USSALEP v. DEPT. OF EMPLOYMENT SERVICES, 00-AA-1467.

• Decision Date: 07 November 2002
• Docket Number: No. 00-AA-1467.,00-AA-1467.
• Citation: 809 A.2d 1184
• Parties: UNITED STATES-SOUTH AFRICA LEADERSHIP EXCHANGE PROGRAM, Petitioner, v. DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.
• Court: D.C. Court of Appeals

809 A.2d 1184

UNITED STATES-SOUTH AFRICA LEADERSHIP EXCHANGE PROGRAM, Petitioner, v. DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.

No. 00-AA-1467.

District of Columbia Court of Appeals.

Argued June 11, 2002.

Decided November 7, 2002.

Jason C. Schwartz, Washington, DC, for petitioner.

Michael A. Milwee, for respondent.

Before FARRELL and REID, Associate Judges, and NEBEKER, Senior Judge.

NEBEKER, Senior Judge:

Petitioner United States-South Africa Leadership Exchange Program (USSALEP) appeals a final decision of the Department of Employment Services Office of Appeals and Review (DOES) affirming the appeals examiner's decision to hold it liable for unemployment benefits previously paid to Dr. Richard Betz without notice to petitioner. This case presents the question whether the final decision of DOES— that claimant was discharged through no fault of his own—was made in accordance with law.¹ We reverse.

I.

Dr. Betz was hired by the United States-South Africa Leadership Exchange Program (USSALEP) as a Project Manager for a specific project funded by the United States Agency for International Development (USAID). USSALEP and Dr. Betz entered into an employment contract in 1994. The contract did not specify a termination date; however, it was understood by the parties that the expiration of the USAID funding agreement would end his responsibilities under the project agreement. Dr. Betz and USSALEP signed a new employment contract, dated October 1, 1996, reducing the number of days required to be worked each year. Dr. Betz worked until the termination of the USAID contract on June 28, 1997.

Dr. Betz applied for and received unemployment benefits from DOES. USSALEP did not receive notice that Dr. Betz applied for benefits, until they were billed by the DOES tax office for unemployment benefits that had already been disbursed. USSALEP, a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code, had elected to "opt out" of unemployment insurance coverage under District of Columbia law. Hence it would be required to reimburse the Department for the amount of the award if Dr. Betz was entitled to benefits.

USSALEP contested the award of unemployment benefits and DOES granted a hearing to determine the employment relationship that existed between Dr. Betz and USSALEP. The lack of notice was cured by the hearing. During the hearing, testimony was elicited from Dr. Betz and Robert Hoen, the Executive Director of USSALEP. Dr. Betz testified that he neither quit nor was fired, and that he knew in advance that the end of the project would terminate his employment. Mr. Hoen testified that claimant left voluntarily at the end of the contract. The hearing examiner found that "the record shows that claimant was discharged due to the project ending," hence that Dr. Betz "remain[ed] eligible for receipt of unemployment compensation benefits." DOES affirmed the appeals examiner's decision stating: "The record evidence indicates that at the hearing, Employer and Claimant both agreed that the contract for hire had expired. Thus, the Hearing Examiner could reasonably conclude that Claimant was separated from his most recent work through no fault of his own."

II.

While findings of fact, if supported by substantial evidence, are binding on a reviewing court, and deference to the responsible administrator as to statutory interpretation is a must for such a court, questions of law are for the court. See Thomas v. District of Columbia Dep't of Labor, 409 A.2d 164, 169 (D.C.1979)

("[W]e are not obliged to stand aside and affirm an administrative determination which reflects a misconception of the relevant law or a faulty application of the law."). Under the facts of this case, we review the final decision of DOES—that claimant was discharged through no fault of his own—as a matter of faulty application of law.

Petitioner argues that an employee whose termination occurs pursuant to mutually agreed terms of an employment contract voluntarily terminates his employment so as to be ineligible for unemployment compensation. Voluntariness means "voluntary in fact, within the ordinary meaning of that term" and voluntariness is "determined by reference to whether the employee's action was compelled by the employer rather than based on the employee's volition." Hockaday v. District of Columbia Dep't of Employment Servs., 443 A.2d 8, 10 (D.C.1982) (internal quotation and citation omitted). While a presumption that an employee leaves involuntarily is a matter of relevance in most cases, under the circumstances of this case, the presumption is not applicable since the relationship was mutually created with a third party funding source for a specific project. Voluntariness is addressed by the court on a case by case basis. See Cervantes v. Administrator, Unemployment Comp. Act, 177 Conn. 132, 411 A.2d 921, 923 (1979)

("[T]he particular facts of each case must be examined to determine whether the termination of employment is truly `voluntary' within the intent and meaning of the unemployment compensation act.").

The question whether Dr. Betz was "discharged" or "separated" through no fault of his own—hence an involuntary separation—depends on the understanding of the parties at the inception of the employment. In this case, the employment relationship was a trilateral relationship between Dr. Betz, USSALEP and USAID. It was understood that the employment was temporary, for a specific project, and only for the period during which funding was provided by USAID. At the hearing, Dr. Betz testified in response to the hearing examiner's questions, as follows:

Q. . . . Now, Mr. Betz, did you voluntarily quit this job or were you discharged?

A. The contract ended. I was told in early 19___ the contract had been extended one time by the U.S. Agency for International Development. They were the funding source in South Africa and our part of the project....

Q. Mr. Betz.

A. we had one last training group in April of 1997.

Q. Mr. Betz?

A. And I was under the impression, I was told by USSALP, by South Africa, the project ended -

Q. Sir, I'm going to give you a chance to tell your side of the story.

A. I'm sorry.

Q. All I need to know right now is did you quit or were you fired?

A. I don't think I was either.

* * * * * *

Q. Mr. Betz, tell us the reason you are no longer working with South Africa?

A. I was told the project ended July— this portion of the project ended July 1st. I was told that by USAID, by everyone. The budget we prepared in late 1996 reflected that.

* * * * * *

Q. You said you were told by someone. Who told you?

A. Who told me what?

Q. That the contract had ended.

A. That the contract had ended? I knew that in advance by—we were— well, we prepared our contract budget, if I remember correctly . . . . Reflecting an end—one final training group in April.

* * * * * *

Q. Go ahead.

A. Well, by USSALP and by the mission, by the project manager at USAID [Prittoria].

Q. So when you left, you were saying you left thinking that the job had ended, is that right?

A. Exactly. Well, I knew it was going to end in July of 1997, this portion of the project regarding training, the portion that I was involved in.

Robert Hoen, testifying for USSALEP, made the following remarks:

A. But, now, keep in mind that the contract that ended was one that we originally built the whole—our employment contract on. It was understood at the beginning, of course, that [Dr. Betz] was hired specifically to work on this USAID contract that we were doing and work only until the [expiration] date of that contract, which was June 30th.

The hearing examiner concluded that respondent had been "discharged." The appeals examiner upheld that conclusion using the term "separated." Both these terms of necessity entail an affirmative action by the employer. No evidence of employer caused discharge is in the record. Thus, it can be said the finding of a discharge lacks substantial evidence to support it.

But more to the point, the conclusion that respondent was discharged is an error of law under the circumstances of this case. Dr. Betz fully understood that his compensation was provided by an entity separate from the employer, USAID, that the employment was tied to the task to be performed, and that upon its completion the employment relationship would simply evaporate or collapse of its own mutually agreed terms over which the employer lacked exclusive control. From the inception of the employment the departure of claimant was an "executory quit," the functional equivalent to a voluntary quit. Cf. Kentucky Unemployment Ins. Comm'n v. Reynolds Metals Co., 360 S.W.2d 746, 747 (Ky.1962)

(claimant's retirement constituted a voluntary termination of his employment because "the employees voluntarily accepted plans which provided for a termination of their employment"). Indeed, the record reflects that Dr. Betz acknowledged that he left voluntarily. This case is distinguishable from cases cited by the respondent. The court in Chicago Transit Auth. v. Didrickson, 276 Ill.App.3d 773, 213 Ill.Dec. 398, 659 N.E.2d 28, 32 (1995), held "that [Illinois' Unemployment Insurance] Act does not disqualify workers whose separation from work was compulsory under the terms of their employment contract or as a result of a mandated policy adopted by the employer. Where the employment terms imposed by the employer allow the employee no alternative but to relinquish her position, the separation is not voluntary ...." (Emphasis added.) In City of Lakin v. Kansas Employment Sec. Bd. of Review, 19 Kan.App.2d 188, 865 P.2d 223, 225 (1993), the court states that "where a claimant had no realistic choice in determining the duration of employment, claimant is eligible for unemployment benefits at the end of the limited-term employment because he or she is out of work through no fault of his or hers" (citation omitted and emphasis added). Both cases involved situation in...