Cornwell Personnel Associates, Ltd. v. Labor and Industry Review Com'n, 92-1718-FT

• Decision Date: 13 January 1993
• Docket Number: No. 92-1718-FT,92-1718-FT
• Citation: 499 N.W.2d 705,175 Wis.2d 537
• Parties: CORNWELL PERSONNEL ASSOCIATES, LTD., Plaintiff-Respondent, v. LABOR AND INDUSTRY REVIEW COMMISSION, Defendant-Appellant, Robert E. Linde, Defendant. . Oral Argument
• Court: Wisconsin Court of Appeals

Page 705

499 N.W.2d 705

175 Wis.2d 537

CORNWELL PERSONNEL ASSOCIATES, LTD., Plaintiff-Respondent, v. LABOR AND INDUSTRY REVIEW COMMISSION, Defendant-Appellant Robert E. Linde, Defendant.

No. 92-1718-FT.

Court of Appeals of Wisconsin.

Oral Argument Jan. 13, 1993.

Opinion Released March 30, 1993.

Opinion Filed March 30, 1993.

Before WEDEMEYER, P.J., and SULLIVAN and SCHUDSON, JJ.

WEDEMEYER, Presiding Judge.

The Labor and Industry Review Commission (LIRC) appeals from an order of the circuit court which reversed the majority decision of LIRC in an unemployment compensation benefits case. The circuit court held that Robert E. Linde was not entitled to unemployment compensation benefits because Linde quit his employment and none of the quit disqualification exceptions provided a basis for him to retain his benefits. Because Linde quit with "good cause attributable to the employing unit," as provided under sec. 108.04(7)(b), Stats., as initially found by LIRC, we reverse.

I. BACKGROUND

Robert E. Linde commenced his employment with Cornwell Personnel Associates, LTD. (Cornwell), a temporary help employer, on August 18, 1987. Linde's first work assignment was with Western Products where he was a general laborer. His rate of pay was $4.25 per hour. Linde received periodic wage increases at Western Products and was receiving $5.75 per hour when he was laid off from this position on February 3, 1989. On April 4, 1989, Linde received an assignment at Production Stamping as a punch press operator where he received $5 per hour. Production Stamping terminated this work on April 10, 1989. The following day Linde called Cornwell for an additional work assignment, as required by the employment contract, and was offered a choice of three assignments. ¹ Linde did not accept any of the assignments and, therefore, he believed that this constituted a termination "with good cause" for unemployment compensation purposes. Linde subsequently applied for unemployment compensation which Cornwell challenged before LIRC.

LIRC concluded that Linde could remain eligible for unemployment compensation benefits despite the fact that he quit his employment with Cornwell. LIRC determined that Linde quit "with good cause attributable to the employing unit" within the meaning of sec. 108.04(7)(b), Stats. LIRC also concluded that Linde remained eligible for benefits within the meaning of sec. 108.04(7)(e), Stats.

Cornwell initiated an action for judicial review of the LIRC decision in the circuit court. The court concluded that Linde quit his employment and that such quitting was not for any exception to the disqualification provisions as delineated in sec. 108.04(7), Stats. LIRC appeals.

II. DISCUSSION

A. Standard of Review

A commission's factual findings are binding on this court as long as they are supported by substantial and credible evidence in the record. Sections 102.23(1)(a) and 108.09(7)(b), Stats.; Holy Name School v. DILHR, 109 Wis.2d 381, 385-86, 326 N.W.2d 121, 124 (Ct.App.1982). Substantial evidence is evidence that is relevant, credible, probative, and of a quantum upon which a reasonable fact finder could base a conclusion. Princess House, Inc. v. DILHR, 111 Wis.2d 46, 54, 330 N.W.2d 169, 173 (1983). Facts of mere conjecture or a mere scintilla of evidence are not enough to support LIRC's findings. Id. The evidence, however, is to be construed most favorably to the commission's findings. Id. at 53, 330 N.W.2d at 173.

Legal conclusions drawn by the commission from its factual findings are subject to judicial review. Wehr Steel Co. v. DILHR, 106 Wis.2d 111, 117, 315 N.W.2d 357, 361 (1982). The commission's construction of a statute and its application to a particular set of facts is a question of law. Bucyrus-Erie Co. v. DILHR, 90 Wis.2d 408, 417, 280 N.W.2d 142, 146-47 (1979). Although a commission's resolution of questions of law does not bind a reviewing court, some deference is appropriate due to the commission's expertise. Berns v. WERC, 99 Wis.2d 252, 261, 299 N.W.2d 248, 253 (1980). If the commission's statutory interpretation "reflects a practice or position long continued, substantially uniform and without challenge by governmental authorities and courts," great weight will be accorded the commission's decision. Id. (Citation omitted). This deference will also be extended to a commission's application of a particular statute to a particular set of facts. Wisconsin's Envtl. Decade, Inc., v. Public Serv. Comm'n, 98 Wis.2d 682, 694, 298 N.W.2d 205, 209 (Ct.App.1980).

B. Analysis

This is a case of first impression in that it involves the application of the unemployment compensation statutes to the temporary help industry. ² Although the temporary help industry is not a new phenomenon in the work place, because of the ever-increasing pressure in the business community to reduce personnel costs, it has experienced an unusual growth rate. ³ The contours of the industry's position in the employee-employer dynamic, as well as the consequences of such status, have yet to be clearly defined. This case addresses one of many possible issues that may arise in the future.

In the temporary help arena, an employment relationship exists between the employee and the temporary help employer. In the present case, the employment relationship was to continue if Cornwell immediately offered a new placement to Linde when he informed Cornwell that his prior placement had ended. When contacted on April 11, Cornwell offered Linde a choice of three placements. Thus, the employment relationship continued until Linde severed it by refusing the new placements. Linde's refusal is regarded as a "quit" or voluntary termination for unemployment purposes.

Where an employee quits an employment relationship, sec. 108.04(7)(a), Stats., generally disqualifies that individual from receiving unemployment benefits. ⁴ Benefits, however, may still be received if the employee quit for one of the exceptions specified in sec. 108.04(7)(am)-(o), Stats.

LIRC concluded that Linde could remain eligible for unemployment compensation benefits despite the fact that he quit his employment with Cornwell. LIRC determined that Linde quit with "good cause attributable to the employing unit" within the meaning of sec. 108.04(7)(b), Stats. ⁵ LIRC based its findings on a significant reduction in wages to a level substantially below prevailing wage rates, particularly in light of the relatively low wage level that Linde initially received.

Good cause attributable to an employer for quitting must involve some fault on the employer's part "and must be real and substantial." Kessler v. Industrial Comm'n, 27 Wis.2d 398, 401, 134 N.W.2d 412, 414 (1965); Nottelson v. ILHR Dep't, 94 Wis.2d 106, 120, 287 N.W.2d 763, 770 (1980). Here, LIRC determined that the three jobs offered to Linde resulted in a wage reduction of fifteen to twenty percent from his wage rate at Production Stamping. Moreover, LIRC found that the offers were all substantially lower than prevailing wage rates for similar work in the employee's labor market, according to department policy in effect at the time the job offers were made. ⁶ Thus, LIRC determined that the lower wages paid by the jobs Cornwell offered met the standard required for "good cause attributable to the employing unit." In light of the deference to be accorded LIRC's determinations, this court will not disturb these findings on appeal. The findings were supported by substantial and credible evidence from the labor market analyst. Consequently, we concur with LIRC that Linde quit his job with Cornwell "with good cause attributable to the employing unit," and therefore, Linde met an exception to the voluntary quit disqualification of sec. 108.04(7)(a), Stats., and remained eligible for benefits.

The trial court concluded that sec. 108.04(7)(f), Stats., precluded a finding of good cause. We do not agree. Section 108.04(7)(f), states that:

Paragraph (a) does not apply if the department determines that the employe terminated his or her work because the employe was transferred by his or her employing unit to work paying less than two-thirds of his or her immediately preceding wage rate with the employing unit, except that the employe is ineligible to receive benefits for the week of termination and the 4 next following weeks.

Section 108.04(7)(f) is worded such that it applies only in cases where the employee is transferred to work paying less than two-thirds of his or her immediately preceding wage rate. However, we find no indication that where an employee is transferred to work paying more than two-thirds of the previous wage rate, sec. 108.04(7)(f) necessarily precludes a finding of good cause. On the contrary, we conclude that good cause can exist where an employee is transferred to a job above the two-thirds threshold. In this case, LIRC made a finding of good cause not only for a significant reduction in wages, but also because the wages offered were substantially below prevailing wages for similar work in the locality. We defer to LIRC on their application of the statute to the facts in this case. Thus, irrespective of the fact that Linde's offers of employment from Cornwell were above the two-thirds threshold, a finding of good cause was not inappropriate.

LIRC also noted the possible application of sec. 108.04(7)(e), Stats., ⁷ which would provide another quit disqualification exception. Although this determination is not dispositive, we wish to offer our reading of the section because both parties briefed the issue and it is reasonable to expect that, if the issue is not now addressed, it will be raised repeatedly in the future. See Jackson v. Coffey at 18 Wis.2d 529, 118 N.W.2d 939, 941 (1962) (where issue is fully briefed and likely to recur in the future, the court has the authority to address the issue).

Because Cornwell is a temporary help agency that assigns different jobs to the same employee, it must be determined...