Key State Bank v. Adams
| Decision Date | 07 January 1985 |
| Docket Number | Docket No. 71910 |
| Citation | 138 Mich.App. 607,360 N.W.2d 909 |
| Parties | KEY STATE BANK, Plaintiff-Appellant, v. Georganne ADAMS, Defendant-Appellee, and Michigan Employment Security Commission, Appellee. 138 Mich.App. 607, 360 N.W.2d 909 |
| Court | Court of Appeal of Michigan — District of US |
[138 MICHAPP 609] Des Jardins & Moorhead, P.C. by Jerry L. Des Jardins, Owosso, for plaintiff-appellant.
Vernon L. Alger, Warren, for claimant.
Before DANHOF, C.J., and HOOD and SHEPHERD, JJ.
Appellant, Key State Bank, employed appellee Georganne Adams in a position requiring Saturday work. Subsequent to commencement of her employment, and after working on Saturdays for a period of several months, Adams underwent conversion to the Seventh-Day Adventist Church and refused to work on Saturdays any longer. Appellant discharged Adams after trying, without success, to accommodate her religious beliefs. The issue posed is whether Adams is entitled to unemployment compensation benefits. We hold that the Free Exercise Clause of the First Amendment, U.S. Const., Am. I, prevents the state from withholding benefits when the reason for termination of employment is based upon conversion to a religious faith.
Adams began work with the bank as a teller on July 2, 1979. As a condition of her employment (a condition of which she was aware when she was [138 MICHAPP 610] hired), Adams was required to work every other Saturday. In September, 1981, she began attending the Seventh-Day Adventist Church. She and her husband became increasingly involved with the church, beginning bible studies in January, 1982. They accepted the doctrine of the church (namely, that the Sabbath, Saturday, should be kept holy, which meant that Adams could not work on Saturdays).
On February 15, 1982, Adams notified the bank of the conflict between her work schedule and her newly-acquired religious beliefs and requested that the bank accommodate her. She continued to work Saturdays through February 27, 1982. On March 4, 1982, the bank advised her that an accommodation could not be made without undue hardship to other employees who refused to take Adams' Saturday work shifts. The bank notified Adams that she would be kept in mind for other available positions which would not require Saturday work as such positions arose.
Adams refused to work on the next Saturday on which she was scheduled to work. The bank placed her on probation for a 30-day period, explaining that failure to work on Saturdays would result in her termination. Nevertheless, she indicated that she would not work on Saturdays. She was again scheduled to work on Saturday April 10, but was absent from work on that day. On the following Monday she was notified that her employment was being terminated for failure to comply with bank policy regarding her work schedule. On April 17, 1982, Adams was officially baptized as a member of the Seventh-Day Adventist Church.
Adams's initial application for unemployment benefits was denied. She filed an appeal and a referee hearing was held. On July 9, 1982, the referee issued his opinion denying her unemployment[138 MICHAPP 611] benefits on the ground that she was disqualified for voluntarily leaving within the meaning of Sec. 69(2)(a) of the Michigan Employment Security Act, M.C.L. Sec. 421.1 et seq.; M.S.A. Sec. 17.501 et seq. Adams appealed the referee's decision to the Employment Security Board of Review. On December 8, 1982, the board reversed the referee's decision, holding that Adams was eligible for benefits.
On the bank's appeal to the circuit court, the Michigan Employment Security Commission was added as a party defendant by stipulation of the parties. On June 1, 1983, the circuit court affirmed the decision of the Board of Review. The bank appeals as of right.
The bank argues that Adams is not entitled to unemployment benefits because she chose, after beginning employment, to acquire religious beliefs which conflicted with the requirements of her job. We disagree.
The applicable statutory provision regarding disqualification for unemployment compensation benefits is set forth in M.C.L. Sec. 421.69; M.S.A. Sec. 17.569(19), and provides in part as follows:
For substantial guidance, we turn to the United States Supreme Court's decisions in Sherbert v. Verner, 374 U.S. 398, 83 S.Ct. 1790, 10 L.Ed.2d 965 (1963), and Thomas v. Review Bd. of the Indiana Employment Security Div., 450 U.S. 707, 101 S.Ct. 1425, [138 MICHAPP 612] 67 L.Ed.2d 624 (1981). In Thomas, a Jehovah's Witness left his job because of religious convictions after being transferred to a munitions factory. At the time that he commenced employment in a foundry, Thomas indicated on his employment application that he was a Jehovah's Witness and studied the Bible. However, he placed no conditions on his employment, nor did he set forth the basic tenets of his religion. After one year's work, the employer closed the foundry and transferred Thomas to a department that manufactured military equipment. Upon realization of this fact, he checked to see if any of the other departments produced non-military items. When this check yielded a negative answer, Thomas requested a layoff on the ground that he could not participate in the production of military equipment without violating the principles of his religion. The employer denied this request. Thomas then quit his job.
Thomas's application for unemployment compensation benefits was denied. The hearing referee specifically found that "claimant did quit due to his religious convictions" but denied benefits on the basis that Thomas quit without "good cause [arising] in connection with [his] work" as required by the Indiana unemployment compensation statute. 450 U.S. 712, 101 S.Ct. 1429. The Supreme Court reversed, finding that the state's denial of benefits infringed upon Thomas's free exercise of religion.
The Thomas decision relied to a large extent upon Sherbert, supra. In Sherbert, an employee was discharged for failure to work on Saturdays, which would have been against her religious principles. The claimant therein became a member of the Seventh-Day Adventist Church at a time when her employer permitted her to work a five-day week. When all three shifts in the employer's mill [138 MICHAPP 613] began working Saturdays, the claimant refused to work and was discharged. The state denied her unemployment benefits for the reason that she was "available" for "suitable work" which she refused to accept. Under the South Carolina unemployment compensation scheme, she was deemed disqualified for benefits. In Sherbert, the Court set forth the requisite inquiry as follows:
"If, * * * the decision of the South Carolina Supreme Court is to withstand appellant's constitutional challenge, it must be either because her disqualification as a beneficiary represents no infringement by the State of her constitutional rights of free exercise, or because any incidental burden on the free exercise of appellant's religion may be justified by a 'compelling state interest in the regulation of a subject within the State's constitutional power to regulate * * *.' " 374 U.S. 403, 83 S.Ct. 1793.
In the instant case, the bank contends that, after accepting employment with the understanding that it entailed Saturday work, Adams changed her religion voluntarily, thereby creating circumstances where her unemployment was not involuntary. Since the Michigan Employment Security Act seeks to compensate those who have become unemployed involuntarily, it is argued that claimant Adams is therefore ineligible for unemployment benefits. The bank posits that in both Thomas and Sherbert the employer changed the employment conditions, either the assigned type of work or scheduled hours, which caused the employment to become objectionable to the affected employees' religious beliefs. This it deems to be a "critical difference", relying on Hildebrand v. Unemployment Ins. Appeals Bd., 19 Cal.3d 765; 140 Cal.Rptr. 151; 566 P.2d 1297 (1977). We are not persuaded by this argument.
In order for a free exercise claim to hold merit, [138 MICHAPP 614] it must be based on state action. Abington Twp. School Dist. v. Schempp, 374 U.S. 203, 226, 83 S.Ct. 1560, 10 L.Ed.2d 844 (1963); Sherbert, supra, 374 U.S. 402, 83 S.Ct. 1792. Hence, the focus of the Court in Thomas, supra, and Sherbert was not on the conduct of the employers, but on the state's conditioning "receipt of an important benefit upon conduct proscribed by a religious faith, or [denial of] such a benefit because of conduct mandated by religious belief". Thomas, supra, 450 U.S. 717-718, 101 S.Ct. 1431-1432. Doubtless the employer in Sherbert acted within its rights when it instituted Saturday work. Similarly, there was nothing improper or unlawful in the employer's closure of its foundry in Thomas. In the present case, we do not have a direct action by Adams against the employer for wrongful discharge and the bank had a legitimate business reason for requiring its employees to work Saturdays. Trans World Airlines, Inc. v. Hardison, 432 U.S. 63, 83-85, 97 S.Ct. 2264, 2276-2277, 53 L.Ed.2d 113 (1977). Adams is not alleging discrimination by her employer, and we need not address that issue.
We hasten to agree that unemployment compensation is designed to guarantee benefits to employees who are out of work through no fault of their own. I.M. Dach Underwear Co. v. Employment Security Comm., 347 Mich. 465, 80 N.W.2d 193 (1956); Kempf v. Michigan Bell Telephone Co., 137 Mich.App. 574, 358 N.W.2d 378 (1984)....
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...convention important to her personal well-being on basis it was a sincere religiously motivated action.); Key State Bank v. Adams, 138 Mich.App. 607, 360 N.W.2d 909 (1984) (Although bank had legitimate business reason for employees to work on Saturday, state could not condition payment of u......