South Dakota Stockgrowers Ass'n, Inc. v. Holloway, 16363

Decision Date17 February 1989
Docket NumberNo. 16363,16363
Citation438 N.W.2d 561
PartiesSOUTH DAKOTA STOCKGROWERS ASSOCIATION, INC., Appellant, v. Daniel HOLLOWAY and South Dakota Department of Labor, Appellees. . Considered on Briefs
CourtSouth Dakota Supreme Court

Dennis H. Hill of Costello, Porter, Hill, Heisterkamp & Bushnell, Rapid City, for appellant.

Rodney C. Lefholz of Fousek, Lefholz and Mairose, Rapid City, for appellee Daniel Holloway.

Drew Johnson, Asst. Atty. Gen., Aberdeen, for appellee Dept. of Labor.

PER CURIAM.

The South Dakota Stockgrowers Association (Stockgrowers) appeals an award of unemployment insurance benefits to Daniel Holloway (Holloway) and the charging of such benefits to its experience rating account. We affirm.

FACTS

Stockgrowers operates under a contract with the South Dakota Brand Board to carry out the board's brand inspection program. Holloway was employed as Stockgrowers' chief brand inspector. In April 1987 the brand board advised Stockgrowers that it would not renew its contract if Holloway remained the chief brand inspector. Stockgrowers relayed the brand board's position to Holloway but emphasized that it was not discharging him because it believed that the matter could be worked out. Holloway tendered his resignation to Stockgrowers on April 9, 1987, but it was not acted upon or accepted.

Despite having tendered his resignation, Holloway remained employed with Stockgrowers. On July 8, 1987, Stockgrowers continued Holloway's employment on an "at will" basis. On September 9, 1987, Stockgrowers requested that the brand board reconsider its position regarding Holloway. The brand board refused to reconsider and on September 23, 1987, Stockgrowers advised Holloway that it had hired a new chief brand inspector. Stockgrowers asked Holloway to continue working until October 15, 1987, to help train the new inspector. Holloway refused, advising Stockgrowers that September 30, 1987, would be his last day of work.

Holloway filed a claim for unemployment insurance benefits on October 5, 1987. The claim was denied on the basis of a departmental finding that Holloway had voluntarily quit his employment without good cause. Holloway appealed the denial of benefits to a hearings examiner for the Department of Labor. Following a hearing, the hearings examiner reversed the denial of benefits concluding that Holloway was discharged by Stockgrowers under nondisqualifying circumstances. 1 The decision of the hearings examiner was affirmed by the Secretary of Labor and appealed to the circuit court. The circuit court adopted its own findings of fact and conclusions of law also finding that Holloway was discharged by Stockgrowers under nondisqualifying circumstances. The circuit court concluded that Holloway was entitled to benefits for the period beginning with what would have been the effective date of his discharge.

ISSUE ONE

Did Holloway voluntarily quit his employment without good cause?

The unemployment insurance law provides for a disqualification from receiving benefits for claimants who voluntarily quit their employment without good cause. SDCL 61-6-13. Additionally, an employer's unemployment insurance experience rating account is exempt from charge for benefits paid to a claimant who voluntarily quit his employment without good cause. SDCL 61-5-29. Citing these provisions, Stockgrowers contends that Holloway voluntarily quit his employment without good cause and should, therefore, be disqualified from receiving unemployment insurance benefits. Stockgrowers also asserts that due to Holloway's voluntary separation its experience rating account is exempt from charge for benefits paid to Holloway.

Stockgrowers relies strongly on Holloway's April 9, 1987, resignation as supporting its position that he voluntarily quit. However, both the hearings examiner and the circuit court focused on the events of September 23, 1987, as actually precipitating Holloway's separation. Both the hearings examiner and the circuit court found that Holloway's choice to resign rather than to continue his employment until his termination date of October 15 2 constituted a discharge rather than a voluntary quit under the unemployment insurance law. Thus the central issue is whether quitting employment after notice of discharge but prior to the effective date of the discharge is a discharge or a voluntary quit under the unemployment insurance law. This is a mixed question of law and fact which this court reviews de novo. Permann v. Dept. of Labor, Umemp. Ins. D., 411 N.W.2d 113 (S.D.1987). See also Carlson v. Job Service of North Dakota, 391 N.W.2d 643 (N.D.1986).

Although Stockgrowers cites some authority 3 for the proposition that quitting a job prior to the effective date of a discharge is a voluntary quit, it appears that the majority rule under the unemployment insurance law is to treat such a separation as a discharge. Johnston v. Florida Dept. of Commerce, 340 So.2d 1229 (Fla.Dist.Ct.App.1976); Elizabeth v. Caldwell, 160 Ga.App. 549, 287 S.E.2d 590 (1981); McCammon v. Yellowstone Co., Inc., 100 Idaho 926, 607 P.2d 434 (1980); School Dist. No. 20 v. Com'r of Labor, 208 Neb. 663, 305 N.W.2d 367 (1981); Poteat v. Employment Sec. Com'n of N.C., 319 N.C. 201, 353 S.E.2d 219 (1987); Carlson, supra; Phil. Parent Child Ctr. v. Com., Unemploy. Comp. Bd., Etc., 44 Pa.Commw. 452, 403 A.2d 1362 (1979). In these jurisdictions the claimant is merely disqualified from receiving benefits for the time period between his resignation and what would have been the effective date of his discharge (the rule followed by the hearings examiner and the circuit court in this case). Johnston, supra; Elizabeth, supra; McCammon, supra; Poteat, supra; Carlson, supra.

The reasoning in support of this rule is provided by the Florida District Court of Appeals in Johnston, 340 So.2d at 1230:

[W]here an employer notifies its employee that his or her employment is being definitely terminated as of a given date, the employee has not "voluntarily left his employment without good cause attributable to his employer" if he or she chooses not to work during all or part of the period between notification and the date given by the employer as the date of termination. In such a situation the employer has fired the employee; the employee has not discharged himself, but rather, being faced with the inevitable, has decided to leave before what might be called the notice period is up. In a case of that kind, the period of voluntary unemployment is that portion of the notice period (the notice period being the time, if any, between notice of discharge and actual discharge) during which the employee chooses not to work. The employee is ineligible to receive unemployment benefits during the notice period, for he could continue on the job if he wished. The period of involuntary unemployment begins with the date which the employer designated as the...

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