Wadkins v. Lecuona
| Decision Date | 19 October 2007 |
| Docket Number | No. S-06-1008.,S-06-1008. |
| Citation | 274 Neb. 352,740 N.W.2d 34 |
| Parties | Richard A. WADKINS, appellant, v. Fernando LECUONA III, Commissioner of Labor, State of Nebraska, appellee. |
| Court | Nebraska Supreme Court |
Richard H. Hoch, of Hoch, Funke & Partsch, Nebraska City, for appellant.
John H. Albin, Thomas A. Ukinski, Lincoln, and W. Russell Barger, of Nebraska Workforce Development, Department of Labor, Office of Legal Counsel and Administrative Affairs, for appellee.
Richard A. Wadkins appeals from an order of the district court, affirming a determination of the Nebraska Appeal Tribunal that Wadkins had received unemployment insurance benefits to which he was not entitled. Wadkins had been laid off and was not performing services for his employer while he was receiving unemployment insurance benefits. But Wadkins was receiving money from his employer for compensatory time (comp time) Wadkins had accrued and for commissions on sales Wadkins had made before he had been laid off. The question presented in this appeal is whether the payments Wadkins received from his employer disqualified him from receiving unemployment insurance benefits under Nebraska's Employment Security Law.1 We conclude they did not, and reverse the decision of the district court affirming the appeal tribunal's decision ordering Wadkins to repay the benefits he had received.
Wadkins was employed by Americana Shopping Carts, Inc. (Americana), a company that, by its own description, "maintains a nationwide fleet of mobile maintenance units that provide cleaning and repair of shopping carts" and other retail sales equipment. Wadkins was a maintenance supervisor, whose duties involved traveling to Americana's customers to repair their shopping carts. While Wadkins was visiting those customers, he also sold them carts and cart-related products such as spare parts and seatbelts. Wadkins earned a 5-percent commission on such sales.
The "Job Description and Requirements" for Wadkins' position explained that his salary was based on a 260-day work year and that comp time was awarded on a one-to-one basis for each day an employee worked over 260 days. Wadkins' regular pay, not including commissions, was $480.77 per week.
Wadkins was laid off because of a "temporary work slow down," effective December 11, 2004. Wadkins filed a claim for unemployment insurance benefits. During the time period at issue, between January 22 and March 5, 2005, Wadkins was paid unemployment insurance benefits of $288 per week. Wadkins was also being paid by Americana during that period. Americana paid Wadkins $480.77 per week except for the weeks of January 22, during which Wadkins was paid $508.55; January 29, during which Wadkins was paid $537.21; and February 12, during which Wadkins was paid $288.48. Wadkins was apparently recalled to work for Americana on March 8.
Wadkins testified that the money he was paid by Americana after he was laid off was money earned before he was laid off, by working Saturdays and Sundays during the prior year. Wadkins described that time as comp time, and explained that when he was off work, the company paid him for his comp time on a weekly basis. Wadkins asserted that he had not worked or earned wages while he was receiving unemployment insurance benefits. Wadkins also explained that commissions on sales orders were not paid immediately, but were paid when the sales orders were shipped. Wadkins said that Americana's payments for the weeks ending January 22 and January 29, 2005, included some of his sales commissions.
Following a wage audit, the Department of Labor (the Department) concluded that Wadkins' payments from Americana were unreported earnings and that Wadkins had been overpaid $2,016 in unemployment insurance benefits. Wadkins appealed, and the Nebraska Appeal Tribunal affirmed the judgment. The appeal tribunal accepted Wadkins' explanation of the payments, but determined that "[t]he amounts were at the time [Wadkins] received them `determinable' and[/]or vacation pay," and therefore disqualifying compensation that exceeded his weekly benefit amount.2
Wadkins appealed the appeal tribunal's determination, pursuant to the Administrative Procedure Act.3 The district court concluded that comp time payments were considered "earnings" when they became "payable" and found that Wadkins' comp time only became "payable" on a day-to-day basis during his layoff. The district court affirmed the decision of the appeal tribunal.
Wadkins assigns that the district court erred in finding that the compensation he received from Americana disqualified him from receiving unemployment insurance benefits.
A judgment or final order rendered by a district court in a judicial review pursuant to the Administrative Procedure Act may be reversed, vacated, or modified by an appellate court for errors appearing on the record. When reviewing an order of a district court under the Administrative Procedure Act for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.4
Statutory interpretation presents a question of law, in connection with which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.5
The issue in this case is whether Wadkins was, despite receiving compensation from Americana after being laid off "unemployed" within the meaning of the Employment Security Law. The Employment Security Law defines "unemployed" as
an individual during any week in which the individual performs no service and with respect to which no wages are payable to the individual or any week of less than full-time work if the wages payable with respect to such week are less than the individual's weekly benefit amount, but shall not include any individual on a leave of absence or on paid vacation leave.6
"Paid vacation leave" is a period of time while employed or following separation from employment in which the individual renders no services to the employer but is entitled to receive vacation pay equal to or exceeding his or her base weekly wage.7 And where a collective bargaining agreement does not allocate vacation pay to a specified period of time during a "period of temporary layoff or plant shutdown," the payment by the employer "will be deemed to be wages . . . in the week or weeks the vacation is actually taken."8
We have explained that based upon the plain and ordinary meaning of the first definition contained in § 48-602(27), two elements must be satisfied to demonstrate unemployment: First, the individual must not perform any services for the relevant time period; and second, no wages may be payable with respect to that time period.9 There is no dispute in this case that Wadkins performed no services for Americana after he was laid off. Our inquiry here focuses on whether Wadkins received wages payable with respect to the time after the layoff and whether Wadkins was on "paid vacation leave" within the meaning of the Employment Security Law.
On appeal, the parties do not dispute the underlying facts. Given those facts, as a matter of law, Wadkins' comp time payments were not "payable with respect" to the weeks in which the payments were made. In Board of Regents v. Pinzon10 we explained that in making such determinations, the test is not in what week the remuneration is received but in what week it is earned or to which it may reasonably be considered to apply. Thus, in Pinzon, we concluded that a university professor whose contract had not been renewed was entitled to unemployment compensation at the conclusion of the 9-month academic term, even though his salary for the year was paid on a 12-month basis.11 Generally speaking, wages are tied to the week of work and not to the week in which they are paid.12 In Pinzon, the claimant's remaining 3 months of salary were, essentially, deferred wages "payable" when they were earned during the academic year, not when they were received.13
The same principles apply here. It is not disputed that Wadkins actually worked the days for which, after the layoff, he was paid. The payments he received are properly allocated to the weeks in which they were earned, before the layoff, not when the payments were received.
The Department contends that Pinzon is distinguishable in a number of ways. Most pertinently, the Department argues that Wadkins' comp time payments are the equivalent of "paid vacation leave" within the meaning of the specific statutory exclusion of paid vacation leave from "unemployment."14
What little authority there is on the subject of comp time is divided. In Transportation Dept. v. LIRC,15 the Court of Appeals of Wisconsin found that compensatory time off was "similar to a paid vacation" and was included within the definition of the term "wages." That disqualified the claimants from receiving unemployment insurance benefits, according to the court because if the claimants received "wages" while they were not working, they were not unemployed under Wisconsin law.16
The Supreme Court of New York, Appellate Division, reached a contrary conclusion in Matter of Giandomenico,17 in which unemployment insurance benefits had been extended to a driver of an ice cream truck who was laid off based on "traded time." Under the employment agreement, a driver would not be paid overtime when it was earned. Instead, the employer would credit the overtime hours to the driver. When business was slack, the least senior drivers would be laid off, but compensated from the fund created by the banked overtime.18
The New York appellate court concluded that the driver was unemployed under New York law and entitled to benefits. The court explained:
The record conclusively demonstrates that ...
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