Court Opinion

ID: 5079469
Source: CourtListenerOpinion
Date Created: 2021-10-01 11:57:04.197964+00
Date Added: 2024-06-11T08:20:08.982918
License: Public Domain

SPAIN, Justice,
dissenting.
I respectfully dissent and would affirm the Kentucky Unemployment Insurance Commission (KUIC) and the Whitley Circuit Court, rather than the Court of Appeals. Thus, I would require the appellee-employees of Gatliff Coal Company to repay to KUIC the unemployment insurance benefits which they received for the period during their temporary layoff and for which they later received back wages and other benefits in full.
This result, in my opinion, is compelled when one considers the clear purpose for which the legislature enacted KRS 341.350, providing some measure of financial relief for those who become unemployed through no fault of their own. Likewise, the re-coupment provisions in KRS 341.415 plainly contemplate that “double dipping” defeats the purpose of the statute by unjustly enriching some recipients at the ultimate expense of either the taxpayers or other eligible recipients for whom no funds may then be available.
KRS 341.415(1) states
Any person who has received any sum as benefits under this chapter while any condition for the receipt of such benefits was not fulfilled in his case ... shall, in the discretion of the secretary ... repay the department for the fund a sum equal to the amount so received by him....
Concededly, at the time the appellee-em-ployees were paid benefits they were eligible therefor by reason of their having been laid off. However, once the arbitration award established that the layoff was illegal and null and void, it was as if said employees had had no interruption in employment, thus resulting in restoration of all their backpay, pension, and medical benefits for the entire period. At that point it became obvious as a matter of fact, that said employees had received benefits for a period of time during which they were not really unemployed after all. Thus, in retrospect, a “condition for the receipt of such benefits was not fulfilled” and, accordingly, repayment was required. This Court so held in Kentucky Unemployment Insurance Commission v. General Electric Company, Ky., 473 S.W.2d 808 (1971), wherein certain employees received unemployment benefits during the time their plant was shut down. After operations resumed, they later received vacation pay from G.E. retroactively for that period. We found not only that recoupment was proper but that “the Commission ... will be required to proceed under KRS 341.415 upon its having been determined that the workers were not entitled to the benefits that were given them.” Id. at 810. (Emphasis added.)
If vacation pay recipients were not entitled to keep unemployment benefits due to a subsequent determination of ineligibility, then why should the appellee-employees in this case, who have received their backpay in full, be entitled to keep their unemployment benefits?
Recoupment is strongly favored in back-pay situations such as this one, in part because the state fund must be maintained in order to continue providing needy unemployed workers with financial assistance. Depletion of the fund by paying benefits to those who subsequently receive their back wages in full and consequently no longer need assistance from the state is contrary to that purpose.
*568Such recoupment of unemployment benefits from employees who subsequently receive backpay has been upheld in a number of our sister states. In Meyers v. Director of Employment Security, 341 Mass. 79, 167 N.E.2d 160 (1960), an arbitrator had awarded employees backpay to make them whole for wages lost. In sanctioning re-coupment of unemployment benefits, the Supreme Judicial Court of Massachusetts found that the purpose of such an arbitration award is to compensate an employee for actual loss of income and is “not a fine, penalty, or damages.” See also Frost v. Review Board of Ind. Employment Sec. Div., 432 N.E.2d 459 (Ind.App.1982); Griggs v. Sands, 526 S.W.2d 441 (Tenn.1975); In re Skutnik, 51 N.Y.S.2d 711, 268 A.D. 357 (1944); Caldwell v. Div. of Unemployment and Disability Ins. of Dept. of State of New Jersey, 145 NJ.Super. 206, 367 A.2d 442 (1976); Halabi v. Administrator, Unemployment Compensation Act, 171 Conn. 316, 370 A.2d 938 (1976); Arizona Department of Economic Sec. v. Lidback, 26 Ariz.App. 143, 546 P.2d 1152 (1976). Furthermore, the United States Supreme Court in National Labor Relations Board v. Gullett Gin Co., 340 U.S. 361, 71 S.Ct. 337, 95 L.Ed. 337 (1951), recognized that recoupment in a backpay situation such as the case at hand is a matter between the state and the employees. The Supreme Court specifically noted in Nash v. Fla. Indus. Commission, 389 U.S. 235, 239, 88 S.Ct. 362, 366, 19 L.Ed.2d 438 (1976), that “... a State is free to recoup compensation payments made during any period covered by a back-pay award.”
For the foregoing reasons, I would permit recoupment by KUIC of the unemployment benefits paid to the appellee-employ-ees, thus preventing their windfall double recovery which defeats both the purpose of the backpay award and the purpose of our unemployment benefits statute.
STEPHENS, C.J., and COMBS, J., join in this dissent.