Douglas Aircraft Co. v. California Unemployment Ins. Appeals Bd.

• Citation: 180 Cal.App.2d 636,4 Cal.Rptr. 723
• Court: California Court of Appeals
• Decision Date: 04 May 1960
• Parties: DOUGLAS AIRCRAFT COMPANY, Inc., a Delaware corporation, Petitioner and Respondent, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD et al., Defendants. California Unemployment Insurance Appeals Board, Glenn V. Walls, Arnold L. Morse, Ernest B. Webb, as members of said Board; John E. Carr, as Director of Employment, Department of Employment, State of California, Appellants. Civ. 24332.

Page 723

4 Cal.Rptr. 723

180 Cal.App.2d 636

DOUGLAS AIRCRAFT COMPANY, Inc., a Delaware corporation, Petitioner and Respondent, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD et al., Defendants California Unemployment Insurance Appeals Board, Glenn V. Walls, Arnold L. Morse, Ernest B. Webb, as members of said Board; John E. Carr, as Director of Employment, Department of Employment, State of California, Appellants.

Civ. 24332.

District Court of Appeal, Second District, Division 2, California.

May 4, 1960.

Hearing Denied June 29, 1960.

Stanley Mosk, Atty. Gen., Herschel T. Elkins, Deputy Atty. Gen., for appellants.

Louis Lieber, Jr., Elmer J. Stone and William D. Craig, Santa Monica, for respondent.

KINCAID, Justice pro tem.

This is an appeal by the Department of Employment and California Unemployment Insurance Appeals Board from a judgment of the superior court that writ of mandate issue commanding said department and board to vacate and set aside certain rulings and orders imposing charges against the respondent employer's unemployment insurance reserve account for certain unemployment compensation benefits allowed to one of respondent's employees.

The primary question presented is whether a female employee, a member of a labor union, who takes an unpaid pregnancy leave of absence commencing with the fifth month of her pregnancy as required by a collective bargaining agreement between her employer and the union, should be held to have 'left [her] most recent work voluntarily without good cause' within the meaning of Unemployment Insurance Code, § 1256.

There is no dispute as to the facts. The employee-applicant for unemployment insurance benefits, Alvilda C. Steffan, had worked for the respondent employer since 1955; and she was a member of a labor union.

While she was employed by respondent and a member of the union, respondent and the union entered into a collective bargaining agreement which was ratified by the members of the union.

Said collective bargaining agreement contained certain provisions, initially proposed by the employer, specifying that a pregnant employee 'shall not be permitted to remain at work * * * beyond the end of the fourth month of pregnancy'; and further specifying that, when it became necessary at said time for a female employee to discontinue her employment, 'she may voluntarily terminate, or if she has been in the employ of the Company for at least one year, she may apply for formal leave of absence * * *.'

The employee became pregnant; and, when she had worked the maximum four months permissible under the collective bargaining agreement, she applied for and was granted a pregnancy leave of absence commencing on 8/16/58 at the end of the fourth month of her pregnancy.

On said 8/16/58, the employee, however, was in good physical health and still able to continue working until the end of October 1958 as shown by report and opinion of her doctor to such effect. She accordingly sought employment elsewhere but was unable to find such employment.

Thereupon she applied for unemployment compensation benefits upon the grounds that she was involuntarily unemployed and was able and willing to work until the end of October. Respondent objected on the ground that the employee had left her work and its employ voluntarily without good cause, and that she was, therefore, ineligible for unemployment compensation benefits.

The department of employment granted the employee's application for unemployment compensation benefits; and it determined and ruled in essence that no severance of employment relationship had occurred; that the employee was also involuntarily unemployed for purposes of determining her eligibility for unemployment compensation benefits; and that the employer's reserve account should be charged with the amounts of unemployment compensation allowed to the employee.

Respondent appealed to the department's referee and later to its appeals board from said ruling and determination. The said ruling and determination was affirmed on the appeal, except that it was held that respondent was not entitled to a ruling or determination as to the eligibility of the employee for benefits upon the ground that the employee had been granted a pregnancy leave of absence and that, therefore, no severance of the employer-employee relationship had occurred.

Thereafter respondent petitioned the superior court for a writ of mandate; and judgment was rendered vacating and setting aside said determinations, rulings and decisions insofar as they imposed charges against respondent's reserve account for unemployment compensation benefits allowed to said employee, and directing that writ of mandate issue in accordance therewith.

The essential basis of the judgment, as shown by the lower court's findings of fact and conclusions of law and its memorandum of decision, was that the employee was bound by the provisions of the collective bargaining agreement; that she must be deemed by reason thereof to have left her most recent work voluntarily without good cause; and that, therefore, the charges against the employer's reserve account were illegal and void. The department and its appeals board have appealed to this court from said judgment.

It is preliminarily necessary to consider appellants' general contention that an employee cannot be deemed to have 'left his most recent work' and to be disqualified for unemployment compensation benefits, unless the employment relationship has been terminated; and that, since the employee herein was given a leave of absence, the employment relationship was not terminated.

The import of said contention is that, although an employee on leave of absence may not have performed services for which wages are payable and is therefore 'unemployed' within the meaning of section 1252 of the Unemployment Insurance Code, such employee on leave must nonetheless be held to be simultaneously sufficiently 'employed' within the meaning of sections 1256 and 1032 of said code so as not to be disqualified for unemployment compensation benefits and so as to deprive the employer of the right to a ruling as to the employee's eligibility for benefits.

We are in accord with the trial court's opinion as expressed in its decision that said contention is untenable. Said contention is predicated upon the unjustified assumption, based on a narrow and isolated construction of certain provisions of said sections 1256 and 1032, that an employee cannot be deemed to have 'left [her] most recent work' or the employer's employ unless the employment relationship has been terminated; and, upon the unsound and unrealistic theory that an employee can be simultaneously sufficiently 'unemployed' to make her eligible for benefits and still sufficiently 'employed' to disentitle the employer to a ruling as to her eligibility for benefits.

Said section 1256 of the Unemployment Insurance Code provides in part, 'An individual is disqualified for unemployment compensation benefits if the director finds that he left his most recent work voluntarily without good cause * * *' (Emphasis added.)

The wording of said section does not expressly nor impliedly lend any support to appellants' contention that the employment relationship has to be terminated before the employee can be held to have 'left his most recent work.' On the contrary, the use of such limited and particular wording connotes and implies that an employee may be disqualified for benefits, even though the employment relationship may not have been completely or technically terminated.

Similarly, the provisions of section 1032 ¹ (especially when construed in conjunction with other pertinent and controlling sections of the Unemployment Insurance Code) do not support appellants' contention that the employment relationship has to be terminated before an employer has any right to have charges against his reserve account removed.

The employer has the right to challenge unemployment compensation awards to ineligible individuals, and no charges can be made against the employer's reserve account unless the individual allowed benefits is eligible for unemployment compensation benefits. Bodinson Mfg. Co. v. California Employ. Comm., 17 Cal.2d 321, 330-331, 109 P.2d 935; Unemployment Insurance Code, §§ 1251-1264.

It is clear, therefore, that section 1032 must be construed in conjunction with the provisions of sections 1251-1264 for the purpose of determining whether the employer's reserve account can be legally charged; and that, so construed, section 1032 cannot authorize the charging of payments to ineligible individuals against the employer's reserve account, even though the employment of such individuals has not been terminated.

Additionally, the mere circumstance that the employer or the collective bargaining agreement has designated the period of required layoff during pregnancy as a 'leave of absence' does not negate the fact that the employee during said required layoff period has left her most recent work, although it may establish that the leaving was involuntary as hereinafter discussed. See Myerson v. Board of Review, etc., App.Div. 43 N.J.Super. 196, 128 A.2d 15, 17, hereinafter reviewed.

We are not unmindful that the Unemployment Insurance Appeals Board has held, in a series of decisions involving similar or closely related situations, that employees so on leave have not left their most recent work or the employer's employ; and that, since no termination of the employment relationship can be said to have occurred in such situations, their employers are not entitled to a ruling determining the cause of such nonexistent termination of the employment or to a determination that the charges made against their reserve accounts should be removed.

It is settled, however, that, while great weight must be given the long-standing administrative construction of statutes, such administrative rulings are not binding on the courts; that the...