Wimberly v. Labor and Indus. Relations Com'n of Missouri, 66083

• Decision Date: 02 April 1985
• Docket Number: No. 66083,66083
• Citation: 688 S.W.2d 344
• Parties: Linda WIMBERLY, Respondent, v. The LABOR AND INDUSTRIAL RELATIONS COMMISSION OF MISSOURI, and The Division of Employment Security of the State of Missouri, and J.C. Penney Co., Inc., Appellants.
• Court: Missouri Supreme Court

Page 344

688 S.W.2d 344

53 USLW 2530

Linda WIMBERLY, Respondent, v. The LABOR AND INDUSTRIAL RELATIONS COMMISSION OF MISSOURI, and The Division of Employment Security of the

State of Missouri, and J.C. Penney Co.,

Inc., Appellants.

No. 66083.

Supreme Court of Missouri,

En Banc.

April 2, 1985.

Opinion Concurring in Result Modified April 30, 1985.

Rehearing Denied April 30, 1985.

Sharon A. Willis, Kansas City, Rick V. Morris, Catherine J. Barrie, Jefferson City, for appellants.

Julie Levin, Legal Aid of Western Missouri, Kansas City, for respondent.

WELLIVER, Judge.

Respondent initiated this proceeding in the Circuit Court of Jackson County after the Missouri Labor and Industrial Relations Commission denied her claim for unemployment compensation. The circuit court reversed and the Missouri Court of Appeals, Western District, affirmed the circuit court's judgment. We ordered the cause transferred to determine whether 26 U.S.C. § 3304(a)(12) (1982) of the Federal Unemployment Tax Act requires states, as a predicate to receipt of federal assistance, to provide unemployment benefits to otherwise eligible claimants who left their employment due to pregnancy. We reverse.

The parties accept the Commission's findings of fact. Respondent had been employed by the J.C. Penney Company, Inc., as a cashier and sales clerk for approximately three years. In late August 1980, respondent, then approximately seven months pregnant, requested a leave of absence, citing her pregnancy as the reason. In accordance with its established policy, the employer granted respondent a "leave" without a guarantee of reinstatement, i.e., respondent would be rehired only if a position was available. Respondent's child was born on November 5, 1980. When, on December 1, 1980, respondent notified the employer of her desire to return to work, she was informed that there were no positions open.

Respondent filed a claim for unemployment compensation benefits on December 7, 1980. A deputy for the Division of Employment Security denied the claim on the ground that respondent was disqualified under § 288.050.1(1), RSMo 1978. The deputy determined that respondent "quit because of pregnancy" and, therefore, had left work voluntarily without good cause attributable to her work or her employer. Respondent appealed the decision to the Division's Appeals Tribunal. After a full evidentiary hearing at which respondent appeared with counsel, the Appeals Tribunal issued findings of fact and conclusions of law and affirmed the deputy's decision. The Tribunal concluded:

Although the claimant did have a good reason for leaving her employment, it is found that that reason was in no way attributable to her work or to her employer. Accordingly, it is found that the claimant quit her job voluntarily on August 23, 1980, without good cause attributable to her work or to her employer.

The Industrial and Labor and Industrial Relations Commission denied respondent's petition for review, and thereby adopted the Tribunal's findings and conclusions. § 288.200.1, RSMo 1978. Respondent then filed a petition for review in the circuit court and that court reversed the Commission's decision. The court accepted the agency's findings of fact and acknowledged that Missouri courts had construed § 288.050.1(1) to disallow unemployment compensation benefits when the claimant left work on a maternity leave without a guarantee of reemployment at the end of the leave period. It concluded, however, that the existing law in Missouri was contrary to 26 U.S.C. § 3304(a)(12) (1982), as construed in Brown v. Porcher, 660 F.2d 1001 (4th Cir.1981), cert. denied, 459 U.S. 1150, 103 S.Ct. 796, 74 L.Ed.2d 1000 (1983). Section 3304(a)(12), one of the federal minimum standards with which states must comply if their unemployment insurance scheme is to qualify for federal assistance, provides that "no person shall be denied compensation under [a state unemployment compensation] law solely on the basis of pregnancy or termination of pregnancy." Relying on Brown v. Porcher, the circuit court held that § 3304(a)(12) "banned the use of pregnancy or its termination as an excuse for denying benefits to otherwise eligible women," and accordingly, the court reversed the Commission's decision and remanded for entry of an award.

The Western District affirmed the court's judgment. Though the court expressed "reservations concerning the soundness of the ruling in Brown," slip op. at 14, it felt constrained to follow the Fourth Circuit's interpretation of § 3304(a)(12), stating:

In cases dealing with the construction of federal statutes, this court is bound by and must follow decisions of federal courts. [Buffalow ] v. Bull, 619 S.W.2d 913, 919 (Mo.App.1981), citing Haley v. Metropolitan Life Insurance Company, 434 S.W.2d 7, 11 (Mo.App.1968). From this rule, it follows that this court must affirm, due to the ruling in Brown v. Porcher, the judgment of the circuit court herein.

Slip op. at 13.

I

The legislature enacted the Missouri Employment Security Law to provide a partial wage replacement for workers left unemployed through no fault of their own. O'Dell v. Division of Employment Security, 376 S.W.2d 137 (Mo.1964). A claimant must satisfy two general requirements to qualify for unemployment benefits. First, he or she must be "able to work and available for work." § 288.040.1(2), RSMo Supp.1984. Second, the claimant must be free from disqualification. Section 288.050.1(1) disqualifies a claimant if he "left his work voluntarily without good cause attributable to his work or to his employer." ¹ Missouri courts have interpreted this provision to disqualify claimants who quit ² their job on account of pregnancy or personal illness unrelated to the employment. See Fifer v. Missouri Division of Employment Security, 665 S.W.2d 81 (Mo.App.1984); Duffy v. Labor and Industrial Relations Commission, 556 S.W.2d 195 (Mo.App.1977); Bussmann Manufacturing Co. v. Industrial Commission, 335 S.W.2d 456 (Mo.App.1960); Bussmann Manufacturing Co. v. Industrial Commission, 327 S.W.2d 487 (Mo.App.1959). See also Division of Employment Security v. Labor and Industrial Relations Commission, 617 S.W.2d 620 (Mo.App.1981); Neeley v. Industrial Commission, 379 S.W.2d 201 (Mo.App.1964); LaPlante v. Industrial Commission, 367 S.W.2d 24 (Mo.App.1963). These decisions persuasively demonstrate that the wording of § 288.050.1(1) evidences a manifest legislative desire to disqualify claimants who, like respondent, left work for reasons that, while perhaps legitimate and necessary from a personal standpoint, were not causally connected to the claimant's work or employer.

The question before us in this proceeding is whether the state can deny unemployment benefits to otherwise eligible claimants who left their employment due to pregnancy and still qualify for certain forms of federal assistance. Understanding this question requires a brief description of this nation's system of unemployment compensation. The system operates as a cooperative venture between the federal government and the various states. The Federal Unemployment Tax Act, 26 U.S.C. §§ 3301 et seq. (1982), imposes a federal payroll tax on wages paid by covered employers. The Act, however, authorizes a credit against a substantial part of the federal tax liability to employers who contribute to a state unemployment compensation fund approved by the Secretary of Labor. Federally-approved state programs also are entitled to federal grants to cover the cost of administering the program.

Section 3304(a) directs the Secretary to approve a state's program if he finds that it complies with the "fundamental standards" enumerated therein. Compliance with the standards is voluntary, but all of the states have found the lure of tax credits and grants in return for conforming legislation "an offer that could not be refused." State of New Hampshire Department of Employment Security v. Marshall, 616 F.2d 240, 241 (1st Cir.), appeal dismissed and cert. denied, 499 U.S. 806, 101 S.Ct. 53, 66 L.Ed.2d 10 (1980). Indeed, it is the expressly stated policy of the Missouri Employment Security Law to comply with the federal minimum standards:

If the Federal Unemployment Tax Act, the Federal Social Security Act or other related federal laws are amended to provide minimum standards for the payment of unemployment benefits, such standards shall become a part of this law to the extent necessary to entitle employers subject to this law to claim the maximum allowable credit against the federal unemployment tax. The provisions of this section shall be implemented by regulation by the division.

§ 288.390, RSMo 1978. Respondent contends such an amendment occurred in 1976 when Congress added a new federal minimum standard providing that "no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy." § 3304(a)(12). The issue to be decided is whether § 3304(a)(12) alters the previously existing law to such a degree that, under § 288.390, we must reject the case law construing § 288.050.1(1) which mandates denying unemployment benefits to claimants in respondent's situation.

II

The decision in Brown v. Porcher, the only reported case construing § 3304(a)(12), quite properly figured prominently in the opinions rendered by the circuit court and the Western District. Certain views expressed by the latter court warrant clarification, however. The Western District stated that the courts of this state, when confronted with the task of interpreting a federal statute, are bound to follow the decisions of lower federal courts construing the statute in question. While several decisions of the court of appeals contain similar statements, see e.g., Buffalow v. Bull, 619 S.W.2d 913, 919 (Mo.App.1981); Haley v. Metropolitan Life Insurance Co., 434 S.W.2d 7, 11 (Mo.App.1968); State ex rel. Atkins v. Missouri State Board of Accountancy, 351 S.W.2d 483, 485 (Mo.A...