Scherer Tax Service, Inc. v. Department of Labor, Licensing & Regulation

SALMON, Judge. Section 8-1005(a)(2) of the Labor and Employment Article of the Maryland Code (1999 Repl. Yol.), 1 with exceptions not here applicable, states that a claimant who otherwise is eligible to receive unemployment insurance benefits is disqualified from receiving such benefits if the Secretary of the Department of Labor, Licensing and Regulation (“DLLR”) finds that “the individual, without good cause, failed to accept suitable work when offered.” Sharon A. Long (“Long”) commenced receiving unemployment insurance benefits during the week of January 9, 2005. On January 20, 2005, she was offered a full-time job that would have lasted twelve weeks, i.e., until April 15, 2005.

Long rejected the job offer because she wanted a permanent job — not a seasonal one. The question to be resolved in this appeal is whether a claimant, such as Long, who rejects an offer of full-time, suitable employment has “good cause” to do so, within the meaning of section 8-1005(a)(2), when the sole reason for the job refusal is that the claimant wants to find permanent employment. We shall answer that question in the negative. ²⁸⁷ I. FACTS AND PROCEDURAL BACKGROUND 2 The appellant, Scherer Tax Service, Inc. (hereinafter “STS”), is owned and operated by Daniel C. Conkling, Esq., a Maryland attorney. STS is in the business of preparing income tax returns.

Its office is in Glen Burnie, Maryland, and is open only during the tax season — mid-January to April 15. Long, who retired from Verizon Communications in 1997, was employed by STS as a receptionist during the 2004 tax season. She worked forty hours per week and earned $11 an hour. Immediately after April 15, 2004, she was terminated by STS due to lack of work.

Nevertheless, Mr. Conkling offered Long a part-time job at one of his other offices where he provided certified public accounting services. Long declined that offer. In September 2004, Long commenced her search for a full-time job. Her search from September to December 2004 was unsuccessful.

On January 9, 2005, Long commenced receiving unemployment compensation. Less than two weeks later, on January 20, 2005, a representative of STS offered Long her old job back at a higher pay rate. She was to work as a receptionist for the same number of hours per week as she had worked previously, and she was to be paid $500 per week ($12.50 per hour x 40 hours). The job offer was for seasonal employment, however, in that the job, like her previous one, would terminate at the end of the “tax season.” Long considered STS’s offer for about two days but then turned it down because she wanted to find a permanent, full-time job. 3 ²⁸⁸ On February 1, 2005, STS notified the DLLR of Long’s refusal to accept its job offer.

A DLLR claims specialist determined, on May 17, 2005, that Long had refused an offer of suitable work from STS, but because STS had failed to timely notify DLLR of the claimant’s refusal, her failure to accept work could not be considered a basis for disqualification under section 8-1005. The claims specialist also found that for the workweek ending February 5, 2005, Long was able, available, and actively seeking work. STS appealed these adverse determinations. On June 14, 2005, a DLLR Hearing Examiner conducted an evidentiary hearing.

Long testified at the hearing that she conducted her job search exclusively by use of the internet and submitted numerous job applications by that means. No evidence was introduced that indicated that Long could not have continued her search for a permanent job if she had accepted STS’s January 20, 2005, offer. 4 By separate decisions, the Hearing Examiner ruled: (1) STS had timely notified DLLR of Long’s refusal of its job offer; (2) nevertheless, the claimant had good cause to reject STS’s offer; and (3) Long, on all relevant dates, was able, available, and actively seeking work. The net effect of the Hearing Examiner’s decision was to affirm the determination of the claims examiner that Long was eligible to continue receiving unemployment compensation benefits from January 9, 2005, until she found employment in May 2005. STS appealed both decisions to the Board of Appeals (“Board”).

By order dated August 1, 2005, the Board remanded the “able, available and actively seeking work” issue to the DLLR Hearing Examiner so that he could take additional evidence concerning the duration and extent of the claimant’s job search. By decision dated August 8, 2005, the Board affirmed the portion of the DLLR Hearing Examiner’s June 14, 2005, ²⁸⁹ decision in which it was found that the claimant had “good cause” within the meaning of section 8-1005 to refuse STS’s job offer. The DLLR Hearing Examiner, on August 25, 2005, held the remand hearing ordered by the Board. 5 After considering additional testimony, the Hearing Examiner, on August 28, 2005, once again affirmed the decision of the claims specialist that the claimant was able, available, and actively seeking work during the period in question. STS appealed this decision.

The Board, by decision dated October 31, 2005, affirmed the August 28 decision of the Hearing Examiner. STS filed two separate petitions for judicial review in the Circuit Court for Baltimore City. The circuit court rejected STS’s contentions in both appeals and affirmed the Board’s decisions. This consolidated appeal by STS followed.

II

The Board’s finding of fact that Long turned down STS’s offer of employment because it was an offer of a seasonal job — and not a permanent one — was supported by substantial evidence. We therefore may not reject the Board’s finding that Long had “good cause” to turn down the job offer unless it is determined that the Board’s “good-cause” finding was wrong as a matter of law. See Thomas v. Dep’t of Labor, Licensing and Regulation, 170 Md.App. 650, 657-58 , 908 A.2d 99 (2006); see also Motor Vehicle Admin, v. Atterbeary, 368 Md. 480, 490-91 , 796 A.2d 75 (2002). We apply the same standards as does the circuit court when reviewing an agency’s legal conclusions and accord “a degree of deference” to the agency’s construction of the statute that it administers.

See Board of Physician Quality Assur. v. Banks, 354 Md. 59, 68 , 729 A.2d 376 (1999); see also ²⁹⁰ Maryland Aviation v. Noland, 386 Md. 556, 571-72 , 873 A.2d 1145 (2005). Sections 8-1005(a) and (b) read, in relevant part, as follows: (a) Grounds for disqualification. — ... [A]n individual who otherwise is eligible to receive benefits is disqualified from receiving benefits if the Secretary finds that the individual, without good cause, failed to: (1) apply for work that is available and suitable when directed to do so by the Secretary; (2) accept suitable work when offered; or (3) return to the individual’s usual self-employment when directed to do so by the Secretary. (b) Determination of suitability. — (1) In determining whether work is suitable for an individual, the Secretary shall consider: (i) the degree of risk involved to the health, morals, and safety of the individual; (ii) the experience, previous earnings, previous training, and physical fitness of the individual; (in) the length of unemployment of the individual and the prospects for securing local work in the usual occupation of the individual; and (iv) the distance of available work from the residence of the individual. (Emphasis added.) When interpreting a statute like the one here under review, it is important to keep in mind the statute’s legislative purpose.

What the Court of Appeals said in Taylor v. Dep’t of Employment & Training, 308 Md. 468, 471-72 , 520 A.2d 379 (1987), is therefore relevant, viz.: As we have often recognized, Maryland’s Unemployment Insurance Law is designed to alleviate the consequences of involuntary unemployment and ease the burden of economic distress. Board of Educ. Mont. Co. v. Paynter, 303 Md. 22 , 491 A.2d 1186 (1985); Employ.

Security Adm. v. Brouming-Ferris, 292 Md. 515 , 438 A.2d 1356 (1982); Sec., Dept. ²⁹¹ Human Resources v. Wilson, 286 Md. 639 , 409 A.2d 713 (1979); Saunders v. Unemp. Comp. Board, 188 Md. 677 , 53 A.2d 579 (1947); [Unemployment] Compensation Board v. Albrecht, 183 Md. 87 , 36 A.2d 666 (1944). To accomplish this important purpose, weekly income benefits are paid to individuals who have become involuntarily unemployed through no fault of their own, and who are otherwise eligible.

In determining the scope of the statute and the eligibility of claimants, we have held that the provisions of the Unemployment Insurance Law should be liberally construed to effectuate its legislative intent, and any disqualifying provisions in the remedial statute should be strictly construed. Saunders v. Unemp. Comp. Board, 188 Md. at 681-683 , 53 A.2d 579 [(1947)].

(Emphasis added.) See also section 8-102 (setting forth the legislative findings and policy of Title 8 of the Labor and Employment Article). About twenty years before Taylor was decided, the Court of Appeals, in Barley v. Maryland Dep’t of Employment Sec., 242 Md. 102, 110 , 218 A.2d 24 (1966), described the purposes of the unemployment compensation statute by quoting at length from Lowell v. Maine Employment Sec. Comm’n, 159 Me. 177 , 190 A.2d 271 (1963), an opinion authored by Justice Williamson of the Supreme Judicial Court of Maine. The Barley court quoted Chief Justice Williamson as follows: “The purpose of the Employment Security Act was well stated by Justice Brennan, then of the New Jersey Supreme Court and now of the Supreme Court of the United States in Krauss v. A. & M. Karagheusian, Inc., [ 13 N.J. 447 , 100 A.2d 277, 281 ]: ‘The Unemployment Compensation Act provides social insurance, for the common good as well as in the interest of the unemployed individuals, against the distress of involuntary unemployment for those individuals who have ordinarily been workers and would be workers now but for their inability to find suitable jobs. (Cited cases omitted) The provisions for eligibility and disqualification are purposed to preserve the fund for the payment of ²⁹² benefits to those individuals and to protect it against the claims of others who would prefer benefits to suitable jobs.

The basic policy of the law is advanced as well when benefits are denied in improper cases as when they are allowed in proper cases. ’[”] Id. (emphasis added). As can be seen, the core purpose of the Maryland Unemployment Compensation statute is to provide unemployment benefits to persons who do not have a job through no fault of their own in order to alleviate the consequences of involuntary unemployment. That purpose is advanced by denying benefits to those who are offered suitable work under terms equal to or better than the job the claimant had before benefits were first sought.

The term “good cause” is not defined in section 8-1005(a)(2) or elsewhere in Title 8 of the Labor and Employment Article of the Maryland Code. Nor, as far as we have been able to determine, is the term defined in other unemployment compensation statutes enacted in our sister states. Nevertheless, an excellent definition of “good cause” utilized in many instances in states with statutory provisions similar to section 8-1005 is “that which would make an ordinarily reasonable individual follow that procedure in the same or similar circumstances.” 6 Allen v. Unemployment Compensation, 160 Ohio App.3d 359 , 827 N.E.2d 378, 380 (2005). ²⁹³ In the case at hand, the Hearing Examiner’s only justification for his “good cause” determination was expressed as follows: EVALUATION OF EVIDENCE The claimant was not in claim status at the time the employer offered her part time employment in April 2004, at the conclusion of the tax season. The claimant was able, available and actively seeking work following her establishment of an unemployment insurance claim in January 2005.

However, when the employer offered the claimant to return to seasonal employment, in January 2005, her refusal of that offer in order to interview for permanent work was made with good cause under Section 8-1005 of the Maryland Unemployment Insurance Law. This precedent has been upheld by the Board of Appeals of the Maryland Department of Labor in the case of Gallagher v. Goodfriend Temporaries, 177-BR-82. Although the Hearing Examiner finds that the employer did make timely notice to the Agency of the claimant’s refusal of employment in January 2005, this does not change the fact that the claimant had good cause for refusing the employment. Because the claimant has met the eligibility requirements of the law, benefits will be allowed and the benefit determination issued by the Claims Specialist will not be modified.

The Board relied on its own decision in Gallagher v. Good-friend Temporaries (Decision No. 1774-Br-82, decided December 21, 1982), as did the Hearing Examiner. Aside from this reliance, the Board gave no indication as to why it concluded that Long had “good cause” to turn down STS’s offer of twelve weeks of full-time employment at a rate of pay $1.50 per hour higher than that received by her when last employed. The Board’s full decision reads: ²⁹⁴ REVIEW OF THE RECORD Upon review of the record in this case, the Board of Appeals adopts the findings of fact and conclusions of law of the Hearing Examiner. In Gallagher v. Goodfriends Temporaries, 1774-Br-82, the Board held that where a claimant refused temporary work in order to interview for permanent work, good cause is supported and no penalty is imposed.

DECISION It is held that the claimant did not fail without good cause, to accept available, suitable work within the meaning of Maryland Code Annotated, Labor and Employment Article, Title 8, Section 1005. No disqualification is imposed under this section of law. Benefits are allowed. The decision of the Hearing Examiner is affirmed.

Gallagher involved a claimant who had worked for several years for an accounting firm earning $18,000 per annum. She was terminated from that job in August 1980. The Board, in its 1982 Gallagher decision, related what happened next: The Claimant then worked sporadically for Goodfriend Temporaries between April of 1981 and October of 1981. She was paid $5.25 per hour for this work.

The Claimant then worked as a temporary management consultant from October 24, 1981[,] until March 3, 1982. She made $11.50 per hour at this job. Goodfriend Temporaries then made several contacts with the Claimant offering her various temporary positions. On March 16, 1982, Goodfriend Temporaries contacted the Claimant with an offer of a temporary job.

The Claimant, however, refused this job because she was interviewing for permanent jobs in Pennsylvania and would not be available until March 22, 1982. Goodfriend Temporaries attempted to call the Claimant on April 2, 1982, but did not reach her. On April 5, 1982, Goodfriend Temporaries contacted the Claimant at 10:00 a.m. in the morning for work which would ²⁹⁵ begin at noon. The Claimant refused the assignment, stating that this was not enough advance notice.

On April 7,1982, substantially the same thing happened. On April 7, 1982, the Claimant was called by Goodfriend Temporaries for a temporary position which would begin on April 8, 1982. She refused the job, citing as a reason the fact that the job was to begin on Good Friday. Good Friday, however, occurred on April 9, 1982, not April 8, 1982.

On April 19,1982, Goodfriend Temporaries called the Claimant concerning a temporary position. The Claimant stated that she was not available for work which began on the same day as the call. (Emphasis added.) In its Gallagher decision, the Board held: CONCLUSIONS OF LAW The question in this case is whether or not the Claimant refused suitable work without good cause, within the meaning of Section 6(d) of the Maryland Unemployment Insurance Law.[ 7 ] Clearly, offers of temporary work may be considered to come under Section 6(d) of the statute. These offers, of course, must be considered along with all the surrounding circumstances.

In this case, the work offered from Goodfriend Temporaries paid less than half the previous salary made by the Claimant. In addition, the work being offered was only temporary, and the Claimant had every reason to devote her efforts to finding more permanent and secure work. On the other hand, the Claimant clearly had done this type of work before and did have some type of obligation to accept suitable work when offered to her. ²⁹⁶ Considering the offer of March 16, 1982, the Board concludes that the Claimant’s reason for refusing temporary work, that she was interviewing in Pennsylvania for a permanent position, is clearly good cause within the meaning of Section 6(d) of the Law. Concerning April 2, 1982, there is no evidence that the Claimant was ever offered any work on that date.

Concerning April 5, 1982, the Board concludes that the Claimant’s reason for refusing the temporary position, i.e.[,] that the position began two hours after the call, was good cause for refusing this type of temporary assignment in these circumstances. The same reasoning applies to the first offer of April 7,1982. Concerning the second offer, on April 7, 1982, for work to begin on April 8, 1982, the Board finds that the Claimant’s stated reason was not even accurate, in that April 8, 1982[,] was not Good Friday. Refusal of this assignment for this reason is not “for good cause” within the meaning of Section 6(d) of the Law.

Considering all of the circumstances, however, the maximum disqualification is not called for in this refusal. The Board concludes that the call of April 19, 1982, was an offer of suitable work, and that the Claimant’s reason did not constitute good cause. The maximum penalty will not be imposed, however, for this refusal either. The Board concludes that an offer of extremely sporadic temporary stop-gap employment paying less than half the rate of which the Claimant was last employed may be an offer of suitable work, but this is not a situation in which the maximum penalty should be imposed.

(Emphasis added.) The DLLR admits in its brief that the Gallagher case “is not on all fours” with the case sub judice. Nevertheless, according to appellee, the “essential principle” of Gallagher was appropriately applied by the Board in the subject case. That “essential principle,” according to appellee, is that “refus ²⁹⁷ ing temporary work to pursue permanent work amounts to good cause” for refusing suitable work. The DLLR reads Gallagher far too broadly.

It must be remembered that the job offered in Gallagher was described as “extremely sporadic temporary stop-gap employment paying less than half the rate of [pay earned while] the Claimant was last employed.” Here, by contrast, the employment offered can scarcely be characterized as sporadic, temporary, or stop-gap because Long was offered twelve weeks of full-time employment at a higher rate of pay than she had earned at her last job. Moreover, as shown by the portion of the Board’s decision in Gallagher discussing the claimant’s refusal to work on April 8 and April 19, 1982, a claimant seeking permanent employment does not have “good cause” to turn down even