Court Opinion

ID: 4276393
Source: CourtListenerOpinion
Date Created: 2018-05-18 09:05:20.244179+00
Date Added: 2024-06-11T09:36:29.866358
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

SYLVIA BRUBAKER,                                                   UNPUBLISHED
                                                                   May 17, 2018
               Claimant-Appellee,

v                                                                  No. 337060
                                                                   Lenawee Circuit Court
SODEXO MANAGEMENT, INC.,                                           LC No. 16-005662-AE

               Respondent,

and

DEPARTMENT OF TALENT AND ECONOMIC
DEVELOPMENT/UNEMPLOYMENT
INSURANCE AGENCY,

               Appellant.

Before: BORRELLO, P.J., and SAWYER and JANSEN, JJ.

PER CURIAM.

        In this action involving unemployment benefits under the Michigan Employment
Security Act (MESA), MCL 421.1 et seq., the Unemployment Insurance Agency (UIA) appeals
by leave granted1 the circuit court’s order reversing an order of the Michigan Compensation
Appellate Commission (MCAC) and concluding that claimant was eligible for unemployment
benefits. For the reasons set forth in this opinion, we reverse the circuit court’s order and
remand this matter with instructions to the circuit court to enter an order affirming the decision
of the MCAC.

                                      I. BACKGROUND

      Claimant worked at Adrian College as an employee of Sodexo Management, Inc.,
(Sodexo), which provided food service for the college. She was a display cook, and she also

1
 Brubaker v Sodexo Mgt, Inc, unpublished order of the Court of Appeals, entered May 25, 2017
(Docket No. 337060).

                                               -1-
worked in catering. As of 2015, claimant had worked for Sodexo for 10½ years. According to
claimant, she worked 40 hours per week during the school year, but she worked approximately
10 to 15 hours per week during the summer. During the summer, claimant and the other Sodexo
employees were required to sign up for work shifts each week to accommodate various groups
that visited Adrian College for camps during the summer. Work hours were then awarded based
on seniority. The weekly schedule was posted on Thursday or Friday each week for the
following week, and claimant was required to check the schedule each week. Claimant was
ranked 18th in terms of seniority among her coworkers. The number of hours that claimant was
assigned to work each week during the summer fluctuated with the number of people using the
facilities each week for camps.

        The instant case involves claimant’s claim for unemployment benefits during the summer
of 2015. Claimant received a letter from Sodexo, dated April 24, 2015, indicating that she would
be laid off beginning on May 4, 2015. The letter stated in pertinent part as follows:

               While Sodexo at Adrian College will be open during the summer months
       and will continue to provide dining and catering services to its customers at
       Adrian College, it will, however, have a reduced level of operations. Therefore,
       you will be placed on a lay-off beginning on May 4th, 2015. During the course of
       the summer, based on operating needs, you may be recalled to work. If so, you
       will be expected to report for work when scheduled.

              The general employee meeting prior to the beginning of the fall semester
       is scheduled on Friday July 17th, 2015. You will be required to attend this
       meeting.

Claimant worked reduced hours from May 4, 2015, until approximately July 26, 2015, when she
returned to full-time work. During the time period when claimant’s hours were reduced, she
worked at least some hours during most of those weeks. As in previous summers, claimant also
filed for unemployment benefits during the summer of 2015 due to her reduced hours.

        The UIA subsequently sent claimant a letter dated September 4, 2015, indicating that
there was a question of claimant’s eligibility for benefits. In the letter, claimant was asked if she
was actively seeking work for the week ending May 23, 2015, and claimant was informed that
she needed to provide a completed work search form. Claimant responded to the letter by
indicating that she was not required to provide work search forms because she was never
informed that she was required to complete work search forms.

        The UIA issued a notice of determination to claimant dated September 21, 2015, stating
in pertinent part as follows:

             You failed to submit proof of work search from May 17, 2015 through
       May 23, 2015.

              Based on available information, you do not meet the seeking work
       requirements of the MES Act.

                                                -2-
               You are ineligible for benefits under MES Act, Sec. 28(6). Your weekly
       benefits are not payable from May 17, 2015 through May 23, 2015. You will not
       receive benefit payments during this period.

The UIA also issued another notice of determination to claimant dated September 21, 2015,
containing the same language and conclusion with respect to the period from June 28, 2015
through July 4, 2015.

       Claimant protested the UIA’s determinations that she was ineligible for benefits. In
addition to arguing that she was not required to provide work search forms because she did not
know about this requirement, claimant also argued that the work search form requirement was
waived because either her layoff was short term with a definite return to work date of less than
15 days from her first day of scheduled unemployment, or her layoff was a temporary one of less
than 45 days.

       Subsequently, the UIA issued notices of redetermination to claimant dated September 29,
2015. One notice of redetermination addressed the period from May 17, 2015 through May 23,
2015, and one addressed the period from June 28, 2015 through July 4, 2015. The
redetermination notices affirmed the previous determinations on the ground that there had been
no new or additional evidence submitted to warrant reversal.

        Claimant appealed the redeterminations and sought a hearing before an administrative
law judge (ALJ); she reiterated her previous arguments that she did not know about the work
search form requirement and that this requirement was waived nonetheless. A hearing was held
before the ALJ on November 9, 2015. At the hearing, claimant testified that she was looking for
work during the summer. Claimant explained:

       I went to a number of different places and I told them, you know, my situation,
       that I was looking for, you know, a job that I needed to do and I also have my
       other job that I’m required to sign up for work and am required to be at my first
       job if I’m called, so then they—they said well then, you know, we cannot use you
       because we need to have you here, you know, if you’re going to sign up for this
       job. So they turned me down because of that.

Claimant testified that she could provide the names of the employers that she contacted, although
she did not give the names of any specific employers during the hearing. Claimant further
testified that none of these employers offered her work because of the scheduling situation she
had with Sodexo over the summer. Additionally, claimant testified that she was never told to
submit any waiver for the work search form requirement in the past in order to collect benefits
during the summer. According to claimant, during previous summers when she collected
unemployment benefits, she was never required to submit a work search form or provide a list of
employers that she contacted while searching for work. Claimant testified that she was aware
that she should look for work during the time when her hours at Sodexo were reduced, but she
was not aware of the requirement to send in a form for her work search.

                                               -3-
       The ALJ issued a written decision, reversing the September 29, 2015 redetermination.
The ALJ concluded that claimant was not ineligible for unemployment benefits under the
seeking work provision of the MESA, reasoning as follows:

              Here, the Claimant credibly testified that she was not required to provide
       proof of a work search during her previous periods of underemployment with the
       involved Employer.

              Based on the Claimant’s past pattern and practice, she failed to provide
       proof of a work search, but the Claimant credibly testified that she made
       reasonable efforts to seek work during her periods of underemployment. As such,
       the Claimant is not ineligible for benefits under the seeking work provision from
       May 17, 2015 through May 23, 2015.

In a separate written decision, the ALJ reached the same conclusion for the period from June 28,
2015 through July 4, 2015, expressing the reasoning for the decision using the same language
quoted above.

       After the UIA appealed the decision of the ALJ to the MCAC, the MCAC issued a
written decision reversing the decision of the ALJ. The written decision of the MCAC that is
included in the record only addressed the period from May 17, 2015 through May 23, 2017. The
MCAC explained its reasoning as follows:

               Because of her reduced earnings, the claimant satisfied the eligibility
       requirements of Section 48 of the MES Act. However, to receive benefits, the
       claimant must satisfy all of the eligibility requirements. In the instant matter, the
       claimant, by her own admission, failed to comply with the seeking work
       requirement of Section 28(6) of the MES Act for the period at issue. As a result,
       she is ineligible for benefits and the ALJ’s decision will be reversed accordingly.

One of the commissioners on the three-member panel dissented, writing as follows:

              I disagree with the Commission majority.

              I agree that, pursuant to Section 28(6) of the MES Act, a claimant must
       seek work as a condition of eligibility for unemployment insurance benefits.
       However, in this case the employer reduced the claimant’s hours during the
       summer break while continuing to require her to be available to work as if fully
       employed. Notably, the employer did not make the claimant’s schedule available
       to her far enough in advance that she could provide another employer with
       meaningful notice of a scheduling conflict. Consequently, the claimant was
       unable to seek employment elsewhere if she intended to keep the job with the
       employer that she held for over ten years. Therefore, I find that under the limited
       circumstances of this matter the claimant fulfilled the seeking work requirement
       by remaining fully available for assignments with the involved employer.
       Consequently, I would affirm the ALJ’s decision. As the Commission majority
       has chosen to do otherwise, I respectfully dissent.

                                               -4-
        Claimant appealed the decision of the MCAC to the circuit court. Claimant filed a brief
in support of her appeal, in which she first argued that the decision of the MCAC was contrary to
law because provisions in Mich Admin Code, R 421.216(1) and (3) that permitted waiver of the
work search requirement were applicable to claimant. More specifically, claimant argued that
she qualified for the waiver permitted in Mich Admin Code, R 421.216(3) because she was
subject to a short-term layoff with a defined return-to-work date. Claimant asserted that her
return-to-work date was determined by either the next work schedule on which she was included
after her layoff or the mandatory July 17, 2015 meeting. Claimant argued that she also qualified
for the waiver permitted in Mich Admin Code, R 421.216(1) because work was made available
to her within 45 days after her layoff, either as a result of returning to work after weeks where
she was not assigned any hours or as a result of returning to full-time employment in July.
Claimant further argued that she was attached to the labor market because she was still required
to check her schedule with Sodexo and report to work when scheduled. Finally, claimant argued
that the decision of the MCAC was not supported by competent, material, and substantial
evidence because the factual record developed before the ALJ did not address the waiver
provisions of Mich Admin Code, R 421.216(1) and (3) and their application to claimant.

        The UIA filed a brief in opposition, arguing that the MCAC’s decision should be
affirmed because it was consistent with law and supported by competent, material, and
substantial evidence. The UIA argued that the work search requirements in MCL 421.28
mandated that an individual both seek work and report the details of that work search in order to
be eligible for unemployment benefits. Further, the UIA argued that the decision of the MCAC
was proper because claimant failed to report the details of any work search to the UIA and,
although she claimed to have looked for work, she never identified the employers that she
contacted, never indicated when she contacted them, and never submitted proof of these contacts
to the UIA. The UIA also argued that none of the provisions for waiving the work search
requirements applied to claimant because her layoff lasted more than the 15-day and 45-day
periods described in Mich Admin Code, R 421.216(1) and (3) and because there was no evidence
that Sodexo had notified the UIA that the layoff would last fewer than 45 days as required for
Mich Admin Code, R 421.216(1) to apply.

        A hearing was held, during which the circuit court heard oral argument from the parties
and the parties essentially reiterated the arguments made in their respective briefs. Additionally,
the UIA argued that claimant was still “unemployed” as that term is defined in MESA during the
time when she was working reduced hours because she was making less than 1½ times her
benefit amount. Therefore, argued the UIA, claimant was not subject to a short-term layoff that
would qualify her for a waiver of the work search requirements because her unemployment, as
defined by statute, lasted longer than the 15-day and 45-day periods referenced in Mich Admin
Code, R 421.216.

       At the conclusion of the hearing, the circuit court announced its ruling reversing the
decision of the MCAC as follows:

       And obviously during the summer and spring semester enrollment is lower, less
       hours were required. So during that time [claimant] was not working many of
       those weeks full-time; what would be termed as underemployed. There were two
       one-week periods where she was not working at all and those are the two weeks

                                                -5-
       that are at dispute in this case. Sodexo did not respond or object in any way or
       appear at any of the hearings. Testimony was placed on the record by [claimant]
       about her work schedule.[2]

               There are exceptions that apply. One would be 45-day layoff. In this case
       the testimony that was placed on the record showed that [claimant] went back to
       work before that 45 days had passed. There is a waiver eligibility that she would
       be qualified for. In this case this was by definition a short-term layoff. So based
       on my understanding and what’s been argued, the 2116 [sic] waiver would apply.
       I am going to overturn the appellate commission’s decision and deem that she was
       eligible for unemployment during that period.

An order was entered reversing the decision of the MCAC for the reasons stated on the record.

        As previously noted, we granted the UIA’s application for leave to appeal the circuit
court’s order.

                                 II. STANDARD OF REVIEW

        “This Court reviews a lower court’s review of an administrative decision to determine
whether the lower court applied correct legal principles and whether it misapprehended or
misapplied the substantial evidence test to the agency’s factual findings, which is essentially a
clear-error standard of review.” Lawrence v Mich Unemployment Ins Agency, 320 Mich. App.
422, 431; 906 NW2d 482 (2017) (quotation marks and citation omitted). Under this standard of
review, “the circuit court’s legal conclusions are reviewed de novo and its factual findings are
reviewed for clear error.” Braska v Challenge Mfg Co, 307 Mich. App. 340, 352; 861 NW2d 289
(2014). “A finding is clearly erroneous where, after reviewing the record, this Court is left with
the definite and firm conviction that a mistake has been made.” VanZandt v State Employees’
Retirement Sys, 266 Mich. App. 579, 585; 701 NW2d 214 (2005).

                                        III. ANALYSIS

       The UIA first argues that the circuit court’s reversal of the MCAC’s decision was
erroneous because the circuit court improperly substituted its own judgment for that of the
MCAC and the MCAC’s decision was in accord with the law and supported by substantial
evidence.

        As a threshold matter, in determining whether the circuit court applied the correct legal
principles and correctly applied the substantial evidence test, we start by setting forth the
standard of review that the circuit court was required to apply to its review of the MCAC’s
decision.

2
  The circuit court was clearly referring to the testimony before the ALJ. No testimony was
taken at the hearing in the circuit court.

                                               -6-
       Pursuant to Michigan’s Constitution, “[a]ll final decisions, findings, rulings and orders of
any administrative officer or agency existing under the constitution or by law, which are judicial
or quasi-judicial and affect private rights or licenses, shall be subject to direct review by the
courts as provided by law.” Const 1963, art 6, § 28. Specifically, MESA provides for direct
review of unemployment benefit claims, with appeals from an ALJ to the MCAC being governed
by MCL 421.34 and appeals from the MCAC to the circuit court being governed by MCL
421.38. Hodge v US Security Assoc, Inc, 497 Mich. 189, 193; 859 NW2d 683 (2015). MCL
421.34(2) provides as follows:

               An appeal to the Michigan compensation appellate commission from the
       findings of fact and decision of the administrative law judge or from a denial by
       the administrative law judge of a motion for a rehearing or reopening shall be a
       matter of right by an interested party. The Michigan compensation appellate
       commission, on the basis of evidence previously submitted and additional
       evidence as it requires, shall affirm, modify, set aside, or reverse the findings of
       fact and decision of the administrative law judge or a denial by the administrative
       law judge of a motion for rehearing or reopening.

MCL 421.38(1) in turn provides in relevant part:

               The circuit court . . . may review questions of fact and law on the record
       made before the administrative law judge and the Michigan compensation
       appellate commission involved in a final order or decision of the Michigan
       compensation appellate commission, and may make further orders in respect to
       that order or decision as justice may require, but the court may reverse an order or
       decision only if it finds that the order or decision is contrary to law or is not
       supported by competent, material, and substantial evidence on the whole record.

        Pursuant to this standard, a circuit court must affirm the MCAC’s decision “if it conforms
to the law, and if competent, material, and substantial evidence supports it.” Hodge, 497 Mich. at
193. As this Court has further explained with respect to the application of the standard in MCL
421.38(1):

       Substantial evidence is that which a reasonable mind would accept as adequate to
       support a decision, being more than a mere scintilla, but less than a preponderance
       of the evidence. Evidence is competent, material, and substantial if a reasoning
       mind would accept it as sufficient to support a conclusion. The circuit court may
       not substitute its own judgment for that of the MCAC when the MCAC’s decision
       is properly supported. [Lawrence, 320 Mich. App. at 431 (quotation marks and
       citations omitted).]

        In this case, the MCAC determined that claimant was ineligible for benefits because she
“failed to comply with the seeking work requirement of Section 28(6) of the MES Act for the
period at issue.” At the time of the administrative and circuit court proceedings in this case,

                                               -7-
MCL 421.28(1)(a)3 provided in pertinent part that for an unemployed individual to be eligible for
benefits, the unemployment agency must find that “the individual has registered for work and
has continued to report in accordance with unemployment agency rules and is actively engaged
in seeking work.”4 MCL 421.28(6),5 the subsection that the MCAC concluded was not satisfied
by claimant, defines what it means to be “actively engaged in seeking work,” providing as
follows:

              (6) For purposes of this section, for benefit years beginning on or after
       January 1, 2013, to be actively engaged in seeking work, an individual must
       conduct a systematic and sustained search for work in each week the individual is
       claiming benefits, using any of the following methods to report the details of the
       work search:

               (a) Reporting at monthly intervals on the unemployment agency’s online
       reporting system the name of each employer and physical or online location of
       each employer where work was sought and the date and method by which work
       was sought with each employer.

              (b) Filing a written report with the unemployment agency by mail or
       facsimile transmission not later than the end of the fourth calendar week after the
       end of the week in which the individual engaged in the work search, on a form
       approved by the unemployment agency, indicating the name of each employer
       and physical or online location of each employer where work was sought and the
       date and method by which work was sought with each employer.

               (c) Appearing at least monthly in person at a Michigan works agency
       office to report the name and physical or online location of each employer where
       the individual sought work during the previous month and the date and method by
       which work was sought with each employer. [Emphasis added.]

3
  MCL 421.28 has since been amended, and the amended version of the statute took effect on
March 21, 2018. 2017 PA 228. However, the amendment only made stylistic changes to the
statutory language at issue in the instant case, which requires an individual to register for work,
actively seek work, and report as required by unemployment agency rules. See 2017 PA 228
(requiring the unemployment agency to find that the “individual has registered for work and has
continued to report pursuant to unemployment agency rules and is actively engaged in seeking
work.”).
4
  MCL 421.28(1) also sets forth other requirements for benefit eligibility, but these additional
requirements are not at issue with respect to the MCAC’s conclusion that claimant failed to
satisfy the seeking work requirement.
5
 No changes were made to MCL 421.28(6) in the recent amendment to the statute. 2017 PA
228.

                                                -8-
        In this case, there was no evidence that claimant ever reported the details of her work
search to the UIA. Furthermore, although claimant testified that she searched for work, she
never provided the name of any employer that she contacted in her search. Claimant testified
that she was aware that she needed to search for work in order to be eligible for unemployment
benefits, but she claimed to be unaware of the need to report the details of her search. However,
ignorance of the law does not excuse a litigant’s failure to comply with a statutory provision.
Curley v Beryllium Dev Corp, 281 Mich. 554, 558; 275 N.W. 246 (1937); see also Spohn v Van
Dyke Pub Sch, 296 Mich. App. 470, 488; 822 NW2d 239 (2012) (stating that “ignorance of the
law is no excuse”) (quotation marks and citation omitted). In the MESA context, MCL
421.28(6) clearly provides that reporting the details of the work search is a necessary component
of being actively engaged in seeking work for purposes of MCL 421.28. A claimant who is not
actively engaged in seeking work as required by the statute is not eligible for unemployment
benefits. MCL 421.28(1)(a).

        Based on the record evidence in this case, it is clear to a reasoning mind that claimant
failed to report any work search that she may have conducted. Lawrence, 320 Mich. App. at 431.
The ALJ found claimant’s testimony credible with respect to her claim that she looked for work
and her belief that she did not have to report her work search based on her assertion that she had
not been required to report her work search in the past; however, the ALJ did not address the fact
that MCL 421.28(6) nonetheless requires a claimant to report her work search in order to be
considered to be actively seeking work, regardless of claimant’s subjective belief. There is
nothing in MCL 421.28(6) providing an exception to the reporting requirement based on a
claimant’s erroneous belief regarding the reporting requirements. By failing to report the details
of her work search, claimant failed to comply with the requirements of MCL 421.28(6). The
MCAC’s conclusion in this regard was therefore not contrary to law and was also supported by
competent, material, and substantial evidence. Accordingly, the circuit court was not permitted
to reverse the MCAC’s decision regarding claimant’s failure to comply with MCL 421.28(6) and
her resulting ineligibility for benefits. Const 1963, art 6, § 28; MCL 421.38(1); Hodge, 497
Mich. at 193.

       Next, the UIA argues that the circuit court further erred by concluding that an exception
applied to excuse claimant’s failure to comply with the requirement that she report her work
search details. In contrast, claimant argues that the circuit court’s decision should be affirmed on
the ground that the MCAC’s decision was contrary to law and not supported by competent,
material, and substantial evidence because the MCAC failed to consider the applicable waiver
provisions.

       On appeal, as in the proceedings below, claimant relies on Mich Admin Code, R
421.216(1) and (3) in support of her contention that the reporting requirement was waived in this
case because her layoff was either a “short-term” layoff of not more than 15 days or a
“temporary” layoff of less than 45 days.

       Mich Admin Code, R 421.216 provides in pertinent part:

               (1) A laid off individual need not seek work if, under section 28(1)(a) of
       the act, this requirement is waived by the agency upon written notification by the
       individual’s employer that the layoff is temporary and that work is expected to be

                                                -9-
       available within 45 calendar days following the last day the individual worked. A
       waiver is effective if the agency receives notification from the employer before
       the individual is certified for his or her first compensable week following the
       layoff.

                                              * * *

               (3) The agency may, under section 28(1)(a) of the act, waive the seeking
       work requirement if an individual is on a short-term layoff, as used in this rule,
       with a definite return-to-work date which is not later than 15 consecutive calendar
       days beginning with the first day of scheduled unemployment resulting from the
       layoff, and if the seeking work requirement is not waived for the individual under
       section 28(1)(a) of the act. The waiver under this subrule shall be based on the
       presumption that suitable work is not available for that individual. Such
       presumption is based on the recognition that an individual on such a short-term
       layoff, as that term is used in this rule, is job-attached and is not likely to be hired
       by another employer for a short period. The agency shall verify, by telephone or
       written communication with the employer, that the layoff meets the criteria of this
       rule. The agency shall record the verification to include the return to work date
       and the name and title of the employer’s representative verifying the date
       submitted. If the agency is unable to obtain confirmation from the employer at
       the time the claim is filed, then the determination as to whether the seeking work
       requirement is subject to waiver under this subrule shall be based on the evidence
       presented by the claimant. The application of a waiver in accordance with this
       subrule shall not extend beyond the above 15 consecutive calendar day period or
       the date the individual returns to work, whichever occurs first. [Emphasis
       added.]6

       These subrules refer to MCL 421.28(1)(a). At the time of the proceedings below, MCL
421.28(1)(a)7 provided in relevant part as follows:

       The requirements that the individual must report, must register for work, must be
       available to perform suitable full-time work, and must seek work may be waived
       by the unemployment agency if the individual is laid off and the employer who
       laid the individual off notifies the unemployment agency in writing or by
       computerized data exchange that the layoff is temporary and that work is expected
       to be available for the individual within a declared number of days, not to exceed

6
  Claimant does not argue that Mich Admin Code, R 421.216(2), which permits the agency “to
waive the seeking work requirement where the agency finds that suitable work is not available in
the locality where the individual resides and in those localities in which the individual earned
base period wages,” is applicable in this case.
7
 As previously noted, MCL 421.28(1)(a) has since been amended. 2017 PA 228. However, the
amendment only made stylistic changes to the quoted statutory language.

                                                -10-
       45 calendar days following the last day the individual worked. This waiver shall
       not be effective unless the notification from the employer has been received by
       the unemployment agency before the individual has completed his or her first
       compensable week following layoff. [Emphasis added.]

        In this case, the MCAC’s decision was based entirely on its conclusion that claimant had
failed to comply with MCL 421.28(6). Yet, in reversing the decision of the MCAC, the circuit
court never addressed this conclusion or explained how it was a conclusion that was contrary to
law or that was not supported by competent, material, and substantial evidence. Instead, the
circuit court agreed with claimant’s waiver argument and grounded its decision to reverse the
MCAC solely on the conclusion that claimant was exempt from the reporting requirements as a
result of the applicability of Mich Admin Code, R 421.216.8 However, Mich Admin Code, R
421.216(1) and (3) provide merely that the “agency”9 may waive the seeking work provision. In
this case, there is no evidence that claimant ever obtained such a waiver from the UIA. There is
no indication in Rule 421.216 that a claimant, after being determined to be ineligible for benefits
by the UIA, can somehow rely on this rule to obtain a waiver during the course of subsequent
administrative or judicial proceedings in order to excuse the claimant’s failure to comply with
the work search reporting requirements in MCL 421.28(6). Even if claimant could have
potentially qualified for a waiver under Mich Admin Code, R 421.216(1) or (3), there is no
evidence that the procedures in these subrules were followed or that claimant was granted a
waiver by the agency. Therefore, by not addressing the waiver provisions in Mich Admin Code,
R 421.216(1) and (3), the MCAC’s decision nonetheless comported with the law and was
supported by competent, material, and substantial evidence.

       Accordingly, the circuit court improperly substituted its own judgment for that of the
MCAC and completely disregarded the applicable standard of review under MCL 421.38(1)
because the circuit court’s decision was not based on an evaluation of whether the MCAC’s
decision was contrary to law or supported by competent, material, and substantial evidence.
Because the circuit court failed to apply the correct legal principles, the circuit court clearly
erred. Lawrence, 320 Mich. App. at 431. The decision of the MCAC was not contrary to law,
and it was supported by competent, material, and substantial evidence; thus, the circuit court
erred by reversing the MCAC’s decision. MCL 421.38(1); Hodge, 497 Mich. at 193. We
therefore reverse the decision of the circuit court.

8
  It is somewhat unclear from the circuit court’s language whether the circuit court relied on
Subrule (1) or (3). However, for the reasons discussed above, it was erroneous for the circuit
court to rely on either subrule to justify the MCAC’s decision because both subrules were
inapplicable under the circumstances of this case.
9
 “Agency” in this context is defined to mean “the state of Michigan, unemployment agency.”
Mich Admin Code, R 421.1.

                                               -11-
      Reversed and remanded to the circuit court for entry of an order affirming the decision of
the MCAC. We do not retain jurisdiction. No costs are awarded. MCR 7.219(A).

                                                           /s/ Stephen L. Borrello
                                                           /s/ David H. Sawyer
                                                           /s/ Kathleen Jansen

                                             -12-