DATED AND FILED
NOTICE
December 23, 1997
Marilyn L. Graves
Clerk, Court of Appeals
of Wisconsin
No. 97-1346
DISTRICT III
Mary Ashleson, Kelly Barthman, Wendy Bowe,
Noel Capra, Dorothy Chenal, Janet Chladek,
Nancy Cooper, Janette Cysewski, Donnis DeLong,
Mary Donatelle, Sharon Edwards, Nila
Fransway, Beth Gerth, Tracy Grant, Rena
Gravunder, Linda Hefty, Amy Henderson, Sandra
Hilger, Diane Hodgson, Jan Hoehne, Connie
Hovland, Chris Hulback, Raynelda Jaworski,
Carol Kallstrom, Terry Kelzer, Joan Klatt,
Wanda Knez, Nancy Koosmann, Rachel
Kumferman, JoAnn Larson, Kelley Lake, Barbara
Lathrop, Sheri Lloyd, Becky Loofboro, Gayle
Lunsmann, Debra Lyons, Kristy Maher, Linda
Meyers, Julie Miller, Russell Minnich, Carla
Musil, Colleen North, Rebecca Nyara, Melody
Nyman, Rebecca Ockler, Bonnie Pannier, Jeanne
Parker, Kathy Phelps, Janet Pingel, Patricia
Purfeerst, Marge Rettenmund, Polly Rudi, Kathy
Ruhde, Sharon Schutz, Julie Severson, Kris
Squier, Mary Thibado, Connie Voeltz, Lena
Vranak, and Penny Waltner,
Plaintiffs-Respondents,
v.
Labor & Industry Review Commission,
Defendant-Appellant,
Cooperative Educational Service Agency No. 11,
Defendant.
APPEAL from a judgment of the circuit court for Eau Claire County:
ERIC J. WAHL, Judge. Reversed.
Before Cane, P.J., Myse and Hoover, JJ.
HOOVER, J. The Labor & Industry Review Commission appeals the
circuit court's judgment reversing LIRC's decision denying unemployment
compensation to the respondent teachers.(1)
The teachers worked for Head Start during
the 1994-95 program year. At the end of the term they applied for unemployment
compensation. "School year employees" who are given a reasonable assurance of
employment during the next program year are not eligible for unemployment benefits
for the period between successive academic years. LIRC denied benefits, concluding,
and now contending on appeal, that the teachers were school year employees who had
received reasonable assurances of similar employment for the next Head Start
program year. A school year employee is one who performs services for an
educational service agency under an employment contract extending less than one
year. The trial court held that they did not perform services under an employment
contract and were therefore not school year employees. We disagree and conclude
the teachers performed services under an implied, at-will employment contract
extending for less than one year and were therefore school year employees. We
therefore reverse the trial court.
We are also required to decide an issue not reached by the trial court:
whether the teachers had a reasonable assurance of performing similar work during
the next academic year. We conclude as a matter of law that they had such an
assurance. We therefore reinstate LIRC's decision denying the teachers
unemployment benefits.
Cooperative Educational Services Agency No. 11 (CESA) administers
the Head Start program and employed the teachers during the 1994-95 program year.
All but one of the teachers(2) had been
employed in the Head Start program prior to the
1994-95 program year. On or about May 4, 1995, CESA sent the teachers letters
tentatively offering them employment for the 1995-96 Head Start program year and
describing the position and location of the assignment. After the program year
ended, the teachers also received an Employee Wage Statement, or what LIRC
referred to as a "fact sheet," which advised each employee as to pay, vacation and the
period of employment. The teachers timely accepted the tentative offer. As their
respective employment terms ended for the 1994-95 program year,(3) each respondent
filed for unemployment compensation benefits.
Section 108.04(17)(c)1 and (f), Stats., provide that a
school year
employee of an educational services agency(4) is ineligible for unemployment benefits
for any week of unemployment that occurs during a period between two successive
academic years or terms if the school year employee performs services for an
educational services agency in the first such year or term and there is reasonable
assurance that the employee will perform services for an educational services
agency
in the second year or term. Section 108.02(22m) defines "school year employe" as
an employee of, inter alia, an educational service agency who "performs services
under an employment contract [that] does not require the performance of
services on
a year-round basis." (Emphasis added.) We are called upon to interpret this
subsection.
The parties have endured vacillating results to this point of the
litigation. This is undoubtedly a consequence of the reasonable and intuitively
appealing but incompatible positions they each espouse. The Department of Industry,
Labor and Human Relations initially determined that the teachers worked for an
educational services agency during a school year or academic term and had
reasonable assurance of performing such services for an educational services agency
in the next academic year or term. It thus denied the teachers' applications for
benefits. The teachers filed a request for a hearing before an appeal tribunal at which
the administrative law judge concluded that they performed services under an
employment contract that did not require the performance of services on a year-round
basis and were therefore school year employees. This conclusion rested upon the
determination that § 108.02(22m), Stats., does not require a written employment
contract. The ALJ agreed with the teachers, however, that they did not have a
reasonable assurance of reasonably similar work for the entire 1995-96 school term
because funding had not yet been secured for the last half of the year. It therefore
reversed the department's initial determination denying benefits. The teachers then
petitioned LIRC for review the appeal tribunal decision.
LIRC determined that the letter offering reemployment and the fact
sheet "illustrate a mutual understanding between the parties regarding the
performance of services for remuneration under an employment contract" and the
teachers were therefore school year employees under § 108.02(22m), Stats. In
considering whether the teachers were offered reasonable assurances of performing
similar work in the next program year, LIRC first found that, while the funding for
the last half of the 1995-96 Head Start term was uncertain to some degree, it was
nonetheless "as definite as it could possibly be given the nature of the program's
fiscal year ." It considered such relative definiteness together with established
practice, the employment relationship between the parties, the letters offering
employment and the fact sheets and concluded that cumulatively they demonstrated
the teachers received reasonable assurance of future employment.
The teachers appealed to the circuit court. The teachers received an
Employee Wage Statement that contained a disclaimer that states, "This data sheet is
intended for information purposes only and neither it, CESA #11 practice, nor other
communications create an employment contract or term." The trial court held that
this disclaimer evinced CESA's intent not to be bound by a contract and therefore no
contract could be implied. It concluded that the teachers were not school year
employees because they were not performing services under an employment contract,
and thus reversed LIRC.(5)
STANDARDS OF REVIEW
The issues primarily require the application of a set of facts to a statute,
which is a question of law.(6) The teachers
contend that LIRC has minimal experience
in interpreting and applying §108.02(22m), Stats., because it was only recently
enacted.
They concede that the agency has had some experience interpreting the "reasonable
assurance"
requirement, but its decisions have not been substantially uniform, long-standing and without
challenge. For these reasons, the teachers contend that this court should accord no deference
to
LIRC's determination of the two issues.
At oral arguments, LIRC conceded that it has not had significant
experience with §108.02(22m), Stats. It nonetheless appears from LIRC's written
decision that it has had at least some occasion to interpret
§ 108.02(22m)(7) and, in
particular, the phrase "performing services under an employment contract."(8)
Considering LIRC's concession, together with evidence of some experience with this
issue, we conclude that it is one of nearly first impression. We afford "due weight"
to such determinations. Bunker v. LIRC, 197 Wis.2d
606, 612, 541 N.W.2d 168, 171 (Ct. App.
1995)
Where a legal question is intertwined with factual determinations or
with value or policy determinations, courts defer to the agency that has primary
responsibility for the determination. Sauk County v.
WERC, 165 Wis.2d 406, 413,
477 N.W.2d 267, 270 (1991). The commission's written decision demonstrates both
a long history of interpreting and applying the "reasonable assurance" requirement
and the policy considerations concerning its application.(9) Its determination on that
issue is therefore entitled to great deference. Bunker,
197 Wis.2d at 611, 541 N.W.2d at
171.
EMPLOYMENT CONTRACT
To determine whether the teachers were school year employees, we
must first decide whether they provided services under an "employment contract."
The teachers first assert that the phrase "employment contract" is a term of art and
implies a written contract. Nothing, however, in either the statute or in case law
requires that the contract be in writing. Indeed, the teachers' contention, unsupported
by any citation, is contrary to established authority. Wisconsin recognizes oral
employment contracts. See, e.g., Micke
v. Jack Walters & Sons Corp., 70 Wis.2d
388, 234 N.W.2d 347 (1975); Marek v. Knab Co., 10
Wis.2d 390, 103 N.W.2d 31
(1960). For the purpose of interpreting statutes, the legislature is presumed to act
with knowledge of existing case law. Ziulkowski v.
Nierengarten, 210 Wis.2d 98,
104, 565 N.W.2d 164, 166 (Ct. App. 1997). Moreover, had the legislature intended
to require that the employment contract in question be written, it could have expressly
stated so as it did in the case of public school teachers.(10)
The teachers further contend that, regardless whether § 108.02(22m),
Stats., requires a written contract, no implied contract existed between CESA and
each respondent, essentially because they were "at will" employees. The position
suggests that the concepts of "employment at will" and "employment contract" are
mutually exclusive. This argument is also contrary to Wisconsin employment law;
a contract for employment at will is nonetheless an employment contract. See,
e.g.,
Ferraro v. Koelsch, 124 Wis.2d 154, 167, 368
N.W.2d 666, 673 (1985); Heinritz v.
Lawrence Univ., 194 Wis.2d 606, 535 N.W.2d 81 (Ct. App. 1995).
Section 108.02(22m), Stats., is clear and unambiguous. To be a school
year employee one must perform services for an educational institution under an
employment contract which does not require performance of those services year-round. The
only term of the contract is duration of employee services. It is
undisputed that CESA is an educational institution, and the teachers performed
services for it during and only during the nine-month 1994-95 Head Start program
year. The disclaimer that the fact sheet was not itself a contract binding
CESA to
future employment does not compel the finding that the parties had no contract at the
time the teachers received the offer of rehire. From the undisputed facts we defer to
LIRC's conclusion that the letters of employment and fact sheets implied a contract
to perform and pay for services for less than year-round, in accordance with the terms
outlined in the documents. At the time the teachers received the letters offering
reemployment, they were performing services under the employment contract implied
by the previous year's letters and fact sheets, which contract commenced at the
beginning of the 1994-95 program year. They were thus school year employees.
REASONABLE ASSURANCE
Having determined that the teachers were school year employees, we
turn to the issue whether they received reasonable assurance of reemployment for the
following program year. This is a mixed question of law and fact, involving the
factual determination of what information the teachers received and the legal
conclusion as to whether such information constituted reasonable assurance of
reemployment. See Farrell v. LIRC, 147 Wis.2d
476, 484, 433 N.W.2d 269, 273 (Ct.
App. 1988). The term "'reasonable assurance' means a written, verbal, or implied
agreement that the employe will perform services in the same capacity during the
ensuing academic year or term ." Leissring v.
DILHR, 115 Wis.2d 475, 487, 340
N.W.2d 533, 538 (1983) (quoting H.R. 1745, 94th Cong. (1976)).
The teachers address the "reasonable assurance" issue with several
arguments. They first contend that LIRC applied the wrong standard in determining
the likelihood of reemployment. In its memorandum opinion, a summary of its
decision, LIRC states the employment offers were more certain than
speculative of
future employment. The standard in the statute, however, is reasonable
assurance.
Before undertaking consideration of whether the teachers received
reasonable assurance of rehire, LIRC cited H.R. 1745, 94th Cong. (1976),
for the
definition that controlled its analysis.(11) The
teachers do not take express issue with
this definition. Nor do we perceive in LIRC's decision a departure from either this
definition or the "reasonable assurance" standard itself. It repeats the phrase
"reasonable assurance" throughout its decision. Further, we do not appreciate a
meaningful distinction between the statute's language and the phrase complained of.
LIRC's reference to a degree of certainty in its decision synopsis is merely an
alternative description of the magnitude of assurance that is reasonable. We
conclude that LIRC's failure to use the "magic words" of the statute does not
compromise its conclusion that the teachers were offered reasonable reassurance of
rehire. See Michael A.P. v. Solsrud, 178 Wis.2d
137, 151-52, 502 N.W.2d 918, 924
(Ct. App. 1993).
The teachers next argue that LIRC is required to consider the elements
of each employee's situation individually, particularly whether each employee was
offered employment "reasonably similar" to the previous year's. They further
contend, this obligation notwithstanding, the commission made only a generalized
finding of reasonable assurance. Their counsel conceded at oral arguments that each
teacher's letter offering rehire and Employee Wage Statement was part of the record
before LIRC. The individualized record before the commission notwithstanding, it
is the teachers' position, implied in their brief and confirmed at oral argument, that
this court should assume LIRC did not consider the reasonable assurance as to each
employee because the decision did not clearly reveal that it did. There is, however,
a presumption of regularity in the decisions of administrative agencies.
Hakes v.
LIRC, 187 Wis.2d 582, 586-87, 523 N.W.2d 155, 157 (Ct. App. 1994).
The lack of
express confirmation that LIRC reviewed the entire record before it is an insufficient
basis upon which to rebut the presumption and conclude that LIRC in fact did ignore
the record.
We further note that there is a basis in the record to support the
conclusion that each person who originally filed for benefits was considered
individually. As the teachers point out, some of the original claimants were
ultimately not rehired. The teachers conceded at oral arguments that these individuals
were determined by stipulation to be entitled to unemployment compensation. During
argument, the teachers characterized CESA's agreement to enter into this stipulation
as a stratagem to remove these employees from the "pool" of claimants, thereby
increasing the percentages of rehires and, in turn, statistically enhancing the rehire
assurances' appearance of reasonableness. This view is unpersuasive; the number of
original claimants who were not rehired is a matter of record. A more logical
construction is that the claimants who were not rehired received unemployment
benefits because they were entitled to them. That they were treated separately from
the remaining teachers belies the argument that the LIRC failed to consider each
respondent's claim, including rehire assurances, individually.
The teachers further argue that the reasonable assurance must be
provided no later than the date summer layoff begins, which is the time they would
be eligible for unemployment compensation. We agree. From this proposition,
however, they argue that because some employees were not rehired, they did not
receive reasonable assurance at the time they were laid off. This position does not
address the issue of what degree of assurance is reasonable.(12) Instead it effectively
elevates the measure of sufficient assurance from reasonable to certain. The
two terms
carry different burdens of meaning. Thus, the construction of subsecs. 108.04(17)(c)1 and
(f), Stats.,
which follows from the no-assurance-if-not-rehired argument is contrary to the plain meaning
of the
statutory language.
The teachers next challenge LIRC's reliance on the established practice
between the parties in finding reasonable assurance. The employees assert that the
record demonstrates the "established practice" in fact involved uncertainty, funding
shortfalls, frequent layoffs and shifting employment sites. First, we note that the
commission's conclusion rested upon the letters of intent the teachers received and
the employment relationship between the parties, as well as established practice.
More significantly, this is an issue of fact. While there was evidence before LIRC
from which it could make the findings the teachers urge:
[W]e must affirm LIRC's findings if they are supported by any
credible and substantial evidence in the record. Substantial
evidence is less of a burden than preponderance of the
evidence in that any reasonable view of the evidence is
sufficient. We cannot substitute our judgment for that of LIRC
in respect to the credibility of a witness or the weight to be
accorded to the evidence supporting any finding of fact.
Where one or more inference may be drawn from the
evidence, the drawing of one such permissible inference by
LIRC is an act of fact finding, and the inference so derived is
conclusive on the reviewing court.
Bernhardt v. LIRC, 207 Wis.2d 294, 300-01,
558 N.W.2d 874, 876 (Ct. App. 1996)
(citations omitted).
The record demonstrates that Head Start is an ongoing program. There
was no evidence that funding for the balance of the program year was in specific
jeopardy. The commission found that Head Start program funding was dependent on
the federal budget, as it was in the past. The funding expectations for the next
program year were the same as in the past. It considered the history of substantial
employment longevity some of the teachers enjoyed as relevant to assessing the
general quality of the employer's rehire assurance. It found that the uncertainty
surrounding Head Start's funding was similar to that associated with other school
programs: "Employment offers are often based on school budgets that are rarely
finalized, authorized or funded before such offers of reasonable assurance are
provided." These findings, under the applicable standard of review, are sufficient to
support LIRC's more stable characterization of the parties' established practice than
that urged by the teachers.
The teachers next rely on Farrell for the
contention that "Employment
positions which are dependent upon unsecured funding do not constitute reasonable
assurance, for purposes of the calculation of unemployment benefits."
Farrell,
however, does not stand for the proposition that all (save ministerial) funding
contingencies prevent an employer from offering reasonable assurance of future
employment.
In Farrell, the employees were involved in a
recently mandated
educational services program. The program in which they had been employed and
were offered future employment was dependent on new and multiple sources of
funding for the next program year. The Private Industry Council was responsible for
overseeing the distribution of one of the sources funds, and at the time the employer
sent written offers of reemployment, the council had not yet agreed to ensure funding.
The employer viewed funding as so sufficiently uncertain that the reemployment
letter expressly conditioned the offer on obtaining a signed agreement for funding.
Later, the employer sent a second letter indicating that funding had now been
authorized and that "only the administrative execution of a written contract reflecting
the agreement of the parties remained uncompleted."
Id. at 485, 433 N.W.2d at 273.
This court upheld the commission's determination that only the second
letter constituted reasonable assurance of employment. We characterized the
remaining act of signing a written outline of the funding agreement as a "ministerial
task;" what was significant to the assurances the employees had received was the
agreement for funding. Conversely, with new and multiple sources of
program funds
and, implicitly, no historical pattern to refer to, funding was, as the first letter
disclosed, truly uncertain. Under those circumstances, any assurance of
reemployment was so speculative as to be unreasonable. Thus
Farrell merely
underscores that reasonableness is a matter of relative degree, and funding
uncertainty may be of such a magnitude as to render reemployment assurances
unreasonable. In the instant case, however, a history of consistent federal funding at
some level and the ongoing character of the Head Start program are factors sufficient
to distinguish Farrell.
The teachers finally assert that LIRC's interpretation of "reasonable
reassurance" unjustly exposes employees to constant uncertainty regarding future
employment. This is a position to be addressed to the legislature. While it is true as
teachers observe that the legislature granted unemployment benefits to employees
who do not receive reasonable assurance of employment, it has also determined that
some degree of uncertainty is either necessary or acceptable, as long as it is
reasonable. The degree of certitude the teachers seek must come from the
legislature
and not from a court that affords great weight to the agency's interpretation of the
statute before it.
In conclusion, we are satisfied that there is a rational basis for LIRC's
conclusions that the teachers were school year employees who had received
reasonable assurances of future employment. See Dairy Equip. Co. v.
DILHR, 95
Wis.2d 319, 327, 290 N.W.2d 330, 334 (1980). Wisconsin law recognizes implied,
at will employment contracts. The commission could rationally conclude from the
letter offering employment, the terms of employment as set forth in the Employee
Wage Statement and from past practices that the teachers were working for CESA
under an employment contract. It could further appropriately consider the ongoing
nature of the Head Start program, the dearth of evidence that funding was in particular
jeopardy, the record of consistent federal funding at some level year to year, the
nature of funding expectations for the next program year, the evidence of substantial
employment longevity, the similarity between Head Start's and other schools' funding
uncertainty and the language of the reemployment letter itself and conclude that the
teachers were given reasonable assurance of future employment. We therefore
reverse the trial court's judgment and reinstate the commission's decision denying
unemployment benefits to the teachers.
By the Court.--Judgment reversed.
Recommended for publication in the official reports.
1 We use the term "teachers" as a convenience. The group of teachers
include both
professional and nonprofessional employees of an educational services agency.
2 Wendy E. Bowe's employment began on August 16, 1994.
3 The terms ended at various times from May 27, 1995 (week 21) through
June 17, 1995,
(week 24).
4 It is undisputed that CESA #11 is an educational service agency.
5 We do not review the trial court decision; our task is merely to determine
whether the
commission's decision was correct. Stafford Trucking, Inc. v.
DILHR, 102 Wis.2d 256, 260, 306
N.W.2d 79, 82 (Ct. App. 1981).
6 The teachers claim that the evidence belies LIRC's factual finding that
funding for the last
half of the upcoming Head Start program year was as definite as it could possibly be. Under
§
102.23(1), Stats., however, "the findings of fact by LIRC, acting within its power shall, in
the
absence of fraud, be conclusive." Bunker v. LIRC,
197 Wis.2d 606, 611, 541 N.W.2d 168, 170 (Ct.
App. 1995).
7 "In a separate case, involving these same employes and issues, the
commission determined
that these employes were school year employes within the meaning of 108.02(22m), Stats."
(LIRC
Decision, pg. 3.)
8 "In Nancy Gathing v. Madison Metro. Sch.
Dist. (LIRC 3-1-95), the commission concluded
that a written contract is not a prerequisite to 'performing services under an employment
contract,'
under section 108.02(22m), Stats."
9 LIRC's decision states: "While the reality of Headstart's (sic) fiscal year
reflects some level
of uncertainty, it does not per se prevent CESA from
providing reasonable assurance as the
administrative law judge in essence finds. If the commission were to apply the
administrative law
judge's rationale, many school year employes could never be provided with reasonable
assurance.
Employment offers are often based on school budgets that are rarely finalized, authorized or
funded
before such offers of reasonable assurance are provided."
10 Section 118.21(1), Stats.: "The school board shall contract in
writing with qualified
teachers." (Emphasis added.)
11 "Furthermore, 'reasonable assurance' has been defined as '(A) written,
verbal or implied
agreement that the employe will perform services in the same capacity during the ensuing
academic
year or term .' "
12 The teachers' brief and oral arguments firmly implied that for an
assurance of reemployment
to be reasonable, it must virtually be guaranteed. When asked at oral argument to define
what would
constitute a reasonable assurance, the teachers' counsel eventually indicated
such assurance as would
lead an employee to conclude that it was not necessary to seek other employment. Counsel
did not,
however, show how the proposed definition facilitates application of the facts to the statutory
standard.
Indeed, although no doubt intended as an objective test, it is nonetheless interesting to note
that counsel
did not contend that LIRC heard evidence that Head Start employees sought other
employment after
receiving the written offer of employment.
STATE OF WISCONSIN
IN COURT OF APPEALS