RENDERED: August 30, 1996; 2:00 p.m.
NOT TO BE PUBLISHED
95-CA-2318-MR KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION APPELLANT
APPEAL FROM KENTON CIRCUIT COURT v. HONORABLE PATRICIA M. SUMME, JUDGE
ACTION NO. 94-CI-001610
CATHOLIC SOCIAL SERVICES AND PAULETTE A. MEIER APPELLEES
AND 95-CA-2449-MR PAULETTE A. MEIER AND KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION APPELLANTS
APPEAL FROM KENTON CIRCUIT COURT v. HONORABLE PATRICIA A. SUMME, JUDGE
ACTION NO. 94-CI-001610
CATHOLIC SOCIAL SERVICES APPELLEE
OPINION AFFIRMING
* * *
BEFORE: GUDGEL, HUDDLESTON, AND SCHRODER, JUDGES.
SCHRODER, JUDGE: These consolidated appeals are from a judgment reversing a ruling by the Kentucky Unemployment Insurance
Commission which determined that Paulette Meier was entitled to unemployment benefits. After considering appellants' arguments, the record on appeal and the applicable law, we affirm.
Paulette Meier was employed by appellee, Catholic Social Services ("CSS") from 1987 until June 1994. CSS is a community service corporation which receives grants from the fiscal courts in various counties and fees from certain schools to which it provides services. CSS employed Meier in its School Services Department which contracted with public and private schools in Northern Kentucky to provide certain services. Meier held the title of Child Guidance Worker and Substance Abuse Specialist. As a guidance counselor, Meier provided both individual and group counseling to students and their parents. Meier's supervisor testified that most of Meier's work as a guidance counselor initiated in the classroom and 99% of her substance abuse counseling involved classroom instruction, which Meier disputed. Meier maintained that most of her work took place outside the classroom and was spent on a one-on-one basis with individual children or talking with parents.
Meier was paid a salary by CSS and elected to receive her salary over a ten (10) month period rather than over a twelve (12) month period. Meier received benefits throughout the year, including the summer months.
On June 12, 1994, upon completion of the 1993-1994 academic year, Meier filed a claim for unemployment benefits. The evidence regarding whether Meier was offered a job by CSS
beginning the 1994-1995 academic year will be discussed later. Meier was approved for benefits and CSS protested Meier's eligibility for such benefits. After a fact-finding interview, Meier was found entitled to receive unemployment benefits. CSS thereafter appealed the decision to the referee, who also affirmed the initial determination that Meier was eligible for benefits. CSS then appealed to the Kentucky Unemployment Insurance Commission (the "Commission"), arguing that KRS 341.360(3)(a) and (3)(b) rendered Meier ineligible to receive unemployment benefits between academic school years. The Commission adopted the referee's factual findings and affirmed the referee's application of KRS 341.360(3) and his conclusions of law based thereon. After the Commission again affirmed the referee's decision on a motion for reconsideration, CSS appealed to the Kenton Circuit Court. Upon reviewing the evidence, the court determined that the Commission had misinterpreted KRS 341.360(3) and that Meier was ineligible, under the statute, to receive unemployment insurance benefits. Meier and the Commission now appeal.
Meier and the Commission argue that the circuit court misconstrued KRS 341.360(3) and that under a correct interpretation of KRS 341.360(3) and federal law, Meier must be an employee of an educational institution in order to be ineligible for unemployment insurance benefits. KRS 341.360(3) provides:
No worker may be paid benefits for any week of employment:
(a) Which, when based on service in an instructional, research, or principal administrative capacity in an institution of higher education as defined in subsection (2) of KRS 341.067 or in an educational institution as defined in subsection (4) of KRS 341.067, begins during the period between two (2) successive academic years, or during a similar period between two (2) regular terms, whether or not successive, or during a period of paid sabbatical leave provided for in the individual's contract, if the worker performs such services in the first of such academic years or terms and if there is a contract or a reasonable assurance that the worker will perform such services in any such capacity for any institution or institutions of higher education or an educational institution in the second of such academic years or such terms; or
(b) Which, when based on service other than as defined in paragraph (a) of this subsection, in an institution of higher education or an educational institution, as defined in subsection (2) or (4) of KRS 341.067, begins during the period between two (2) successive academic years or terms, if the worker performs such services in the first of such academic years or terms and there is a reasonable assurance that the worker will perform such services in the second of such academic years or terms; except that if benefits are denied to any worker under this paragraph and such worker was not offered an opportunity to perform such services for such institution of higher education or such educational institution for the second of such academic years or terms, such worker shall be entitled to a retroactive payment of benefits for each week for which the worker filed a timely claim for benefits and for which benefits were denied solely by reason of this paragraph; or
(c) Which, when based on service in any capacity defined in paragraphs (a) and (b) of this subsection, begins during an established and customary vacation period or holiday recess if the worker performs any such services in the period immediately before such vacation period or holiday recess, and
there is a reasonable assurance that such worker will perform any such services in the period immediately following such vacation period or holiday recess; or
(d) Based on service in any capacity defined in paragraph (a) or (b) of this subsection when such service is performed by the worker in an institution of higher education or an educational institution, as defined in subsection (2) or (4) of KRS 341.067, while the worker is in the employ of an educational service agency, and such unemployment begins during the periods and pursuant to the conditions specified in paragraphs (a), (b), and (c) of this subsection. For purposes of this paragraph the term "educational service agency" means a governmental agency or governmental entity which is established and operated exclusively for the purpose of providing such services to one (1) or more institutions of higher education or educational institutions.
KRS 341.360(3) was enacted by the General Assembly in order to comply with the provisions of 26 U.S.C. $ 3304(a)(6). The federal statute provides that in order for a state's unemployment compensation law to be approved by the United States' Secretary of Labor, the state law must provide, subject to certain exceptions set forth therein, that employees of governmental entities and tax exempt organizations must be eligible to receive unemployment benefits "in the same amount, on the same terms, and subject to the same conditions" as other employees. 26 U.S.C. $ 3304(a)(6)(A). Such approval is required before the state can receive federal funding for the administrative costs associated with the operation of the state's unemployment services programs. 42 U.S.C. $ 502; 29 U.S.C. 49d. The state's unemployment law must also meet the requirements of
27 U.S.C. $ 3304 in order for employers to receive a credit against their federal unemployment tax for the amount of unemployment tax paid to the state. 26 U.S.C. $ 3302(a).
As to the exceptions mentioned above, there are certain exceptions that are mandatory and certain ones that are optional under federal law in order to meet the above stated requirements for federal funding. With respect to those mandatory exceptions where eligibility for unemployment benefits must be denied, 26 U.S.C. $ 3304(a)(6)(A)(i), (iii) and (iv) provide as follows:
(i) with respect to services in an instructional, research, or principal administrative capacity for an educational institution to which section 3309(a)(1) applies, compensation shall not be payable based on such services for any week commencing during the period between two successive academic years or terms (or, when an agreement provides instead for a similar period between two regular but not successive terms, during such period) to any individual if such individual performs such services in the first of such academic years (or terms) and if there is a contract or reasonable assurance that such individual will perform services in any such capacity for any educational institution in the second of such academic years or terms.
(iii) with respect to any services in clause (i) or (ii), compensation payable on the basis of such services shall be denied to any individual for any week which commences during an established and customary vacation period or holiday recess if such individual performs such services in the period immediately before such vacation period or holiday recess, and there is a reasonable assurance that such individual will perform such services in the period immediately following such vacation period or holiday recess.
(iv) with respect to any services described in clause (i) or (ii), compensation payable on the basis of services in any such capacity shall be denied as specified in clauses (9), (ii), and (iii) to any individual who performed such services in an educational institution while in the employ of an educational service agency, and for this purpose the term "educational service agency" means a governmental agency or governmental entity which is established and operated exclusively for the purpose of providing such services to one or more educational institutions. (Emphasis added.)
With regard to the optional exceptions, where eligibility for unemployment benefits may be denied by the state, 26 U.S.C. $ 3304(a)(6)(A)(ii) provides:
(ii) with respect to services in any other capacity for an educational institution to which section 3309(a)(1) applies -- (I) compensation payable on the basis of such services may be denied to any individual for any week which commences during a period between 2 successive academic years or terms if such individual performs such services in the first of such academic years or terms and there is a reasonable assurance that such individual will perform such services in the second of such academic years or terms, except that (II) if compensation is denied to any individual for any week under subclause (I) and such individual was not offered an opportunity to perform such services for the educational institution for the second of such academic years or terms, such individual shall be entitled to a retroactive payment of the compensation for each week for which the individual filed a timely claim for compensation and for which compensation was denied solely by reason of subclause (I). (Emphasis added.)
The referee for the Commission construed KRS 341.360(b) such that the worker must actually be employed by the educational institution rather than simply working in an educational
institution. Since CSS was Meier's actual employer, the referee found that KRS 341.360(3) did not apply to Meier. The circuit court interpreted KRS 341.360(3)(a) and (b) according to its plain meaning ("based on service . . . in an educational institution" (emphasis added)) and ruled that the statute did not require the worker to actually be employed by the educational institution, only that the worker be employed in an educational institution in order to be ineligible for benefits.
Meier and the Commission argue that because the state statute must be construed in compliance with the federal law and because the federal law provides that the worker must be employed by the educational institution, the state statute must be construed to allow Meier unemployment benefits since she is employed by CSS and not by an educational institution. While the language in Section 4 of Acts 1984, chapter 1, shows the legislative intent to conform to federal law on the subject, we do not believe there is any conflict with federal law on this issue. 26 U.S.C. $ 3304(a)(6)(A)(i) applies to "services . . . for an educational institution" (emphasis added). Contrary to the assertions by Meier and the Commission, this does not mean that the worker must be employed by the educational institution and we are not aware of any federal law so construing said act. Certainly a worker can do work for an educational institution without being employed by said institution. Accordingly, we agree with the lower court's interpretation of KRS 341.360(a) and (b).
Meier also argues that she was improperly found to be ineligible for unemployment benefits because CSS did not reasonably assure her of work performing the same services (KRS 341.360(3)(a) and (b)) in the same school (KRS 341.360(b)) as the previous term as required by the statute. The testimony of Meier and her supervisor established that at the end of the 1993-1994 year, Meier was offered a position for the coming year, but that Meier expressed reservations about taking the position. The referee specifically found, "Although given assurances that she would be renewed for the coming school year beginning sometime in the second half of August 1994, claimant notified the employer that she is undecided whether she will return."
Regardless of whether KRS 341.360(a) or (b) applies, there was no evidence that Meier was offered a position for the 1994-1995 academic year doing a different job or performing different services than she had the previous year and she does not claim on appeal what different kind of job she was offered. As to the educational institution where she was to work, the evidence established that her job required that she work in multiple schools and, again, there was no evidence that she was to work in different schools than she had in past years. Also, Meier did not argue this issue below and it is being improperly raised for the first time in this appeal.
If the findings of fact of the Commission are supported by substantial evidence of probative value, they must be accepted as binding by the reviewing court. Raines v. Kentucky
Unemployment Ins. Commission, Ky. App., 669 S.W.2d 928 (1983). The duty of the reviewing court is to determine whether the Commission misapplied the correct rule of law to the facts as found, not to substitute its judgment for that of the Commission. Kosmos Cement Co., Inc. v. Haney, Ky., 698 S.W.2d 819 (1985). We cannot say the Commission erred in finding that Meier was given reasonable assurance of a position for the following academic year in keeping with the statute. Accordingly, the circuit court was correct in impliedly upholding this finding when it reversed the case as a matter of law.
For the reasons state above, the judgment of the Kenton Circuit Court is affirmed.
ALL CONCUR.
BRIEF AND ATTENDANCE FOR PAULETTE A. MEIER:
Glenda Harrison Covington, Kentucky
BRIEF AND ORAL ARGUMENT FOR APPELLANT, KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION:
Timothy A. Sturgill Frankfort, Kentucky
BRIEF AND ORAL ARGUMENT FOR APPELLEE CATHOLIC SOCIAL SERVICES:
Stacey L. Graus Covington, Kentucky