STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF WASHTENAW. Plaintiff-Appellant, Defendants-Appellees.

Transcription

1 A. D. s. s. B. o. :: I':J No. No. do.j..-u4j PM~ 52 STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF WASHTENAW MICHIGAN EMPLOYMENT SECURITY COMMISSION, Plaintiff-Appellant, v. No AE GEORGE CLARK and YPSILANTI REGIONAL PSYCHIATRIC HOSPITAL, Defendants-Appellees. FRANK J. KELLEY, Attor~ey General of the State of Michigan By: PATRICIA L. SHERROD (P-26749) Assistant Attorney General Attorneys for Appellant, M.E.S. C. WILLIAM H. RIDLEY (P-27596) Attorney for Appellee, G. Clark YPSILANTI REGIONAL PSYCHIATRIC HOSPITAL Defendant-Appellee ~/ OPINION AND ORDER At a session of said Court, held in the Washtenaw County Courthouse, Ann Arbor, Michigan, on the 20th day of April, 1983~ PRESENT: HONORABLE HENRY T. CONLIU, CIRCUIT JUDGE. The Defendant-Appellee, George Clark, had been employed as a child care worker at ~he Ypsilanti Regional Psychiatric Hospital (YRPH) for about five years. During the last two years of this eoployment, he had returned to graduate school to complete a Master of Social Work degree. This necessitated -1-

2 reducing his status at Ypsilanti Regional Psychiatric Hospital to part-time so that he could concentrate on his studies. In January, 1981 Mr. Clark interviewed for a full time position as a medical social worker with the Allen Park Veterans Administration Medical Center. On January 21, 1981 he was offered this position, and he formally accepted it. On February 3, 1981 he completed a pre-employment physical examination and filled out health information and insurance forms at the request of his new employer. He was instructed to report to work at 8:00 a.m. on Monday, February 9, Mr. Clark had informed the Ypsilanti Regional Psychiatric Hospital personnel office that he had accepted full time employment with the Federal Government at the beginning of February, He asked that his resignation request be delayed because he knew that there was a federal hiring freeze in effect. However, since he had been told to report to work on February 9th, he submitted his resignation and worked his last shift at Yps ilanti Regional Psychiatric Hospital on Sunday, February 8, When he reported to the VA on Monday, he was told that there would be a delay in the start of his employment. He returned to Ypsilanti Regional Psychia tric Hospital and asked to continue his part-time employment. He was told that the state had also imposed a hiring freeze and that since he had submitted his resignation he would not be rehired. Mr. Clark had not missed any work at Ypsilanti Regional Psychiatric Hospital because of the nature of his -2-

3 part-time schedule. However, because his resignation had been entered into the state computer, he would have to be considered a "new hire" and was therefore subject to the state hii:ing freeze. The Defendant-Appellee applied for unemployment benefits on February 17, The Michigan Employment Security Commission determined that he was disqualified for benefits under Section 29(1)(a) of the Michigan Employment Security Act, ~.fcla 421.1ff; MSA 17.50lff. This decision was affirmed by Referee Lois H. Smith in a written opinion dated May 29, Th~ referee's decison was reversed by the Michigan Security Board of Review in a written decision dated August 31, The Michigan Employment Security Commission filed this appeal. When reviewing the determinations of an administrative tribunal an appellate court must review both the factual and legal basis for the decision reached. A separate standard of review i s used in each category. Factual determinations must be reviewed to find if the adninstrative tribunal's decision is supported by competant, material and substantial evidence on the record considered as a whole. Saber v. Capital Reproductions, Inc., 28 Mich App 462 (1970) A thorough and thought provoking discussion of the parameters of this standard of review can be found in MERC ~Detroit Symphony Orchestra, 393 Mich 116 (1974) in which our Supreme Court reviewed the record of the 1963 Constitutional Convention for direction on the precise meaning of the substantial evidence standard of -3-

4 review. The Court concluded its analysis with the following model to be used by reviewing courts= "The cross-fire of debate at the Constitutional Convention imports meaning to the 'substantial evidence' standard in Uichigan jurisprudence. What the drafters of the Constitution intended was a thorough judicial review of administrative decision, a review which considers the whole record -- not just those portions of the record supporting the findings of the administrative agency. Although such a review does not attain the status of de novo review, it necessarily entails a degree-of qualitative and quantitative evaluation of evidence considered by the agency. Such review must be undertak«?n with considerable sensitivity in order that the courts accord due deference to administrative expertise and not invade the province of exclusive administrative fact-finding by displacing an agency choice between two reasonably differing views. Cognizant of these concerns, the courts must walk the tightrope of duty which requires judges to provide the prescribed meaningful review." Practically and concisely put, this means that a reviewing court will not substitute its judgement of the facts f~r that of the fact finding tribunal but that a careful review of the whole record must be made on review. Cleaners, 25 Mich App 672, 675 (1970) Williams v. Arnold On factual questions, "'... the judicial function is finished when there is found to be a rational basis for the conclusions approved by the ad:r.~.inistrative body.'" Dynamic Manufacturers v. Employment Security Co'rnmission, 369 Mich 556, 560 (1963) quoting from Rochester Telephone Corp. ~United States, 307 US 125; 59 SCt 754; 83 LEd A careful scrutiny of the total record provided by the Employment Security Board Review in this case shows that there -4-

5 is factual support for the decision reached by the Board of Review. There is no dispute that hlr. Clark left a part-time job for full time employment or that this factual situation can provide the basis for an exemption from the disqualification provisions of Section 29 of the Empl0yment Security Act. The legal issue present a~ the adminis~rative level, as here, concerns the meaning of the phrase " performs services" found in Section 29(5) of the Employment Security Act. Does the record below provide a sufficient factual basis for the Board of Review to conclude that Mr. Clark had "provided services" for the Veterans Administration? I think that it does. First, Mr. Clark became active on the Federal Civil Service register in March, (April 8, 1981 hearing - p. 8) Second, Mr. Clark interviewed for the job on January 20, (April 8, 1981 hearing - p. 9) Third, Ur. Clark was offered and accepted full time employment on January 21, 1981, and this commitment remained open at the time of the hearing pending the end o! the federal hiring freeze. (April 8, 1981 hearing- p. 9-11) At all relevant times Mr. Clark remained available for and willing to work for the Veterans Administration. (April 8, 1981 hearing - p. 11) Forth, Mr. Clark through his counsel informed the Board of Review that he had reported for a pre-employment physical scheduled by the Veterans Administration on Tuesday, February 3, 1981 at which time he filed out health insurance forms as well as taking the physical examination. (April 8, 1981 hearing - Exhibit 12) Fifth, Mr. -5-

6 Clark reported for work on February 9, 1981 as required by the. Veterans Administration. (April 8, 1981 hearini- p. 11) Sixth, the Board of Review was aware that Mr. Clark did not start work on February 9, (April 8, 1981 hearing - p. 11, 26) Therefore, it is the finding of this Court that there is present in the record of this case a rational basis for the factual finding of the Board of Review. It remains to decide if there is a legal basis which sustains the decision of the Board of Review. The pa~ties are in agreement that Section 29(5) provides an exemption from the disqualification provisions found in Section 29(1) of the Employment Security Act. Section 29(5) reads in pertinent part: "If an individual leaves his work to accept permanent full-time work with another employer, and performs services for that employer... the disqualification provisions of subsection (1) shall not apply to that leaving. " Two criteria must be satisfied for this exemption to apply: There must be permanent full-time work, and the individual must perform services for that employer. There is no dispute here that the Veterans Administration position was a permanent full-time position. The dispute centers around the meaning to be given the phrase "perform services.'' The Board of Review held that -6-

7 ''... the Refereeis conclusion was based on too narrow an interpretation of the actual services performed by the claimant in behalf of his new employer... While the VA Hospital employer was prevented from assigning the claimant to the new position, there is no question that the claimant fully complied with the employer's recruitment procedures. His performance was clearly a service in behalf of the staffing needs of that employer. The claimant did, indeed, carry out acts under the direction of his new employer, although the specific tasks to which he was appointed could not be performed at that time because of the recruitment freeze." Board of Review Decision p. 2. In support of this holding the Board cited the case Ingham County~ Cole, Docket No (1981) which is the only Michigan case that has attempted to define the "perform services" language. In Cole the claimant had worked for Ingham County as a Deputy County Clerk Bookkeeper for only a few hours on the morning of February 22, 1978 before she terminated her employment. In construing thi s same section the Court of Appeals concluded that the claimant had performed services wi~hin the meaning of subsection 29(5). In reaching this conclusion the Court applied an analysis which has been consistently applied by Michigan courts when interprating the Employment Security Act. This analysis merits a closer look. First, the provisions of the Employment Security Act are meant to be liberally construed by reviewing courts. This policy position has been consistently reiterated by Uichigan Courts. In Linski v. Employment Sec. Comm., :358 r.1ich 24X, 245 ( 1959) the Hichigan Supreme Court stated: -7-

8 "Our concern with employment security cases does not apply solely to the claimant before us. In each such case, there may... likewise be involved the fate of claimant's family, and impact of his unemployment upon the butcher, the baker and the candlestick ~aker who supply his needs. The effect of mass unemployment upon society g a ve rise to this great social insurance statute. In one of this Court ' s first i nterpretations of it, we held that a liberal interpretation should be given to it: 'The purpose of the unemployment compensation act is to relieve the distress of economic insecurity due to unemployment. It was enacted in the interest of public welfare to provide for assistance to the unemployed and as such is entitled t o a liberal interpretation. Godsol ~ Unemployment Compensatiorr Commission, 302 Uich 652, 665 (142 ALR 910)." The analysis found in Laya ~ Cebar Construction.Co, 101 llich App 26 (1980) serves as a paradigm for determining a "liberal interpretation" of the statute in situations where the claimant is forced by circumstances beyond his control to be unemployed. The cla imant in Laya had taken a job in Ohio 275 miles from his Warren, ~ichigan home after being laid off. He worked for 25 days visiting his family on the weekends before quiting his job because of fa~ily problems. The Court found that the claimant was not disqualified for voluntarily quitting his Ohio job. This conclusion was reached by applying ". a realistic standard which [recognizes] that the physical distance between home and work, as well as the economic problems in. trying to maintain t wo homes, could render a decision to quit as involunta ry as it would be if compelled - 8-

9 instead by law, the elements, or a serious illness.. Plaintiff was not faced with a choice between alternatives that ordinary persons would consider reasonable.rr Id. at 31, 33 If the alternative presented to the claimant is not reasonable then the Laya Court found that the purpose of the act was thwarted. "The declaration of policy found in the employment security act provides: 'Declaration of policy. The legislature acting in the exercise of the police power of the state declares that the public policy of the state is as follows: Economic insecurity :: due to unemployment is a serious menance to the health, morals, and welfare of the people of this state. Involuntary unemployment is a subject of general interest and concern which requires action by the legislature to prevent its spread and to lighten its burden which so often falls with crushing force upon the unemployed worker and his.family, to the detriment of the welfare of the people of this state. Social security requires protection against this hazard to our econimic life. Employers should be encouraged to provide stable employment. The systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment by the setting aside of unemployment reserves to be used for the benefit of persons unemployed through~ fault of their own, thus maintaining purchasing power and limiting the serious social consequences of relief assistance, is for the public good, and the general welfare of the people of this state.' MCL 421.2; MSA (Emphasis added.) It bears repeating that the courts should construe the provisions of the act liberally in order to give effect to this remedial policy. General Motors Corp~ Employment Security Cornm, 378 Mich 11 0, 117; 142 NW2d 686 (1966), Linski ~Employment Security Comm, 358 Mich 239, 245; 99 NW2d 582 (1959). For this same reason, the d~squalification provisions of the -9-

10 act should be narrowly construed. Chrysler Corp ~ DeVine, 92 Mich App 555, 558; 285 NW2d (1979). It would be a sad commentary on our values and would be wholly inconsistent with the purposes of the act for our law to be interpreted in such a manner as to discourage the initiative displayed by the plaintiff in the instant case... This is not a worker who is unemployed through his own fault." Id. at 34, 35 It is clear that the Board of Review applied this analysis to the present case, and their decision deserves to be sustained. A careful reading of their decision makes clear that they have followed the dictates of the appellate courts of this state that the employment security act be liberally construed to avoid injustice in situations where the claimant is unemployed through no fault of his own and has made a reasonable effort to obtain full-time employment. Mr. Clark showed initiative and acted ethically in the present situation. He would have covered himself to a greater extent by not informing his employers at YRPH of his federal position until after he began his regular duties. owever, he was upfront and honest in his dealings with them so that they had as much advance notice as he could provide that he was changing employment. Additionally, Mr. Clark sought to move from a part-time job to a full-time position. Clearly, the legislature seeks to encourage this type of employment change especially if the commitment made by the new employer is as strong as that present in this case. No more could be asked of a citizen than the intiative shown by Mr. Clark in seeking to -10-

11 advance himself. That political and economic circumstance caught him in this type of "catch 22" situation is unfortunate. Therefore, given the purpose of the employment security act, the broad interpretation of the phrase "performs services'' used by the Review Board in this case is both appropriate and just. To determine tha t the services performed by Mr. Clark at the direction of the Veterans Administration officials were not adequate simply because he was not directly compensated for them would basically conflict with the purpose of the act. The Court of Appeals in Laya ~ Cebar Construction Co, supra recognized, as did the. Board of Review in this case, that a realistic standard of review must be used in these cases. Actions taken by the claimant must be viewed in the context of the real world. This type of analysis mode allows factual situations like this to be covered by an exception clearly intended by the legislature to do this. AFFIRMED. THEREFORE, the decision of the Board of Review is IT IS SO ORDERED. HENRY T. CONLI, CIRCUIT JUDGE -11-

12 STATE OF. MICHIGAN EMPLOYMENT SECURITY BOARD OF REVIEW In the Matter of the Claim of GEORGE W. CLARK, Appeal Docket No. BBl ~ YPSILANTI REGIONAL PSY. HOSPITAL, Claimant Social Security No Employer DECISION OF BOARD OF REVIEW In this case, the Referee held the claimant disqualified for leaving work voluntarily without good cause attributable to the employer under Section 29(1) (a) of the MES Act. For the reasons that follow, the Referee's decision is reversed. The Referee, in his decision, considered whether the provisions of Section 29(5 ) could apply to the claimant's leaving. The Section provides: ''Sec. 29. (5) If an individual leaves his work to accept permanent full-time work with another employer, and performs services for that employer, or to accept a recall from a former employer, the disqualification provisions of subsection (1) shall not apply to that leaving; but the wages earned with the employer that he last left, including wages previously transferred under this provision to the last employer, shall, for the purpose of computing and charging benefits, be deemed wages earned from the employer with whom the individt.~al accepted work or recall, and benefits paid based upon those wages, shall be charged to that employer. When issuing a determination covering that period of employment, the commission shall advise the chargeable employer of the name and address of the other employer, the period covered by the employment, and the extent of the benefits which may be charged to the account of the chargeable employer." Upon being notified that he was offered a full-time position as social worker with Federal VA Hospital, the claimant. notified his state employer on February 4, 1981 of his intention to resign (T, PP 9 & 12). He completed his schedule on the last weekend of work and prepared to assume his new duties ::>n Monday (T, pp. 7 & 8, 13), the next work day. ~ Reporting to the ne~~ VA Hospital employer, as required on February 9, the claimant was informed a hiring freeze order delayed the start of his new employment (T, pp. 11 & 12). I:nmediately returning to his former state employer, the claimant was informed that, despite his f:!.ve-year record of sat:! sfactory employment (T, p. 20), the processing of his t"esignation had changed his employment status. Under the employer's policy, he could only be reinstated as a new hire (T, p 15). However, the claimant was :ol1 :hat a sts~e-wide hiring freeze prevented his reinstatement at that time (!, P 22).

13 uv l 'O.J ~,_,... _ Page 2 There is no question in the record that the claimant's leaving was for the purpose of beginning his new assignment with the VA Hospital, the federal employer, and that there was reasonable expectation of permanent, full-time work. The choice was voluntary on the claimant's part, not attributable to any cause of the state hospital employer. The Referee held that the claimant's inability to perform the duties of his new federal appointment foreclosed application of Section 29(5) and that the claimant was, therefore, disqualified under the voluntary leaving provisions of Section 29(1)(a). It is the opinion of the Board that the Referee's conclusion was based on too narrow an interpretation of the actual services performed by the claimant in behalf of his new employer. The VA Hospital letter of commitment (Exhibit 10), the testimony of the claimant, and the claimant's counsel's argument in requesting a hearing, before the Board of Review, all support the extent of the claimant's performance of services, namely: 1) Through application and examination the claimant became actively listed on the Federal Civil Service register in March, 1980 (T, p. 8); 2) On January 21, 1981, following an. employment interview the claimant was informed that he was accepted for a Federal position (T, p. 9); 3) The claimant submitted a pre-employment medical exam and completed health insurance application forms on that date (claimant counsel oral hearing argument); 4) As required by the employer commitment letter, specifying the terms of t he federal appointment (Exhibit 10), the claimant reported for work. While the VA Hospital employer was prevented from assigning the claimant to the new position, there is no question that the claimant fully complied with the employer's recruitment procedures. His performance was clearly a service in behalf of the st.affing needs of that employer. The claimant did, indeed, carry out acts under the direction of his new employer, although the specific tasks to which he was appointed could not be performed at that time because of the recruitment freeze. In a recent decision, Ingham County v Cole, Mich App (October 1, 1981), the Court of Appeals interpreted the scope of the "performance of services" requirement of Section 29(5) on similar facts of interrupted performance. In that case, the claimant reported for duty and "observed the work of others but did not actually perform any specific task herself." The Court of Appeals held that the claimant "performed acts" in accordance with the instructions of her employer, even though the claimant decided on that reporting day not to carry out the assigned tasks after her observation. Section 29(5) was applied to the claimant's leaving to accept the new employment and the Board of Review's decision holding the claimant not disqualified for leaving the first employer was affirmed. We add that the courts of this state haye consistently held that a ~arty who is misled as to his legal rights and induced, through misrepresectation by another to act contrary to his interests, should be extended affirmative relief from the

14 Page 3 consequences of his adverse actions. As the Supreme Court in Carpenter v Detroit Forging Co, 191 Mich 45 ( 191 6) pointed out, in releasing a party from a workman's compensation settlement induced through misrepresentation, such equitable relief is an exception to the ordina-ry practice of withholding relief from a party claiming ignorance having a mistaken view of legal requirements. The Supreme Court added in Holt v Stofflet, 338 Mich 115, 119 (1953): "The central principle of equitable estoppel is that one who by his language or conduct leads another to do what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted. " On the basis of the foregoing, we think fhat the second employer in our case--the federal government--is estopped from denying the claiman~ 1 s performance of service under Section 29(5). Therefore, we believe the Referee should have applied the affirmative relief of Section 29(5) and held the claimant not disqualified for benefits under Section 29(1 )(a) of the Act. Moreover, Section 31 of the MES Act requires that this Board construe the statute in a way that would avoid a waiver of benefits in this case through the agreement between the claimant and the federal employer. The federal employer did not appear at the Referee hearing. Application of Section 29(5) may present unanticipated difficulties in transferring credits from the state to the federal employer's rating account considering that the federal employer is ' governed by a separate unemployment insurance program. The Board wishes to state that it will consider the federal employer's position regarding said difficulties should a request for rehearing on this question be filed in a timely manner. The decision of the Referee is hereby reversed. The claimant is not disqualified by reason of the separation in issue, and is entitled to unemployment benefits if otherwise eligible and qualified. Thomas L. Gravelle, Member MAILED AT DETROIT, MICHIGAN A_u_gus_t_3_1_,_1_9_8_z This decision will become final unless a written request for rehearing or appeal to the appropriate circuit court is RECEIVED on or before September 20, 1982 TO PROTECT YOUR RIGHTS, YOU MUST ne ON TIME.