THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
TRUMBULL COUNTY, OHIO
THOMAS G. BURNS, et al., : O P I N I O N
Appellants, :
CASE NOS. 2004-T-0071
- vs - : and 2004-T-0072
DIRECTOR, OHIO DEPARTMENT OF :
JOB AND FAMILY SERVICES, et al.,
Appellees.
:
Administrative Appeals from the Court of Common Pleas, Case Nos. 03 CV 23 and 03
CV 25.
Judgment: Affirmed.
Frederick G. Cloppert, Jr., William J. Steele and Rory P. Callahan, Gloppert, Latanick,
Sauter & Washburn, 225 East Broad Street, Columbus, OH 43215 (For Appellants
Thomas G. Burns and Perry McClain).
Jim Petro, Attorney General, and Charlett Bundy, Assistant Attorney General, State
Office Building, 11th Floor, 615 West Superior Avenue, Cleveland, OH 44113-1899
(For Appellees, Director of Ohio Department of Job and Family Services and State of
Ohio Unemployment Compensation Review Commission).
Barbara J. Leukart and Laura R. Anderson, Jones, Day, Reavis & Pogue, North Point,
901 Lakeside Avenue, Cleveland, OH 44114-1190 (For Appellees, General Motors).
COLLEEN MARY O’TOOLE, J.
{¶1} This case involves consolidated appeals by Thomas G. Burns and Perry
McClain, on behalf of General Motors Corporation employees, (collectively
“appellants”). This court consolidated the appeals sua sponte on July 27, 2004.
Appellants appeal from a judgment of the Trumbull County Common Pleas Court
affirming a decision of the Ohio Unemployment Compensation Review Commission
(“Review Commission”), in which it affirmed a determination by the Director of the Ohio
Bureau of Employment Services, disallowing appellants’ claims for unemployment
compensation benefits for the week ending July 4, 1998.
{¶2} The following background facts are undisputed. In 1998, employees at
General Motors Corporation (“GM”) facilities in Michigan went on strike. Eventually, the
strike caused a shortage of parts at GM’s Trumbull County facilities. Production was
halted and 8,136 employees (appellants within this appeal) were laid off. Appellants
were on lay off status during the week ending July 4, 1998. Appellants filed for
unemployment compensation, and were not recalled to return to work until sometime
after August 1, 1998.
{¶3} As a part of the settlement of the Michigan strike, GM and the United Auto
Workers Union (“UAW”), entered into a Memorandum of Understanding (“MOU”) on July
28, 1998. The MOU provided:
{¶4} “MEMORANDUM OF UNDERSTANDING ONE TIME SPECIAL PAYMENT”
{¶5} “As a result of these negotiations and without prejudice to the position
taken by either party, and without setting any precedent in the disposition of any other
case involving similar circumstances, the parties agree to the following:
{¶6} “Employees who were on strike or layoff status at General Motors
locations due to the labor dispute at the Flint Metal Center and Delphi E. Flint East and
who did not receive Independence Week Shutdown and Holiday Pay as a result of
being on said layoff or strike and were otherwise entitled to these pay provisions as
stipulated in the GM-UAW National Agreement, shall receive a one time special
payment in the amount they would have been entitled to had they not been on strike or
layoff. This payment will be made in an expeditious manner and taxed as a regular
wage payment in accordance with Document No. 81 of the GM-UAW National
Agreement. This payment shall initially be made by General Motors. Thereafter,
payments otherwise required by Paragraph IIIA of the Memorandum of Understanding
Joint Activities, 1996 GM-UAW National Agreement, shall be waived until General
Motors is reimbursed for the total amount paid to employees as a result of this
Memorandum. Further, the parties recognize that these payments may result in
employees being ineligible for unemployment compensation already received.
Employees impacted by such overpayment of unemployment compensation will be
responsible to repay the State that provided the unemployment compensation.”
{¶7} Appellants were advised of the holiday pay restoration, pursuant to the
MOU, by union fliers distributed on August 5, 1998, and a UAW newsletter. Payments
for the Independence Holiday Shutdown were made on August 13, or August 14, 1998,
calculated to equal thirty-two hours of a claimant’s base salary for the period of June 29
through July 3. Payment for the July 4th holiday made at the same time, represented
eight hours at the same rate of pay as that of the same week. The replacement holiday
pay was identified separately from regular wages on appellants’ pay stubs and was
separately subjected to payroll taxes. All payments were subject to payroll withholding
taxes.
{¶8} Appellants became eligible to receive unemployment compensation
benefits when they were laid off by GM, from the date each was laid off until he or she
was recalled to work. GM subsequently objected to payment of benefits for the period
June 29 through July 3, 1998, arguing that the one time special payment each claimant
received pursuant to the MOU was remuneration that disqualified them from receiving
benefits. On review, the Director of the Department of Job and Family Services
(“Director”) agreed and disallowed benefits for the period June 29 through July 3, 1998.
{¶9} Appellants and other claimants appealed the Director’s decision to the
Review Commission. On December 12, 2002, the Review Commission rendered a
decision disallowing benefits for the period concerned, pursuant to R.C. 4141.31(A)(5).
In its decision, the Review Commission stated:
{¶10} “The question to be determined by the Review Commission is whether the
monies received by claimants are deductible as remuneration in the form of holiday pay.
This special payment was negotiated by General Motors Corporation and the United
Auto Workers. The weight of the evidence before the Review Commission is that the
purpose of this payment was to replace the lost Independence Week Shutdown Period
pay and Independence Holiday pay. Certain prerequisites for receiving this pay could
not be met by employees because of the strikes and layoff situations existing at the
time. In the negotiation process, it appears that the parties agreed to waive these
impossible prerequisites and pay the unemployed workers a special payment calculated
to make them whole for loss of the holiday payments. Deductions were made by the
employer in the same manner as regular holiday payments would have been handled
and employees received credit, including additional vacation entitlement, under the
National Agreement for these monies. The circumstances which allowed the employer
to recoup these monies via reduced contributions to another fund does not alter the
nature of the payments. That the parties believed and intended these payments to
replace the Independence Week Holiday pay is evidenced by Employer Exhibit #1,
Shop Committee-Information Flyer, issued August 5, 1998, wherein the following
statement was made: ‘Independence Week Holiday Pay. The International Union and
Corporation have agreed to pay the negotiated settlement concerning the
Independence Week Shutdown Week. This payment will be included in the regular
payroll checks on August 14, 1998. Even though you only receive one check, taxes will
be deducted from the individual amounts of the two weeks, as per your regular payroll
tax status.’ Based upon the weight of the evidence before the Review Commission, it is
held that the Director properly disallowed all claims for the weeks in issue because
claimants received remuneration in the form of holiday pay or allowance in excess of
their weekly benefit amount.”
{¶11} Appellants appealed the Review Commission’s decision to the Trumbull
County Court of Common Pleas. On May 20, 2004, the court entered a judgment entry
affirming the decision of the Review Commission. Appellants filed a timely notice of
appeal. In their consolidated appeal, appellants present five assignments of error for
our review:
{¶12} “[1.] The trial court erred in affirming the Decision of the Review
Commission denying benefits to claimants because they were totally unemployed under
Revised Code Section 4141.01(M).
{¶13} “[2.] The trial court erred in affirming the decision of the Review
Commission denying benefits to claimants because the one-time special payment was
not holiday pay under section 4141.31(A)(5) and could not be allocated to the week
ending July 4, 1998.
{¶14} “[3.] The Trial Court erred in affirming the Decision of the Review
Commission denying benefits to claimants because the special payment was not
remuneration under Revised Code Section 4141.01(H).
{¶15} “[4.] The Trial Court erred in affirming the Decision of the Review
Commission denying benefits to claimant’s, where the special payment was a form of
bonus, that could not be used to reduced benefits under Section 4141.31(A)(5).
{¶16} “[5.] The Trial Court did not liberally construe under R.C. 4141.46 the
Appellants’ claims for unemployment benefits.”
{¶17} Appellants’ five assignments of error are intertwined and will be
considered together. At the outset, it should be noted that, in Ohio, unemployment
compensation is a statutory scheme governed by R.C. 4141. The standard of review in
cases arising under Ohio’s Unemployment Compensation Statute is set forth in R.C.
4141.282(H) and states as follows: “If a trial court, upon appeal of a decision of the
commission, finds that the commission’s decision was “unlawful, unreasonable, or
against the manifest weight of the evidence, it shall reverse, vacate, or modify the
decision, or remand the matter to the commission.” The same standard applies to an
appellate court’s review.
{¶18} An appellate court may reverse the Unemployment Compensation Board
of Review’s decision only if it is unlawful, unreasonable or against the manifest weight of
the evidence. Tzangas, Plakas & Mannos v. Ohio Bur. of Emp. Services (1995), 73
Ohio St.3d 694, at paragraph one of the syllabus. In Simon v. Lake Geauga Printing
Co. (1982), 69 Ohio St.2d 41, the Supreme Court of Ohio reasoned that the Review
Commission is in the best position to weigh evidence and assess the credibility of the
witnesses. See, also, Shaffer v. State of Ohio Unemployment Rev. Comm., 11th Dist.
No. 2003-A-0128, 2004-Ohio-6956; Boos v. Admr, Ohio Bur. of Unemployment
Services, 11th Dist. No. 2003-T-0174, 2004-Ohio-6693.
{¶19} In their first assignment of error, appellants argue that they were “totally
unemployed” according to R.C. 4141.01(M), which provides as follows: “an individual is
‘totally unemployed’ in any week during which the individual performs no services and
with respect to such week no remuneration is payable to the individual.” Thus, “if a
claimant either performs services, or receives remuneration, he is not unemployed
within the foregoing statute.” In re DeLuca (June 19, 1979), 10th Dist. No. 79AP-28,
1979 Ohio App. LEXIS 11570, at 7. See, also, Rini v. Unemployment Comp. Bd. of
Rev. (1983), 9 Ohio App.3d 214, at paragraph one of the syllabus.
{¶20} Pursuant to R.C. 4141.01(H), “‘[r]emuneration’ means all compensation for
personal services, including commissions and bonuses and the cash value of all
compensation in any medium other than cash[.]”
{¶21} We note that subsequent to the filing of briefs, the Fifth District in Futey v.
Ohio Dept. of Job & Family Services, 5th Dist. No. 04-CA-14, 2004-Ohio-5400, the
Second District in Ashwell v. Ohio Dept. of Job & Family Services, 2nd Dist. No. 20522,
2005-Ohio-1928, and the Tenth District in Nicolas v. Ohio Dept. of Job & Family
Services, 10th Dist. No. 04AP-771, 2005-Ohio-2635, all rendered decisions affirming
trial court decisions that affirmed the Review Commission’s determination that GM’s one
time special payment in August 1998 was holiday pay remuneration for the Fourth of
July holiday. Thus, appellants were denied unemployment compensation benefits for
the week ending July 4, 1998. We also note that the appellants in Futey appealed that
decision, but the Ohio Supreme Court declined further review.
{¶22} Here, the trial court found that the language of the MOU, as well as other
factors, supported the Review Commission’s determination that the parties intended to
have the one time special payment replace the lost Independence Week Holiday pay,
and that it was properly allocated to the Independence Day Holiday week. The court
concluded that “the determination of the Review Commission *** was lawful,
reasonable, and not contrary to law.” The court found that the evidence, including
stipulated facts in the record, supported the Review Commission’s determination that
the parties to the MOU intended to have the one time special payment replace the
Independence Day shutdown. The court further held that “the ODJFS believed as does
this Court, that there is no evidence that appellants’ employers intended to make a gift
of the one time ‘special payment’.” The court also found that the terms of the MOU
“clearly set forth the employees obligation to re-pay any over payments to the state and
that the payment may make them ineligible for benefits for the week in question.” In
affirming the decision of the Review Commission, the court concluded that “this
payment is indeed holiday pay and the contractual shutdown pay [a]ppellants would
have received had they worked the obligated day before and after the holiday.”
{¶23} Upon a review of the record in this case, we agree. Here, the MOU
specifically referenced the fact that the one time special payment was for employees on
strike or layoff status due to the Flint labor dispute “who did not receive Independence
Week Shutdown and Holiday Pay as a result of being on said layoff or strike and were
otherwise entitled to these pay provisions as stipulated in the GM-UAW National
Agreement[.]” The MOU further provided that the parties “recognize that these
payments may result in employees being ineligible for unemployment compensation
already received.”
{¶24} GM classified the 32-hour payments in its records as “MISCIWSP,” and
the eight-hour payment as “MISCHOSP,” which the court in Futey reasonably
interpreted as “miscellaneous independence week special pay” and “miscellaneous
holiday special pay.” Futey at ¶21.
{¶25} Appellants contend that no remuneration was “payable” to them during the
week ending July 4, 1998, because they could not meet, under the national agreement,
the prerequisites for receiving the payments, i.e., due to the strike, they were unable to
work the scheduled workday prior to and following the shutdown period and holiday.
{¶26} Appellants maintain that it was not until after the MOU was executed (on
July 28, 1998) that any amount was payable and that GM “allocated” the payment to the
week of August 9, 1998, when the checks were issued. Thus, appellants assert that the
one time special pay cannot be allocated to the work week ending on July 4, 1998.
{¶27} Appellants urge this court to follow the decision in General Motor’s Corp.
v. Buckner (Mo.App. 2001), 49 S.W.3d 573, wherein a Missouri Court of Appeals held
that unemployment compensation claims arising out the same circumstances should be
paid. However, in Buckner, the court relied upon a statutory provision not present in
Ohio’s Unemployment Statutory Scheme providing that “[v]acation pay and holiday pay
shall be considered as wages for the week with respect to which it is payable.”
Mo.Rev.St. 288.036.1. Ohio’s statutory scheme provides in part that “[r]emuneration in
the form of holiday pay will be applied to the week during which the holiday occurs ***
regardless of when such remuneration is actually received.” Ohio Adm.Code 4141-9-
05. Further, we agree with the Buckner court that “[d]ue to the fact that the types of
statutes involved in the various states are not uniform, but frequently divergent, we do
not consider authorities from other jurisdictions decisive of this matter.” Id., at 759.
{¶28} Under Ohio law, the date of allocation is not determined by the date on
which the payment was received. Pursuant to R.C. 4141.31(A)(5), benefits otherwise
payable for any week are to be reduced by the amount of remuneration a claimant
receives with respect to “[v]acation pay or allowance payable under the terms of a labormanagement
contract or agreement *** which payments are allocated to designated
weeks.”
{¶29} The Director is authorized to “[a]dopt rules with respect to the collection,
maintenance, and disbursement of unemployment and demonstrative funds[.]” R.C.
4141.13(C). Such rules must be approved by the Review Commission before they
become effective. R.C. 4141.14(A). These rules are set forth at Ohio Adm.Code 4141-
{¶30} Ohio Adm.Code 4141-9-04(B) provides in part: “[r]emuneration may be ***
denominated by terms such as vacation pay or allowance, separation pay, holiday pay,
paid absence allowance, downtime paid absence allowance, or short workweek pay.”
{¶31} Ohio Adm.Code. 4141-9-05(A) further provides that “remuneration in the
form of holiday pay will be applied to the week during which the holiday occurs as
specified by state or national declaration, regardless of when such remuneration is
actually received. If, however, there exists a written labor-management agreement to
observe a holiday on a date other than the one specified by state or national
declaration, the holiday pay will be applied to the week during which the date specified
in the agreement occurs.”
{¶32} In construing the above statutory provisions to the same stipulated facts
as the instant case, the court in Ashwell, held in relevant part: “The Independence
Week Shutdown pay period identified in the National Agreement is the period of
Monday, June 29 through Thursday, July 2, 1998. One of the holidays for which
payment is specified by the National Agreement is July 4, 1998. The July 4 holiday was
observed on Friday, July 3 in 1998. The MOU provides that eligible employees ‘shall
receive a one time special payment in the amount they would have been entitled to
receive had they not been on strike or layoff’ during the Independence Week Shutdown
and Holiday. Per O.A.C. 4141-9-05(A), the pay for the Independence Day holiday
necessarily must apply to July 3, 1998, the last day of the Independence Week
Shutdown and Holiday period that year.” Id. at ¶¶ 57-59.
{¶33} Here, as in Ashwell and Nicolas, the one time special payment was
apportioned and paid to employees, who, but for their inability to work the required
prior and subsequent shifts due to the layoff, would have been entitled to receive
Independence Week Shutdown and Holiday Pay in 1998.
{¶34} Further, there was evidence supporting the Review Commission’s finding
that the parties, through the MOU, agreed to waive certain prerequisites under the
national agreement in order to provide these workers Independence Week Shutdown
and Independence Day Pay. It is from the employment relationship that payment to the
appellants arose. As a result of negotiation with the UAW, GM agreed that appellants
would receive a payment that was intended to replace, in the same manner as the
Independence Week Shutdown and Holiday Pay that appellants would have been
eligible to receive for the week ending July 3, 1998, if the strike had not occurred and
layoffs ensued.
{¶35} We agree with the Ashwell court and Nicolas court that, under the facts of
this case, the Review Commission could have reasonably concluded that the one time
special payment was allocated to the Independence Week shutdown and Independence
Day holiday, thereby constituting remuneration for purposes of R.C. 4141.31(A)(5) for
the week ending July 4, 1998.
{¶36} Appellants’ reliance on Akzo Salt, Inc. v. Ohio Bur. of Emp. Services
(1995), 107 Ohio App.3d 567, is misplaced. Unlike the case sub judice, in Akzo Salt,
there was no evidence before the Review Commission of an MOU labor-management
agreement that specifically allocated the payment to a designated week.
{¶37} We further disagree with appellants’ claim that the one time payment was
a “bonus,” that could not be used to reduce unemployment compensation pursuant to
R.C. 4141.31(A)(5). Under “R.C. 4141.01(H)(2), a ‘bonus’ is a form of remuneration,
[and] therefore, payment of a bonus renders an employee, even one who is laid-off,
ineligible for benefits because he is not then unemployed.” Nicolas at ¶31, quoting
Ashwell at ¶53.
{¶38} Further, the express language of the MOU recognizes that both GM and
the UAW were aware that appellant’s receipt of this payment would affect eligibility for
benefits for the week ending July 3, 1998. The MOU stated in pertinent part: “The
parties recognize that these payments may result in employees being ineligible for
unemployment compensation ***.” At the Review Commission hearing, GM
representative Cheryl Ollila testified that the purpose of the special one time payment
was to make appellants whole for the Independence Week Shut down period, and the
intent of the MOU’s phrase warning of ineligibility for unemployment benefits was: “[i]f it
was determined by the state that they were ineligible as a result of an overpayment,
they would have to pay this back.” Thus, it is reasonable to conclude that both the UAW
and GM, as parties to the MOU, intended the one time special payment as replacement
holiday pay and recognized that the payment may result in reduced eligibility of
employee recipients for unemployment compensation.
{¶39} Appellants further raise the contention that, if the payment actually
constituted holiday pay, GM would have been required to pay claimants from its general
revenue. Appellants maintain, instead, that GM was “excused” from payment of its
contractual obligation to the Joint Activities Fund.
{¶40} The court in Ashwell also addressed and rejected this argument, noting,
“R.C. 4141.31(A)(5) takes no account of the source of vacation pay or allowances, so
long as the amount is payable under the terms of a labor-management agreement and
allocated to designated weeks.” Ashwell at ¶70. The court reasoned, “[r]eliance on the
fact that the payment is the product of a labor-management agreement, as it was here,
demonstrates that questions such as the source, amount, or payment terms are matters
committed to the negotiating process, not ones that affect the application of R.C.
4141.31(A)(5).” Id.
{¶41} Similarly, the Review Commission found that “the circumstances which
allowed the employer to recoup these monies via reduced contributions to another fund
does not alter the nature of the payments.”
{¶42} Appellants further contend that the Review Commission erred in relying
upon evidence in the form of information contained in fliers distributed by the union and
describing the payments as “Independence Week Shutdown.” Although appellants do
not present a specific argument on this issue, the Ashwell court found that this
contention involved a claim of inadmissible hearsay. Ashwell at ¶75.
{¶43} The hearing officer is not bound by “common law or statutory rules of
evidence or by technical or formal rules of procedure.” R.C. 4141.28(J); Simon at ¶43.
“The aim of this portion of R.C. 4141.28(J) is to avoid the rigid formality imposed by
technical rules of evidence, while constructing an efficient method for ascertaining a
claimant’s entitlement to unemployment compensation benefits.” Id. Therefore,
hearsay evidence which is inadmissible in a court or hearing required to apply stringent
rules of evidence, is admissible in the Review Commission’s hearings on whether to
affirm or reverse a decision granting or denying unemployment benefits. Id. at ¶44.
{¶44} We further find that it is undisputed that a local union representative
distributed the flyer to union members. On this point, the Ashwell court held that the
statements in the union flier qualified as non-hearsay admissions of a party-opponent
under Evid.R. 801(D)(2)(d), and the trial court properly viewed the admission of the flier
as evidence of what the UAW, as appellants’ representative, thought and intended with
respect to the MOU and one time special payments. Id. at ¶76. We agree.
{¶45} Furthermore, as this court has previously stated “we are required to give
great deference to the hearing officer’s findings of fact.” Boos at ¶22, citing Todd v.
Admr, Ohio Dept. of Job and Family Services, 4th Dist. No. 03 CA 2894, 2004-Ohio-
2185, at ¶26. Thus, it would be inappropriate to disregard the findings of the Review
Commission because they are based partially on the union fliers.
{¶46} Appellants’ final assignment of error is that the Review Commission failed,
pursuant to R.C. 4141.46, to liberally construe R.C. 4141.
{¶47} Although unemployment compensation statutes are to be liberally
construed, neither the agency nor the trial court has a duty to construe facts more
favorably to either party. Dailey v. Admr. Ohio Bur. of Emp. Services, 8th Dist. No.
52633, 1987 Ohio App. LEXIS 5607. Further, “[a] direction to liberally construe a
statute in favor of certain parties will not authorize a court to read into the statute
something which cannot be reasonably be implied from the language of the statute.”
Thomas v. Stringer, (May 27, 1995), 11th Dist. No. 5-127, 1975 Ohio App. LEXIS 8389,
at 4, quoting Szekely v. Young (1963), 174 Ohio St. 213, 218.
{¶48} This court recognizes the commitment of the UAW in its representation on
behalf of the appellants. However, under Tzangas, we are unable to speculate as to the
reason why appellants did not fully appreciate the terms of the MOU and that such
payment may result in reduction of unemployment compensation benefits.
{¶49} In its application of the statutes and regulations to the facts, we agree with
the trial court that the Review Commission’s decision was not unreasonable, unlawful,
or against the manifest weight of the evidence. Thus, we do not find that the Review
Commission violated the principle of R.C. 4141.46.
{¶50} For the foregoing reasons, appellants’ five assignments of error are
without merit.
{¶51} The judgment of the Trumbull County Court of Common Pleas is affirmed.
DONALD R. FORD, P.J.,
WILLIAM M. O’NEILL, J.,
concur.