Gray v. Department of Employment Sec.

• Decision Date: 22 March 1984
• Docket Number: Nos. 19005,19321,19127,19322 and 19346,s. 19005
• Citation: 681 P.2d 807
• Parties: Gordon A. GRAY, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant. Agnes PAYOTELIS, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant. Cathleen L. ALVARADO, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant. Steve E. CHYTRAUS, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant. Mary A. SCHOEN, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant.
• Court: Utah Supreme Court

Page 807

681 P.2d 807

Gordon A. GRAY, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant.

Agnes PAYOTELIS, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant.

Cathleen L. ALVARADO, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant.

Steve E. CHYTRAUS, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant.

Mary A. SCHOEN, Plaintiff, v. DEPARTMENT OF EMPLOYMENT SECURITY, Defendant.

Nos. 19005, 19127, 19321, 19322 and 19346.

Supreme Court of Utah.

March 22, 1984.

John L. Black, Jr., Utah Legal Services, Salt Lake City, for plaintiffs.

Floyd G. Astin, K. Allan Zabel, Sp. Asst. Attys. Gen., Salt Lake City, for defendant.

HALL, Chief Justice:

These five unemployment compensation cases, having come to this Court as separate appeals, involve similar factual circumstances and identical legal issues and are therefore consolidated in the interest of judicial economy.

The factual scheme common to each of these cases is as follows. After losing their jobs, appellants applied to the Department of Employment Security (hereinafter "department") for unemployment compensation benefits. At the time they filed their claims for benefits, they were instructed orally by department personnel that they must, inter alia, make a determined number (i.e., either two or three) of in-person contacts with potential employers each week in order to retain their eligibility status. They further received written instructions at that time as to their responsibilities relative to receiving benefits. On the claim for benefits form, they certified to the following: "I understand that I must personally seek work and be able and available to accept full-time work. I received the Unemployment Insurance Claimant Guide explaining my rights and responsibilities." (Emphasis added.) The Unemployment Insurance Guide (hereinafter "Claimant Guide") contains the following instructions in this regard: "Make an active effort to look for work. An active effort means that you should contact several employers in person each week who would hire people in your occupational field." (Emphasis added.) Appellants also signed and received copies of a form entitled "Responsibilities While Claiming Benefits," which provides:

Seek work--I must make an active effort to look for full time work each week and will follow up on any job leads I am given by Job Service. An active effort, in part, means I will personally contact employers who would hire people in my occupation. Failure to do so may be considered as evidence that I do not have a genuine desire to find immediate employment.

After receiving benefits for several months, appellants were notified by mail that they were scheduled to be interviewed by the department for the purpose of reviewing their eligibility status. Included with this notice was an "Eligibility Review" form, which, inter alia, required the claimant to report the contacts, in person or otherwise, he had made to secure employment during the previous 30-day period. The form also contained the following statement in boldface type: "Please complete this form accurately. Your eligibility for unemployment insurance will be based in part on the information you provide. Bring this form with you when you report for your interview." (Emphasis added.)

At their eligibility interviews, appellants signed a "Statement Regarding Claims For Benefits," wherein each acknowledged that during certain weeks his work search (as reported on the eligibility review form) did not satisfy the standard (i.e., several in-person contacts per week) that had been set at the time the initial claim was filed.

Within only a few days after their eligibility interviews, appellants received "Eligibility Determination and Overpayment Notice[s]" from the department, indicating that their unemployment benefits were suspended and that they were liable to the department for certain benefits received. The reason given in these notices for the denial of benefits was that apellants had failed to establish their "availability for work" pursuant to the dictates of the Employment Security Act. ¹

Appellants appealed the adverse department decisions, first to an appeals referee and then to the Board of Review of the Industrial Commission. On each level of appeal, certain of the appellants received partial relief, but none received total relief. Appellants are now before this Court pursuant to U.C.A., 1953, § 35-4-10, requesting further relief from the decisions of the board of review.

The following issues are raised by each of the appellants:

(1) Did appellant act in good faith to make an active and reasonable effort to secure employment?

(2) Is the "2 to 3 new, in-person contact rule" a valid legal standard? and

(3) Does the Fourteenth Amendment require that recipients of Utah unemployment compensation benefits be afforded a Goldberg v. Kelly ² hearing prior to being deprived of such benefits?

In addition to these issues, appellant Gray raises a question regarding the propriety of the department's order that the overpayment of benefits be offset by deductions from future benefits payable to him.

I. GOOD FAITH EFFORT TO SECURE EMPLOYMENT

Appellants contend that notwithstanding their failure to satisfy the department's two- to three-new-in-person-contact requirement, they carried their burden of establishing the requisite "availability for work" by conducting a "good faith" search for employment. This contention rests upon their analysis of the following provision of the Employment Security Act:

An unemployed individual is eligible to receive benefits with respect to any week only if it has been found by the commission that:

....

(c) He ... acted in good faith in an active effort to secure employment.... ³

(Emphasis added.) They point out that this provision requires a "subjective" analysis of the claimant's acts ⁴ and, further, that it is to be construed liberally ⁵ and administered to effectuate the purposes of the Act. ⁶ On the basis of this standard, appellants maintain that their efforts to secure employment were sufficient to establish the requisite "availability for work" (eligibility).

Appellants further assert that the in-person-contact requirement imposed by the department establishes a standard for eligibility that is inconsistent with the "good faith, subjective" standard required by the Act (§ 35-4-4(c)). They suggest that the in-person-contact standard is rigid and inflexible, thus requiring an "objective" rather than "subjective" analysis of the claimant's work search efforts.

Our scope of review of Industrial Commission decisions varies according to the nature of the issues involved. This first issue (and the second issue as well) presents a question of "mixed law and fact," ⁷ as well as a "technical" question. ⁸ The appropriate scope of review of questions of this nature requires that we afford deference to the commission's "informed discretion" ⁹ and that we sustain the commission's decision so long as it "fall[s] within the limits of reasonableness or rationality." ¹⁰

Appellants argue that their position on this issue is supported by judicial precedent in this as well as many other jurisdictions. They cite, however, only one such precedent from this state, the case of Gocke v. Wiesley. ¹¹ In that case, the claimant's work search over a 2-month period consisted of inquiries to her former employer, several telephone calls, two in-person contacts and written replies to newspaper box advertisements. The Court reversed the commission's denial of benefits to the claimant, reasoning as follows:

There is nothing in the Referee's findings which will support any inference that she did not make a legitimate attempt to obtain work. Based upon her apparent clean work record, it seems reasonable and natural that she should look to her former employer in the first instance for re-employment. When that expectation did not materialize, the plaintiff acted reasonably in seeking employment elsewhere by personal application, telephone calls and written responses to newspaper advertisements. These affirmative acts are all in the record and the Referee's own findings of fact. Such efforts constitute a reasonable effort on her part to obtain work. ¹²

The fact that the claimant in Gocke was considered eligible for benefits without having made weekly in-person contacts is not at all dispositive here. The in-person-contact requirement was not at issue in Gocke nor was it even mentioned. Moreover, there is no evidence before this Court to indicate that the disputed requirement was even in existence at the time Gocke was decided. The only support Gocke lends to appellants' argument is with respect to the subjective nature of the standard for determining eligibility. This point is, however, not in dispute. Thus, we conclude that the Gocke decision has no direct bearing upon the question of whether the in-person-contact requirement is a proper measure for determining the adequacy of a job search.

Appellants also cite several decisions from other jurisdictions wherein the claimant's eligibility to receive benefits was established on the basis of a work search effort much like that described in the Gocke decision, supra. ¹³ All but one of those decisions, however, are distinguishable upon the same grounds as Gocke, i.e., they do not involve an in-person-contact requirement. In the one case that does involve a similar requirement, Hill v. District Unemployment Compensation Board, ¹⁴ the court's rejection of the requirement appears to be grounded upon its rigid and inflexible application. ¹⁵

The specific question before us at this point is whether the agency applied the requisite "subjective" test to determine appellants' eligibility. More specifically, we must determine whether the agency applied the in-person-contact requirement in accordance with the "subjective" statutory standard. These questions can be readily determined by examining the agency's (...