FELDMAN,
APPELLANT,
vs.
LOEB ET AL.,
APPELLEES
No. 51950
COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, CUYAHOGA
COUNTY
525 N.E.2d 496, 37 Ohio App. 3d 188
April 6, 1987, Decided
HEADNOTE
Unemployment compensation -- Attorneys at law -- Attorney
refuses to accept an offer of new work with just cause, when --
Reduction in benefits -- No reduction for "release" of funds in
employer-financed KEOGH plan, when.
SYLLABUS
1. A claimant seeking unemployment compensation should not be
required to accept proffered new employment immediately, at a
substantially lower rate of pay. (R.C. 4141.29[D][2][b], [E] and
[F], applied.)
2. R.C. 4141.31(A) requires a reduction in benefits for a
particular week of unemployment only if remuneration is received
"with respect to such week," i.e., the
remuneration must be allocable to the period of unemployment. Thus,
where an employer has lost all control of contributions paid to his
employee's KEOGH plan prior to the employee's separation from
employment, the employer cannot allocate the funds in the KEOGH
plan to the weeks of the claimant's unemployment. (R.C. 4141.31[A]
[3], applied.)
COUNSEL
Crede C. Calhoun, for appellant.
Patrick R. Hanrahan, for appellee Lawrence
R. Loeb.
Anthony J. Celebrezze, Jr., and
Renee Scott Chestang, for appellee Administrator,
Ohio Bureau of Employment Services.
JUDGES
McMANAMON, J. NAHRA, P.J., and DAVID T. MATIA, J., concur.
AUTHOR: MCMANAMON
OPINION
{*188} This dispute over unemployment compensation arose
between two attorneys, appellant Marvin J. Feldman ("the employer")
and appellee Lawrence R. Loeb ("the claimant"). The employer,
ostensibly dissatisfied with the parties' salary arrangement,
cancelled the employment contract and offered to retain the
claimant on a "commission" basis. The claimant balked and filed for
unemployment compensation benefits.
The Administrator of the Bureau of Employment Services, an
appellee herein, allowed the claim. The {*189} employer
appealed to the board of review, and a referee of the board
modified part of the administrator's determination but affirmed the
claimant's entitlement to benefits. The board disallowed further
appeal, and the court of common pleas affirmed the board's
decision. The employer timely appeals and presents two assignments
of error, neither of which mandates reversal.1
In his first assignment of error, the employer contends the
claimant refused suitable employment and should have been
disqualified from receiving benefits. R.C. 4141.29 states in
part:
"(D) Notwithstanding division (A) of this section, no individual
may serve a waiting period or be paid benefits under the following
conditions:
"* * *
"(2) For the duration of his unemployment if the administrator
finds that:
"* * *
"(b) He has refused without good cause to accept an offer of
suitable work when made by an employer either in person or to his
last known address * * *.
"* * *
"(E) No individual otherwise qualified to receive benefits shall
lose the right to benefits by reason of a refusal to accept new
work if:
"* * *
"(4) The remuneration, hours, or other conditions of the work
offered are substantially less favorable to the individual than
those prevailing for similar work in the locality.
"(F) * * * [I]n determining whether any work is suitable for a
claimant in the administration of sections 4141.01 to 4141.46 of
the Revised Code, the administrator shall, in addition to the
determination required under division (E) of this section, consider
the degree of risk to the claimant's health, safety, and morals,
his physical fitness for the work, his prior training and
experience, the length of his unemployment, the distance of the
available work from his residence, and his prospects for obtaining
local work.">
The referee's findings of fact are largely undisputed. In
September 1981, the parties executed an employment contract which
provided the claimant with a starting salary of $ 24,000, rising to
$ 28,000 for 1982. The benefits included paid medical insurance,
two weeks of paid vacation, automobile expenses, and a KEOGH
account into which the employer would contribute an amount equal to
fifteen percent of the claimant's salary. Although the employer's
office was open from 9:00 a.m. to 5:00 p.m., the claimant was
expected to work longer hours when necessary. all files and fees
were deemed the property of the employer, who retained a right of
control over all cases.
During 1982 the employer grew dissatisfied with the arrangement
for reasons not pertinent to this appeal. {*190} On
January 25, 1983, three weeks after the execution of a new but
substantially similar contract, the employer notified the claimant
of his intent to cancel the contract. The employer proposed a new
agreement in which the employer would provide office and
secretarial facilities and, in exchange, the claimant would be
permitted to retain fifty percent of any fees he generated. All of
the claimant's contract benefits under the previous contract would
be terminated. When the claimant rejected the offer, the employer
proposed to guarantee the claimant a draw of $ 1,000 per month, and
the difference, if any, between this amount and the claimant's
monthly fees would be repaid to the employer at the end of the
year. Again the claimant rejected the offer.
The referee, in applying R.C. 4141.29(E)(4), found that the
remuneration, hours, and other conditions of the employer's
proposal were not substantially less favorable than those
prevailing in the Greater Cleveland area. This finding is
problematic because no evidence was presented on the issue at the
hearing. Nonetheless, we deem this error inconsequential because
the referee based his determination on other grounds.
The referee found the proposed employment unsuitable because the
claimant would have suffered a substantial reduction in pay. The
referee compared the claimant's 1982 income -- the $ 28,000 salary,
$ 4,200 KEOGH contribution, and various benefits -- with the figure
of $ 21,439.07, an amount representing "commissions" the claimant
would have earned if the new proposal had been in effect during
1982. The unsuitability was heightened, the referee reasoned, by
the relatively brief "length of his unemployment," a factor to be
considered under R.C. 4141.29(F).
The suitability of employment in this context is mainly a
question of fact. Pennington v. .
Dudley (1967), 10 Ohio St. 2d 90, 39 O.O. 2d 94, 226
N.E.2d 738, paragraph two of the syllabus; Pratt
v. . Kirby Co. (1984), 19 Ohio App. 3d 188, 19 OBR
296, 482 N.E.2d 1318. The determination of this factual issue is
primarily within the province of the referee and the board of
review. Brown-Brockmeyer Co. v. .
Roach (1947), 148 Ohio St. 511, 518, 36 O.O. 167, 170, 76
N.E.2d 79, 84. Thus, the scope of review is necessarily
circumscribed: "A reviewing court can not usurp the function of the
triers of fact by substituting its judgment for theirs. * * *"
Simon v. . Lake Geauga Printing
Co. (1982), 69 Ohio St. 2d 41, 45, 23 O.O. 3d 57, 60, 430
N.E.2d 468, 471. The board's determination need only be supported
by "some competent, credible evidence." C.E. Morris
Co. v. . Foley Constr. Co. (1978), 54
Ohio St. 2d 279, 8 O.O. 3d 261, 376 N.E.2d 578, syllabus;
Central Ohio Joint Vocational School Dist. Bd. of
Edn. v. . Ohio Bur. of Emp. Serv. (1986),
21 Ohio St. 3d 5, 8, 21 OBR 269, 271-272, 487 N.E.2d 288, 291. The
standard to be employed by the court of common pleas is whether the
decision was "unlawful, unreasonable, or against the manifest
weight of the evidence," R.C. 4141.28(O), and our role is to
determine whether the court abused its discretion.
Angelkovski v. . Buckeye Potato Chips
Co. (1983), 11 Ohio App. 3d 159, 11 OBR 242, 463 N.E.2d
1280.
In concluding that the claimant would incur a substantial
reduction in pay, the referee recognized that any attempt to
calculate an approximate figure would be inherently speculative.
The fees generated by the claimant under the salary arrangement
provide an unsatisfactory basis for comparison because the claimant
presumably lacked the incentive to generate fees as he necessarily
would have had to do under a pure commission contract.
{*191} However, the parties presented a great deal of
testimony about the claimant's 1982 performance. This evidence,
considered with the fees he did generate, reasonably supports the
referee's determination that the claimant would have incurred, at
least initially, a substantial reduction in income.
The employer points out that the statute does not expressly
allow consideration of a reduction in income. Under the literal
terms of the statute, the new rate of pay is relevant only when
compared to the remuneration "prevailing for similar work in the
locality." R.C. 4141.29(E)(4). A review of the case law, however,
demonstrates that this reading of the statute is unsupportable.
There is ample authority for permitting the referee to consider
the claimant's reduction in pay. See, e.g., Palmer
v. . State Bur. of Unemp. Comp. (C.P. 1961), 90
Ohio Law Abs. 545, 19 O.O. 2d 363, 177 N.E.2d 806;
Leach v. . Bd. of Review (1963),
3 Ohio App. 2d 314, 32 O.O. 2d 425, 210 N.E.2d 395, disapproved on
other grounds in Pennington, supra; Bortz v.
. Lakewood Foods Serv. (May 22, 1980), Cuyahoga
App. No. 41010, unreported; Watson v. .
Bd. of Review (Feb. 28, 1986), Trumbull App. No. 3503,
unreported.
Although the issue of whether the statute permits consideration
of the pay reduction is a question of law, the further
determination of whether the change in pay or other conditions
renders the employment unsuitable is a factual issue within the
province of the board of review. We hold that the board's
determination in this case is supported by some competent, credible
evidence. The claimant was faced not only with a material reduction
in pay, but with an inability to determine the extent of that
reduction.
We further agree with the conclusion, implicit in the referee's
findings, that a claimant should not be required to accept
proffered new employment immediately, at a substantially lower rate
of pay. However, in making this observation we are mindful of the
procedural posture of this case, and that this issue too is within
the board's discretion. See Pennington, supra, at
95-96, 39 O.O. 2d at 97, 226 N.E.2d at 742 (finding error where the
reviewing court reversed the board of review and held as a matter
of law that new employment offered prior to the claimant's
separation was not suitable employment).
Accordingly, the employer's first assignment of error is not
well-taken.
In his second assignment of error, the employer contends the
claimant's unemployment compensation benefits should have been
offset by the pension funds in the claimant's KEOGH account. R.C.
4141.31 states in part:
"(A) Benefits otherwise payable for any week shall be reduced by
the amount of remuneration a claimant receives with respect to such
week as follows:
"* * *
"(3) * * * payments in the form of retirement, or pension
allowances under a plan wholly financed by an employer which
payments are paid either directly by the employer, or indirectly
through a trust, annuity, insurance fund, or under an insurance
contract whether payable upon retirement, termination, or
separation from employment * * *."
The referee found that the KEOGH account did not constitute a
"payment" by the employer. The referee's determination was based in
part on his finding that the claimant could not withdraw the monies
without incurring a penalty.
We agree with the referee's ultimate disposition of this issue,
but for different reasons. R.C. 4141.31(A) requires a reduction in
benefits for a particular week of unemployment only if remuneration
is received "with {*192} respect to such week." The
statute clearly requires that the remuneration be allocable to the
period of unemployment. The allocability is ensured by the
requirement under paragraph "(A)(3)" that the remuneration be
"payable upon retirement, termination, or separation from
employment * * *." It may be unnecessary that the claimant actually
receive the payment during the period of unemployment, but some
nexus between the receipt and the unemployment is essential.
The distinction is illustrated by Budd Co. v.
. Mercer (1984), 14 Ohio App. 3d 269, 14 OBR 298,
471 N.E.2d 151. In Budd Co., the employer
attempted to allocate the employees' vacation payments to the
plant's shutdown period. Since vacation payment operates under
certain conditions to reduce unemployment compensation pursuant to
R.C. 4141.31(A)(5), the employees' claims for benefits were denied.
The appellate court determined that the purported vacation payments
were in fact bonuses and not within the purview of R.C. 4141.31.
The court commented, "* * * [f]urther, the 'vacation payments'
which appellants herein actually received were not related to an
ascertainable week during which appellants lost wages. * * *"
Id. at 277, 14 OBR at 307, 471 N.E.2d at 159.
A similar lack of relation is patent in the case at bar. The
parties stipulated during the hearing that the employer "lost all
control" over the KEOGH funds on January 1, 1983, and that the
funds were thereafter under the exclusive control of the claimant.
Since the employer did not present the new offer to the claimant
until January 25, 1983, we find no basis for allocating the monies
to the subsequent period of unemployment. The fact that the
employer did not transfer the KEOGH passbooks until February 28,
1983 is not material to the issue; the passbooks were mere
memorializations of something the employer no longer owned.
Accordingly, the employer's second assignment of error is not
well-taken. The decision of the court of common pleas is
affirmed.
Judgment affirmed.
DISPOSITION
Judgment
affirmed.
OPINION
FOOTNOTES
1 The assignments of error are:
I
"The court erred in affirming the conclusion of the referee that
the offer of employment was unsuitable because of the length of the
claimant's unemployment even though the terms of employment offered
by appellant were similar to those prevailing for similar work in
the locality."
II
"The referee erred in concluding that the delivery to claimant
of two saving deposit books totally paid for by the appellant in a
KEOGH Pension Plan did not constitute 'payment' to claimant of the
amount deposited under Revised Code Section 4141.31(A)(3)."