Welch v. Iowa Dept. of Employment Services, Job Service Div.

• Decision Date: 27 January 1988
• Docket Number: No. 87-136,87-136
• Citation: 421 N.W.2d 150
• Parties: John P. WELCH, Petitioner-Appellee, v. The IOWA DEPARTMENT OF EMPLOYMENT SERVICES, JOB SERVICE DIVISION, n/k/a Employment Appeal Board, A Division of the Department of Inspections and Appeals, Respondent-Appellant, City of Minburn, Employer.
• Court: Iowa Court of Appeals

Page 150

421 N.W.2d 150

John P. WELCH, Petitioner-Appellee, v. The IOWA DEPARTMENT OF EMPLOYMENT SERVICES, JOB SERVICE DIVISION, n/k/a Employment Appeal Board, A Division of the Department of Inspections and Appeals, Respondent-Appellant, City of Minburn, Employer.

No. 87-136.

Court of Appeals of Iowa.

Jan. 27, 1988.

Blair H. Dewey and William C. Whitten, Des Moines, for respondent-appellant.

David L. Wornson, Legal Services Corp. of Iowa, Decorah, for petitioner-appellee.

Considered by DONIELSON, P.J., and SCHLEGEL and HAYDEN, JJ.

DONIELSON, Presiding Judge.

Respondent appeals from a district court decision which awarded the petitioner unemployment compensation benefits, ruling that a separation from a regular, but part-time job, in a second benefit year was not a disqualifiable event. We affirm.

The petitioner, John P. Welch, was separated from his employment with Oscar Mayer on May 9, 1983. He received other separation benefits (severance pay) and consequently did not become eligible for unemployment insurance benefits until January 1984. Welch secured part-time employment with the City of Minburn on May 15, 1984, and thus he continued to receive partial unemployment benefits based upon his wage credits at Oscar Mayer. Welch voluntarily quit his part-time work on January 11, 1985, to seek full-time employment in Arizona.

While in Arizona, Welch filed an interstate claim for unemployment compensation. A claims deputy in Iowa denied the claim on the basis that Welch left his part-time employment without good cause. The hearing officer and appeal board affirmed that decision. The district court remanded for additional fact-finding to determine whether Welch's act was a disqualifiable separation. The hearing officer found that because Welch voluntarily left his part-time employment he was disqualified from benefits. The appeal board affirmed. The district court reversed, finding that the agency's interpretation of the statute was inconsistent with the purpose and principles of Iowa Code chapter 96. Respondent appeals.

Under the Iowa Administrative Procedure Act, the district court functions in an appellate capacity to correct errors of law on the part of the agency. Barnes v. Iowa Dep't of Transp., 385 N.W.2d 260, 263 (Iowa 1986). Our review of a decision of a district court rendered pursuant to the Iowa Administrative Procedure Act, Iowa Code section 17A.19, is limited to the sole question of whether the district court correctly applied the law. Jackson County Public Hosp. v. Public Employment Relations Bd., 280 N.W.2d 426, 429 (Iowa 1979). We must therefore apply the standards of section 17A.19(8) to the agency action to determine whether our conclusions are the same as those of the district court. Lefebure Corp. v. Iowa Dep't of Job Service, 341 N.W.2d 768, 770 (Iowa 1983).

I. The respondent Employment Appeal Board claims that voluntary separation from regular, part-time employment without good cause during a second benefit year is a disqualifiable event under Iowa employment security law. The Board states that the work secured by Welch with the City of Minburn became regular and suitable based upon the length of his unemployment. This is because Welch was unemployed for one year and was required to secure a job in order to maintain his partial unemployment benefits in the second benefit year. Welch asserts that the agency did not raise this argument in any proceedings below and so cannot raise it now on appeal.

A party cannot raise for the first time on appeal issues of fact or law which have not been raised below. Chicago & N.W. Transportation Co. v. Iowa Trans., 322 N.W.2d 273, 276 (Iowa 1982). This principle of law extends to judicial review of administrative decisions where issues have not been raised during the contested case proceeding. Armstrong v. State of Iowa Bldgs., 382 N.W.2d 161, 165 (Iowa 1986). The federal courts recite that the validity of agency decisions must rest upon the reasoning as given by the agency and not based upon counsel's post hoc rationalization. E.g., Motor Vehicle Manufacturers v. State Farm Mutual, 463 U.S. 29, 50, 103 S.Ct. 2856, 2870, 77 L.Ed.2d 443, 462 (1983).

We agree with Welch that the Board's characterization of Welch's work with the City of Minburn as "suitable," as that word is contained in Iowa Code section 96.5(3) (1985), is an issue which should have been addressed below. A review of the record discloses this argument was not previously raised.

II. While Welch worked for City of Minburn, his wages reduced his benefits according to a statutory formula contained in Iowa Code section 96.3(3), called a wage-earnings limitation. See I.A.C. 370--4.18 (1986). In other words, a claimant who is unemployed as a result of a separation from his regular, full-time employment and who continues to meet the other eligibility requirements of availability and actively and earnestly seeks work pursuant to Iowa Code section 96.4(3) may work part-time and still receive benefits as a result of his separation from his full-time employment. However, the weekly earnings must not exceed the weekly benefit amount plus $15. Welch met the requirements of section 96.4(3) to actively search for work and be available. He was not required to accept part-time work or supplement his benefits. Thus, the issue before us is one of first impression: whether a claimant's voluntary quit from part-time employment during a second benefit year of receiving partial unemployment benefits is a disqualifiable event resulting in a total benefit disqualification.

Iowa Code section 96.5(1) (1985) disqualifies an individual for benefits "[i]f the individual has left work voluntarily without good cause attributable to the individual's employer, if so found by the department." The respondent claims the district court erred by failing to properly construe the statutory scheme, which it contends is to prohibit voluntary separation from regular, part-time work when a claimant has been unemployed for an extended period of time. The respondent states that Iowa Code section 96.5(1) applies to disqualify a claimant from benefits if he voluntarily leaves full-time or part-time employment.

The Iowa Supreme Court in McCarthy v. IESC, 247 Iowa 760, 762, 76 N.W.2d 201, 202 (1956), stated that Iowa Code section 96.5(1), and specifically the word "work" in the clause "if he left his work," was not "plain and unambiguous" when applied to entitlement issues involving part-time or full-time work. The court ruled "... whether the process be called 'interpretation' of the language, or merely 'application' of it to unforeseen facts, we must, if reasonably possible, avoid a result clearly contrary to the avowed purpose of the entire Chapter." Id.

The issue presented demands determination of the legislative intent and statutory construction of the language of Chapter 96. Chapter 96 is to be construed liberally to achieve the objective of minimizing the burden of involuntary unemployment. Maschino v. George A. Hormel & Co., 372 N.W.2d 256, 261 (Iowa 1985). In interpreting a statute, the court must look to the object to be accomplished and evils sought to be remedied or the purpose to be subserved. Shidler v. All American Life and Financial Corp., 298 N.W.2d 318, 321 (Iowa 1980). Courts must place a reasonable construction on the statute which will best effect its purpose rather than defeat its purpose. Peffers v. City of Des Moines, 299 N.W.2d 675, 678 (Iowa 1980).

We are in agreement with the district court's construction of the statutory language to find Welch entitled to continue receiving partial benefits even though he voluntarily quit his part-time employment with the City of Minburn. The district court based its decision on the McCarthy case, which recognized that the legislature did not intend the term "work" in section 96.5(1) to be applied to all employment situations and especially those not the cause of the claimant's unemployment. McCarthy involved a claimant who quit, without good cause, a part-time job held concurrent with his regular, full-time employment. He was then laid off and disqualified from receiving benefits under the rationale that section 96.5(1) does not distinguish between part-time and regular work and hence total benefit disqualification resulted from any part-time separation without cause. The court in McCarthy, 247 Iowa at 765, 76 N.W.2d at 204, held that part-time separation had no effect on the claimant's entitlement to benefits because the part-time separation did not cause the claimant's initial unemployment and that a windfall would come to the regular employer who did cause claimant's unemployment because of that employer's being relieved of liability. We find the district court's decision in the case at hand is consistent with the rationale given in McCarthy.

A recent Minnesota case addressed this particular issue with substantially the same fact pattern. In Holman v. Olsten Corp., Olsten Health Care Service, 389 N.W.2d 236, 241 (Minn.1986), the Minnesota Supreme Court held that a quit without good cause from part-time employment obtained to supplement benefits and therefore entitling claimant to partial unemployment benefits based on a previous regular employment separation was not disqualifiable. The "all or nothing proposition" is not justified by the cases or statutes. Id.

There are certain policy considerations to which we look for our guidance in resolving this issue. The unemployment statutory schemes provide a statutory benefit formula which provides a monetary incentive for unemployed workers to supplement their benefits; to totally disqualify benefits from those in Welch's situation would appear to be inconsistent and act...