Rummel v. Director

Don E. RUMMEL, et al. v. DIRECTOR, 
Arkansas Employment Security Department

E 96-4                                             ___ S.W.2d ___

                  Court of Appeals of Arkansas
                          Division III
               Opinion delivered December 17, 1997


1.   Unemployment compensation -- "unemployed" defined. -- Arkansas Code
     Annotated section 11-10-214(a) (Repl. 1996) provides that an
     individual shall be deemed "unemployed" with respect to any
     week during which he performs no services and no wages are
     payable to him with respect to that week.  

2.   Unemployment compensation -- Board's conclusion that administrative leave
     payments were wages supported by substantial evidence. -- Where the
     Board of Review found that appellants' eight-week
     administrative leave payments were wages, the appellate court
     could not say, on the facts of the case, that the Board's
     conclusion was not supported by substantial evidence.

3.   Unemployment compensation -- Federal Worker Adjustment and Retraining
     Notification Act -- notice provision. -- Under the Federal Worker
     Adjustment and Retraining Notification Act, 29 U.S.C.S. 
     2101-09 (1990), an employer is required to provide a sixty-day
     written notice to employees before a plant closing or mass
     layoff; failure to provide such notice gives rise to employer
     liability for "back pay" up to a maximum of sixty days,
     reduced by any voluntary and unconditional payment by the
     employer to the employee that is not required by any legal
     obligation; employees may enforce such liability by suing in
     federal district court.

4.   Unemployment compensation -- Federal Worker Adjustment and Retraining
     Notification Act -- description of payments does not control classification
     of payments for purposes of unemployment compensation eligibility. -- The
     federal description of payments for purposes of the Federal
     Worker Adjustment and Retraining Notification Act does not
     control classification of the payments for the purposes of
     unemployment compensation eligibility.

5.   Unemployment compensation -- Board of Review analogous to trial court. --
     The Board of Review's position in employment security cases is
     analogous to that of a trial court in the sense that it
     functions as the trier of fact.

6.   Unemployment compensation -- disqualification -- receipt of vacation
     payments. -- Under Ark. Code Ann.  11-10-517(5) (Repl. 1996),
     a claimant is disqualified for benefits for any week with
     respect to which the claimant receives or has received
     remuneration in the form of vacation payments.

7.   Unemployment compensation -- Board did not err in finding that vacation pay
     disqualified appellant from receiving benefits. -- Where appellant's
     former employer notified him that he would receive payment for
     his accrued vacation time for two years, and where appellant
     also testified that he received this vacation pay as part of
     the severance agreement, the appellate court could not say
     that the Board of Review erred in finding that the vacation
     pay disqualified appellant from receiving benefits pursuant to
     Ark. Code Ann.  11-10-517(5).


     Appeal from the Arkansas Board of Review; affirmed.
     James E. Nickels, for appellants.
     Allan Pruitt and Phyllis Edwards, for appellee Director.
     Cross, Gunter, Witherspoon, and Galchus, A Professional
Limited Liability Company, by: Allen C. Dobson, for appellee
Arkansas Power & Light Co.

     John E. Jennings, Judge.
     Don E. Rummel and seven others were employed by Arkansas Power
and Light Company (AP&L) at its White Bluff facility.  The
employment of all eight workers was terminated by AP&L as part of
a general reduction in its work force.  Their last day to work was
December 6, 1994.  
     Each employee received a severance package under an agreement
negotiated between their union, the International Brotherhood of
Electrical Workers, and AP&L.  The agreement provided that each
would receive "administrative leave pay," "separation pay," and
"vacation pay."  
     Each of the employees filed a claim for unemployment benefits. 
The Agency initially denied the claims, but this decision was
subsequently modified by the Appeal Tribunal.  Finally, after an
appeal to the Board of Review, the claims were once again denied. 
     On appeal to this court the claimants contend that the Board
erred in concluding that they were not unemployed during the eight-
week period in which they received administrative leave pay.  In a
second argument, which affects Mr. Rummel only, he contends that
the Board improperly concluded that his receipt of vacation pay was
disqualifying.  We find no reversible error in the Board's
determination and therefore affirm.  
     The negotiated agreement provided that each employee would
receive "two months administrative leave with full base pay. 
Administrative leave begins as determined by the company.  At the
end of the two-months administrative leave, employment will be
terminated...."  From the date he last reported to work in early
December 1994, each claimant received his normal weekly wage based
on a forty-hour work week, payable bi-weekly, as in the past.  The
claimants' insurance benefits and credit union benefits continued
during the "administrative leave."  
     The parties agree that the primary issue on appeal is whether
the claimant-appellants were unemployed during the two-month period
designated as administrative leave.  Arkansas Code Annotated
section 11-10-214(a) (Repl. 1996) provides that an individual shall
be deemed "unemployed" with respect to any week during which he
performs no services and no wages are payable to him with respect
to that week.  The Board held that the administrative leave
payments were wages.  On the facts of this case we cannot say that
the Board's conclusion is not supported by substantial evidence. 
While we agree with the appellants that McVey v. Daniels, 270 Ark.
409, 605 S.W.2d 483 (Ark. App. 1980), cited by the Board, is not
directly on point, it is also of no help to the appellants.  In
McVey, we merely recognized that the statutory definition of
unemployment contained two parts: that the employee performed no
services, and that no wages were payable to him with respect to the
week in question.
     Appellants also contend that the Federal Worker Adjustment and
Retraining Notification Act, 29 U.S.C.S.  2101-09 (1990),
requires the Board to reach a different conclusion.  We disagree. 
The WARN Act requires that an employer provide a sixty-day written
notice to employees before a plant closing or mass layoff.  Failure
to provide such notice gives rise to employer liability for "back
pay" up to a maximum of sixty days, reduced by "any voluntary and
unconditional payment by the employer to the employee that is not
required by any legal obligation."  29 U.S.C.S.  2104(a)(2)(B). 
Employees may enforce such liability by suing in Federal District
Court.  
     In the case at bar it is not at all clear that the
administrative leave payments were "WARN Act payments."  Appellants
rely on Capital Castings, Inc. v. Arizona Dep't of Economic
Security, 828 P.2d 781 (Ariz. Ct. App. 1992); Georgia-Pacific Corp.
v. Unemployment Compensation Bd. of Review, 630 A.2d 948 (Pa.
Commw. Ct. 1993); and Westinghouse Electric Corp. v. Callahan, 658 A.2d 1112 (Md. Ct. Spec. App. 1995).  These cases do tend to
support appellants' position.  Labor & Indus. Relations Comm'n v.
Division of Employment Sec., 856 S.W.2d 376 (Mo. Ct. App. E.D.
1993), and Division of Employment Sec. v. Labor and Indus.
Relations Comm'n, 884 S.W.2d 399 (Mo. Ct. App. W.D. 1994), however,
tend to support the Board's view in the case at bar.  In any event
it is clear that each of the cases involving the application of the
WARN Act in the state unemployment benefits context was determined
under the particular unemployment compensation law of the state
where the decision was rendered.  We agree with the conclusion of
the court in Capital Castings, supra, that the federal description
of payments for purposes of WARN does not control classification of
the payments for the purposes of unemployment compensation
eligibility.  The Arizona Court of Appeals noted that neither in
WARN itself nor in its legislative history did Congress express an
intent to control eligibility for state unemployment compensation. 
Capital Castings, 828 P.2d  at 785.
     Appellants also argue that the Board did not follow the
precedent established in an earlier ESD case, but we know of no
authority for the proposition that the Board's earlier decisions
constitute binding precedent upon itself.  Although it hears
appeals, the Board's position in these cases is analogous to that
of a trial court in the sense that it functions as the trier of
fact.  See Edwards v. Stiles, 23 Ark. App. 96, 743 S.W.2d 12
(1988); City of Fayetteville v. Daniels, 1 Ark. App. 258, 614 S.W.2d 680 (1981).
     Mr. Rummel alone contends that the Board erred in finding his
receipt of certain vacation pay disqualified him from receiving
unemployment benefits.  Mr. Rummel received payment for unused 1994
vacation and pay for the vacation that he would have received in
1995 had his employment not been terminated.  The applicable
statute, Ark. Code Ann.  11-10-517(5)(Repl. 1996), provides that
a claimant shall be disqualified for benefits for any week with
respect to which the claimant receives or has received remuneration
in the form of vacation payments.  The statute also provides:
          However, [the claimant] shall be paid, with
          respect to the week in which the vacation
          period occurred, an amount equal to the weekly
          benefit amount less that part of the vacation
          pay, if any, payable to him, or in which he
          has been paid or will be paid at a later date
          with respect to such week, which is in excess
          of forty percent (40%) of [the claimant's]
          weekly benefit amount, rounded to the nearest
          lower full dollar amount.  For the purpose of
          this subdivision, the employer shall promptly
          report the week or weeks involved in the
          vacation period as well as the corresponding
          amount of vacation pay with respect to such
          week or weeks[.]

     On this issue the Board held:

          With regard to the vacation pay issue, there
          was no dispute concerning the amount of
          vacation pay which the Department found the
          claimant to have received.  Further, the Board
          of Review interprets  11-10-517(5) to require
          that accrued vacation pay, paid at separation
          from employment, be allocated, until
          exhaustion, to the weeks immediately following
          the separation.  Also, there was no dispute
          with regard to the Department's calculations
          which resulted in allocation of the claimant's
          vacation pay to four benefit weeks, and the
          Board finds those calculations to be accurate. 
          As a result, the Board finds the Department's
          allocation of the vacation pay to the weeks
          ending February 11 through 25 and March 4,
          1995, to be appropriate.

     In support of his argument, appellant Rummel relies on several
cases which were decided under prior law.  Arkansas Code Annotated
section 11-10-517 deals with the receipt of certain remunerations
by a claimant and their disqualifying effect.  Remunerations in the
form of separation payments, bonus payments, and vacation payments
are included as disqualifying under the statute.  Ark. Code Ann.
 11-10-517 (1), (5), (6).  In the instances where separation
payments or bonus payments are made in one lump sum, the statute
specifically provides that the payment will only be disqualifying
for the week it is received.  No such provision is found under
vacation payment.   Thus, the Board of Review interpreted the
statute to require that vacation pay, paid at separation from
employment, be allocated, until exhaustion, to the weeks
immediately following the separation.  We agree with appellee, the
Arkansas Employment Security Department, that this is consistent
with the intent of the legislature.  Because the legislature chose
to specifically address the issue of lump-sum payments with regard
to separation and bonus payments, and did not do so with vacation
payments, it seems apparent that they contemplated vacation pay to
be allocated to specific weeks until exhaustion.  AP&L notified
appellant Rummel that he would receive payment for his accrued
vacation time for 1994 and 1995.  Rummel also testified that he
received this vacation pay as part of the severance agreement. 
Therefore, we cannot say that the Board of Review erred in finding
that the vacation pay disqualified Rummel from receiving benefits
pursuant to section 11-10-517(5).
     Affirmed.
     Meads and Roaf, JJ., agree.