IN RE LOYAL ORDER OF MOOSE, INC., LODGE# 1090

• Citation: 872 A.2d 345
• Decision Date: 15 March 2005
• Docket Number: No. 2004-112,2004-112
• Parties: In re Loyal Order of Moose, Inc., Lodge # 1090
• Court: United States State Supreme Court of Vermont

872 A.2d 345

In re Loyal Order of Moose, Inc., Lodge # 1090

No. 2004-112, December Term, 2004

Supreme Court of Vermont

March 15, 2005

ENTRY ORDER

In the above-entitled cause, the Clerk will enter:

¶ 1. Employer Loyal Order of Moose, Inc., Lodge #1090, appeals pro se from the Employment Security Board's decision charging its experience—rating record with a share of unemployment benefits paid to one of its employees. The Board found that employer provided employee with irregular, as—needed, employment, and it "terminated" her after each assignment. The Board thus concluded that employer was not entitled to the benefit of 21 V.S.A. § 1325(f)(3), which provides that the experience—rating record of a base-period employer shall not be charged if an individual's employment with that employer has not been terminated or reduced in hours. We conclude that the Board misinterpreted 21 V.S.A. § 1325(f)(3), and we therefore reverse.

¶ 2. Employer hired employee in 2001 to work as a part-time waitress and bartender on an as-needed basis. The employee subsequently obtained a full-time position elsewhere, but continued to work for employer Moose as well. In February 2003, the employee left her full-time job, and applied for unemployment benefits. Because employer Moose was a base-period employer for employee, it was asked to complete a "Request for Separation Information" form. On the form, employer indicated that it continued to employ employee, her hours had not been reduced, and she worked as a "spare — when needed — no hours committed." In March 2003, the Department of Employment and Training notified employer that it would be charged for a portion of the employee's unemployment compensation benefits. Employer requested a hearing, and after a hearing, an appeals referee concluded that employer had reduced the employee's hours, and thus, its experience-rating record was properly charged for its share of benefits paid to employee.

¶ 3. Employer appealed to the Employment Security Board. After a hearing, the Board affirmed the referee's decision, concluding that employer should be charged because it was not entitled to the benefit of 21 V.S.A. § 1325(f)(3), which exempts the charge where "the individual's employment with that employer had not been terminated or reduced in hours." The Board found that employer contacted its employee when it needed a spare waitress or bartender, and at the end of each assignment, there was no guarantee that employer would contact the employee again. Absent a regular schedule, the Board reasoned, the parties' employment relationship did not continue beyond each specific assignment, and the relationship was more accurately described as a termination or layoff after each assignment. The Board concluded that 21 V.S.A. § 1325(f)(3) was intended to provide relief to employers who continued to employ individuals on the same, regular, consistent basis as they had before the individuals separated from other employers; it did not provide relief to employers, such as employer Moose, who provided irregular, on call, as-needed, employment. The Board thus upheld the referee's decision charging employer's experience-rating record for a portion of the unemployment benefits paid to employee. Employer appealed.

¶ 4. On appeal, employer argues that the Board erred in concluding that it was not entitled to the benefit of 21 V.S.A. § 1325(f)(3). Employer asserts that it did not terminate employee, nor did it reduce her hours; rather, employee's work schedule has remained steady, and her employment schedule is consistent with the purpose for which she was hired-as an "as-needed" employee. Employer argues that the Board erroneously concluded that employee was "terminated" after each assignment because she was, and continues to be, an active employee.

¶ 5. On review, we will uphold the Board's decision unless it can be demonstrated that its findings and conclusions are erroneous. Trombley v. Dep't of Employment & Training, 146 Vt. 332, 334, 503 A.2d 537, 539 (1985). Absent a compelling indication of error, we defer to the Board's interpretation of a statute that it is charged with executing. Sec'y, Agency of Natural Res. v. Upper Valley Reg'l Landfill Corp., 167 Vt. 228, 238, 705 A.2d 1001, 1007 (1997). As discussed below, we conclude that the Board erred in charging employer's experience-rating record for a share of employee's unemployment benefits because employer was plainly entitled to the benefit of 21 V.S.A. § 1325(f)(3).

¶ 6. Unemployment legislation is designed to remove economic disabilities and distress that results from involuntary unemployment, and assist those workers who become jobless for reasons beyond their control. Adams v. Dep't of Employment Sec., 139 Vt. 413, 414, 430 A.2d 446, 447 (1981). Employers bear the financial burden of accomplishing these goals because they are generally in a better position than individual workers to bear a share of the economic cost, and because penalty assessments may tend to prevent casual lay-off decisions. Hunt v. Dep't of Employment Sec., 142 Vt. 90, 92, 453 A.2d 391, 392 (1982). To provide a fund for unemployment compensation claims, employers are taxed based on a portion of wages paid in each calendar year, and on the basis of a benefit experience ratio computed by the Commissioner. 21 V.S.A. §§ 1321(a), (b), 1326(a). The benefit experience ratio is the quotient of the total benefits charged to the employer over a three-year period divided by the total of the taxable payroll for that same period. Id. § 1326(a). The ratio is structured so that "employers who cause the need for compensation by terminating workers should pay more taxes than those who do not cause such need." Sirloin Saloon v. Dep't of Employment & Training, 151 Vt. 123, 125, 558 A.2d 226, 227 (1989).

¶ 7. Normally, when an eligible individual receives unemployment benefits, the experience-rating record of each subject employer who provided base-period wages is charged its proportionate share. 21 V.S.A. § 1325(f). The experience-rating record of a base-period employer is not charged, however, if "as of the date on which the individual filed an initial claim for benefits, the individual's employment with that employer had not been terminated or reduced in hours." Id. § 1325(f)(3). The Board concluded that 21 V.S.A. § 1325(f)(3) applied only to employers who continued to employ individuals on the "same, regular, consistent basis" as they did before the individuals separated from other employers. The Board found that this did not include employer because it provided "irregular" employment to employee. We reject the Board's interpretation of 21 V.S.A. § 1325(f)(3) because it contravenes the statute's plain language, and it undermines the intent of the provision.

¶ 8. In construing a statute, our primary task is to give effect to the intent of the Legislature. Sirloin Saloon, 151 Vt. at 126, 558 A.2d at 228. When a statute is plain on its face, we enforce it according to its terms. Id. If the meaning is unclear, we consider the whole statutory scheme-the effects and consequences, and the reason and spirit of the law. Id. We resolve any ambiguities against the taxing power, and in favor of the taxpayer. Id. The plain language of 21 V.S.A. § 1325(f)(3) indicates its applicability to employer here. Employer neither "terminated" its employee, nor "reduced" her hours; it continued to employ her on the same "as-needed" basis as it had before she filed a claim for unemployment benefits.

¶ 9. The Kansas Court of Appeals addressed an analogous situation in Manpower, Inc. v. State Employment Security Board of Review, 724 P.2d 690 (Kan. Ct. App. 1986). In that case, employer provided customers with temporary, emergency, and part-time employees, and claimant worked in this capacity on "various intermittent" days for employer. Id. at 691. At some point, claimant did not report to employer for a new assignment, although employer had work available. After working for other employers, claimant filed a claim for unemployment compensation, and employer's experience-rating was charged based on its liability as a base-period employer. The board upheld the charge, explaining that work assignments at various locations with different employers could not be construed as continuous employment, but instead constituted different periods of employment. According to the board, each time an assignment was completed by the employee, the employee was laid off due to lack of work until a new assignment was accepted.

¶ 10. The court rejected this position, and concluded that employer's experience-rating should not be charged because the employer-employee relationship was continuous in nature, and the completion of a given work assignment did not result in the termination of the employer-employee relationship. As the court explained, claimant accepted, and contracted for, work assignments as the employee of employer when they might be available, but that did not mean that when one work assignment was completed, he had to make application to become an employee of employer for a new assignment. "Availability of work assignments could obviously be sporadic, but that is not the same thing as completion of one job and rehiring for another." Id. at 693. The court explained that claimant became an employee of employer without a guarantee of full-time employment but with the understanding that work would be available as long as there were customers for employer's services. Claimant had the option of not reporting for work, but he also had the opportunity to work when there was demand for employer's particular services. "In those circumstances," the court stated, "the employment agreement was continuing at claimant's option, as is the case with most employment calling for unskilled or semiskilled labor." Id. at 695.

¶ 11. Although the Kansas court's decision turned on the applicability of a different statutory provision than the...