Mississippi Employment Security Commission v. Scott Funches
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IN THE COURT OF APPEALS
OF THE
STATE OF MISSISSIPPI
NO. 1999-CC-01337-COA
MISSISSIPPI EMPLOYMENT SECURITY COMMISSION
v.
SCOTT FUNCHES
APPELLANT
APPELLEE
DATE OF JUDGMENT:
07/27/1999
TRIAL JUDGE:
HON. JAMES E. GRAVES, JR.
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT:
ALBERT B. WHITE
ATTORNEY FOR APPELLEE:
FLOYD E. DOOLITTLE
NATURE OF THE CASE:
CIVIL - STATE BOARDS AND AGENCIES
TRIAL COURT DISPOSITION:
CIRCUIT COURT REVERSED THE DECISION OF THE
BOARD AND AWARDED BENEFITS.
DISPOSITION:
AFFIRMED - 06/06/2000
MOTION FOR REHEARING FILED: 6/19/2000-3/13/2001-GRANTED/AFFIRMED
CERTIORARI FILED:
MANDATE ISSUED:
4/17/2001
ON MOTION FOR REHEARING
EN BANC.
IRVING, J., FOR THE COURT:
¶1. The motion for rehearing is granted. The original opinion is withdrawn, and this opinion substituted.
¶2. This is an appeal by Mississippi Employment Security Commission (MESC) from a judgment of the
Circuit Court of Hinds County which reversed the decision of the Board of Review of the MESC denying
unemployment compensation benefits to Scott Funches. MESC assigns the following issues: (1) whether the
Board of Review's decision finding that the employer was shut down from June 28, 1998 through July 11,
1998 is supported by the substantial evidence, such that the circuit court erred in overturning that decision,
(2) whether the Board of Review's decision, finding that Funches, et al., were disqualified from receiving
benefits from June 28, 1998 through July 11, 1998, due to the employer's holiday shutdown, is supported
by substantial evidence, such that the decision was not arbitrary and capricious, and (3) whether the circuit
court erred by finding that the contract between Delphi Packard Electric and the Union, rather than
Mississippi Code Annotated Section 71-5-511(k) (Rev. 1995), determines whether Funches, et al., are
entitled to unemployment benefits during the plant's agreed vacation/holiday shutdown.
¶3. Finding no reversible error, we affirm the decision of the circuit court.
FACTS
¶4. In 1998, Funches and others similarly situated were employed as part-time non-seniority employees
with Delphi Packard Electric Company in Clinton, Mississippi. An agreement between the local union and
the employer provided that Delphi would shut down its operations during Independence week with the
option of designating as plant vacation shutdown week the week before or after the Independence week
shutdown. The agreement provided that active employees without seniority such as Funches would be on
"lay-off" during the shutdown.
¶5. More specifically, the collective bargaining agreement contained three sections which are relevant to our
determination. They are sections (101u), (101u) (1) and (101u) (7). Section (101u) provides that during the
year 1998, the Independence week shutdown period would be June 29 through July 2. Section (101u) (1)
authorizes the employer to designate as plant vacation shutdown week the week before or after the
Independence week shutdown. In other words, the employer could designate as plant vacation shutdown
week either the week prior to June 29 or the week following July 2. In our case, the week following July 2
was designated. Section (101u) (7) provides: "An active employee without seniority who is not scheduled
to work shall be considered on layoff for the entire shutdown." (emphasis added).
¶6. As stated, Funches and the other appellees here are active employees without seniority. During the
shutdown, they applied for and were denied unemployment benefits. The denial was based on the
conclusion reached by the Board of Review of the Mississippi Unemployment Commission that Funches
and the other appellees were not involuntarily unemployed and were not available for work.
ANALYSIS OF THE ISSUES PRESENTED
¶7. All of the issues assigned by the Mississippi Employment Security Commission are interrelated and will
be joined for purpose of discussion and resolution. The central issue is whether there is substantial evidence
to support the decision of the Board of Review that Funches and others similarly situated are not entitled to
benefits because of the dictates of Mississippi Code Annotated Section 71-5-511(k) (Rev. 2000) which
provides that "[a]n individual shall be deemed prima facie unavailable for work, and therefore ineligible to
receive benefits, during any period which, with respect to his employment status, is found by the
commission to be a holiday or vacation period."
¶8. The Commission undergirds its position not only with the quoted code section, but also with the holding
in the following cases: Mississippi Employment Security Commission v. Jackson, 237 Miss. 897, 116
So. 2d 830 (1960); Smith v. Mississippi Employment Security Commission, 344 So. 2d 137 (Miss.
1977). On the other hand, Funches contends that Buse v. Employment Security Commission, 377 So.
2d 600 (Miss. 1979), controls. We will discuss each case in term.
¶9. In Jackson, the court framed the issue before it this way: "The question for our decision involves the
right to unemployment compensation for a period when the plant was shut down for vacations in
accordance with the union contract." Jackson, 237 Miss. at 899, 116 So. 2d at 831.
¶10. The union contract in Jackson contained no specific provision designating when the Reliance
Manufacturing Company would be shut down, but for some years it had closed its plant for a period of one
week about July 4 and one week during or immediately following Christmas for the purpose of taking
inventory. The union contract provided that all employees having a certain minimum service with the
company would be entitled to one week's vacation with pay to be taken between June 1 and September
30, in accordance with operation requirements of the company. The contract also provided that all
employees having three years continuous employment with the company would be entitled to an additional
week's vacation with pay to be taken during Christmas week. On December 13, 1957, the company
closed the plant and announced it would be closed until January 6, 1958, or for a period of three weeks,
which, of course, included Christmas week of 1957. About half of the production employees were not
entitled to vacation with pay during Christmas week because they had not been employed for a sufficient
length of time. These employees filed claims for unemployment benefits with the Mississippi State
Employment Security Commission for the three week period beginning December 13, 1957. The
Commission allowed the claims for the first and third week but disallowed the claims for the second week
of the three week period. The basis of the denial of the claims for benefits for Christmas week was that the
employees were not involuntarily unemployed and were not available for work within the meaning of the
statute. Id. at 898-99, 116 So. 2d at 831. The circuit court reversed the Commission, and on appeal, the
Mississippi Supreme Court reversed the circuit court and reinstated the decision of the Commission, with
these instructive words:
The shutdown for Christmas week was in accordance with the union contract and the union
represented all of the appellees. It cannot be said that appellees were unemployed within the meaning
and purpose of the statute. They were not laid off; their employment had not been terminated,
and the relationship of employer and employee continued during the week the plant was closed
for the purposes stated.
Jackson, 237 Miss. at 901, 116 So. 2d at 832. (emphasis added).
¶11. There is one distinct and important difference between our case and Jackson. In Jackson, the union
contract was silent on the status of the employees who were not entitled to vacation pay during the
shutdown. In our case, section (101u) (7) of the collective bargaining agreement specifically provides that
"[a]n active employee without seniority who is not scheduled to work shall be considered on layoff for
the entire shutdown." It is not disputed that Funches and the other appellees here were active employees
without seniority at the time of the shutdown and not scheduled to work during the shutdown. Moreover,
Dorothy M. Johnson, the employer's representative, left no doubt that Funches and the other appellees
were active employees without seniority and that the relationship of employer and employee was severed
during the shutdown:
Q. I have one last question. Mr. Funches and these part-time workers, they are active employees
actively working at the plant.
A. That's correct.
Q. But they don't have seniority?
A. That's correct.
Q. And if I can refer you to page 101, I think it's paragraph (l0lu) (7), I guess the last sentence of the
top paragraph on 101, does this contract not state that active employees without seniority not
scheduled to work will be considered on layoff for the entire shutdown period?
REFEREE: It would be at the top of the page.
A. Yes.
Q. Okay.
A. Yes, that's exactly what it says.
Q. So, the, so, [sic] General Motors, in agreement with the IUE, has agreed to these individuals are
laid off?
A. Yes.
¶12. At another point in her testimony, Johnson testified:
Q. Anything else you like to explain or cover at this time?
A. No, other than this category of employees are recalled as needed and that we, the
management, at Delphi Packard Electric have no problem with them receiving unemployment
benefits.
(emphasis added). At still another point in her testimony, Johnson testified:
Q. Would an employee of Mr. Funches's category receive some kind of vacation pay during that
week?
A. No, these employees are . . . part-time employees are without any benefits and they are removed
from the active roll during the vacation shutdown.
(emphasis added).
¶13. As stated, Johnson's testimony makes clear that the relationship of employer and employee between
the part-time non-seniority employees is severed during the shutdown because they are removed from the
active employment roll. Consequently, for Funches and the others, post-shutdown work was neither
guaranteed nor expected. Therefore, these employees are either laid-off employees as specified in the
collective bargaining agreement or laid-off employees by virtue of being removed from the active roll as
testified by Johnson. In either case, a laid-off employee by definition cannot have employment status during
a holiday or vacation shutdown period unless employment is available to him during the post-holiday or
vacation shutdown period.
¶14. In Smith, Gloria J. Smith, due to pregnancy, took a leave of absence from her position as an
accounting clerk at Desoto, Inc. on August 30, 1994. She was supposed to return from leave on December
3, 1994. It was company policy to grant a three-month leave of absence for pregnancy without terminating
the employment. However, prior to December 3, Mrs. Smith was informed that because of declining
business conditions her position had been temporarily eliminated, and she was being "involuntarily" laid off.
Smith, 344 So. 2d at 139. The employer, the Board of Review and the circuit court concluded that Smith
had left work voluntarily and denied her benefits. Id. at 138.
¶15. On appeal, the Mississippi Supreme Court concluded that Smith was entitled to benefits beginning
December 3, 1994, the day she was due to return to work but could not because she had been laid off. Id.
at 140. While it is clear in Smith that Mrs. Smith voluntarily took a leave of absence, it is likewise equally
clear that her employment continued during her leave of absence. She simply temporarily suspended it
pursuant to an agreement with her employer. Id. at 139. She did not seek benefits for the period of time
covered by her voluntary leave of absence.
¶16. Apparently, the Commission feels that since Funches and the others voluntarily left their employment
during the vacation shutdown period pursuant to the collective bargaining agreement, they should be denied
benefits for that period as was Mrs. Smith. That, however, is both a misunderstanding of the facts and a
misreading of Smith. As stated, Mrs. Smith did not seek benefits for the period of time covered by her
voluntary leave of absence. Further, during the period of the leave of absence, the employer/employee
relationship continued to exist during the period of the leave of absence. That is not our case. We have
already pointed out that Funches and the others were removed from Delphi Packard Electric's active
employment roll during the shutdown.
¶17. Buse involved a situation where Fred Buse was laid off on October 30, 1977, from his employment
with Pennsylvania Tire & Rubber Company. He began receiving unemployment compensation one week
after his last date of employment. On December 19, 1977, pursuant to a collective bargaining agreement,
Pennsylvania paid Buse $525.23 for two weeks accumulated vacation pay for the past year. The
Mississippi Employment Security Commission thereafter denied Buse unemployment compensation for the
two-week period following such vacation payment. Buse, 377 So. 2d at 601. The Commission based its
denial of benefits on the premise that the vacation payment constituted "wages" and thereby eliminated
unemployment benefits for the period. Id. Therefore, the issue in Buse was whether Buse had earned wages
in December or whether the wages were earned prior to discharge. The Mississippi Supreme Court agreed
with Buse that the wages had been earned prior to discharge. Id. We see little support in Buse in aid of the
issues before us.
¶18. The critical focus must be on whether during the vacation shutdown period, Funches's employment and
the employer/employee relationship had already been terminated or whether it had been just temporarily
suspended to be resumed after the shutdown. For us, the answer is clear. According to the collective
bargaining agreement, Funches was laid off. Based on the already quoted testimony of company employee,
Johnson, Funches's employment and the employer/employee relationship had ended. It came to an end
prior to the shutdown, not after, because during the shutdown, Funches was removed from Delphi Packard
Electric's active employment roll. Nothing in the collective bargaining agreement required the removal of
Funches from Delphi Packard Electric's employment roll. While Funches was unavailable for work during
what was termed a "vacation shutdown period," it cannot be argued legitimately, on these facts, that
Funches was on vacation. For the reasons set forth, we affirm the decision of the circuit judge reversing the
decision of the Board of Review denying benefits.
¶19. THE JUDGMENT OF THE CIRCUIT COURT OF HINDS COUNTY REVERSING THE
DECISION OF THE BOARD OF REVIEW OF THE MISSISSIPPI EMPLOYMENT
SECURITY COMMISSION DENYING BENEFITS IS AFFIRMED. THE COSTS OF THIS
APPEAL ARE ASSESSED TO THE APPELLANT.
McMILLIN, C.J., KING AND SOUTHWICK, P.JJ., PAYNE, BRIDGES, THOMAS, LEE,
MYERS AND CHANDLER, JJ., CONCUR.
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