Merren v. EMPLOYMENT SEC. COMM.

380 Mich. 240 (1968)

156 N.W.2d 524

MERREN v. EMPLOYMENT SECURITY COMMISSION.

Calendar No. 3, Docket No. 51,514.

Supreme Court of Michigan.

Decided March 4, 1968.

*243 Marcus, McCroskey, Libner, Reamon, Williams & Dilley, for plaintiff.

Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Arthur W. Brown, Assistant Attorney General, for defendant.

KELLY, J. (for affirmance).

Appellant presents this one question:

"After the claimant in this case had quit a job with a Michigan employer to take a job with a Florida employer and was laid off from the latter job about 10 weeks after it commenced because of cancellation of a Federal government contract, was he properly disqualified for unemployment compensation benefits under a provision of the Michigan employment security act which provides that a claimant will be disqualified from unemployment compensation benefits if he leaves his work voluntarily without good cause attributable to his employer but provides an exception if the claimant left to accept permanent full-time work with another employer and is laid off within 39 weeks, the disqualification being based on the theory that the exception applies only if the second employer is also a Michigan employer?"

and claims that the hearing referee, the appeal board, and the circuit court for the county of Ingham, and the Court of Appeals erroneously answered this question with the answer "yes."

Appellant stresses the fact that before the 1955 amendment, section 29(1)(a)(1) of the Michigan employment security act provided:

"(1) An individual shall be disqualified for benefits: (a) For the duration of his unemployment in all cases where the individual has: (1) Left his work voluntarily without good cause attributable to the employer or employing unit. * * * Any wages earned prior to any such act with the employer involved *244 therein, whether earned during the base period or within the current benefit year, shall not be used as a basis for computing or paying benefits for any period subsequent to the time said disqualifying act occurred." CL 1948, § 421.29, as amended by PA 1954, No 197 (Stat Ann 1960 Rev § 17.531).

Appellant claims "the legislature recognized that the rigors of this kind of disqualification should be softened in the case of the ambitious person who seeks to better himself through changing employment from one company to another and becomes the unfortunate victim of layoff with the second employer within a relatively short time * * * and the legislature took steps in the early 1950's to remedy it" by passing the following amendment:

"Provided further, however, That if an individual leaves his work voluntarily without good cause attributable to the employer for the purpose of accepting permanent full-time work with another employer, and if, during the 39 weeks following his separation he is laid off for lack of work by his new employer, enough of his credit weeks with his separating employer whom he left voluntarily shall be reinstated so that the total number of weeks of benefits available to him from all employers at the time of such layoff will not be less than if he had been laid off by the said separating employer." PA 1936 (Ex Sess), No 1, § 29, subd (1)(a), as amended by PA 1955, No 281 (CLS 1961, § 421.29 [Stat Ann 1960 Rev § 17.531]).

Appellant claims that by answering "yes" to the above question, the appeal board and the courts gave an overly technical construction to the act, thereby completely defeating the legislature's intent and purpose in enacting the 1955 amendment.

The legislature spelled out what was meant in the enactment by the use of the words "employing unit" and "employer."

*245 Section 40 defines "employing unit":

"`Employing unit' means any * * * corporation, whether domestic or foreign, * * * which has or subsequent to this amendatory act, had in its employ 1 or more individuals performing services for it within this State." (Emphasis ours.) CLS 1961, § 421.40 (Stat Ann 1960 Rev § 17.542).

Section 41 defines "employer":

"`Employer' means: (1) * * *

"(b) Any employing unit which in each of 20 different weeks within the calendar year 1956 or within any succeeding calendar year * * * has or had in employment 4 or more individuals." (Emphasis ours.) CLS 1961, § 421.41 (Stat Ann 1960 Rev § 17.543).

Using these definitions, it is impossible to interpret the amendment in any other way than as though it read: If an individual leaves his work voluntarily without good cause attributable to the Michigan employer for the purpose of accepting permanent full-time work with another Michigan employer, and if during the 39 weeks following his separation from his former Michigan employer he is laid off for lack of work by his new Michigan employer, then the individual comes within the provisions of the amendment.

The appeal board in denying plaintiff's claim attached and approved the referee's decision[*] which *246 stressed the fact that adjusting credit weeks between the separating employer and the new employer was proof that the legislature intended the amendment to apply only when both employers were Michigan employers.

We agree with such a conclusion.

Affirmed. No costs, a public question involved.

DETHMERS, C.J., and BLACK and BRENNAN, JJ., concurred with KELLY, J.

SOURIS, J. (for reversal).

I dissent. This is a classic example of a case in which the statutory definition of "employer"[1] should not be applied. The legislature itself has said, in section 39[2] of the employment security act, that the statutory definitions contained in the act do not apply if the context clearly requires otherwise. I think the context of the first proviso clause of section 29(1)(a)[3] clearly *247 requires that the statutory definition of "employer" not be applied.

The proviso clause serves well an enlightened social policy of encouraging the mobility of labor. It provides, in effect, that the normal rule of disqualification for compensation benefits for unemployment resulting from a voluntary quit shall not apply when the claimant voluntarily quits one job in order to take another permanent full-time job and then soon thereafter is laid off because of lack of work. Nothing in the proviso clause limits its beneficial effect to new jobs in Michigan. Yet Mr. Justice KELLY today reads such a limitation into the proviso clause by a mechanistic application of the statutory definition of "employer" and by an unwarranted assumption that the "separating employer's" rating account cannot be credited with compensation benefits available to the claimant from other employers unless those other employers are "Michigan employers".

Justice KELLY suggests, by his quotation from the appeal board's opinion, that the legislature must have intended such a limitation to:

"give some protection to the separating employer from whom the claimant left his work voluntarily so that the separating employer would not have to assume the entire burden of having charged to its rating account the entire amount of benefits so paid to the individual. * * * It is apparent that the new employer must be a subject employer under the act; otherwise it would be impossible for the claimant to earn credit weeks in the course of employment with the new employer. To hold that the new employer *248 need not be a subject liable employer under the act would create an anomaly and it would be impossible to fulfill the intent of the legislature."

However, because of his rigid reliance upon the statutory definition of "employer", Justice KELLY would have to allow benefits against Lear Siegler in this case had Douglas Aircraft had even one employee in Michigan and at least three others anywhere else (thus qualifying as a Michigan "employer" within the statutory definition[4]) even though claimant's short-lived job with Douglas was in Florida or, indeed, Timbuktu. Under such circumstances, claimant would not have earned any credit weeks under the Michigan act notwithstanding his employment with a company which fits the definition of Michigan "employer". In short, slavish application of the statutory definition would cause claimant's entitlement to benefits to turn upon whether the new employer had any employees other than claimant employed in Michigan; and whether or not it did could not have any effect whatever upon Lear Siegler's experience rating or upon the social policy sought to be achieved by the proviso clause of section 29(1)(a).

Since application of the statutory definition of "employer" in the context of the proviso clause would lead to an illogical and anomalous result, I would accept the legislature's invitation in section 39 not to apply the statutory definition. I would hold that the proviso clause applies whenever a claimant voluntarily quits one job to accept permanent full-time work, wherever located, with another employer, whether or not one subject to the act. Such a holding would be totally consistent with the legislature's purpose not to discourage the mobility of labor. Although not necessary to decision here, it may be appropriate *249 to note that the language of the proviso does not prohibit the commission's taking into account the number of weeks of unemployment compensation benefits available to the claimant in other jurisdictions in computing how many of his credit weeks earned with his Michigan "separating employer" should be reinstated. Such a reading of the proviso clause would treat all claimants equally, would protect "separating employers'" rating accounts, and would fully implement the legislature's manifest purpose.

In Lyons v. Employment Security Commission (1961), 363 Mich 201, all members of this Court agreed that section 29(1)(a)(1), the old voluntary quit disqualification provision, applied to the voluntary quitting of employment out of State for purpose of determining whether benefits were payable and chargeable to a prior Michigan employer from whose employment claimant earlier had been laid off.[5] The conclusion for which I write in this case has the merit of logical consistency with the conclusion we all reached in Lyons dealing with the same statutory section if not the identical portion thereof.

I would reverse and remand for further proceedings consistent with the views expressed herein.

T.M. KAVANAGH, O'HARA, and ADAMS, JJ., concurred with SOURIS, J.

[*] "The key to this situation would appear to turn on the express language of the reinstatement proviso where it is stated, `enough of his credit weeks with his separating employer whom he left voluntarily shall be reinstated.' By this language it is the opinion of this appeal board that the legislature intended to protect not only the claimant in his efforts at other employment but at the same time give some protection to the separating employer from whom the claimant left his work voluntarily so that the separating employer would not have to assume the entire burden of having charged to its rating account the entire amount of benefits so paid to the individual. Therefore, it would appear that if the legislature intended to reinstate only enough of the credit weeks so earned with a separating employer from whom the individual leaves voluntarily and at the same time fulfill the other condition of the proviso which states as follows, `so that the total number of weeks of benefits available to him from all employers at the time of such layoff will not be less than if he had been laid off by the said separating employer,' then it is apparent that the new employer must be a subject employer under the act; otherwise it would be impossible for the claimant to earn credit weeks in the course of employment with the new employer. To hold that the new employer need not be a subject liable employer under the act would create an anomaly and it would be impossible to fulfill the intent of the legislature."

[1] "`Employer' means: (1) * * *

"(b) Any employing unit which in each of 20 different weeks within the calendar year 1956 or within any succeeding calendar year * * * has or had in employment 4 or more individuals." CLS 1961, § 421.41 (Stat Ann 1960 Rev § 17.543).

"`Employing unit' means any * * * corporation, whether domestic or foreign, * * * which has or subsequent to this amendatory act, had in its employ 1 or more individuals performing services for it within this State." CLS 1961, § 421.40 (Stat Ann 1960 Rev § 17.542).

[2] CL 1948, § 421.39 (Stat Ann 1960 Rev § 17.541).

[3] "Provided further, however, That if an individual leaves his work voluntarily without good cause attributable to the employer for the purpose of accepting permanent full-time work with another employer, and if, during the 39 weeks following his separation he is laid off for lack of work by his new employer, enough of his credit weeks with his separating employer whom he left voluntarily shall be reinstated so that the total number of weeks of benefits available to him from all employers at the time of such layoff will not be less than if he had been laid off by the said separating employer." CLS 1961, § 421.29 (Stat Ann 1960 Rev § 17.531), since amended.

[4] See footnote 1, supra.

[5] While all Justices agreed that section 29(1)(a)(1) applied to voluntary quitting of employment out of State, we disagreed on whether the facts of the case justified a finding that claimant quit his out-of-State job voluntarily.