Grand Rapids Public Schools v. Falkenstern

• Decision Date: 07 July 1988
• Docket Number: Docket Nos. 98730
• Parties: , 47 Ed. Law Rep. 713 GRAND RAPIDS PUBLIC SCHOOLS, Employer-Appellee, and Michigan Employment Security Commission, Appellee, v. Ann FALKENSTERN, Carl Novak, Jose D'Acunti, Sally J. Siebesma, David S. Kail, Teresa S. Reno, Nova Barnes Yvonne M. Burgin, Debra Blandford, Joann H. Vanderwall, Sharon A. Townsend, Sheryl A. Leestma, Martha M. Broach, Mary Keetun, Debra L. (Hoffman) Battjes, Susan A. (Fansler) LaPenna, Desiree D. Eubank, June R. Gorman, Marcia J. DeKramer, Linda SW. Jernighan, Janice C. Cage, Deborah F. Norman, Mary J. Smith, Debra L. Kiss, Arsenia C. Popma, Luanne Helder, Lewis R. Hedberg and Clementine McIntosh, Claimants-Appellants. GRAND RAPIDS PUBLIC SCHOOLS, Employer-Appellee, and Michigan Employment Security Commission, Appellee, v. Gwendolyn McDONALD, Claimant-Appellant. GRAND RAPIDS PUBLIC SCHOOLS, Employer-Appellee, and Michigan Employment Security Commission, Appellee, v. Nancy HUNSBERGER, Claimant-Appellant. to 98732.
• Court: Court of Appeal of Michigan — District of US

Page 128

425 N.W.2d 128

168 Mich.App. 529, 47 Ed. Law Rep. 713

GRAND RAPIDS PUBLIC SCHOOLS, Employer-Appellee, and Michigan Employment Security Commission, Appellee, v. Ann FALKENSTERN, Carl Novak, Jose D'Acunti, Sally J.

Siebesma, David S. Kail, Teresa S. Reno, Nova Barnes Yvonne

M. Burgin, Debra Blandford, Joann H. Vanderwall, Sharon A.

Townsend, Sheryl A. Leestma, Martha M. Broach, Mary Keetun,

Debra L. (Hoffman) Battjes, Susan A. (Fansler) LaPenna,

Desiree D. Eubank, June R. Gorman, Marcia J. DeKramer, Linda

SW. Jernighan, Janice C. Cage, Deborah F. Norman, Mary J.

Smith, Debra L. Kiss, Arsenia C. Popma, Luanne Helder, Lewis

R. Hedberg and Clementine McIntosh, Claimants-Appellants.

GRAND RAPIDS PUBLIC SCHOOLS, Employer-Appellee, and Michigan Employment Security Commission, Appellee, v. Gwendolyn McDONALD, Claimant-Appellant.

GRAND RAPIDS PUBLIC SCHOOLS, Employer-Appellee, and Michigan Employment Security Commission, Appellee, v. Nancy HUNSBERGER, Claimant-Appellant.

Docket Nos. 98730 to 98732.

Court of Appeals of Michigan.

Submitted Dec. 7, 1987.

Decided Feb. 23, 1988.

Released for Publication July 7, 1988.

Anderson & Swets by David W. Swets, Grand Rapids, for Grand Rapids Public Schools.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., and Sherwin Vine, Asst. Atty. Gen., for Michigan Employment Sec. Com'n.

Levin, Levin, Garvett & Dill by Erwin B. Ellmann and Eli Grier, Southfield, for claimants-appellants.

Before MAHER, P.J., and GRIBBS and SIMMONS, ^* JJ.

PER CURIAM.

This is a consolidation of three separate appeals, ¹ all of which involve the claims of numerous Grand Rapids public school teachers, the claimants herein, for unemployment compensation benefits for the 1981 summer months. The Michigan Employment Security Commission Board of Review determined that all of the claimants were entitled to unemployment compensation for at least part of the claimed period because they had not been given reasonable assurances of employment for the next school year. The Kent Circuit Court reversed that determination, ruling that the assurances had been reasonable. As a result, sixteen of the claimants were denied all benefits and the remaining fourteen claimants were awarded benefits for a reduced period only. It is from that decision that the claimants bring their respective appeals as of right, which were consolidated for consideration by this Court. We reverse the decision of the circuit court and reinstate the decision of the MESC Board of Review.

On March 18, 1981, in anticipation of severely strained resources, Grand Rapids Public Schools sent layoff notices to approximately 625 members of its staff with the lowest seniority. Having worked only three years or less for the school district, claimants were among those who received the notices.

After the layoff notices were sent out, the economic situation worsened. During the summer of 1981, federal assistance was reduced by 1 1/2 million dollars. The school system, fearing further financial deficits, cut its own budget by twelve to thirteen million dollars. The problem was exacerbated because of a steady, three-year decline in student enrollment. Due to the school system's "belt tightening," the school superintendent met with the various employee-bargaining units in an effort to negotiate wage concessions.

Notwithstanding the bleak economic conditions facing the school district, the school system was able to recall 180 of the teachers who were originally laid off before the end of the 1980-81 school year. Moreover, on June 19, 1981, letters of reasonable assurance were sent to 266 teachers, including all of the claimants herein, ² which stated that "it is anticipated that you will be offered a teacher position for the 1981-82 school year." No explanation was ever given for this new-found optimism.

Subsequently, on August 14, 1981, fourteen of the claimants ³ were sent a second letter, which rescinded the earlier assurances of fall employment. Although the other sixteen claimants did not receive similar letters, they claimed to have no greater hope for reemployment. All the information supplied by the school system to claimants' collective bargaining representative, the Grand Rapids Education Association (GREA), indicated that as many as two hundred teachers would remain laid off as the new school year began. Apparently, the GREA was frustrated in its attempts to obtain more specific information on the matter because the school system declined to disclose how many teachers received the June assurance letter or any other information concerning terms and conditions of teacher employment.

Despite the gloomy employment predictions, all but five of the 180 teachers who received the June assurance letter (including the fourteen claimants who later received the rescission letter) had been rehired only days before the start of the 1981-82 school year on September 9, 1981. By October 8, 1981, the remaining five teachers had also been rehired. Each of the claimants was among those who were rehired.

Sometime thereafter, the claimants filed for unemployment compensation benefits with the MESC. In the Falkenstern case, a MESC referee found that "in spite of the serious financial difficulties experienced by the school district, the letters of assurance were issued with such care and in such good faith that apprehensions about the district's finances could not reasonably been [sic] regarded as a basis for failing to give effect to the employer's statements of assurance." The referee thus held that the claimants who received the rescission letter were entitled to unemployment compensation only from August 16, 1981, through the date of their ultimate reemployment. As to the other claimants, unemployment benefits were denied entirely. The referee made like rulings in both the McDonald and Hunsberger cases. ⁴

In all three cases, the decisions of the referee were appealed to the MESC Board of Review. In the Falkenstern case, a two-member majority held that the school system did not have "sufficiently certain budgetary data to offer such assurance" in the June, 1981, letter. Therefore, the thirteen claimants who received such were found to be entitled to unemployment compensation for the entire summer period. The others were granted compensation up to August 15, 1981, the date on which the board believed the school system "had the necessary information upon which to base reasonable assurance." One member of the board dissented, stating:

"I disagree with the Board majority and would allow benefits only to those 13 claimants who received the rescission of the reasonable assurance letter and would allow such benefits only for the period from August 16, 1981, through September 5, 1981.

"My review of the record discloses that the employer acted in good faith on the best information available when it sent the June 19, 1981, letters of reasonable assurance. Had it not been acting in good faith, it could have sent such letters to all of the teachers who had not received recall notices.

"Section 27(i)(1) of the Act [MCL 421.27(i)(1); MSA 17.529(i)(1) ] does not require a guarantee of employment. All that is required is a reasonable assurance. In my opinion, the employer has established such reasonable assurance."

In the McDonald case, the same two-member majority of the board found that the claimant had not been sent a rescission letter and, therefore, awarded her benefits from June 21 to August 15 only. In the Hunsberger case, an opposite conclusion was reached. Because this claimant had received the rescission letter, she was held to be eligible for benefits for the entire summer period. In both cases, one member of the panel disagreed with the majority's decision for the same reasons expressed in the Falkenstern dissent.

Following the Board of Review's decisions, the school system filed timely appeals in the Kent Circuit Court. The cases were consolidated for a single hearing and determination. In a written opinion issued in January of 1987, the court reversed the majority decisions of the board and adopted the reasoning of the dissents. The court held that the letter sent to each of the claimants in June constituted "reasonable assurance" of future employment, as required by M.C.L. Sec. 421.27(i)(1); M.S.A. Sec. 17.529(i)(1), so as to deny eligibility for unemployment compensation. As a result, the fourteen claimants who received the August rescission letters were found eligible for benefits only from August 16 to September 5 (the date they were rehired). The remaining claimants were found ineligible for any benefits. On February 6, 1987, an order to that effect was entered by the circuit court.

It is from that order that the claimants bring their respective appeals as of right, which we consolidated for our review.

In Michigan, courts may review questions of law or fact on appeal from the MESC Board of Review. Const. 1963, art 6, Sec. 28; Paynes v. Detroit Bd. of Ed., 150 Mich.App. 358, 366, 388 N.W.2d 358 (1986). However, a circuit court can reverse an order or decision of the board only if it is contrary to law or is unsupported by competent, material, and substantial evidence on the whole record. M.C.L. Sec. 421.38(1); M.S.A. Sec. 17.540(1); Paynes, supra. Where there is no dispute as to the underlying facts, questions presented on appeal are to be treated as matters of law. Gormley v. General Motors Corp., 125 Mich.App. 781, 785, 336 N.W.2d 873 (1983).

Resolution of the instant appeals is dependent upon the interpretation placed on Sec. 27(i)(1) of the Michigan Employment Security Act, M.C.L. Sec. 421.27(i)(1); M.S.A. Sec. 17.529(i)(1). Generally, the purpose of the act (M.C.L. Sec. 421.1 et seq.; M.S.A. Sec. 17.501 et seq.) is to safeguard the general welfare through the dispensation of benefits intended to ameliorate the disastrous effects of involuntary unemployment. Paynes, supra, 150 Mich.App. p. 367, 388 N.W.2d 358. In light of that...