Globe-Democrat Pub. Co. v. Industrial Commission

• Decision Date: 07 May 1957
• Docket Number: No. 29643,GLOBE-DEMOCRAT,29643
• Parties: PUBLISHING COMPANY, a Corporation, Appellant, v. The INDUSTRIAL COMMISSION of Missouri, The Division of Employment Security of the Department of Labor and Industrial Relations, and Ernest J. Yaeger, Respondents.
• Court: Missouri Court of Appeals

Page 846

301 S.W.2d 846

GLOBE-DEMOCRAT PUBLISHING COMPANY, a Corporation, Appellant, v. The INDUSTRIAL COMMISSION of Missouri, The Division of Employment Security of the Department of Labor and Industrial Relations, and Ernest J Yaeger, Respondents.

No. 29643.

St. Louis Court of Appeals, Missouri.

May 7, 1957.

Motion for Rehearing or to Transfer to Supreme Court Denied

May 31, 1957.

Jones, Hocker, Grand, Peper, Martin & Roudebush and Harold B. Bamburg, St. Louis, for appellant.

Lloyd G. Poole, Jefferson City, for respondent Industrial Commission.

George Schwartz, Jefferson City, for respondent Division of Employment Security.

Morris J. Levin and Donald S. Siegel, St. Louis, for respondent Yaeger.

MATTHES, Judge.

The Globe-Democrat Publishing Company has appealed from the judgment of the Circuit Court, which affirmed the decision of The Industrial Commission of Missouri holding that Ernest J. Yaeger was eligible for unemployment compensation benefits. For the sake of brevity the Globe-Democrat Publishing Company will be referred to as Publisher, The Industrial Commission of Missouri as Commission, and Ernest J. Yaeger will sometimes be referred to as Employee.

The facts are undisputed and disclose that Yaeger was an employee of Publisher from February 10, 1943, to April 23, 1955, when he was discharged for a reason other than his own willful breach of duty or willful misconduct. At the time Employee was separated from service there was in force and effect a collective bargaining contract between the Publisher and The St. Louis Newspaper Guild, of which Employee was a member. Article IV of the contract provided, inter alia, that:

'1. When an employee is dismissed otherwise than as a result of his own willful breach of duty or willful misconduct, he shall be compensated in addition to the sum otherwise due him one (1) week's pay for each six (6) months last continuous employment by the Publisher to a maximum of forty-eight (48) weeks in dismissal pay.

'2. * * * Dismissal compensation shall be computed at the highest weekly wage (excluding any night differential payment) received by the employee within the previous 12 months;'

Upon being dismissed the Employee received a lump sum dismissal payment equal to twenty-four weeks' pay in the total amount of $1,825.75, less deduction for taxes. Thereafter, and on April 29th, Employee filed a claim for benefits under the Missouri Employment Security Law for the week ending May 7, 1955. A Deputy of The Division of Employment Security determined and found that the dismissal pay received by Employee covered the period from April 24, 1955, to October 8, 1955 (24 weeks), and that for said period Employee was ineligible for benefits. An Appeals Referee, after hearing, also ruled that the dismissal pay constituted termination allowance within the meaning of the law, and that it was paid for the twenty-four weeks following April 23, 1955, for which period Employee was ineligible for benefits. On review the Commission reversed the decision of the Appeals Referee. It found that although the dismissal payment was in an amount equivalent to twenty-four weeks' pay, it was not designated as being paid for the twenty-four consecutive weeks immediately following Employee's separation and therefore constituted termination allowance for only the week in which it was paid, and that Employee was 'entitled to benefits, if otherwise eligible, notwithstanding his receipt of the lump sum termination allowance of $1,825.75, except for the week in which such lump sum payment was received by him'. As stated, this decision was affirmed by the judgment of the Circuit Court.

The case is one of first impression in this jurisdiction. The determination thereof requires construction of the statutory provisions relating to payment of unemployment benefits. Section 288.040, subd. 2(1), ¹ here applicable, provides:

'A claimant shall be ineligible for waiting week credit or benefits for any week for which he is receiving or has received remuneration exceeding his weekly benefit amount in the form of

'(a) Wages in lieu of notice;

'(b) Termination allowances;

'(c) Compensation for temporary partial disability under the workmen's compensation law of any state or under a similar law of the United States;

'(d) Old age benefits under Title II of the Social Security Act, as amended (42 U.S.C.A. Sec. 401 et seq.), or similar payments under any act of congress;

'(e) A pension paid in whole or in part from funds furnished by an employing unit to the extent that such pension is provided from funds not provided by the claimant.' (Italics supplied.)

In light of the foregoing statute which disqualifies a claimant for benefits for any week for which he is receiving or has received remuneration in the form of termination allowances, the Publisher contends that the amount paid Employee upon his discharge not only constituted a termination allowance, but that it disqualified Employee for the twenty-four weeks following separation from service. This contention is based upon the fact that the dismissal payment was equivalent to the sum of Employee's wages for the period of twenty-four weeks. Employee argues with much insistence that the dismissal payment does not come within the purview of the disqualifying statute. He insists that such payment was not a termination allowance; was made only with reference to the period prior to his discharge for which and during which period said dismissal payment was earned; and that it was paid for purposes other than tiding him over or protecting him from the hazards of unemployment following his discharge. It is further urged by Employee that, 'the dismissal pay is in the nature of a deferred bonus or settlement payment made by the employer for the employee's loss of opportunity to continue his equity in his job and to retain further enjoyment of those rights and benefits granted employees under said collective bargaining agreement'. The Commission advances two theories in this court. Following the contention that the dismissal payment was a termination allowance contemplated by the statute which had the effect of disqualifying Employee for only the week in which it was paid, if advances the somewhat inconsistent argument that the payment actually represented additional remuneration for the Employee's prior services.

The Commission based its decision on Ackerson v. Western Union Telegraph Co., 1951, 234 Minn. 271, 48 N.W.2d 338, 25 A.L.R.2d 1063. In this court Employee and Commission insist that the Ackerson case is squarely in point and urge us to follow it. In addition to Ackerson, the Employee and Commission rely upon: Western Union Telegraph Co v. Texas Employment Commission, Tex.Civ.App.1951, 243 S.W.2d 217; Dubois v. Maine Employment Security Commission, Me.1955, 114 A.2d 359; Industrial Commission of Colorado v. Sirokman, Colo.1957, 306 P.2d 669; Owens v. Press Publishing Co., 1956, 20 N.J. 537, 120 A.2d 442; Adams v. Jersey Central Power & Light Co., 1956, 21 N.J. 8, 120 A.2d 737.

An analysis of the Minnesota Statute, M.S.A. Sec. 268.08, which sets up the disqualification for benefits discloses that it is substantially the same as the Missouri Act. The collective bargaining contract involved in the Ackerson case is likewise strikingly similar to the instant agreement with respect to dismissal pay. The only difference is that in the Ackerson case the employee had the right to choose to be paid a lump sum separation allowance and, instead of providing, as does the instant contract, that he would be compensated one week for each six months of continuous service, it provided that the separation allowance 'shall be determined on the basis of four weeks' pay at the regular rate of the position last occupied, for every year of service, * * *'. [234 Minn. 271, 48 N.W.2d 339.]

The Appeal Tribunal in the Minnesota case ruled that the severance payment constituted a delayed payment based on services performed prior to the date of termination. The Supreme Court of Minnesota held that such reasoning was untenable, and chose to base its decision on the theory that the severance pay actually constituted compensation for loss of seniority rights, loss of pension rights, and compensation for retraining or acquiring new skills. It is interesting to note, however, that the Minnesota court pointed out that employment and security divisions in the states of California, Florida, Massachusetts, Pennsylvania, Indiana, Kansas, Maine, Maryland, and Tennessee had held that severance payments should be considered as wages in the future and that the employee was ineligible for benefits until the expiration of the number of weeks for which payment was so made. See foonote 1 in 48 N.W.2d loc. cit. 340.

Western Union Telegraph Co. v. Texas Employment Commission, supra, is clearly distinguishable. The Texas Statute provides that, 'An individual shall be deemed 'totally unemployed' in any benefit period during which he performs no services and with respect to which no wages are payable to him.' Vernon's Ann.Civ.St. art. 5221b-17(l). Under that statutory provision the court held that the severance allowance did not disqualify the claimant. The court was careful to emphasize that the Texas Act does not render a claimant who has received a separation allowance ineligible for benefits.

The claimants in the Dubois case, supra, were not discharged. They retired. The bargaining contract provided for a lump sum pension plan. Pursuant thereto the claimants received a lump sum payment. Under those facts the Maine court ruled that the payment did not constitute 'dismissal wages' which disqualified a claimant from receiving benefits.

The case of Industrial Commission of Colorado v. Sirokman, supra, presents a vitally distinguishing feature. The Colorado Statute does not disqualify a claimant for benefits on account of receipt of termination allowances. The disqualification goes to remuneration in the...