Empire Iron Min. Partnership v. Orhanen, Docket Nos. 103269-103271

Citation565 N.W.2d 844,455 Mich. 410
Decision Date29 July 1997
Docket Number103301-103313,Docket Nos. 103269-103271,Nos. 4-5,s. 4-5
PartiesEMPIRE IRON MINING PARTNERSHIP, et al., Plaintiffs-Appellants, v. Peter ORHANEN, et al., Defendants-Appellees, and Michigan Employment Securities Commission, Cross-Appellee. EMPIRE IRON MINING PARTNERSHIP, et al., Plaintiffs-Appellees, v. Donald A. ASMUND, et al., Defendants-Appellants. Calendar
CourtSupreme Court of Michigan

Clancey, Hansen, Chilman & Greenlee, P.C. by Ronald E. Greenlee and W. Scott Chilman, Ishpeming, for plaintiff Empire Iron Mining Partnership.

Miller, Cohen, Martens, Ice & Geary, P.C. by Stuart M. Israel and Ronald C. Engler, Southfield, for defendants.

Clark Hill, P.L.C. by Duane L. Tarnacki and J. Walker Henry, Detroit, amicus curiae, for Michigan Manufacturers Association.



This appeal is a consolidation of two cases. The Court is asked to determine what statutory requirements a striking worker must satisfy in order to requalify 1 for unemployment benefits under the Michigan Employment Security Act. M.C.L. § 421.29(8)(b); M.S.A. § 17.531(8)(b). In both these cases, the Michigan Employment Security Board of Review found that the sixteen striking employees requalified for unemployment compensation benefits. They had obtained interim jobs for a combined period of two weeks or more at statutorily prescribed wage-rates.

The employers in Orhanen appeal from a decision of the Court of Appeals that affirmed the Board of Review's grant of benefits to three employees. 2 Each employee had requalified by securing interim employment through a union hiring hall, which included jobs from more than one employer. The struck employers argue that it was error to hold that striking employees can earn requalification wages from multiple employers, as it encourages make-work and bad-faith interim employment.

In Asmund, employees appeal from a Court of Appeals decision that the award of unemployment compensation benefits to them was improper. 3 They assert that the appellate court erred as a matter of law by requiring "good faith" employment as a necessary element for requalification. The thirteen Asmund employees each worked for only one interim employer. However, the Court of Appeals found that they did not act in good faith in obtaining the interim employment.

We affirm the Court of Appeals decision in Orhanen and reverse the decision in Asmund.

I Introduction

Eligibility of employees to receive unemployment compensation benefits and the bases of disqualification for those benefits are established by the MESA. M.C.L. § 421.28; M.S.A. § 17.530 and M.C.L. § 421.29(8)(b); M.S.A. § 17.531(8)(b). 4 The issues presented on appeal involve the labor dispute disqualification provision, which states:

(b) An individual's disqualification imposed or imposable under this subsection is terminated if the individual performs services in employment with an employer in at least 2 consecutive weeks falling wholly within the period of the individual's total or partial unemployment due to the labor dispute, and in addition earns wages in each of those weeks in an amount equal to or greater than the individual's actual or potential weekly benefit rate with respect to those weeks based on the individual's employment with the employer involved in the labor dispute. [M.C.L. § 421.29(8)(b); M.S.A. § 17.531(8)(b) (emphasis added).]

In Orhanen and Asmund, the Court is asked to consider whether, in amending the disqualification provision of § 29(8)(b), the Legislature intended (1) that a requirement of "good faith" be added to the listed objective criteria, and (2) whether it intended that the phrase "services in employment with an employer" be construed as requiring employment with a single employer.

We resolve the issues in favor of the employees. We find that the Board of Review's interpretations of § 29(8)(b) are in accord with the underlying purpose of the act itself.


The "Good Faith" Criterion Issue


The "Single Employer" Issue

Whether interim employment ends disqualification for unemployment benefits is dependent on the wording of the statute. Thomas v. Employment Security Comm., 356 Mich. 665, 97 N.W.2d 784 (1959). Because of conflicting Court of Appeals decisions, we are alerted to the fact that the statutory language of § 29(8)(b) may be subject to differing interpretations. We note that the plain wording of the statute does not express a "good faith" requirement. We note also that the phrase "an employer" may be interpreted in the plural as well as in the singular. Therefore, we consider whether "good faith" employment with a single employer was nonetheless intended by the Legislature.

We begin our analysis by examining the rationale underlying the MESA.

Doing so sharpens our understanding of the circumstances surrounding its enactment. We review the prelegislative history and the motivations that induced enactment. Horack, The disintegration of statutory construction, 24 Ind L J 335, 338 (1949).

Next, we look to this Court's decisions that touch on the history and the circumstances surrounding § 29(8)(b). Dow Chemical Co. v. Curtis, 431 Mich. 471, 480, 430 N.W.2d 645 (1988); Great Lakes Steel Corp. v. Employment Security Comm., 381 Mich. 249, 254, 161 N.W.2d 14 (1968). Throughout our analysis, we bear in mind the underlying purpose of the act. Dep't of Social Services v. Brewer, 180 Mich.App. 82, 84, 446 N.W.2d 593 (1989).

Once we have ascertained the Legislature's intent, we follow the primary rule of statutory construction for cases interpreting the MESA: a "liberal" construction to afford coverage and a "strict" construction to effect disqualification. See Linski v. Appeal Bd. of Michigan Employment Security Comm., 358 Mich. 239, 99 N.W.2d 582 (1959). In order to comply with the public policy of the act, we recognize that this primary rule must prevail, despite any other conflicting rule. People v. Russo, 439 Mich. 584, 595, 487 N.W.2d 698 (1992). Other rules of construction serve only as guides to assist us in determining the intent with a greater degree of certainty. Nolan v. Dep't of Licensing & Regulation, 151 Mich.App. 641, 648, 391 N.W.2d 424 (1986). We recognize that, as a general rule, deference is given to an administrative agency's decisions, provided that the agency's construction is consistent with the purpose and policies of the statute itself. 5


The MESA was enacted primarily for the benefit of persons involuntarily unemployed. Its purpose is to lighten the burden of economic insecurity on those who become unemployed through no fault of their own. Kalamazoo Tank & Silo Co. v. Unemployment Compensation Comm., 324 Mich. 101, 107, 36 N.W.2d 226 (1949). The act specifies:

Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state. Involuntary unemployment is a subject of general interest and concern which requires action by the legislature to prevent its spread and to lighten its burden which so often falls with crushing force upon the unemployed worker and his family, to the detriment of the welfare of the people of this state. Social security requires protection against this hazard of our economic life. Employers should be encouraged to provide stable employment. [M.C.L. § 421.2; M.S.A. § 17.502.]

As the MESA is a remedial statute, it should be liberally construed to achieve its intended goal. Dudewicz v. Norris Schmid, Inc., 443 Mich. 68, 77, 503 N.W.2d 645 (1993). The precise language of the act springs from its underlying policy. The wording expresses our legislators' ideas, which, taken as a whole, become the basis for legislative intent.

As Justice McAllister stated in his dissent in Chrysler Corp. v. Smith, 297 Mich. 438, 475, 298 N.W. 87 (1941):

The purpose of the legislation is to pay unemployment compensation benefits and to ameliorate the consequences of widespread unemployment. Such compensation is payable to unemployed workers with certain exceptions. To bring claimants within such exceptions, it is necessary to strain at the meaning of the language of the statute and to read into the act exceptions with regard to "integrated industry," which are not mentioned anywhere in the legislation. To say the least, this would result in a narrow rather than a liberal construction of the meaning of the statute. It is most salutary, and in this case, in our opinion, conclusive, to bear in mind that the purpose of the legislation is to pay unemployment benefits, and not to refuse them; and a liberal construction results in the allowance of the claims rather than their denial.

We cited the McAllister dissent with approval in Park v. Appeal Bd. of Mich. Employment Security Comm., 355 Mich. 103, 94 N.W.2d 407 (1959), which overruled Chrysler Corp v. Smith, supra. See also Johnides v. St. Lawrence Hosp., 184 Mich.App. 172, 457 N.W.2d 123 (1990); Wilkerson v. Jackson Public Schools, 170 Mich.App. 133, 136, 427 N.W.2d 570 (1988).


In 1968, this Court interpreted § 29(8)(b) of the MESA, as then worded 6, to mean that interim employment of even a short duration was sufficient to terminate the disqualification. Great Lakes, supra. The only standard to be applied with respect to interim employment was that an employee be an "employee" of an "interim employing units." 7 Id.

The question in Great Lakes was whether the phrase "establishment in which he is or was last employed" would affect the employees' claims for benefits. Id. at 253-254, 161 N.W.2d 14. If it does, then a layoff from an interim employment is not disqualifying under § 29(8)(b).

The Great Lakes Court did not define the necessary minimum length of interim employment. As a consequence, employees who had worked a few hours or days were able to avoid disqualification. Nor did the Great Lakes Court explicitly interpret § 29(8)(b) as requiring a subjective criterion of "good faith" e...

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