Davis v. Gatson
Annotate this Case
September 1995 Term
___________
No. 22859
___________
RONALD DAVIS, ET AL.,
Petitioners
v.
CATHY S. GATSON, CLERK OF THE CIRCUIT
COURT OF KANAWHA COUNTY; THE BOARD
OF REVIEW OF THE WEST VIRGINIA DEPARTMENT
OF EMPLOYMENT SECURITY; AND
CORHART REFRACTORIES CORPORATION,
Respondents
___________________________________________________
Appeal from the Circuit Court of Kanawha County
Honorable Paul Zakaib, Jr., Judge
Civil Action No. 93-AA-51
REVERSED AND REMANDED
WITH DIRECTIONS.
____________________________________________________
Submitted: September 26, 1995
Filed: November 17, 1995
J. Robert Weaver
Thomas P. Maroney
Charleston, West Virginia
Attorneys for the Petitioners
John R. Merinar, Jr.
Steptoe & Johnson
Clarksburg, West Virginia
Attorney for Corhart Refractories Corporation
CHIEF JUSTICE McHUGH delivered the Opinion of the Court.
JUSTICE ALBRIGHT did not participate.
RETIRED JUSTICE MILLER sitting by temporary assignment.
SYLLABUS BY THE COURT
1. "The findings of fact of the Board of Review of the West Virginia
Department of Employment Security are entitled to substantial deference unless a reviewing
court believes the findings are clearly wrong. If the question on review is one purely of law,
no deference is given and the standard of judicial review by the court is de novo." Syl. pt.
3, Adkins v. Gatson, 192 W. Va. 561, 453 S.E.2d 395 (1994).
2. "Unemployment compensation statutes, being remedial in nature, should
be liberally construed to achieve the benign purposes intended to the full extent thereof."
Syl. pt. 6, Davis v. Hix, 140 W. Va. 398, 84 S.E.2d 404 (1954).
3. An unemployed individual shall be eligible to receive benefits only if the
Commissioner finds, inter alia, that he has been totally or partially unemployed during his
benefit year for a waiting period of one week prior to the week for which he claims benefits
for total or partial unemployment, under W. Va. Code, 21A-6-1(4) [1994]. The terms total
and partial unemployment are defined in W. Va. Code, 21A-1-3 [1994]. However, under the
definition of wages found in W. Va. Code, 21A-1-3 [1994], the term wages shall not include
vacation pay received by an individual before or after becoming totally or partially
unemployed but earned prior to becoming totally or partially unemployed, provided that the
term totally or partially unemployed shall not be interpreted to include employees who are
on vacation by reason of the employer's request provided they are unequivocally so informed
at least ninety days prior to such vacation.
McHugh, Chief Justice:
This is a petition for a writ of certiorari,See footnote 1 in which twenty-two employees seek
unemployment compensation benefits for a two-week period in August of 1992 during which
their employer shutdown its facility. Though the Board of Review of the West Virginia
Bureau of Employment Programs had determined that, under W. Va. Code, 21A-1-3 [1991],
the employees were entitled to such benefits because the employer failed to give unequivocal
notice of the planned shutdown within ninety days thereof, the Circuit Court of Kanawha
County reversed, ruling that W. Va. Code, 21A-1-3 [1991] does not require such notice to
be unequivocal and that the employees were sufficiently informed of the planned shutdown.
This Court has before it the petition, all matters of record and the briefs and arguments of
counsel. For the reasons stated below, the order of the circuit court is reversed.
I.
The following relevant events, which, for the most part, are undisputed,
occurred prior to the planned two-week shutdown of the Buckhannon, West Virginia facility
of respondent Corhart Refractories Corp. (hereinafter "Corhart"). On March 5, 1992, a
labor-management meeting was held where, as the minutes of the meeting reflect, plant
manager Jim Zalaznik commented upon the possibility of a planned plant shutdown: "We are starting to plan a shutdown for this summer because of the sales forecast. I want to
discuss it early so people can be planning ahead. The exact timing isn't set yet, but it is
definitely after school is out." Two months later, on May 7, 1992, another labor-
management meeting took place and, according to the minutes of that meeting, the following
relevant comments were made by Mr. Zalaznik:
The order backlog is very low. There are only a couple of
weeks of forming an Isopress and Special Materials. Corning
France is the only order even available now. The Russian order
is still being discussed but there are no promises. If something
isn't received soon, we face some kind of layoff. A shutdown is
being planned in August.See footnote 2
(footnote added).
The following week, Corhart posted its first announcement of a planned
shutdownSee footnote 3. The notice read, in relevant part:
NOTICE
Summer Shutdown
Announcement
Please plan on a two week total plant production shutdown
August 10-August 23. Plan to take vacation during that time
unless your supervisor and the Plant Manager approve an
exception. Some administrative areas may need to work. Also,
a skeleton security staff will be maintained in the plant.
If orders are received, you will be immediately notified of
cancellation of the shutdown.
When it was subsequently determined that the shutdown should occur one
week later than was originally stated in the first shutdown announcement, the following
revised announcement was posted on May 15, 1992, approximately ninety days prior to the
planned shutdown:
NOTICE
Revised
Summer Shutdown
Announcement
Due to the ship date of the Corning France order, the shutdown
has been delayed one week. Please plan on a two week total
plant production shutdown August 17 - August 30. Plan to take
vacation during that time unless your supervisor and the Plant
Manager approve an exception. Some administrative areas may need to work. Also, a skeleton security staff will be maintained
in the plant.
If orders are received, you will be immediately notified of
cancellation of the shutdown.
According to the minutes of the labor-management meeting held on July 1,
1992, the status of the planned shutdown was again discussed:
The quote activity has been heavy, so we have some chances for
orders. We did receive a Central Glass Fiber order and hope to
receive an Iwaki and Oschatz, Poland order. We also look for
an OCF order for late in the year. However, all of these orders
only add up to the disappointing $17 million forecast for 1992.
Any fall out from these would be a drop from this number. It is
difficult to forecast any substantial changes in manpower until
I get more information on these orders. It's possible that the
shutdown could be cancelled if these orders are received, but I
can't plan without the details.See footnote 4
(emphasis and footnote added.)
Finally, on July 27, 1992, Corhart posted the following notice of shutdown
and, in addition, the following shutdown policy:
NOTICE
The scheduled shutdown is firm now that the orders we were
waiting for have arrived and been evaluated. They do not
require enough production to prevent the shutdown.
Additional details about shutdown procedures will be available
soon. If you have any immediate questions about the shutdown,
please see your supervisor.
SHUTDOWN POLICY
During the planned two week shutdown, starting August
17, 1992, all hourly employees will be required to take vacation.
If an employee does not have enough vacation time to
cover the shutdown, they will be required to take whatever
vacation time they have and be placed on layoff for the
remainder of the two week period.
Employees who wish to take time off later in the year and
have exhausted their vacation, may, if their Supervisor agrees,
take a leave of absence without pay.
A few employees may be required to work as needed.
If you have any questions concerning this policy or
unemployment benefits, please see Mike Pasternak.
According to Corhart, because it had received a decreased number of orders,
it had urged its employees to take vacation earlier that summer in an effort to avoid a
shutdown.See footnote 5 The petitioners herein are twenty-two hourly employees who chose not to take vacation until the shutdown period in August. Consequently, they had sufficient vacation
accrued to cover the entire two-week shutdown period.See footnote 6 The petitioners (hereinafter
"claimants") subsequently applied for unemployment compensation benefits for the two-
week shutdown period with the West Virginia Department of Employment Security
(hereinafter "DES").
DES Deputy Pat Pingley found that claimants were eligible for unemployment
compensation benefits because they were partially unemployed during the two-week
shutdown period. See W. Va. Code, 21A-6-1(4) [1987] ("[a]n unemployed individual shall
be eligible to receive benefits only if the commissioner finds [inter alia,]that . . . (4) He has
been totally or partially unemployed during his benefit year for a waiting period of one week
prior to the week for which he claims benefits for total or partial unemployment"); W. Va.
Code, 21A-1-3 [1991] ("'[P]artial unemployment' means: . . . [a]n individual who has not
been separated from employment is partially unemployed in any week in which due to lack
of full-time work wages payable to him are less than his weekly benefit amount plus twenty-
five dollars: Provided, That said individual must have earnings of at least twenty-six dollars.")See footnote 7 However, Deputy Pingley found claimants to be disqualifiedSee footnote 8 for benefits under
W. Va. Code, 21A-1-3 [1991], which states in relevant part:
the term 'wages' does not include: . . . (10) Vacation pay . . .
received by an individual before or after becoming totally or
partially unemployed but earned prior to becoming totally or
partially unemployed: Provided, That the term totally or
partially unemployed shall not be interpreted to include . . . (B)
employees who are on vacation by reason of the employer's
request provided they are so informed at least ninety days prior
to such vacation[.]
Deputy Pingley concluded that the May 15, 1992 notice of shutdown posted by Corhart
sufficiently informed the claimants of the shutdown within ninety days thereof and that,
consequently, they were disqualified from benefits for the two-week shutdown period because their wages exceeded their weekly benefit amount by twenty-five dollars or more.See footnote 9
See W. Va. Code, 21A-1-3 [1991] (defining partial unemployment).
The claimants appealed Deputy Pingley's decision to the Board of Review of
the West Virginia Bureau of Employment Programs and a hearing was conducted on
November 2, 1992 before Administrative Law Judge Roderick A. Devison. Claimant
Kenneth Johnston testified that, in late June of 1992, during a meeting with Mr. Zalaznik,
the plant manager, Mr. Zalaznik indicated that he would let the employees know in a few
weeks whether the shutdown was going to occur.See footnote 10 In addition, Sturl Waybright, president of the local union and also a claimant herein, testified that many employees were confused
as to whether a shutdown was actually going to occur because there had been rumors that
Corhart had been receiving orders and that there was a possibility the shutdown might be
cancelled. Mr. Waybright further testified that he approached Corhart's personnel manager,
Mike Pasternak, on more than one occasion regarding the status of the shutdown and that Mr. Pasternak's response was that "we really don't know yet." Conversely, notwithstanding
Corhart management's hope that it would receive enough orders to warrant a cancellation of
the shutdown, Mr. Zalaznik, the plant manager, testified that the shutdown was going to
occur as scheduled, unless cancelled, and that no such cancellation occurred.See footnote 11
In a decision dated November 10, 1992, ALJ Devison found, inter alia:
There were several policy statements and explanations regarding
the vacation time announced by the employer. There were some
rumors that the shutdown would not occur if the employer got
sufficient orders which had to be met at or during the period of
the shutdown. Additional statements were made by the
employer and passed on to the claimants and the other hourly
workers that there could be some changes made but that the
shutdown was still affirmed.
ALJ Devison concluded that W. Va. Code, 21A-1-3 [1991]
provides that the phrase totally or partially unemployed shall not
be interpreted to mean employees who are on vacation by
reason of the request of the employer where the employees have
been informed about the vacation at least 90 days prior to the
vacation. The record reflects that the claimants were informed
of the vacation on May 15, 1992, more than 90 days prior to the
commencement of the vacation. Accordingly, having met the
statutory notice requirement, it must be concluded that the
claimants are neither totally nor partially unemployed. Article
21A-6-1 provides that an individual is not eligible for benefits
unless he/she is totally or partially unemployed. Since the
claimants are neither totally nor partially unemployed they are
not eligible for benefits. The claimants are not disqualified. In
view of the decision on eligibility, there remains an
overpayment which may be collected in accordance with the
usual procedures.See footnote 12
(footnote and emphasis added).
The claimants appealed the administrative law judge's decision to the Board
of Review of the West Virginia Bureau of Employment Programs (hereinafter "Board of Review").See footnote 13 In a decision dated February 8, 1993, the Board of Review determined, inter
alia, that the May 15, 1992 shutdown notice, posted more than ninety days before the
planned shutdown, was "equivocal in nature" and as such, did not satisfy the requirements
of W. Va. Code, 21A-1-3 [1991]. The Board of Review ruled that claimants were partially
unemployed and therefore eligible for benefits. The Board further found that the claimants
were not disqualified, stating, in pertinent part:
Although employees were advised to plan on a plant shutdown
for [August 17 to August 30, 1992], the notice indicated that an
employee's supervisor or the plant manager could approve an
exception. Moreover, the notice indicated that certain other
areas might need to work. Finally, the notice indicated that the
vacation shutdown would be cancelled if orders were received.
The record reflects that orders were thereafter received and
there was great confusion among employees as to whether or not
the shutdown would take effect. It was not until approximately
thirty days prior to the shutdown that employees were notified
that the shutdown was firm. That notice on its face said that not
enough orders had been received to prevent the shutdown.
Finally the shutdown policy, issued approximately twenty days
prior to the shutdown, stated that certain exceptions would be
made. Under all the circumstances of this case it is apparent
that the notice issued on May 15, more than ninety days prior to
the shutdown, was equivocal in nature. The obvious purpose of
the statutory ninety day requirement is to provide notice to
employees so that vacation plans may be made. The record in
this case plainly reflects that the equivocal notice, the
subsequent receipt of orders and the obvious confusion among
employees did not serve to satisfy the statutory ninety day
requirement. If the notice had been unequivocal the Board
would not hesitate to make a different finding. However, the notice was on its face, not unequivocal and the circumstances
that followed after the posting of the notice indicate that the
statutory objective has not been satisfied. Accordingly, it is
concluded that the claimants were partially unemployed within
the meaning of the unemployment statute.
(emphasis added).
Corhart subsequently appealed the Board of Review's decision to the Circuit Court
of Kanawha County. See W. Va. Code, 21A-7-17 [1967]. In a final order dated September
22, 1994, the circuit court reversed the Board of Review's decision: The
Board'
s
determ
ination
that
the
notice
of the
plant
closing
was
equivo
cal is a
finding
of fact
and as
such is
entitle
d to
'plainl
y
wrong'
defere
nce.
The
Court
adopts the
Board'
s
findin
gs of
fact
herein
by
refere
nce in
their
entiret
y.
However, the Board's assumption that the statute requires
an absolutely unequivocal notice is a conclusion of law that may
be reviewed by this Court. Kisamore v. Rutledge 276 S.E.2d 821 (W. Va. 1981).
After a thorough review of the record, this Court
concludes that there is no evidence or authority that notice must
be unequivocal. Thus, the Board was incorrect in determining
that the requirements of § 21A-1-3 regarding the definition of
'wages' were not satisfied as a matter of law.
Accordingly, the Court does hereby ORDER that the
final decision by the Board of Review is reversed and the
vacation pay received by the claimants shall be used in
determining their eligibility for unemployment benefits.
This order is before this Court, pursuant to W. Va. Code, 21A-7-27 [1970].
II.
An unemployed individual is eligible to receive unemployment compensation
benefits if the Commissioner finds, inter alia, that such individual "has been totally or
partially unemployed during his benefit year for a waiting period of one week prior to the week for which he claims benefits for total or partial unemployment[.]" W. Va. Code, 21A-
6-1(4) [1987]. At the time of the August 1992 shutdown, W. Va. Code, 21A-1-3 [1991]
defined total and partial unemployment as follows:
(1) An individual is totally unemployed in any week in
which such individual is separated from employment for an
employing unit and during which he performs no services and
with respect to which no wages are payable to him.
(2) An individual who has not been separated from
employment is partially unemployed in any week in which due
to lack of full-time work wages payable to him are less than his
weekly benefit amount plus twenty-five dollars: Provided, That
said individual must have earnings of at least twenty-six dollars.
W. Va. Code, 21A-1-3 [1991] further provided, in relevant part, that
the term 'wages' does not include: . . . (10) Vacation pay . . .
received by an individual before or after becoming totally or
partially unemployed but earned prior to becoming totally or
partially unemployed: Provided, That the term totally or
partially unemployed shall not be interpreted to include . . . (B)
employees who are on vacation by reason of the employer's
request provided they are so informed at least ninety days prior
to such vacation[.]See footnote 14
(footnote added).
In determining whether the claimants herein are eligible to receive
unemployment compensation benefits under W. Va. Code, 21A-6-1(4) [1987] and 21A-1-3
[1991], we must address two issues: (1) whether, as a matter of law, W. Va. Code, 21A-1-3 [1991] requires an employer to "unequivocally" inform employees of employer-requested
vacation at least ninety days prior thereto; and (2) if unequivocal notice is required under
W. Va. Code, 21A-1-3 [1991], whether this requirement was satisfied by the May 15, 1992
shutdown announcement, posted at least ninety days prior to the planned shutdown.
A.
It is well-settled in this jurisdiction that the Board of Review's findings of fact
will only be set aside if they are clearly wrong. However, the Board's conclusions of law are
fully reviewable by this Court:
The findings of fact of the Board of Review of the West
Virginia Department of Employment Security are entitled to
substantial deference unless a reviewing court believes the
findings are clearly wrong. If the question on review is one
purely of law, no deference is given and the standard of judicial
review by the court is de novo.
Syl. pt. 3, Adkins v. Gatson, 192 W. Va. 561, 453 S.E.2d 395 (1994). See syllabus,
Courtney v. Rutledge, 177 W. Va. 232, 351 S.E.2d 419 (1986); syl. pt. 2, Perfin v. Cole,
174 W. Va. 417, 327 S.E.2d 396 (1985); syl. pt. 1, Kisamore v. Rutledge, 166 W. Va. 675,
276 S.E.2d 821 (1981). See also W. Va. Code, 21A-7-21 [1943] ("In a judicial proceeding
to review a decision of the board, the findings of fact of the board shall have like weight to
that accorded to the findings of fact of a trial chancellor or judge in equity procedure.")
Whether W. Va. Code, 21A-1-3 [1991] required Corhart to unequivocally inform its
employees, including the claimants, of the planned plant shutdown at least ninety days in advance, is a question of statutory interpretation. Thus, our review of W. Va. Code, 21A-1-3
[1991] is plenary. Donley v. Bracken, 192 W. Va. 383, 387, 452 S.E.2d 699, 703 (1994).
The purpose of our State's unemployment compensation laws, as stated in W.
Va. Code, 21A-1-1 [1978] "is to provide reasonable and effective means for the promotion
of social and economic security by reducing as far as practicable the hazards of
unemployment[,]" so as to:
(1) Provide a measure of security to the families of unemployed
persons.
(2) Guard against the menace to health, morals and welfare
arising from unemployment.
(3) Maintain as great purchasing power as possible, with a view
to sustaining the economic system during periods of economic
depression.
(4) Stimulate stability of employment as a requisite of social
and economic security.
(5) Allay and prevent the debilitating consequences of poor
relief assistance.
See Gibson v. Rutledge, 171 W. Va. 164, 167-68, 298 S.E.2d 137, 141 (1982); Lee-Norse
Co. v. Rutledge, 170 W. Va. 162, 166, 291 S.E.2d 477, 481 (1982). See also Hill v. Board
of Review, 166 W. Va. 648, 651, 276 S.E.2d 805, 807 (1981). To that end, this Court has
traditionally held that "[u]nemployment compensation statutes, being remedial in nature,
should be liberally construed to achieve the benign purposes intended to the full extent
thereof." Syl. pt. 6, Davis v. Hix, 140 W. Va. 398, 84 S.E.2d 404 (1954). See syl. pt. 1,
Lewis v. Gatson, 181 W .Va. 214, 382 S.E.2d 51 (1989); syl. pt. 1, Perfin v. Cole, supra; syl. pt. 1, Gibson v. Rutledge, supra; syl. pt. 1, Lee-Norse Co. v. Rutledge, supra. See also
Adkins v. Gatson, 193 W. Va. at 564-65, 453 S.E.2d at 398-99; Bailey v. Rutledge, 174 W.
Va. 476, 478, 327 S.E.2d 456, 458 (1985); London v. Bd. of Review of Dept. of
Employment Security, 161 W. Va. 575, 576-77, 244 S.E.2d 331, 333 (1978). Accord Kirk
v. Cole, 169 W. Va. 520, 523, 288 S.E.2d 547, 549 (1982).
The requirement of noticeSee footnote 15 in W. Va. Code, 21A-1-3 [1991] is a practical one,
clearly meant to insure that employees are afforded ample opportunity to plan vacations for
shutdown periods chosen not by them, but by their employer. We recognize that when
planning a shutdown, employers are, at the same time, hopeful that business conditions will
improve and that a shutdown will not be necessary. The record in this case does not suggest
nor do the claimants contend that Corhart management answered employees questions
regarding the status of the shutdown in a manner intended to mislead or confuse them.
Nevertheless, an employer which communicates its ambivalence to employees cannot fairly
and reasonably expect them to confidently plan their lives, including vacation periods which
may include many family members, only to have their plans disrupted when their employer
determines that a shutdown is not warranted after all.See footnote 16 Unless a definite standard is set, the reason for the statutory requirement of informing the employee at least ninety days prior to
the designated vacation period could be undermined.
We hold, therefore, that an unemployed individual shall be eligible to receive
benefits only if the Commissioner finds, inter alia, that he has been totally or partially
unemployed during his benefit year for a waiting period of one week prior to the week for which he claims benefits for total or partial unemployment, under W. Va. Code, 21A-6-1(4)
[1994]. The terms total and partial unemployment are defined in W. Va. Code, 21A-1-3
[1994]. However, under the definition of wages found in W. Va. Code, 21A-1-3 [1994], the
term wages shall not include vacation pay received by an individual before or after becoming
totally or partially unemployed but earned prior to becoming totally or partially unemployed,
provided that the term totally or partially unemployed shall not be interpreted to include
employees who are on vacation by reason of the employer's request provided they are
unequivocally so informed at least ninety days prior to such vacation.
B.
We must now determine if the May 15, 1992 shutdown announcement, posted
at least ninety days prior to the planned shutdown, satisfied the requirements of W. Va.
Code, 21A-1-3 [1991]. We find that it did not and that the claimants were partially
unemployed during the shutdown period.
As we previously stated, "[t]he findings of fact of the Board of Review of the
West Virginia Department of Employment Security are entitled to substantial deference
unless a reviewing court believes the findings are clearly wrong." Syl. pt. 3, in relevant part,
Adkins v. Gatson, supra. Applying this standard of review to the facts of this case, we do
not find the Board's findings to be clearly wrong, as they are supported by the evidence
presented.
The Board of Review found that the May 15, 1992 announcement stated "that
employees should plan on a two week total plant production shutdown from August 17 to August 30[;]" "that they should plan to take vacation during that time unless their supervisor
and the plant manager approved an exception[;]" "that some administrative areas may need
to work[;]" and finally, "that if orders are received, employees will be notified immediately
of the cancellation of the shutdown." The Board further found that:
[a]pparently there was some concern among employees as to
whether the shutdown would actually occur. Orders were being
received and there was discussion that the shutdown might not
occur. Employees were concerned about scheduling vacations
in light of the receipt of the orders and discussions that the
shutdown might not occur. Those discussions prompted the
employer to post the [July 27, 1992] notice . . . that the
shutdown would be firm.
As its decision indicates, the Board of Review's finding that the May 15, 1992
shutdown announcement was "equivocal in nature" was based upon the four corners of the
posted announcement and upon events and discussions which occurred in relation thereto.
We find that the Board fairly assessed the evidence in this regard and hold that its finding
that Corhart failed to unequivocally inform its employees of the plant shutdown was not
clearly wrong. Accordingly, the claimants were partially unemployed during the shutdown
period, are eligible for unemployment compensation benefits under W. Va. Code, 21A-6-1(4)
[1987] and are not disqualified. See W. Va. Code, 21A-6-3 [1990]; n. 8, supra.
III.
For reasons discussed herein, the September 22, 1994 order of the Circuit
Court of Kanawha County, denying the claimants unemployment compensation benefits, is reversed. This case is remanded to the Board of Review for it to enter an order in
accordance with this opinion, as required by W. Va. Code, 21A-7-28 [1936].
Reversed and remanded
with directions.
Footnote: 1
W. Va. Code, 21A-7-27 [1970] states: "The appeal from the decision of
the circuit [court] of Kanawha county may be taken to the supreme court of appeals if a
proper petition for certiorari is filed within sixty days of the date of the final decision of
the circuit court of Kanawha county. The cases shall go from the circuit court of
Kanawha county only on writ of certiorari and need be heard only at the session of the
supreme court."Footnote: 2
Corhart was authorized to plan a shutdown of its facility under the
collective bargaining agreement in effect at the time between Corhart and the Aluminum
Brick and Glass Workers International Union, AFL-CIO Local No. 477, the union which
represents the employees. The collective bargaining agreement provided, in pertinent
part:
ARTICLE 15
VACATION PAY
. . . .
SECTION 5. Employees are required to take their vacation
except for their optional week. The company reserves the
right to shut down any or all of its departments or plants for
part or all of the vacation periods and to have the employees
take their vacations at such time.
The collective bargaining agreement further provides, in article 15, sections 2 and 3, that
employees who have accrued vacation pay are entitled to receive it on July 1 of any given
year.Footnote: 3
According to Corhart, the 1992 shutdown was only the second shutdown in
the plant's history. The other shutdown, which occurred in 1991, was planned due to
poor business conditions.Footnote: 4
Corhart maintains that a discussion of the planned shutdown at the July 1,
1992 meeting was inevitable considering that all employees, including the claimants,
were to receive and, in fact, did receive, their vacation pay on that day, pursuant to article
15, sections 2 and 3 of the collective bargaining agreement, discussed supra. According
to Corhart, though employees receive vacation pay on July 1 of any given year, such pay,
for administrative purposes, is allocated to the weeks during which employees actually
take vacation. Footnote: 5
The record reveals that by memorandum dated January 7, 1992, Corhart
notified its employees that vacation requests received between January 1 and March 31,
1992 would be granted on a seniority basis, while those requests received between April
1 and July 1, 1992 would be granted on a first-come, first-served basis. Footnote: 6
Conversely, employees who did take vacation earlier in the year had
exhausted their vacation and were, thus, placed on layoff during the two-week shutdown.
As a result, these employees were qualified to collect unemployment compensation
benefits for the shutdown period.Footnote: 7
W. Va. Code, 21A-6-1 was amended in 1994. However, the changes made
thereto do not affect the issues in this appeal. W. Va. Code, 21A-1-3 was amended in
1993 and 1994. In 1994, the legislature changed, inter alia, the meaning of the term
partial unemployment insofar as "[a]n individual who has not been separated from
employment is partially unemployed in any week in which due to lack of full-time work
wages payable to him are less than his weekly benefit amount plus sixty dollars:
Provided, That said individual must have earnings of at least sixty-one dollars."
(emphasis added).Footnote: 8
"The West Virginia Unemployment Compensation Law provides a two-
step process to determine entitlement to unemployment compensation benefits. When an
individual is held to be eligible to receive such benefits, the next step is to consider
possible disqualification from receiving such benefits. Kisamore v. Rutledge, 166 W. Va.
675, 680, 276 S.E.2d 821, 824 (1981)." Peery v. Rutledge, 177 W. Va. 548, 550 n. 2,
355 S.E.2d 41, 43 n. 2 (1987).Footnote: 9
Deputy Pingley rendered separate, but virtually identical, decisions for
each of the twenty-two claimants. In that the claimants received varying rates of pay
from Corhart, the amount of vacation pay and the amount of overpayment of benefits
received by each claimant differed. Footnote: 10
At the November 2, 1992 hearing, the following relevant testimony was
elicited:
Q [Judge to Mr. Johnston:] Did you have some
testimony you'd like to offer regarding a policy meeting on or
about -- or some time in --
A [Mr. Johnston:] It was some time in the last of
June.
Q [Judge:] Okay.
A [Mr. Johnston:] At that time, Jim was asked and he
said --
Q [Judge:] Mr. Zalaznik?
A [Mr. Johnston:] Yes, sir.
Q [Judge:] All right.
A [Mr. Johnston:] At that time we had about three
weeks, something like that to go, and he said we will let you
know in two weeks. As of whether we're going to have the
shut down or not.
. . . .
MR. ZALAZNIK: I don't recall the date, but I
remember in one of the policy meetings I explained the reason
for the 90-day warning or notice and the purpose the fact that
the company wanted to pay vacations which, you know, it's
obligated to do and wants to, but didn't see paying
unemployment if the people had the opportunity to take paid
vacation. And I think all along I expressed the fact that,
yeah, if we get enough orders and if something like a miracle
happens, we could cancel it, but I don't remember.
It's an interpretation of whether somebody says, well,
I'm going to firm it up or it still could be cancelled. That
doesn't sound very firm. But I think we also said if somebody
had a vacation scheduled and that we cancelled the shut
down, then we would go ahead and offer that vacation period.
(emphasis added).Footnote: 11
Mr. Zalaznik testified, in relevant part:
You know, all along everybody was hoping, of course,
for more orders. So as Mr. Pasternak has stated, we don't
normally take a shut down, we're not the kind of business that
normally does, except in this case, the last two years when
our business is down almost 50 percent, and we, in fact, have
about 50 people on layoff.
So throughout all this, and you see the notes from the
meeting where even in March I said we were planning a shut
down, but we had yet to make the announcement. Whenever
anybody asked, they said, you know, when somebody says
they don't know, it's they don't know that it's going to be
canceled. In other words, all along we said, yeah, we would
love to cancel it, and we would love to have some orders, but
that we continue, you know, if we're going to have people
take vacations and pay them for their vacations, that we want
to abide by this 90-day notice, so it was definitely going to be
a shut down unless we canceled. So, on July 27th, there were
a lot of rumors flying around because everybody knows when
we get a few orders. So there were a lot of rumors flying
around, well, maybe it will be canceled.
. . . .
Just to reiterate the fact that there was never a notice
posted after the May 15th notice that said anything different
that there wouldn't be a shut down.
Footnote: 12
ALJ Devison agreed with Deputy Pingley's ruling that the claimants were
not entitled to unemployment compensation benefits. ALJ Devison modified Deputy
Pingley's decision insofar as Devison found the claimants to be ineligible for such
benefits and not disqualified.Footnote: 13
See Adkins v. Gatson, 192 W. Va. 561, 565, 453 S.E.2d 395, 399 (1994)
("Under the statutory scheme of W. Va. Code, 21A-7-1 et seq., the findings of the ALJ
are recommendations only and are not binding on the Board of Review.")Footnote: 14
As we previously indicated, W. Va. Code, 21A-1-3 has been amended
since the shutdown period in August 1992. See n. 7, supra. However, this particular
provision of W. Va. Code, 21A-1-3 has not been changed.Footnote: 15
Corhart takes issue with the fact that W. Va. Code, 21A-1-3 [1991]
employs the term "inform" and not "notice." However, Corhart neither distinguishes
these terms nor contends that the use of one term as opposed to the other affects the
issues in this case. To the contrary, the term "notice" is defined, inter alia, as
"[i]nformation[.]" Black's Law Dictionary 1061 (6th ed. 1990).Footnote: 16
We are enlightened by the federal Worker Adjustment and Retraining
Notification (WARN) Act, 29 U.S.C. § 2101, et seq., which requires some employers
which are closing an operation or which are implementing a mass layoff to provide sixty
days notice to affected employees. The United States Secretary of Labor has
promulgated 20 C.F.R. § 639.1, et seq., Worker Adjustment and Retraining Notification,
pursuant to 29 U.S.C. § 2107(a) (1988). Under these regulations, notice to affected
employees is required to be specific, 20 CFR § 639.7(a)(1) (1994) and, more
significantly:
Notice may be given conditional upon the occurrence
or nonoccurrence of an event, such as the renewal of a major
contract, only when the event is definite and the
consequences of its occurrence or nonoccurrence will
necessarily, in the normal course of business, lead to a
covered plant closing or mass layoff less than 60 days after
the event. For example, if the non-renewal of a major
contract will lead to the closing of the plant that produces the
articles supplied under the contract 30 days after the contract
expires, the employer may give notice at least 60 days in
advance of the projected closing date which states that if the
contract is not renewed, the plant closing will occur on the
projected date.
20 C.F.R. § 639.7(a)(3) (1994), in relevant part.
In contrast, the May 15, 1992 shutdown announcements simply indicated, without specificity, that if orders were received, employees would be notified of the cancellation of the shutdown.
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