Title: Wyoming Dept. of Employment, Div. of Unemployment Ins. v. Secrest

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Wyoming Dept. of Employment, Div. of Unemployment Ins. v. Secrest1991 WY 83811 P.2d 733Case Number: 90-295Decided: 05/28/1991Supreme Court of Wyoming
WYOMING DEPARTMENT OF 
EMPLOYMENT, DIVISION OF UNEMPLOYMENT INSURANCE, Appellant 
(Respondent),

v.

Shirley I. SECREST, 
Appellee (Petitioner).

Appeal from The District 
Court, NatronaCounty, Dan Spangler, 
J.

William G. Hibbler, Sr. 
Asst. Atty. Gen., for appellant.

Earl R. Johnson, Jr., 
Casper, for 
appellee.

Before URBIGKIT, C.J., 
and THOMAS, CARDINE, MACY and GOLDEN, JJ.

CARDINE, 
Justice.

[¶1.]     The Wyoming Department 
of Employment, Division of Unemployment Insurance (Division), appeals the 
district court's reversal of its administrative decision denying Secrest 
unemployment benefits.

[¶2.]     We 
affirm.

[¶3.]     The Department raises 
two issues:

"I. Whether the 
appellant, Wyoming Department of Employment, Division of Unemployment Insurance, 
properly disqualified the appellee, Shirley I. Secrest, from certain weeks of 
unemployment insurance benefits pursuant to W.S. § 27-3-313(a) 
(1987)?

"II. Whether the 
appellant, Wyoming Department of Employment, Division of Unemployment Insurance, 
properly allocated the lump-sum remuneration received by the appellee, Shirley 
I. Secrest, to disqualify her from certain weeks of unemployment insurance 
benefits pursuant to Chapter XXX, Regulations of the Division of Unemployment 
Insurance?"

[¶4.]     The facts are not in 
dispute. On January 23, 1990, Secrest left her employment with the WyomingYouthTreatmentCenter. A claims deputy with the Division 
denied Secrest's application for benefits effective immediately on the grounds 
that her termination was the result of misconduct. Shortly after the denial of 
unemployment benefits, Secrest withdrew her accrued contributions to the state's 
retirement fund. Secrest testified that she was "forced" to withdraw her 
retirement contributions "[s]o that I could have something to eat - to live on." 
Secrest had nothing to "live on" because the Division was denying her 
unemployment benefits based on the charge of misconduct. The charge of 
misconduct was later reversed on May 25, 1990, after a hearing examiner 
concluded that the YouthTreatmentCenter had offered no evidence to 
substantiate the charge of misconduct; and Secrest, therefore, was entitled to 
receive unemployment benefits.

[¶5.]     On March 9, 1990 - 
before the above charge of misconduct was reversed - a claims deputy with the 
Division informed Secrest that:

"The Wyoming Employment 
Security Law provides for the denial of benefits to any individual whose 
retirement pay * * * exceeds their weekly unemployment insurance benefit. * * 
*

"On 2-24-90 you received 
a lump sum retirement payment which when allocated per employment security 
commission regulations, represents payment for 11 weeks. You are, therefore, 
disqualified [beginning 2-18-90] through 5-5-90 * * *."

[¶6.]     Secrest appealed the 
deputy's determination to an appeals examiner. After conducting a hearing, the 
appeals examiner issued his ruling on April 12, 1990, affirming the denial of 
unemployment benefits based on Secrest's withdrawal of retirement contributions. 
(This hearing and the hearing on the charge of misconduct were conducted as 
separate hearings before different appeals examiners.)

[¶7.]     Secrest appealed to the 
Unemployment Insurance Commission, which affirmed the examiner's decision. She 
then filed a petition for review in district court. The district court reversed 
the examiner's decision and ruled that 

"since the petitioner did 
not retire, did not intend to retire, and was not retired pursuant to a 
mandatory retirement program, she [Secrest] should not be denied unemployment 
benefits nor should any offset be made because of the [retirement] payment 
received. The payment in question was not a retirement payment as defined by the 
statute."

[¶8.]     The Division appeals 
the district court's order.

[¶9.]     We recently discussed 
the scope of our review of agency decisions in Union Pacific R.R. Co. v. Wyoming 
State Bd. of Equalization, 802 P.2d 856 (Wyo. 1990). Here we are concerned with 
an agency's decision on a question of law: the proper construction of W.S. 
27-3-313(a)(v) (Cum. Supp. 1989). In Union Pacific R.R. we stated that "[i]n 
considering an appeal from a district court's review of agency action, we are 
not bound by, nor must we accord any special deference to, the district court's 
decisions on questions of law." 802 P.2d  at 859. It is also true that "[i]f the 
correct rule of law has not been properly applied, we do not defer to the 
agency's finding but correct the agency's error in either stating or applying 
the law." Union Pacific R.R., 802 P.2d  at 860-61. We find that the district 
court, and not the Division, correctly applied the rule of law in this 
case.

[¶10.]  The unemployment insurance system is an 
example of "`cooperative federalism,' in which each state receives federal funds 
to reimburse its costs of administering the program, and employers receive a 
federal tax credit for the unemployment insurance tax they pay." Rivera v. 
Patino, 524 F. Supp. 136, 140 (N.D.Cal. 1981). The federal arm of the 
unemployment insurance system is administered under the provisions of the 
Federal Unemployment Tax Act (FUTA). Wyoming participates in the FUTA program. W.S. 
27-3-202(b). Wyoming Statute 27-3-313(a)(v) is patterned after 26 U.S.C. § 
3304(a)(15) (1988).

[¶11.]  The hearing examiner based his ruling on 
W.S. 27-3-313(a)(v) (Cum.Supp. 1989), which states in pertinent 
part:

"(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:

* * * * * 
*

"(v) Retirement 
annuities, pensions or other such payments are received from any former employer 
or any trust or fund contributed to by any former employer. If the payments 
decreased to the next lower multiple of one dollar ($1.00) are less than the 
weekly benefit amount otherwise due under this article, the individual is 
entitled to benefits in an amount reduced by the 
payments."

[¶12.]  The purpose of W.S. 27-3-313(a)(v), 
according to the Division, is to prevent "double dipping" of the Unemployment 
Trust Fund. The Division, therefore, argues that Secrest does not actually have 
to retire before the offset requirement is triggered.

[¶13.]  We agree that the purpose of the statute 
is to prevent "double-dipping." We disagree with the Division's attempt, 
however, to apply the statute to those who are not retired. "The purpose of the 
federal and complementary State statutes is to prevent so-called 
`double-dipping' by persons who are retired." Tucker v. Dep't of Employment 
Sec., 122 N.H. 958, 453 A.2d 1247, 1248 (1982).

[¶14.]  The Supreme Court of New Hampshire, 
citing legislative history, has succinctly described the "underlying purpose" of 
that state's similarly worded statute:

"This important public 
policy of preventing individuals who have actually retired from reaping the 
double benefit of receiving retirement payments and unemployment compensation is 
not furthered by forcing a discharged employee who is still an active member of 
the labor force and seeking employment to exhaust retirement benefits before 
qualifying for unemployment compensation." Tucker, 453 A.2d  at 1248. See also 
Redin v. Empire Oldsmobile, Inc., 746 P.2d 52 (Colo. App. 
1987).

[¶15.]  The issue of "double-dipping" is not a 
concern here; Secrest has not retired. In fact, she testified that she withdrew 
her retirement contributions, not to retire, but so that she "could have 
something to eat - to live on" while she actively sought work. If the Division 
had granted Secrest unemployment benefits, as it should have, she would not have 
needed to withdraw her retirement benefits or to put this in the agency contest. 
The Division's duty of safeguarding the unemployment compensation fund "from the 
claims of unworthy and ineligible claimants" is not thwarted by granting Secrest 
unemployment benefits while she actively seeks work. Sage Club, Inc. v. 
Employment Sec. Comm'n, 601 P.2d 1306, 1311 (Wyo. 1979).

[¶16.]  Today we decide only that the Division 
should have granted Secrest unemployment benefits and not offset them against 
her withdrawal of retirement contributions. Our resolution in favor of Secrest 
of her right to unemployment benefits without offset makes it unnecessary for us 
to reach the question of allocation raised by the Division in its second 
issue.

[¶17.]  The decision of the district court 
is

Affirmed.