Title: Southwestern Bell Tel. v. Employment SEC. Bd. of Review
Citation: 210 Kan. 403, 502 P.2d 645
Docket Number: 46,594
State: Kansas
Issuer: Kansas Supreme Court
Date: November 4, 1972

210 Kan. 403 (1972)
502 P.2d 645
SOUTHWESTERN BELL TELEPHONE COMPANY, a Corporation, Appellant,
v.
EMPLOYMENT SECURITY BOARD OF REVIEW OF THE STATE OF KANSAS, and MARIE T. DAILEY, Appellees.
No. 46,594

Supreme Court of Kansas.
Opinion filed November 4, 1972.
T. Larry Barnes, of Topeka, argued the cause, and Lawrence A. Dimmitt, also of Topeka, was with him on the brief for the appellant.
Marlin A. White, of Holton, argued the cause and was on the brief for the appellee.
The opinion of the court was delivered by
OWSLEY, J.:
This is an appeal from a decision of the district court affirming an order of the Kansas Employment Security Board of Review finding Marie T. Dailey was entitled to maximum unemployment compensation benefits upon her retirement at age sixty-five. Marie T. Dailey will be referred to as Dailey, Southwestern Bell Telephone Company as Bell, and the Kansas Employment Security Board of Review as the Board.
Broadly stated, the issue is whether one who wishes to continue working is entitled to unemployment benefits after retirement under a mandatory retirement plan which is part of a union-management agreement.
Dailey entered Bell's service in 1938 as a telephone operator. At that time Bell had adopted and was maintaining a "Plan for Employees' Pensions, Disability Benefits and Insurance." The plan called for retirement at age sixty-five, which was known by Dailey. In 1941 an agreement was made between Bell and the Union (Communications Workers of America, AFL-CIO), of which *404 Dailey was a member, that no change would be made in the "plan" without the consent of the Union.
On February 1, 1969, Dailey, having reached the age of sixty-five, was retired. Her retirement pension amounted to $85.56 per month and on May 31, 1969, it was raised to $125.00 per month. She is also receiving social security payments in the sum of $146.00 per month. Her salary prior to retirement had been $105.50 per week.
On February 28, 1969, Dailey filed an application for unemployment benefits. On March 3, 1969, an examiner found she was disqualified. On appeal, a referee reversed the decision of the examiner. On review by the Board, it was found that Dailey was entitled to unemployment benefits. The decision of the district court was in accord with the Board and Bell has appealed to this court.
The jurisdiction of this court on review of the action of an administrative body is not in question. The parties agree that the issue hereinbefore stated is a question of law and as such is subject to judicial review under K.S.A. 1971 Supp. 44-709 (i).
A large portion of the monies used for administration of the unemployment benefit laws comes from taxes on employers. The method of assessing and collecting these taxes is set out in K.S.A. 1971 Supp. 44-710, et seq., which establishes an employer's "experience rating." The experience rating is determined by the number of times ex-employees obtain benefits without periods of disqualification. If there is no period of disqualification the employer's account is charged with the full amount which the claimant receives. If the claimant is disqualified for any statutory reason he is disqualified "For the week in which he left work ... and for the six (6) consecutive weeks which immediately follow such week: ..." (K.S.A. 1971 Supp. 44-706 [a].) After the seven-week period has passed, the claimant is then permitted to receive unemployment compensation if he still meets the eligibility requirements. Payments are not charged to the experience rating of the employer when claimant leaves his employment voluntarily without good cause. (K.S.A. 1971 Supp. 44-710 [c].) The result is that the employee who voluntarily left the labor market through no fault of the employer may be allowed a limited amount of compensation, but the employer will not be taxed for these payments.
Eligibility conditions are found in K.S.A. 44-705 (now K.S.A. 1971 Supp. 44-705), which sets forth five requirements. Eligibility is frequently questioned under requirement (c) which provides claimant *405 "is able to work, is available for work, and is making reasonable efforts to obtain work." Bell does not question Dailey's eligibility under this statute.
Disqualifications for benefits are found in K.S.A. 44-706 (now K.S.A. 1971 Supp. 44-706.) When a disqualification rule applies, a claimant may still be eligible to receive benefits, but not for the full twenty-six weeks. This case involves Dailey's disqualification. The pertinent part of the statute reads:
"An individual shall be disqualified for benefits:
The issue presented in this appeal is one of first impression in this state. It might be advisable, however, to review our unemployment benefit cases to the extent they might bear on the issue in this case.
In Clark v. Board of Review Employment Security Division, 187 Kan. 695, 359 P.2d 856, the claimant, having reached mandatory retirement age, was retired on a pension from his employer, Skelly Oil Company. The case was decided against the claimant on the eligibility issue of availability for work. We did not consider the effect of the mandatory retirement. We did state, however, that the public policy of the state is to "... protect against involuntary unemployment  that is, to provide benefits for those who are unemployed through no fault of their own and who are willing, anxious and ready to support themselves and their families, and who are unemployed because of conditions over which they have no control; ..." (p. 698.)
In Goodyear Tire &amp; Rubber Co. v. Employment Security Board of Review, 205 Kan. 279, 469 P.2d 263, we considered a vacation shutdown of two weeks and said:
This was a four-three decision. The dissent was principally based on K.S.A. 44-718, which provides "No agreement by an individual to waive, release, or commute his rights to benefits or any other rights under this act shall be valid...." It was said:
In Pickman v. Weltmer, 191 Kan. 543, 382 P.2d 298, we said the provisions of the Kansas Employment Security Law should receive a liberal interpretation.
In Southwestern Bell Telephone Co. v. Employment Security Board of Review, 189 Kan. 600, 371 P.2d 134, we held that lump sum payments on termination of employment pursuant to a collective bargaining agreement did not render employees ineligible for unemployment compensation benefits. We also stated that need of the claimant was not a prerequisite to eligibility.
Our approach to the issue is set by the rule of liberal interpretation. (Pickman v. Weltmer, supra.) The public policy of the state is to "protect against involuntary unemployment." (Clark v. Board of Review Employment Security Division, supra.) Lump sum payments on termination of employment pursuant to a collective bargaining agreement do not render an employee ineligible and need of an employee is not a prerequisite to eligibility. (Southwestern Bell Telephone Co. v. Employment Security Board of Review, supra.) The effect of Goodyear will be later discussed.
Turning to other case law, we find the first mandatory retirement case to reach the appellate courts was Campbell Soup Co. v. Div. of Employment Security., 13 N.J. 431, 100 A.2d 287 (1953). The opinion was written by Mr. Justice William J. Brennan, Jr., now of the Supreme Court of the United States. This case squarely presented the question of whether workers who were required to retire on pension at age sixty-five by a collective bargaining agreement left work voluntarily without good cause so as to be disqualified for unemployment compensation. The court held the workers had left their employment involuntarily and were awarded benefits. *407 The court considered the use of the word "voluntary", considered the controlling effect of a union contract as to the individual, and considered the effect of a statute similar to our K.S.A. 44-718. The court said:
..............
The decision in Campbell Soup did not remain unchallenged. Five years later in Bergseth v. Zinsmaster Baking Co., 252 Minn. 63, 89 N.W.2d 172 (1958), the court held claimants were disqualified for voluntarily leaving their employment under facts similar to those in Campbell Soup. The court emphasized the *408 fact that the question of whether retirement should be mandatory or optional at age sixty-five had been submitted to the union membership at a regular meeting and a majority had voted in favor of the mandatory provision. The claimants contended they were not in accord with the union contract and that they desired to remain on the job, and were forced to retire against their wishes. The claimants had not worked for the employer long enough to be entitled to pension payments, but each received $200.00 severance pay. The employer took the position that the claimants' retirement was voluntary, stating he would not have retired them had he not been required to do so by the union contract. The court said:
..............
In disposing of the effect of a Minnesota statute similar to our K.S.A. 44-718, the court said:
The dissent of Mr. Justice Murphy in this case calls attention to the opposing views as to the meaning of this statute. He said:
The Campbell Soup case and the Bergseth case created a foundation for a controversy that has continued to rage to the present time. Each of these views has found support among the cases which followed.
The principal cases holding for the granting of benefits under similar facts as in Campbell Soup are: Reynolds Metal Company v. Thorne, 41 Ala. App. 331, 133 So. 2d 709 (1961), cert. den. 272 Ala. 709, 133 So. 2d 713; Employment Security Com'n v. Magma Copper Company, 90 Ariz. 104, 366 P.2d 84 (1961); Jenkins v. Review Board of Indiana Emp. Sec. Div., 211 N.E.2d 42 (Ind. 1965); Gianfelice Unempl. Compensation Case., 396 Pa. 545, 153 A.2d 906 (1959) (Warner); St. Joe Paper Company v. Gautreaux, 180 So. 2d 668 (Fla. App. 1965).
The principal cases holding for the denial of benefits as in Bergseth are: Kentucky Unemploy. Ins. Com'n v. Kroehler Mfg. Co., 352 S.W.2d 212 (Ky. 1961); Lamont v. Director of the Division of Employment Security., 337 Mass. 328, 149 N.E.2d 372 (1958); Ivy v. Dudley, 217 N.E.2d 875 (Ohio 1966).
There are no significant statutory differences which have a material bearing on the reasoning of these cases. It would add little to the body of the law of this state to set out the basis on which these cases differ in their conclusions in view of the decision later made herein. An annotation dealing with this question appears in 90 A.L.R.2d, pp. 842, 843, where the annotator makes this observation:
..............
We are impressed by the strong support given Campbell Soup by writers of articles appearing in law reviews. For the benefit of the scholars who have been stimulated by the legal problem in this case, we list the following: 28 N.Y.U. Law Rev. 1332 (1953); 5 Syracuse L. Rev. 286 (1954); 53 Michigan Law Rev. 849 (1955); 4 U.C.L.A. Law Rev. 438 (1957); 34 Notre Dame Lawyer 466 (1958); 39 Boston University Law Rev. 124 (1959); 64 Dickinson Law Rev. 71 (1959); 59 Columbia Law Rev. 209 (1959); 49 Calif. Law Rev. 580 (1961); 14 Alabama Law Rev. 470 (1961).
We have tried to place the problem in proper perspective as it comes before this court. We believe the issue in this case is controlled by K.S.A. 44-718. What is a proper construction of this statute prohibiting an agreement to waive, release, or commute rights to benefits? The above quotations from Campbell Soup and Bergseth disclose the opposing views on the meaning and application of like statutes. In Gianfelice Unempl. Compensation Case., supra, (Warner), it was said:
..............
The opposing view was expressed in Kentucky Unemploy. Ins. Com'n v. Kroehler Mfg. Co., supra. It was said:
Bell maintains that we have squarely decided this point by our expression in the majority opinion in Goodyear, where we said:
This raises the question of whether K.S.A. 44-718 should have the same application in retirement cases as in a vacation shutdown case such as Goodyear. The Arizona Supreme Court dealt with this problem in Employment Security Com'n v. Magma Copper Company, supra. Because it strikes at the heart of the problem in this case we quote at length from this opinion:
In construing different statutes contained in the Unemployment Security Act the legislative intent is determined from a general consideration of the whole act. In determining legislative intent the court may properly look to the purpose to be accomplished, the necessity and effect of the statute. (Tilley v. Keller Truck &amp; Implement Corp., 200 Kan. 641, 438 P.2d 128.) K.S.A. 44-702 reads in part:
*413 For further statements as to the history and purpose of the act, see Whitehead v. State of Kansas Labor Department, 203 Kan. 159, 453 P.2d 11. As stated in K.S.A. 44-702, as well as in Clark, the purpose of the act is to prevent involuntary unemployment.
The claimant in this case, on reaching sixty-five years of age, was retired. It is conceded that she was able to work, was available for work, and was making reasonable efforts to obtain work. She became involuntarily unemployed unless Bell's policy adopted by the collective bargaining agreement, made her retirement voluntary. If voluntary, the retirement had to result from an agreement between Bell and Dailey or between Bell and the union of which Dailey was a member.
The statute prohibits an agreement to waive, release, or commute benefits. It also states such an agreement is void. These words require no dictionary search for their meaning. The difficulty arises when some courts attempt to rationalize these words in order to prevent a workman from collecting a pension as well as unemployment benefits. Even if we concede that the collection of funds from two sources is not desirable, we cannot place a strained construction on the statute in order to accomplish this end. We said in In re Estate of Pyke, 199 Kan. 1, 427 P.2d 67:
It is our view that a collective bargaining agreement or any other agreement is invalid to the extent that its provisions are construed to waive, release, or commute unemployment compensation benefits. We adopt and approve Campbell Soup, Gianfelice Unempl. Compensation Case (Warner), and Magma Copper in their application and construction of statutes similar to our K.S.A. 44-718.
Bell's contention that such a conclusion is contrary to Goodyear is apparent. Although we disapprove the statement in Goodyear as to the application of K.S.A. 44-718, we recognize a distinction between vacation shutdown, which is temporary, and retirement, which is permanent. Under the facts in Goodyear, we can see merit in an argument that the employees were not available for work and were not members of the general labor market. We can also see merit in an argument that an employee on vacation status *414 would not conscientiously seek other full time, permanent employment. While we approve the result in Goodyear, we can no longer agree with the basis upon which the court reached that result.
Judgment is affirmed.
SCHROEDER, J., dissents.
FROMME, J., concurring:
I agree with the rationale and the decision of the court except in one small particular. My views as to the applicability of K.S.A. 44-718 expressed in Goodyear remain unchanged and I cannot now approve the result reached in Goodyear. The majority opinion as expressed in Goodyear should be disapproved by this court for I see no distinction between a negotiated "vacation shutdown agreement" as in Goodyear and a negotiated "permanent retirement agreement" as in the present case so far as the prohibition of K.S.A. 44-718 is concerned. I am authorized to say that Mr. Justice Kaul joins in the foregoing concurrence.