Mason v. Donnelly Club

• Citation: 21 P.3d 903,135 Idaho 581
• Decision Date: 29 March 2001
• Docket Number: No. 25768.,25768.
• Parties: Mary M. MASON, Claimant-Respondent, v. DONNELLY CLUB, Employer-Respondent, and State of Idaho, Department of Labor, Respondent-Appellant.
• Court: United States State Supreme Court of Idaho

21 P.3d 903

135 Idaho 581

Mary M. MASON, Claimant-Respondent, v. DONNELLY CLUB, Employer-Respondent, and State of Idaho, Department of Labor, Respondent-Appellant.

No. 25768.

Supreme Court of Idaho, Boise, January 2001 Term.

March 29, 2001.

Hon. Alan G. Lance, Attorney General, Boise, for appellant.

Respondents did not participate in this appeal.

TROUT, Chief Justice.

This is an appeal from the Industrial Commission (Commission) holding claimant Mary M. Mason eligible for benefits where Mason gave notice of resignation but was discharged immediately thereafter based on the notice of resignation and not for employee misconduct.

I. FACTUAL AND PROCEDURAL BACKGROUND

Mason began working at the Donnelly Club in 1990 as a permanent full-time bartender. In March 1998 the Donnelly Club (employer) was purchased and taken over by a new owner. On April 27, 1998 Mason wrote on the employer's calendar her name and two weeks notice of her intent to quit. The following day, the employer called Mason at home. Mason indicated she was going to work with her husband and was told she should not return to work during her two-week notice period because she had been replaced.

Mason filed a claim for unemployment insurance benefits on May 7, 1998. In her claim, Mason indicated her reason for leaving was that she "could not get along with new owner."

A Department of Labor (Department) claims examiner issued two benefit eligibility determinations on the claim. One determination held Mason eligible for benefits for the period between April 26, 1998 and May 3, 1998 because she was discharged, but not for misconduct. The other determination held her ineligible for benefits effective May 4, 1998, the effective date of her resignation, because she left her employment voluntarily without good cause connected with her employment. The examiner issued the ruling based on what the examiner considered to be a "McCammon separation."

Mason appealed. After a telephone hearing an appeals examiner affirmed the eligibility determination and Mason again appealed. The Commission reversed the decision of the appeals examiner. The Commission considered only the Employer's discharge, not Mason's effective resignation date, in determining Mason's eligibility for unemployment benefits. Specifically, the Commission reasoned that by dismissing her after receiving notice of her resignation, the employer rejected the resignation and discharged her instead. The Commission held the only basis for Mason's discharge was her notice of resignation; therefore, she was discharged for reasons other than misconduct and was eligible for benefits effective April 26, 1998. The Department filed a motion for reconsideration asking the Commission to apply the provisions of IDAPA 09.01.30.476.30 and the McCammon case. The Commission denied the motion to reconsider. The Department appeals to this Court.

II. STANDARD OF REVIEW

The Idaho Constitution limits this Court's review of the Industrial Commission's decisions to questions of law. Idaho Const. Art. V. § 9. If this Court determines the Commission's findings of fact are supported by substantial and competent evidence in the record, the Court will not disturb those findings. Alexander v. Harcon, Inc., 133 Idaho 785, 787, 992 P.2d 780, 782 (citing Hamilton v. Ted Beamis Logging and Const., 127 Idaho 221, 223, 899 P.2d 434, 436 (1995); Hutchinson v. J.R. Simplot Co., 98 Idaho 346, 347, 563 P.2d 404, 405 (1977)). However, this Court exercises free review over the Commission's conclusions of law. Id. (citations omitted).

III. DISCUSSION

A. The Department's rule is reasonably related to the purposes of the Employment Security Law.

The first issue presented to this Court is whether IDAPA 09.01.30.476.03 conforms with the Employment Security Law and whether the rule is reasonably directed to the accomplishment of the principles of that law. It is fundamental that the judiciary has the ultimate responsibility to construe legislative language to determine the law. J.R. Simplot Co. v. Tax Com'n, 120 Idaho 849, 853, 820 P.2d 1206, 1210 (1991) (citing Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60, 73 (1803)) (citations omitted). This principle extends to our review of administrative rules, and it is this Court's responsibility to determine the validity of the rule. "[A]dministrative rules are invalid which do not carry into effect the legislature's intent as revealed by existing statutory law, and which are not reasonably related to the purposes of the enabling legislation." Holly Care Center v. State, Dept. of Employment, 110 Idaho 76, 78, 714 P.2d 45, 47 (1986) (citations omitted). This Court has established a four-prong test for determining the appropriate level of deference to be given to an agency construction of a statute. J.R. Simplot Co. v. Tax Com'n, 120 Idaho 849, 820 P.2d 1206 (1991). First, we must determine if the agency has been entrusted with the responsibility to administer the statute at issue. Id. at 862, 820 P.2d at 1219. Second, the agency's statutory construction must be reasonable. Id. Third, we must determine whether the statutory language at issue does not expressly treat the precise question at issue. Id. Finally, we must ask whether any of the rationales underlying the rule of deference are present. Id. If the four-prong test is met, then courts must give "considerable weight" to the agency's interpretation of the statute. Id.

The Department has clear authority to administer and promulgate the rules under the Employment Security Law. See I.C. §§ 72-1331 and 72-1333. Therefore, the first prong of the test is met.

The second prong is also met. Pursuant to their authority, the Department enacted IDAPA 09.01.30.476.03¹, which states:

When Notice of Resignation Prompts a Discharge. Where a claimant had given notice of appending resignation, but was discharged before the effective date of the resignation, both "separations" must be considered. The following three elements should be present:

a. The employee must have given notice to the employer of a specific separation date;

b. The employer's decision to discharge before the effective date of the resignation must be a consequence of the pending separation; and

c. The discharge must occur a short time prior to the effective resignation.

IDAPA 09.01.30.476.03 was prompted by this Court's decision in McCammon v. Yellowstone Co., 100 Idaho 926, 607 P.2d 434 (1980). In McCammon, an employee was given two weeks notice of his termination. Id. at 927, 607 P.2d at 435. Instead of waiting until the termination date, the employee quit voluntarily. This Court found that both separations—the date of resignation and the firing date—should be considered to determine whether an employee is entitled to unemployment benefits after voluntarily leaving work prior to the effective termination date. Id. at 927, 607 P.2d at 436. This determination was based on other jurisdictions which distinguish between periods of voluntary and involuntary unemployment and on Idaho precedent recognizing "the determination of a claimant's eligibility is not a one-time affair." Id. at 927-28, 607 P.2d at 435-36. Our holding in McCammon is directly reflected in IDAPA 09.01.30.331.07² and the converse situation in IDAPA 09.01.30.476.03, discussed above. The two rules, based directly on precedent of this Court, are a reasonable construction of the statute.

Furthermore, the IDAPA rule comports with the purposes of the Employment Security Law. The intent of the Employment Security Law is to alleviate problems related to insecurity due to unemployment. Specifically, the Employment Security Law "addresses this problem by encouraging employers to offer stable employment" and establishes a system to "set[] aside unemployment reserves to be used for workers who are unemployed through no fault of their own." I.C. § 72-1302. The disqualifying factors for denial of benefits require that "the claimant's unemployment is not due to the fact that he left his employment voluntarily without good cause connected with his employment, or that he was discharged for misconduct in connection with his employment." I.C. § 72-1366(5). Applying McCammon to the converse situation conforms to this intent. IDAPA 09.01.30.476.03 provides that both separations are to be considered and if there is a period of voluntary unemployment, absent good cause, benefits should be denied. In addition, benefits would be allowed for the period of involuntary unemployment, so long as the discharge was based solely on the resignation and was not due to misconduct.

The Commission, in the Order Denying Reconsideration, states that the "reverse analysis of McCammon would not necessarily enhance the purpose of the Employment Security Law", arguing:

By applying `double separation' analysis, this Commission would effectively discourage employees from providing notice of their pending resignations. Once notice of resignation is given, employers could discharge their workers prior to the effective date of resignation. As in this case, such a discharge would effectively exchange two weeks of the employee's full wages for two weeks of unemployment benefits. Two weeks of unemployment benefits are not the equivalent of two weeks of full wages, especially considering the waiting period for benefits.... Furthermore, notice periods have several features that support the purpose of the Employment Security Law. First, they give employees the opportunity to work for full wages during the remaining term of their employment. Second, the employer benefits by not being left short-handed. Third, notice periods promote the orderly transition of new employees into the workplace.... And, fourth, the overly-burdened unemployment system is spared the expense of providing benefits to claimants who have voluntarily quit work provided by a particular employer.

Although IDAPA 09.01.30.476.03 and this case present a situation where the employee...