Case Title: Wyoming Dept. of Employment, Unemployment Ins. Com'n v. Porter,

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1999-07-14T00:00:00Z

Document:
Wyoming Dept. of Employment, Unemployment Ins. Com'n v. Porter,1999 WY 103986 P.2d 148Case Number: 98-257Decided: 07/14/1999Supreme Court of Wyoming

WYOMING DEPARTMENT OF EMPLOYMENT, UNEMPLOYMENT INSURANCE 
COMMISSION, Appellant (Respondent),

 

v.

 

CRAIG PORTER, Appellee 
(Petitioner).

 

               
                  

Appeal from the District Court 
of Uinta County, Honorable John D.

Troughton, 
Judge.

 

Gay Woodhouse, Attorney 
General; and Joe Scott, Senior Assistant Attorney General. Argument by Mr. 
Scott, representing appellant.

 Michael D. Newman of Honacker, Hampton & Newman, 
Rock Springs, WY. Argument by Mr. Newman, representing 
appellee.

 

    
Before LEHMAN, C.J., and THOMAS, MACY, GOLDEN, and HILL, 
JJ.

 

    
HILL, Justice.

  [¶1]      The Wyoming Department of Employment, 
Unemployment Insurance Commission (Commission), appeals from the decision of the 
district court reversing the determination of the Commission that Appellee Craig 
Porter (Porter) was liable for the repayment of unemployment insurance benefits 
based on this Court's decision in General Chemical Corporation v. Unemployment 
Insurance Commission, 906 P.2d 380 (Wyo. 1995).

 

   [¶2]   We affirm the decision of the 
district court.

 

                               
ISSUES

 

  [¶3]      The Commission sets forth a single issue 
for review:

 

Whether Unemployment Insurance Commission Decision 
No. C-6501-98, which held Craig Porter was liable to repay unemployment benefits 
is supported by substantial evidence and is in conformity with 
law?

 

  Porter's statement of the issue 
substantially agrees with that set forth by the 
Commission:

 

Was the Unemployment Insurance Commission's decision 
affirming the Appeals Examiner's holding that the Claimant had been overpaid 
unemployment insurance benefits in accordance with law?

 

  

                                
FACTS

 

  [¶4]      In 1993, Porter was part of a group of 
employees of General Chemical Corporation who went on strike. Porter was 
terminated from his employment for alleged picket line misconduct. Porter and 
other striking employees filed claims for unemployment benefits, and General 
Chemical challenged the claims for benefits filed by the striking workers. An 
initial determination was made by a deputy of the Department of Employment, 
Employment Resources Division (Division), that Porter was eligible for 
unemployment benefits. In an apparent effort to simplify matters, General 
Chemical entered into an agreement with the striking workers whereby they agreed 
to consolidate their claims into a test case" based upon the conclusion that 
Acommon questions of law and fact [will] determine" the claimant's rights to 
benefits (hereinafter the Agreement). Despite having been terminated from his 
employment, Porter signed the Agreement, along with other 
strikers.

 

  [¶5]      General Chemical appealed the test case, 
and an Appeals Examiner overturned the deputy's decision and found that the 
claimants were not entitled to benefits because they were members of a labor 
organization engaged in a work stoppage, and such activity disqualifies an 
individual from benefits under Wyo. Stat. Ann. § 27-3-313(a)(i) (LEXIS 1999). 
The Appeals Examiner also specifically found that Porter had not engaged in any 
misconduct on the picket line. The decision of the Appeals Examiner was appealed 
to the Commission. Reversing the decision, the Commission concluded that work 
stoppage" referred to the employer's business operations and not the individual 
worker's decision to withhold his labor. The Commission did affirm the Appeals 
Examiner's determination that Porter had not engaged in misconduct.1

 

  [¶6]      General Chemical appealed that portion 
of the Commission's decision relating to the eligibility of the claimants under 
the work stoppage" provision of Wyo. Stat. Ann. § 27-3-313(a)(i) to the district 
court, which certified the matter to this Court.  In General Chemical Corporation v. 
Unemployment Insurance Commission, 906 P.2d 380 (Wyo. 1995), we reversed the 
Commission on the basis that the plain language of the statute indicated that 
"work stoppage" referred to an individual's voluntary decision to withhold his 
labor, and, consequently, the striking workers were disqualified under Wyo. 
Stat. Ann. § 27-3-313(a)(i) from receiving unemployment insurance benefits. 
General Chemical Corporation, 906 P.2d  at 381-82.

 

  [¶7]      In response to the General Chemical 
decision, the Division sent Porter a notice on March 12, 1996, that he had been 
paid unemployment benefits for which he was not qualified. The Division 
requested repayment of $2,420.00 for the weeks ending September 18 through 
November 27, 1993. The Division did not request repayment for any benefits 
Porter received after November 27 - which was when the strike ended - because 
his employment had been terminated.

 

  [¶8]      On March 25, 1996, Porter protested the 
notice of overpayment, and, in response, the Division sent Porter an application 
for waiving the overpaid benefits. When Porter had not responded over a year 
later, the Division sent another letter 
requesting payment of the $2,420.00 in full. Porter, unable to repay that amount 
in a lump sum, agreed to pay in installments and, on April 21, 1997, signed an 
agreement to that effect.2 When Porter failed to make the 
first payment, as agreed, the Division again sent a letter asking for 
repayment. At this point, Porter filed a 
protest to the notice of overpayment, contesting the validity of his 
disqualification and asking for a waiver. The Division denied the waiver request 
on the basis that he did not meet the criteria for a waiver pursuant to the 
provisions of Wyo. Stat. Ann. § 27-3-409(b) and Chapter 32 of its rules and 
regulations. Porter subsequently protested this decision.

 

  [¶9]      The matter was referred to an Appeals 
Examiner for hearing after which Porter's protest was denied on the grounds that 
he did not meet the criteria for a waiver3 and that he was disqualified from 
benefits based on this Court's decision in General Chemical.  That decision was affirmed by the 
Commission, and Porter appealed to the district court.

 

  [¶10] 
  Reversing, the district 
court acknowledged that an employee who is on strike is disqualified from 
benefits under the holding of the General Chemical decision. However, it 
concluded that those workers who are fired while on strike are not disqualified 
so long as the discharge is not related to misconduct connected with their 
employment because their termination deprived them of the choice to strike or to 
work. Therefore, Porter was entitled to unemployment benefits. The Commission 
has now appealed that decision to this 
Court.

 

           
              STANDARD 
OF REVIEW

 

  [¶11] 
  Review of the Commission's 
decision proceeds as if the matter had come directly to us, and we afford no 
special deference to the district court's determinations. Wyoming Department of 
Employment, Division of Unemployment Insurance v. Banks, 854 P.2d 709, 711 (Wyo. 
1993). The Wyoming Administrative Procedure Act defines and limits our authority 
in review of administrative decision-making:

 

(c) To the extent necessary to make a decision and 
when presented, the reviewing court shall decide all relevant questions of law, 
interpret constitutional and statutory provisions, and determine the meaning or 
applicability of the terms of an agency action. In making the following 
determinations, the court shall review the whole record or those parts of it 
cited by a party and due account shall be taken of the rule of prejudicial 
error. The reviewing court shall:

 

(i) 
Compel agency action unlawfully withheld or unreasonably delayed; 
and

 

(ii) Hold unlawful and set aside agency action, 
findings and conclusions found to be:

 

(A) 
Arbitrary, capricious, an abuse of discretion or otherwise not in accordance 
with law;

 

                        
(B) Contrary to constitutional right, power, privilege or 
immunity;

 

(C) 
In excess of statutory jurisdiction, authority or limitations or lacking 
statutory right;

 

                        
(D) Without observance of procedure required by law; 
or

 

(E) 
Unsupported by substantial evidence in a case reviewed on the record of an 
agency hearing provided by statute.

 

    
Wyo. Stat. § 16-3-114(c) (1990).

 

Gibson v. Wyoming Division 
of Unemployment Insurance, 907 P.2d 1306, 1309 (Wyo. 1995). "We will affirm an 
agency's legal conclusion only if it is in accordance with the law. " Haynes v. 
State ex rel. Wyoming Workers' Compensation Division, 962 P.2d 876, 878 (Wyo. 
1998).

 

                             
DISCUSSION

 

  [¶12] 
  Initially, we consider the 
Commission's contention that the Agreement, signed by Porter as part of the 
proceedings leading up to our decision in General Chemical, bound him to our 
holding that striking workers are disqualified from benefits. The Commission 
notes that the Agreement stated that the signers, including Porter, agree that 
common questions of law and fact determine the below listed claimant's right to 
benefits" and that the claims will be adjudicated, and that decision will be 
binding on the rest of us. " In effect, the Commission is arguing that, by 
signing the Agreement, Porter has waived his right to challenge his 
disqualification for benefits upon any basis arising out of the events which 
gave rise to his initial claim (i. e., the strike).

 

  [¶13] 
  Unfortunately, neither 
party addressed the impact of Wyo. Stat. Ann. § 27-3-319(a) on the Agreement. 
That provision provides:

  

(a) Except as provided by W.S. 27-3-305, 27-3-320 and 
27-3-321, any agreement to waive, release or commute benefit rights or any 
other rights under this act is void and any agreement by any employed 
individual to pay any portion of an employer's contribution required by this act 
is void.

 

Wyo. Stat. Ann. § 
27-3-319(a) (LEXIS 1999) (emphasis added).  
The plain, unambiguous language of the statutory provision makes it clear 
that a claimant cannot agree to waive, release, or commute benefit rights or any 
other rights under this Act.4 Any agreement which purports to do 
so is void. Therefore, regardless of what the intent of the parties to the 
Agreement was, it is void insofar as the Commission attempts to characterize it 
as a waiver by Porter to any of his rights under the Act. This is not to say 
that Porter is not bound by this Court's decision in General Chemical. Even if 
the Agreement is void, Porter would still not be eligible for benefits as a 
striking worker simply because striking workers do not have any right to 
benefits under the Act, and our decision in General Chemical is dispositive of 
that issue for all claimants under the doctrine of stare 
decisis.

 

  [¶14] 
  The validity of our 
decision in General Chemical, however, is not the issue confronted by us today. 
The question we must decide is whether a striking worker who is disqualified for 
benefits while a work stoppage is ongoing becomes eligible for benefits upon his 
termination from employment, absent work-related 
misconduct.

 

  [¶15] 
  The Commission's position 
is that once a claimant has been disqualified, they cannot be eligible for 
benefits until the initial condition which created the disqualification has been 
removed. In other words, the Commission argues that since Porter's initial 
unemployment was due to a disqualifying work stoppage, he cannot qualify for 
benefits regardless of any change in circumstances until that work stoppage has 
been resolved. We must reject the Commission's position because it not only 
ignores reality but is inconsistent with the statutory language and purpose 
underlying unemployment insurance.

 

  [¶16] 
  We begin with the language 
of the statutory provision which disqualifies a claimant if his unemployment is 
due to a work stoppage:

 

(a) For any week with respect to which the 
following situations occur or payments have been or will be received, an 
individual shall be disqualified from benefit entitlement 
if:

 

(i) 
Total or part total unemployment for any week is due to work stoppage 
resulting from a labor dispute on the employment premises at which he was last 
employed.

 

Wyo. Stat. Ann. § 
27-3-313(a)(i) (LEXIS 1999) (emphasis added). Our decision in General Chemical 
Corporation made it clear that the decisive factor in disqualifying a claimant 
under this provision was the claimant's voluntary decision to withhold his 
labor. General Chemical Corporation, 906 P.2d  at 382. Hence, under the plain language of the statute, "for any 
week" where a claimant has voluntarily withheld his labor due to a work stoppage 
resulting from a labor dispute, he is disqualified from benefits. The use of the 
language Afor any week" clearly contemplates that a claimant's eligibility 
status for benefits could vary from week to week. This proposition is supported 
by the general structure of the Wyoming Employment Security Law.  Wyo. Stat. Ann. §§ 27-3-101 - 704 (LEXIS 
1999). For example, the term "unemployment" is defined as "any week in 
which an individual performs no services and receives no wages or performs less 
than full-time work if wages payable for that week are less than his weekly 
benefit amount and are in accordance with regulations of the commission". Wyo. 
Stat. Ann. § 27-3-102 (a)(xv) (LEXIS 1999); see also Wyo. Stat. Ann. §§ 27-3-303 
(benefits paid and calculated on a weekly basis); 27-3-306 (eligibility 
requirements); 27-3-307 (eligibility when enrolled in approved training 
programs); 27-3-314 (extended benefit periods); 27-3-315 (when individual is 
deemed an exhaustee); 27-3-316 
(applicability of regular claim and payment provisions to extended benefits); 
and 27-3-317 (eligibility for extended benefits).

 

  [¶17] 
  In this case, Porter was 
initially disqualified because he was voluntarily withholding his labor due to a 
work stoppage. That is undisputed. What is also undisputed is that Porter was 
terminated from his employment during the course of the strike. That action 
effected a fundamental change in the nature of Porter's relationship with his employer. At that moment, 
Porter was no longer voluntarily withholding his labor since he was no longer an 
employee. The basis of our holding in General Chemical was the voluntary nature 
of a striker's decision to withhold his labor.  That condition evaporated upon Porter's 
termination, and, consequently, for the purposes of benefits under the Act, 
Porter's unemployment for each succeeding week of the strike was not due to a 
voluntary withholding of his labor pursuant to a work stoppage, it was due to 
the termination of his employment relationship with his employer. Thus, absent 
any other disqualifying conditions, Porter was eligible for unemployment 
benefits under the plain and unambiguous language of the Wyoming Employment 
Security Law.

 

  [¶18] 
  The courts of other states 
have also concluded that the termination of an employee during the course of a 
labor dispute entitles the claimant to unemployment compensation benefits.  See Federico v. Brannan Sand & 
Gravel Company, 788 P.2d 1268, 1273 (Colo. En Banc 1990) ("We conclude that an 
employee involved in a labor dispute is entitled to unemployment compensation 
benefits when the employer-employee relation has been terminated with respect to 
that employee. "); Christianson v. Geo. A. Hormel & Company, 404 N.W.2d 334, 337-38 (Minn.App. 1987) (claimant was 
entitled to unemployment benefits because his actions resulting in his 
termination during the course of a strike did not constitute 
misconduct).

 

  [¶19] 
  The precedent cited by the 
Commission addresses the issue of eligibility in the context of an employer's 
replacement of striking workers and whether such an action constitutes a 
termination of the striking employer's relationship with his employer. In those 
cases, the courts have analyzed whether, under the particular facts of the situation, the hiring of 
replacement workers has acted as a de facto termination of the claimant's 
employment. If no de facto termination has occurred, then the claimant is not 
entitled to benefits but conversely, if so, then he is entitled to the benefits. 
See Federico, 788 P.2d  at 1273; Baugh v. United Telephone Company, 377 N.E.2d 766 (Ohio 1978) (hiring of replacement workers severed the labor dispute as the 
proximate cause of unemployment, and the statutory disqualification was no 
longer applicable); Building Products Company v. Arizona Department of Economic 
Security, 604 P.2d 1148 (Ariz. App. 1979) (claimants who continued strike 
despite the hiring of replacement workers were still disqualified from receiving 
benefits); See also Williams v. Teledyne Continental Motors Aircraft Products, 
646 So. 2d 22 (Ala. 1994) (claimants ineligible); and City of Fort Smith v. 
Moore, 599 S.W.2d 750 (Ark. App. 1980) (claimants 
eligible).

 

  [¶20] 
  The underlying theme of all 
of the above-cited cases is that the key consideration is whether the 
employer-employee relationship has been terminated. If so, then a claimant who 
was initially disqualified because of a labor dispute becomes eligible for 
benefits. In this case, there is no dispute that Porter's relationship with his 
employer was terminated and, therefore, he was eligible for 
benefits.

 

                             
CONCLUSION

 

  [¶21] 
  A claimant who is initially 
disqualified for unemployment benefits on the basis that his unemployment is due 
to a work stoppage may become eligible for benefits, despite the continuation of 
the work stoppage, if it can be demonstrated that his relationship with his 
employer has been terminated. Porter has made that demonstration, and he is 
entitled to retain the benefits paid to him during the course of the strike. The 
decision of the district court reversing the Commission's determination of 
overpayment is hereby affirmed.

 

        

 

        

 

FOOTNOTES

  1That determination is not disputed 
by the Commission.

  

2The 
Commission has not argued on appeal that this particular agreement by Porter 
waived any of his rights to contest the propriety of the notice of overpayment, 
so we will not consider what, if any, effect it has on this proceeding. However, 
we do note that the validity of any waiver alleged to have occurred by virtue of 
Porter's actions here is questionable in light of our discussion below of Wyo. 
Stat. Ann. § 27-3-319(a).

  

3Porter 
has not challenged this determination on appeal.

  

4The 
three exceptions noted above, Wyo. Stat. Ann. §§ 27-3-305 (child support 
obligations), 27-3-320 (federal income tax withholding), and 27-3-321 (food 
stamp over issuance) are not applicable under the facts of this 
proceeding.