December 10, 2015

View/download the full decision

HOLDING: Claimant is ineligible for unemployment benefits under MCL 421.46. The Circuit Court’s decision affirming that Claimant is eligible for unemployment benefits is reversed. The case is remanded for the entry of the order upholding the Agency’s denial of Claimant’s claim for benefits.

FACTS: Claimant was discharged from her job and subsequently filed a claim for unemployment benefits. The Unemployment Insurance Agency (“Agency”) denied her claim and found that she could not establish a benefit year under MCL 421.46. At the administrative law hearing, the ALJ reversed the Agency’s finding and found that a benefit year had been established because “Claimant’s high quarter wages were $2,883.00.”

DECISION: The ALJ’s finding that Claimant was paid $2,883.00 in a completed quarter is not supported by substantial and competent evidence. The Circuit Court’s conclusion that Claimant was paid more than $2,871.00 in a completed quarter is clearly erroneous.

RATIONALE: The court referred to the definition of “benefit year” in MCL 421.46(c), the definition of a “base period” in MCL 421.45, and the definition of “calendar quarter” in MCL 421.47 to determine Claimant’s eligibility for unemployment benefits.

Under those provisions, Claimant was required to have been paid at least $2,871.00 in at least one completed calendar quarter in the first four of the last five completed calendar quarters before filing her claim. Claimant would need to meet that requirement to establish a benefit year. In this case, Claimant only made $1,958.30 for the entire calendar year.

Although MCL 421.45 provides an alternative base period if a claimant cannot meet the above requirement, Claimant in this case still did not earn enough to establish a base period under MCL 421.45.

Digest author: Rita Samaan, Michigan Law, Class of 2017
Digest updated: 10/31/2017

 

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Cite as: Newman v River Rouge Schools, unpublished opinion of the Court of Appeals, issued July 24, 2014 (Docket No. 314033).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

View/download the full decision

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

Myllylahti v. Full Force Diamond Drilling – 10.109

Myllylahti v. Full Force Diamond Drilling
Digest No. 10.109

Section 421.29(1)(a)

Cite as: Myllylahti v Full Force Diamond Drilling, unpublished opinion of the Ontonagon County Circuit Court, issued February 9, 2010 (Docket No. 09-71 AE).

Appeal pending: No
Claimant: Robert J. Myllylahti
Employer: Full Force Diamond Drilling USA, Inc.
Date of decision: February 9, 2010

View/download the full decision

HOLDING: Where the working conditions imposed on a claimant by the employer are mentally and physically challenging enough to cause a reasonable, average or otherwise qualified worker to give up his employment, the claimant’s leaving was with good cause attributable to the employer.   

FACTS: Claimant began working for the employer on October 1, 2008 as a driller’s assistant working 13 hours per day, seven days per week. Claimant’s last day of work was October 22, 2008, when Claimant quit without prior notice to employer in the middle of his shift. Claimant indicated that the work was too hard and he could no longer do it. However, Claimant did not notify his employer of any work-related problems prior to quitting.

DECISION: The ALJ found that Claimant was disqualified for benefits. The MCAC affirmed. The Circuit Court reversed. Claimant is not disqualified for benefits.  

RATIONALE: To determine whether an employee left employment due to good cause attributable to the employer, the reasonable person standard is applied. “Under that standard, ‘good cause’ compelling an employee to terminate his or her employment should be found where the employer’s actions would cause a reasonable, average, or otherwise qualified worker to give up his or her employment.” Carswell v Share House, Inc, 151 Mich App 392, 396-397 (1986). The cumulative effect of 13 hours of heavy manual labor every day for twenty-two days straight, both mentally and physically, on a reasonable, average or otherwise qualified worker is born out by the record. Claimant’s physical inability to continue to do the job demanded of him by the employer, under working conditions imposed by the employer, would cause a reasonable, average or otherwise qualified worker to give up his employment, as well. This constitutes good cause attributable to the employer and not a personal reason attributable to claimant.

Digest author: Cydney Warburton, Michigan Law, Class of 2017
Digest updated: 10/31/2017

Physicians Health Plan of Mid Michigan v. Chapman – 12.149

Physicians Health Plan of Mid Michigan v. Chapman
Digest No. 12.149

Section 421.29(1)(b)

Cite as: Physicians Health Plan v Chapman, unpublished opinion of the Ingham County Circuit Court, issued December 16, 2008 (Docket No. 08-628-AE).

Appeal pending: No
Claimant: Shanika Chapman
Employer: Physicians Health Plan of Mid Michigan
Date of decision: December 16, 2008

View/download the full decision

HOLDING: It is misconduct as a matter of law when an insurance company employee committs insurance fraud in violation of her employer’s human resources manual.

FACTS: Claimant worked in customer service for the employer insurance company; her job duties included assessing claims and administering customers’ financial obligations. Claimant was fired after she revealed to her employer that she committed criminal fraud by filing a false claim against her car insurance company.

At the ALJ hearing, the employer cited its H.R. policy manual as permitting employee firings for criminal activity, which could harm the employer’s public image. But, the ALJ decided Claimant was still not disqualified from receiving benefits for misconduct. The Board of Review affirmed, citing the mandate to interpret the meaning of misconduct narrowly to avoid disqualification.

DECISION: Reversed. The Circuit Court determined that claimant’s conduct constituted misconduct connected with her work, disqualifying her from benefits.

RATIONALE: The Circuit Court surveyed various cases regarding whether off-duty conduct may be sufficiently connected to a claimant’s work to constitute misconduct. Ultimately, it concluded that, as a matter of law, the filing of a false insurance claim constituted a wanton disregard of the employer’s interests and standards of behavior. This behavior clouded Claimant’s ability to fulfill her job duties, particularly given her unique financial responsibilities; sufficiently involved the employer’s interests; and adversely affected the employer’s behavioral expectations of employees.

Digest author: Austin L. Webbert, Michigan Law, Class of 2017
Digest updated: 10-31-2017

Elliott’s Amusements, LLC v. Garrison – 17.23

Elliott’s Amusements, LLC v. Garrison
Digest No. 17.23

Section 421.44

Cite as: Elliott’s Amusements, LLC v Garrison, unpublished opinion of the Ingham County Circuit Court, issued October 1, 2007 (Docket No. 07-251-AE).

Appeal pending: No
Claimant: Ronald L. Garrison
Employer: Elliott’s Amusements, LLC
Date of decision: October 1, 2007

View/download the full decision

HOLDING: Certain per diem payments made by the employer to the claimant were remuneration when not for the “convenience of the employer” and the claimant had the ability to choose how to spend the money.

FACTS: The ALJ decided that per diem amounts the employer paid to the claimant were remuneration under Section 44(1). The Board of Review affirmed and incorporated the ALJ’s decision. As the Board explained, the claimant worked six months per year for the employer, while also living in the employer’s trailer and paying rent and food money. The claimant received a per diem payment from the employer, plus reimbursements for some expenses. Citing Seligman v MESC, 164 Mich App 507 (1988) as controlling, the Board endorsed the ALJ’s view that the per diem payments amounted to wages because the employer did not require the claimant to live at the work site, the lodging was not free, and the claimant’s use of the per diem payments were not controlled by the employer.  The claimant choice to use the employer-provided lodging was based on his own convenience, distinguishing his situation from the mandatory on-site lodging provided for the “convenience of the employer” in Seligman.

DECISION: The court upheld the determination that certain per diem payments made by the employer to the claimant were remuneration.

RATIONALE: Per diem payments for on-site lodging and food are considered remuneration if the employer did not control the claimant’s use of the per diem monies and the claimant could have spent the money in other ways.

Digest author: Austin L. Webbert, Michigan Law, Class of 2017
Digest updated: 10/25/2017

 

Jones v. Pinconning Area Schools – 10.103

Jones v. Pinconning Area Schools
Digest No. 10.103

Section 421.29(1)(a)

Cite as: Jones v Pinconning Area Schools, unpublished opinion of the Bay County Circuit Court, issued April 5, 2007 (Docket No. 187403W).

Appeal pending: No
Claimant: Terese G. Jones
Employer: Pinconning Area Schools
Date of decision: April 5, 2007

View/download the full decision

HOLDING: A claimant’s decision to voluntarily leave her job following a unilateral change in her employment agreement is with good cause attributable to her employer if the claimant notifies her employer about her concerns regarding the change in her employment agreement and gives her employer the opportunity to correct her concerns prior to her resignation.  

FACTS: Claimant began work for Pinconning Area Schools on August 1, 2005 after responding to a job posting that advertised an “initial two-year contract annually renewed for future years”. Claimant was provided with a “proposed” employment contract on the first day of her employment that contained a 30 day “at-will” provision. Claimant found this objectionable since it was contrary to the two-year contract that the job posting had promised. Claimant raised these concerns with her employer and was told that they did not wish to change the contract. A second proposed contract was given to Claimant, which Claimant signed on August 10, 2005. On August 11, 2005, Claimant tendered her resignation. The ALJ found that Claimant was disqualified from receiving benefits. The MCAC reversed, finding Claimant was not disqualified.   

DECISION: The Circuit Court affirmed the decision of the MCAC. Claimant is not disqualified from receiving benefits.

RATIONALE: The employer unilaterally changed the terms of Claimant’s employment because the employer’s only offer had been set forth in its job posting, and Claimant’s acceptance of the position was predicated by the terms that were set forth in the posting.

Material changes in an employment contract may constitute good cause for quitting if: (1) a claimant provides the employer with notice and an opportunity to correct the claimant’s concerns; (2) the employer fails to correct these concerns; and (3) the claimant’s concerns are reasonable. Here, it was reasonable for Claimant to be concerned about the unilateral change in her employment contract. Additionally, Claimant did provide employer with notice of her concerns and gave the employer an opportunity to correct her concerns prior to her resignation.

Digest author: Cydney Warburton, Michigan Law, Class of 2017
Digest updated: 10/31/2017

 

Wolverine Transportation & Storage v. Downey – 17.27

Wolverine Transportation & Storage v. Downey
Digest No. 17.27

Section 421.42

Cite as: Wolverine Transportation & Storage, Inc v Downey, unpublished opinion of the Macomb County Circuit Court, issued March 23, 2007 (Case No. 2006-4021-AE). 

Appeal pending: No
Claimant: Edward Downey
Employer: Wolverine Transportation and Storage, Inc.
Date of decision: March 23, 2007

View/download the full decision

HOLDING: The “economic reality” test set forth in McKissic v Bodine, 42 Mich App 203, 208-209; 201 NW2d 333 (1972) (Digest No. 20.04), determines whether a party is an independent contractor or an employee. The court held that Claimant was an employee under the “economic reality” test and, therefore, eligible for benefits.

FACTS: Claimant transported cars to auctions for Wolverine Transportation and Storage, Inc. (“Wolverine”). He was not working for anyone else while performing services for Wolverine.

Claimant had to abide by specific rules set by Wolverine for transporting services. Claimant testified at the ALJ hearing that he signed an independent contractor agreement with Wolverine. Claimant’s services for Wolverine ended when his manager informed him he would not get work for a week. Claimant felt he was being forced out due to work being slow. 

DECISION: Board of Review’s decision finding Claimant not disqualified from receiving benefits is affirmed. 

RATIONALE: Although the parties agreed that they signed an agreement stating Claimant was an independent contractor, labels given in a contract are not dispositive of whether a person is an independent contractor or employee. See Lincoln v Fairfield-Nobel Co, 76 Mich App 514, 520;(1977) (holding that “[t]he manner in which the parties designate the relationship is not controlling”.)

Claimant was an employee, not an independent contractor, under the economic reality test. Transporting cars was Wolverine’s only business, and Claimant was engaged in transporting cars for Wolverine. Claimant also worked full-time for Wolverine and did not work for anyone else during this time, or make himself available to the public as a transport driver.

Moreover, Claimant’s services are considered employment because Wolverine exercised sufficient control over him. Capital Carpet Cleaning and Dye Co, Inc v Employment Sec Com’n, 143 Mich App 287, 292;(1985); See, also, Foster v Michigan Employment Security Comm’n, 15 Mich App 96, 107 (1968) (”[C]ontrol or direction in performance can be implicit if the nature of the business is such that all the control the employer needs and desires to exercise can be effected by establishing a certain pattern of operation and engaging persons to participate therein knowing that if they respond normally they will conform to the established, workable and profitable pattern.”).

Digest author: Rita Samaan, Michigan Law, Class of 2017
Digest updated: 10/31/2017