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Windham County Sheriff'S Department v. Department of Labor

Supreme Court of Vermont

September 27, 2013

Windham County Sheriff's Department
Department of Labor

On Appeal from Employment Security Board June Term, 2013 Anne M. Noonan, Chair

Barbara R. Blackman and Scarlett S. MacIlwaine of Lynn, Lynn & Blackman, P.C., Burlington, for Plaintiff-Appellant.

Dirk Anderson, Montpelier, for Defendant-Appellee.

PRESENT: Reiber, C.J., Dooley, Skoglund, Burgess and Robinson, JJ.


¶ 1. Appellant Windham County Sheriff’s Department (WCSD) appeals the decision of the Employment Security Board holding it liable for reimbursement of unemployment compensation benefits as a base-period employer of a former employee. WCSD argues that because the employee was terminated for gross misconduct, and because an amendment to the statute governing reimbursement of unemployment compensation benefits that would have removed its liability for payments for employees terminated for gross misconduct took effect before the employee became eligible to receive any benefits, it should not be held liable for reimbursement payments. [*] We affirm.

¶ 2. The employee worked as a deputy sheriff in the Windham County Sheriff’s Department and was discharged for theft of department equipment. His last day of work was March 2, 2011, after which he filed a claim for unemployment benefits. By notice dated April 18, 2011, the Vermont Department of Labor found that Inman had been discharged for “gross misconduct connected with [his] work, ” 21 V.S.A. § 1344(a)(2)(B), and that he was “disqualified for benefits for the week ending March 26, 2011 and until [he had] earned wages in excess of six times [his] weekly benefit amount.” The notice also stated that “[a]ny employer liable to reimburse the fund for benefits paid in accordance with 21 V.S.A. § 1321(c)(5) cannot be relieved of charges by this determination.”

¶ 3. WCSD has elected to be a “reimbursable employer” under § 1321(e). This means that rather than paying an unemployment tax, WCSD must reimburse the unemployment trust fund for unemployment compensation benefits paid to a former employee under circumstances chargeable to the employer. A “reimbursable employer” is the type of employer referenced in the notice sent by the Department of Labor to WCSD.

¶ 4. At the time that this initial determination was made, § 1338(e) provided that an individual’s weekly benefit amount—and thus the reimbursable employer’s obligation under § 1321(c)(5)—was to be computed in a way that included wages earned in a position from which the individual was terminated for gross misconduct. On July 1, 2011, however, an amendment to that law came into effect whereby “[t]he base period wages shall not include any wages paid by an employing unit based on a separation for gross misconduct.” Id. § 1338(e).

¶ 5. After returning to work for a time at a covered employer and meeting the requirements set out in the April 18 notice, the employee became unemployed and successfully filed for benefits for the week ending December 24, 2011. In March 2012, he successfully applied for the next year’s benefits. WCSD was charged for benefits both in the benefit year ending March 17, 2012 and for the benefit year ending March 16, 2013, as provided in the pre-July 1, 2011 version of the statute. A claims adjudicator of the Department of Labor notified the employer that it was being charged for reimbursement of the employee’s compensation on February 15, 2012, and WCSD petitioned for a hearing, arguing that the new version of the statute should apply and it should not be liable for the employee’s benefits. An administrative law judge upheld the Department of Labor’s determination, as did the Employment Security Board. This appeal followed.

¶ 6. When reviewing decisions of the Employment Security Board, we “generally defer to its interpretations of the statutes it is charged with administering.” Blue v. Dep’t of Labor, 2011 VT 84, ¶ 6, 190 Vt. 228, 27 A.3d 1096; see In re Porter, 2012 VT 97, ¶ 8, ___ Vt. ___, 70 A.3d 915, 918 (“We defer to an administrative agency's interpretation of statutory provisions that are within its particular area of expertise.” (quotation omitted)). “Our standard of review is based, however, on the nature of the [agency]’s expertise and the appropriateness of paying deference to it.” Porter, 2012 VT 97, ¶ 8 (quotation omitted). Because the questions in this case are of the statutory construction and retroactivity of provisions not involving any facts or employment-specific knowledge, our review is de novo. See id. ¶ 9.

¶ 7. On appeal, WCSD argues that the employee became eligible to receive benefits only once he had earned wages in excess of six times his weekly benefit amount, as reflected in the April 18, 2011 notice, and that the date that controls which statute to apply is therefore that of his reapplication for benefits on December 24, 2011. We cannot accept that argument. Pursuant to 1 V.S.A. § 214(b)(2), the amendment of a statutory provision shall not “[a]ffect any right, privilege, obligation or liability acquired, accrued or incurred prior to the effective date of the amendment or repeal.” The question, then, of what version of the statute should be applied to WCSD depends on when WCSD’s liability accrued.

¶ 8. According to 21 V.S.A. § 1301(23), a “valid claim” for unemployment compensation benefits is established by a determination of monetary eligibility at the time that an initial claim is filed. At that time, the liability of the employer is established—which would or would not include liability based on wages paid to an individual terminated for gross misconduct, depending on which version of § 1338(e) is applicable at that time. Reimbursable employers like WCSD are then responsible for payments towards the employee’s unemployment compensation based on this liability, id. § 1321(c)(5), without the need for any new adjudication of that liability.

¶ 9. In essence, employee was found eligible for unemployment compensation benefits in March, 2011, but was required to go through a disqualification period before he received the unemployment compensation benefits. A “valid claim” is a “ prerequisite to the making of a... determination of an individual’s disqualification for benefits under section 1344 of this title.” Id. § 1301(23) (emphasis added). That sentence makes clear that the “valid claim” does not disappear with disqualification—all the disqualification means is that the individual cannot receive ...

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