Rosas v. Ariz. Dep't of Econ. Sec.

• Decision Date: 19 June 2020
• Docket Number: No. CV-19-0100-PR,CV-19-0100-PR
• Citation: 465 P.3d 516,249 Ariz. 26
• Parties: Maria ROSAS, Appellant, v. ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an agency, and Chicanos Por La Causa Inc., Appellees. Maria Castillo, Appellant, v. Arizona Department of Economic Security, an agency, and Chicanos Por La Causa Inc., Appellees. Alicia Solorzano, Appellant, v. Arizona Department of Economic Security, an agency, and Chicanos Por La Causa Inc., Appellees. Xochitl Correa, Appellant, v. Arizona Department of Economic Security, an agency, and Chicanos Por La Causa Inc., Appellees.
• Court: Arizona Supreme Court

249 Ariz. 26

465 P.3d 516

Maria ROSAS, Appellant,

v.ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an agency,andChicanos Por La Causa Inc., Appellees.

Maria Castillo, Appellant,

v.Arizona Department of Economic Security, an agency,andChicanos Por La Causa Inc., Appellees.

Alicia Solorzano, Appellant,

v.Arizona Department of Economic Security, an agency,andChicanos Por La Causa Inc., Appellees.

Xochitl Correa, Appellant,

v.Arizona Department of Economic Security, an agency,andChicanos Por La Causa Inc., Appellees.

No. CV-19-0100-PR

Supreme Court of Arizona.

Filed June 19, 2020

Mark Brnovich, Arizona Attorney General, Brunn W. Roysden, III, Division Chief, Drew C. Ensign, Section Chief, Civil Appeals, JoAnn Falgout (argued), Assistant Attorney General, Phoenix, Attorneys for Arizona Department of Economic Security

Stephen C. Biggs (argued), Smith LC, Mesa, Attorney for Maria Rosas, Maria Castillo, Alicia Solorzano and Xochitl Correa

JUSTICE BOLICK authored the opinion of the Court, in which CHIEF JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER, and JUSTICES GOULD, LOPEZ, and MONTGOMERY, and JUDGE BREARCLIFFE^* joined.

JUSTICE BOLICK, opinion of the Court:

¶1 This case concerns the interpretation of A.R.S. § 23-750(E)(5), which provides that income earned by "any individual who performed" certain services while employed by an entity that provides such services "to or on behalf of an educational institution" cannot be used to qualify for unemployment for breaks between academic terms if that person is assured reemployment. We hold that in deciding unemployment eligibility, petitioner Arizona Department of Economic Security ("ADES") must determine whether the employees performed services that the entity provided to or on behalf of the educational institution.

BACKGROUND

¶2 Plaintiffs/respondents are employees of Chicanos Por La Causa ("CPLC"), a nonprofit corporation, which operates childcare facilities for infants, toddlers, and preschool children up to five years old. CPLC administers federally funded Early Head Start and Migrant Seasonal Head Start programs and, as a result, is subject to extensive federal regulation. See 42 U.S.C. § 9831 et seq. ; 45 C.F.R. § 1301 et seq.

¶3 In addition to its Head Start responsibilities, CPLC provides services to help school districts comply with their obligations under the Individuals with Disabilities Education Act ("IDEA"), 20 U.S.C. § 1400 et seq. Those services are described in a Memorandum of Understanding ("MOU") with each district, and include recruiting, enrolling, and screening children.

¶4 Plaintiffs Maria Rosas and Xochitl Correa worked for CPLC in its Head Start facilities as infant and toddler teachers. Plaintiffs Maria Castillo and Alicia Solorzano worked, respectively, as a cook and cook's assistant. When the 2016 summer break began, the plaintiffs applied for unemployment insurance benefits from ADES, and an ADES deputy granted benefits to all four, concluding that CPLC does not provide services to or on behalf of an educational institution. See A.R.S. § 23-750(E)(5).

¶5 CPLC appealed the determinations to the ADES Appeal Tribunal. It reversed, finding that CPLC "provides services to or on behalf of an educational institution" based on the MOUs. The tribunal also found that plaintiffs had reasonable assurance of reemployment for the following school year. Consequently, the tribunal held that § 23-750(E)(5) prohibited them from using their wages earned at CPLC to qualify for unemployment benefits. Adopting the tribunal's reasoning, the ADES Appeals Board affirmed.

¶6 Plaintiffs appealed to the court of appeals, which concluded they were eligible for unemployment benefits, holding that, although CPLC provides services to or on behalf of an educational institution, there were insufficient facts to support a determination that the plaintiffs performed such services. Rosas v. Ariz. Dep't of Econ. Sec. , 246 Ariz. 267, 438 P.3d 636 (App. 2019).

¶7 We granted review to determine the proper standards for determining eligibility for unemployment benefits under § 23-750(E)(5), which is a recurring matter of statewide concern. We have jurisdiction pursuant to article 6, section 5(3) of the Arizona Constitution and A.R.S. § 41-1993(B).

DISCUSSION

A. Eligibility for Unemployment Benefits

¶8 In an appeal from an administrative decision, we review statutory interpretation de novo. We defer to the agency's fact findings, but its conclusions must be supported by the record. See Pawn 1st, LLC v. City of Phoenix , 242 Ariz. 547, 551 ¶ 9, 399 P.3d 94, 98 (2017) ; see also A.R.S. § 12-910(E).

¶9 Although this case involves interpretation of a state statute, it is informed on multiple levels by federal law. In order to qualify for federal unemployment support, Arizona unemployment provisions must conform to the Federal Unemployment Tax Act. See 26 U.S.C. § 3304(a). Through 26 U.S.C. § 3304(a)(6)(A)(v), Congress authorized states to adopt provisions excluding employees performing certain services for educational institutions from unemployment benefits during the break between academic terms if they are assured continuation of employment. This is commonly referred to as the "between and within terms" exception to unemployment benefit eligibility.

¶10 Arizona adopted this exception in A.R.S. § 23-750(E). Section 23-750(E)(1) provides that "[b]enefits based on service in an instructional, research or principal administrative capacity for an educational institution" shall not be paid between and within terms under specified circumstances "if there is a contract or a reasonable assurance that the individual will perform services in any such capacity" in the next term. Section 23-750(E)(2) extends ineligibility "based on service in any other capacity for an educational institution."

¶11 Section 23-750(E)(5), at issue here, pertains to individuals who are not directly employed by educational institutions. It states that "benefits are not payable on the basis of services specified in paragraph 1, 2 or 3 of this subsection to any individual who performed these services while in the employ of an entity that provides these services to or on behalf of an educational institution."

¶12 Although they provide early learning services, Head Start providers like CPLC are not educational institutions for purposes of federal or state unemployment statutes. U.S. Dep't of Labor, Unemployment Insurance Program Letter ("UIPL") No. 41-97 (Sept. 30, 1997). Absent the criteria set forth in § 23-750(E)(5), CPLC's employees would qualify for unemployment benefits.

¶13 "Our task in statutory construction is to effectuate the text if it is clear and unambiguous." BSI Holdings, LLC v. Ariz. Dep't of Transp. , 244 Ariz. 17, 19 ¶ 9, 417 P.3d 782, 784 (2018). Words should be construed in their overall statutory context. Stambaugh v. Killian , 242 Ariz. 508, 509 ¶ 7, 398 P.3d 574, 575 (2017). If the statute's text yields different reasonable meanings, we consider secondary interpretation methods, such as the statute's subject matter, historical background, effect and consequences, and spirit and purpose. State v. Burbey , 243 Ariz. 145, 147 ¶ 7, 403 P.3d 145, 147 (2017).

¶14 On its face, § 23-750(E)(5) encompasses two discrete criteria. To be excluded from unemployment eligibility, the claimant must be an individual "who performed" services specified in §§ 23-750(E)(1)–(2),¹ "while in the employ of an entity that provides these services to or on behalf of an educational institution." Those "services," in turn, are "service in an instructional, research or principal administrative capacity," § 23-750(E)(1), or "service in any other capacity," § 23-750(E)(2).

¶15 The parties and the adjudicators below construed this language in sharply divergent ways. The plaintiffs, whose position was embraced by the court of appeals, argue that they are not excluded from unemployment benefits because they perform no services whatsoever for the school district. The teachers, they assert, do not serve students above age three who would be eligible for IDEA services from the district. The cook and assistant cook provide meals for the students, but as part of CPLC's normal Head Start services, not on behalf of a school district.

¶16 The appeal tribunal and appeals board ruled, by contrast, that so long as the employer provides services to an educational institution, anyone who works for the employer, even if in a capacity that does not serve an educational institution, and whose continued employment is assured, is subject to the unemployment benefit exception.

¶17 In interpreting a statute, we must whenever possible give meaning to every word and provision. Nicaise v. Sundaram , 245 Ariz. 566, 568 ¶ 11, 432 P.3d 925, 927 (2019). The language in § 23-750(E)(5) is quite clear that the employee must be an individual "who performed" the specified services. Thus, the conclusion of the appeal tribunal and appeals board is untenable. In order to be disqualified from unemployment benefits under the statute, (1) the employer must have provided services to or on behalf of an educational institution, (2) the employee must have "performed" those services, and (3) the employee must have received assurance of employment in the following year.

¶18 The appeals board erroneously reduced those issues to two: whether the employing entity provided services to or on behalf of an educational institution and whether the employees were given assurances of reemployment. The board essentially ruled as a matter of law that, if CPLC provided any services to or on behalf of the districts, then all CPLC employees were ineligible for unemployment benefits so long as they were assured of reemployment. Focusing on the MOUs, the board concluded that CPLC provided services to the school districts. But it never determined exactly what services CPLC provided to the school districts or whether the employees performed them, which is necessary to determine eligibility under the statute.

¶19 The MOUs are not...