STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION


KEITH P LEIGHTON, Employee

CORNWELL PERSONNEL ASSOC LTD, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 93605582MW


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

On June 26, 1993, the Department of Industry, Labor and Human Relations (the department) issued an initial determination which found that the employe accepted work which he could have refused with good cause, but quit that work within ten weeks with the same good cause. As a result, benefits were allowed under sec. 108.04 (7)(e), Stats.

The employer filed a timely request for hearing, and a hearing was held before an appeal tribunal on August 11, 1993. Following the hearing, the presiding appeal tribunal issued a decision on August 19, 1993, which reversed the initial determination and found that the employe was ineligible for benefits under sec. 108.04 (7)(a), Stats. The department filed a timely petition for review of the appeal tribunal decision. In its petition the department cited the recent court of appeals decision in Cornwell Personnel Associates v. LIRC and Linde, 175 Wis. 2d 537 (Ct. App., 1993), (hereafter Linde) and another case involving the same employer and substantially the same issue, Glenn Davis v. Cornwell Personnel Associates Ltd., hearing no. 93605549 (Appeal Tribunal Decision dated August 19, 1993). Wisconsin Manufacturers & Commerce (WMC) sought, and was granted, permission to file an amicus brief in this case and the Glenn Davis case. WMC and the department submitted briefs on the petitions in November 1993.

Thereafter, the commission noted that several other cases pending before it involved the same employer and substantially the same issue. The commission associated all the cases for the purposes of review. It also requested further briefing on the issue of whether certain language in the court of appeals' decision in Linde was nonbinding dicta. The department and WMC submitted briefs on that issue in March and April 1994. The department took the position the language was dicta while WMC argued it was not.

Based on the applicable law, records and evidence in this case, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employe began working for the employer, a temporary help agency, on March 8, 1993 (week 11). The employer first assigned him to a one-day placement with a client, a bakery. The employe worked as a packer on first shift and earned $5.00 per hour in this one-day assignment. The employer contacted the employe at 4:20 p.m., on March 8, shortly after he completed his assignment at the bakery. The employer offered the employe his choice of three assignments, all of which were first shift and began the next day, March 9. The first offer was an assignment as a general laborer at a waste management facility at $5.00 per hour. The second offer was an assignment as assembly worker at manufacturing business at $4.25 per hour. The third offer was for assembly work for another manufacturer at $5.00 per hour. The employe refused all three offers: the first because it was outside, the second because it paid too little and the third because it was too messy. Thereafter, the employe refused another assignment on March 16, but eventually accepted an assignment beginning on March 23, 1993.

A certified report from a labor market analyst was introduced into evidence in this case. The report describes the employe's work as similar to that of a laborer and gives data about general labor positions in the Milwaukee metropolitan labor market area. The labor market analyst opined that in that labor market area: the pay range for general labor positions was from $5.00 to $16.00 per hour, the mean pay rate was $9.36, the average entry level rate was $7.21, 95 percent of similar positions pay at least $4.75 to $5.00 per hour, and the lowest quartile of the similar positions pay from $5.00 to $7.10 per hour.

The department's policy is that "any wage that is less than the wage that is at the 25 percent quartile of the population (75 percent of workers earn a wage that is greater than this amount and 25 percent of workers earn a wage that is less than this amount)" is substantially less favorable than prevailing. Job Service and Unemployment Compensation Directive no. 505, 90-5, dated July 27, 1990. Applying that standard, it is clear that the $5 per hour the employe was paid at the bakery and the offered wages of $4.25 and $5.00 were substantially less favorable than prevailing for similar work in the locality.

In most temporary help situations the employment relationship between a temporary help employer and a temporary help worker continues if the temporary help employer offers the worker immediate reassignment after an assignment ends. If the worker refuses the offer of reassignment, however, he or she severs the employment by voluntary termination. In this case, the employe voluntarily terminated his employment with the employer on March 8, 1993 (week 11) by refusing to accept one of the offers made immediately after his first assignment at the bakery ended. Linde, at 175 Wis. 2d 546.

Generally, employes who quit are ineligible for benefits until they requalify for benefits under sec. 108.04 (7)(a), Stats. A number of exceptions to this general rule are set in sec. 108.04 (7)(am) to (o), Stats. The issue in this case is whether any of these exceptions apply to the employe.

The exception that seems most likely to apply in this case is sec. 108.04 (7) (e), Stats. (1)   That exception and the general quit disqualification provision provide as follows:

108.04 Eligibility for benefits. (7) Voluntary termination of employment. (a) If an employe terminates work with an employing unit, the employe is ineligible to receive befits until 4 weeks have elapsed since the end of the week in which the termination occurs and the employe earns wages after the week in which the termination occurs equal to at least 4 times the employe, weekly benefit rate ....

(e) Paragraph (a) does not apply if the department determines ... that the employe accepted work which the employe could have refused under sub. (9) and terminated such work within the first 10 weeks after starting the work.

Section 108.04 (7)(e), Stats., refers to sec. 108.04 (9), Stats., which provides in relevant part:

108.04 (9) Protection of labor standards. Benefits shall not be denied under this chapter to any otherwise eligible individual for refusing to accept new work under any of the following circumstances:

(b) If the wages, hours (including arrangement and number) or other conditions of the work offered are substantially less favorable to the employe than those prevailing for similar work in the locality.

Under the relevant part of sec. 108.04 (7) (e), Stats., a worker who accepts a job that he could have refused under sec. 108.04 (9), Stats., may quit that work within ten weeks of starting it and remain eligible for benefits. This "quit/labor standards" exception was enacted to encourage a worker to accept, on a trial or experimental basis, work which he or she could otherwise refuse under sec. 108.04 (9), Stats. If the worker later decides to quit, and does so within ten weeks, he is no worse off than he would have been had he refused the nonprevailing work in the first place.

One of the reasons an employe may refuse new work under sec. 108.04 (9)(b), Stats., and thus may quit that work within 10 weeks under the quit/labor standards exception, is that the work pays a wage that is substantially less favorable to the individual than the prevailing wage for similar work. As noted above, the employer paid the employe the $5.00 per hour wage in his first assignment at the bakery. This wage and the wages for each of the assignments offered were in the quartile of workers in similar positions. Therefore, the commission concludes the wages were substantially less favorable to employe than the wages that prevailed in the locality for similar work.

Neither the statute nor past commission and court precedent require that wages need actually be stated as a reason for quitting for sec. 108.04 (7) (e), Stats., to apply. (2)   In addition, nothing in sec. 108.04 (7) (e), Stats., suggests that it does not apply to temporary help employment. The general argument that the labor standards provision under sec. 108.04 (9), Stats., applies only to "new work" would not ordinarily prevent the application of the quit/labor standards exception. The exception by its terms deals with quitting an existing employment relationship, not starting "new work." That is, application of sec. 108.04 (7)(e), Stats., ordinarily does not depend upon an offer of new work, but rather on a quit from work which could have been refused without disqualification when originally offered. Because the employe quit his work with the employer within ten weeks after starting it, and because the wage paid to the employe throughout that employment was substantially less favorable than prevailing, one might easily conclude sec. 108.04 (7)(e), Stats., applies in this case

Indeed, the majority of this commission in Linde applied the "quit/labor standards" exception to a quit by a temporary help worker who refused three assignments that were offered immediately upon completion of the first assignment and within ten weeks of re-employment. The majority's view treated the worker's employment relationship with the temporary help employer as being the "work" for the purposes of determining whether the worker quits "such work." Thus, the "work" or employment relationship with the temporary help employer would ordinarily continue beyond the completion of one assignment into subsequent assignments or offers.

The department's current construction of the statute is similar to the commission's position in Linde. It recently issued a directive instructing its adjudicators to apply the quit/labor standards provision to second and successive assignments by temporary help employers, so long as the quit occurs within the first ten weeks after hire, "even though the new assignment is within the original contract of hire." DILHR Unemployment Compensation Directives no. 93-28, dated May 5, 1993, and no. 93-28 supp. 1, dated July 15, 1993.

However, any attempt to apply sec. 108.04 (7)(e), Stats., in a case involving a temporary help employer must take into account language discussing that exception from the court of appeals' decision in Linde. Because the Linde case allowed benefits under the "good cause attributable" exception, section 108.04 (7)(b), Stats., no discussion of the "quit/labor standards" issue was actually necessary to decide the case. Indeed, the court of appeals acknowledged that its determination on the quit/labor standards issue was not dispositive. Linde, at 175 Wis. 2d 549. Nonetheless, the court went on to "offer [its] reading of the section because both parties briefed the issue and it is reasonable to expect that, if the issue is not now addressed, it will be raised repeatedly in the future." Linde, at 175 Wis. 2d 549. In addition, the commission acknowledges that its decision, which was ultimately affirmed by the court of appeals, was based alternatively on sec. 108.04 (7)(e), Stats.

Mr. Linde had been indefinitely laid off following a long term assignment. Thereafter, he was offered and accepted an assignment at Production Stamping that paid a substantially less favorable than prevailing wage. The Production Stamping assignment lasted one week, at which time he was immediately offered three other assignments, all of which also paid substantially less favorable than prevailing wages. The court of appeals stated:

... Linde was regarded as being indefinitely laid off before he accepted the Production Stamping job. Thus, Linde's Production Stamping job is regarded as "new work" under [sec. 108.04 (9), Stats.]

...[LIRC applied sec. 108.04 (7)(e), Stats., to the three offers made after the Production Stamping job ended] because: (1) the wages were substantially less favorable than those prevailing for similar work in the locality; and (2) he terminated his work with Cornwell within ten weeks of starting the work.

We do not agree with LIRC's interpretation of [sec. 108.04 (7)(e), Stats.] Specifically, the section states that the employee must terminate "such work", (as opposed to the employer, Cornwell), within ten weeks after starting the work. "Such work" is referring to the "new work" under sub. (9). Linde terminated the employment relationship between Cornwell and himself by refusing to accept the three job offers. These job offers did not constitute "new work" since Linde was not indefinitely laid off when these offers were made. Moreover, Linde did not terminate the Production Stamping job (which was "new work"); rather, Production Stamping did. Thus, sec. 108.04 (7)(e), Stats., is inapplicable ....

Linde, at 175 Wis. 2d 550-51 [emphasis in original; footnote omitted.]

The court of appeals does not characterize a worker's whole employment relationship with the temporary help employer as "such work." Instead it appears to treat each discrete assignment given to a temporary help worker by the temporary help employer as being different "work" which is neither "such work" or "new work" when compared to the original assignment. That is, the wording of its decision indicates that the court of appeals treated Mr. Linde's assignment at Production Stamping as the "new work" (and later "such work" for comparison purposes), not Mr. Linde 's job with the temporary help employer which continued after the first assignment ended.

The court of appeals in effect concluded that, in temporary help situations, the "quit/labor standards" exception applies only to the first assignment a temporary help worker receives upon starting "new work" with the temporary help employer. Quitting by refusing or leaving the second and subsequent assignments would not be covered under the court of appeals reasoning, unless the second and subsequent assignments themselves constituted "new work." Further, the Linde court affirmed the commission's practice of not automatically regarding second and successive assignments from a temporary help employer as "new work". Linde at 175 Wis. 2d 550. (3)

Thus, the court of appeals' construction of sec. 108.04 (7) (e), Stats., has a much narrower application than that of the department or of the majority of this commission in Linde.   Nonetheless, among the commission, the department and the court of appeals, it is the interpretation of the court of appeals that must prevail if it is made as a judicial act of that court resulting in a binding decision.

The department argues that the court of appeals' discussion of sec. 108.04 (7)(e), Stats., in the Linde case is nonbinding dicta. The Wisconsin supreme court has defined "dictum" as a statement not addressed to the question before the court or necessary for its decision. The supreme court went on to state that it is not bound by its own dicta. American Family Mut. Ins. Co. v. Shannon, 120 Wis. 2d 560, 565 (1984). Indeed, the court has often declined to follow earlier dicta upon closer and more careful consideration of the issue. Reiter v. Dyken, 95 Wis. 2d 461, 474 (1980).

Many courts including the Wisconsin appellate courts have distinguished between "obiter dicta", "judicial dicta" and "nondicta" (remarks that seem like dicta but are not). The Wisconsin supreme court long ago stated that:

[W]hen a court of last resort intentionally takes up, discusses, and decides an issue germane to, though not necessarily dispositive of, the controversy, such decision is not a dictum but is a judicial act of the court which it will thereafter recognize as a binding decision.

Chase v. American Cartage Co., 176 Wis. 235, 238 (1922). The supreme court has adhered to that rule through the years. See: State v. Kruse, 101 Wis. 2d 387, 392 (1981); Beloit Corp. v. ILHR Department, 63 Wis. 2d 23, 31 (1974). The court of appeals has restated the rule as: "[t]he decision of a court of last resort is not dictum, even if it is not decisive of the primary issue, if it is germane to that issue." State v. Lange, 158 Wis. 2d 609, 625 (Ct. App. 1990). See also: State v. Lee, 119 Wis. 2d 355, 359 (Ct. App. 1984), affirmed, 122 Wis. 2d 266 (1985); Madison v. Madison Police Assn., 138 Wis. 2d 360, 364 (Ct. App. 1987), reversed on other grounds, 144 Wis. 2d 576 (1988) and Kuehnen v. Musolf, 143 Wis. 2d 134, 147 (Ct. App. 1988).

Moreover, the court of appeals has cited Kruse and Chase for the proposition that "[m]atters not decisive to the primary issue of presented but germane to that issue are not dictum, and are a judicial act of the court which it will recognize as a binding decision." State of Louisiana ex re. Eaton v. Leis, 120 Wis. 2d 271, 277 (Ct. App. 1984); Luhman v. Beecher, 144 Wis. 2d 781, 787 (Ct. App. 1988). See also: State ex rel.Newspapers v. Showers, 128 Wis. 2d 152, 166 note 2 (Ct. App. 1985), reversed on other grounds, 135 Wis. 2d 77 (1987); Prof. Offices Bldg. v. Roya1 Indemn., 145 Wis. 2d 573, 588 (Ct. App. 1988) and Gordie Boucher Lincoln Mercury v. J & H Landfill, 172 Wis. 2d 333, 338 note 6 (Ct. App. 1992). The wording in these decisions refer simply to "the court" deciding the matter, not specifically a court of last resort or the supreme court.

In another case, the court of appeals went a step further and stated that:

When an appellate court intentionally takes up and decides an issue on a question germane to a controversy, such a decision is not a dictum but a judicial act of the court which it will thereafter recognize as binding decision.

State v. Holt, 128 Wis. 2d 110, 118 (Ct. App., 1985) [underlining supplied].

The court of appeals' discussion of the quit/labor standards issue in Linde, while not dispositive, was germane. Discussion of the issue was relevant and appropriate, given that both sides briefed the issue to the court of appeals and that it was offered as an alternative basis for affirming the commission's decision. In the Linde case, the controversy concerned benefit eligibility, the application of the good cause attributable exception was decisive, and the decision on the quit/labor standards issue germane.

The commission appreciates the department's position that a germane matter should be narrowly regarded as one that is made as part of the reasoning of the dispositive issue in a case. The commission does not dispute the department's analysis of the cases it cites in its brief as support for that proposition. However, the language of the Chase rule indicates a fairly broad meaning for a "germane" issue, given its distinction from a "decisive" issue, in relation to a controversy. Further, the courts have applied the Chase rule in cases where a court went well beyond resolving the decisive matter to discuss the germane one. See, for example, the reference in State v. Lange, 158 Wis. 2d 609, 625 (Ct. App., 1990) to the alleged dicta discussion of the supreme court in Murray v. United States, 487 U.S. 533 (1987).

The Chase rule requires that the germane issue be taken up, discussed and decided by a "court of last resort." Our state supreme court has addressed this issue directly. The court has stated that, "under (Wisconsin's) two-tiered appellate system, the court of appeals is destined to be the court of last resort in most cases." State v. Schumacher, 144 Wis. 2d 388, 407-08 (1988), citing to Appellate Practice and Procedure in Wisconsin, sec. 1.2 (1986). See also: Vollmer v. Luety, 156 Wis. 2d 1, 15 (1990). These decisions indicate that the court of appeals is "the court of last resort" in cases which the supreme court does not review.

Although it may seem inconsistent to apply the Chase rule to a court whose function is error-correcting, not law-developing, the fact remains that the court of appeals was the court of last resort in the Linde case. As a result, its construction of sec. 108.04 (7) (e), Stats., is binding until over-ruled by another appellate court decision or legislation. The commission now withdraws statements in earlier decisions (4)   suggesting that the court of appeals' construction of sec. 108.04 (7) (e), Stats., in Linde was merely dicta.

Returning to the facts of the case at hand, the commission must conclude that the offers of reassignment on March 8 were neither "new work" nor "such work" under the Linde decision. Just as in Linde, the employe did not quit the bakery; that placement ended when the employe finished the job. Nor was the employe indefinitely laid off between assignments. In sum, this case is factually indistinguishable from the Linde case in which the court of appeals determined that the quit/labor standards exception under sec. 108.04 (7) (e), Stats., did not apply. Consequently, the commission determines that the exception under sec. 108.04 (7)(e), Stats., is inapplicable here as well.

The commission therefore finds that in week 11 of 1993, the employe terminated his work with the employing unit, within the meaning of sec. 108.04 (7)(a), Stats., and that his quitting was not for any reason constituting an exception to that section.

DECISION

The appeal tribunal decision is modified to conform to the foregoing and, as modified, is affirmed. Accordingly, the employe is ineligible for benefits beginning in week 11 of 1993, and until four weeks have elapsed since the end of the week of quitting and he has earned wages in covered employment performed after the week of quitting equalling at least four times his weekly benefit rate which would have been paid had the quitting not occurred. There is no overpayment and the department has informed the commission that the employe requalified as of week 25 of 1993.

Dated and mailed June 29, 1994
101 : CD8000  SW 844  VL 1025

/s/ Richard T. Kreul, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The majority of the commission wishes to note that if it were not bound by precedent it would have allowed benefits under sec. 108.04 (7)(e), Stats., in this case consistent with the commission's holding in Linde v. Cornwell Personnel Associates, hearing no. 89-604101MW (LIRC, June 27, 1991). The majority was surprised by the result reached by the court of appeals on this issue in Linde and cannot agree with the legal analysis of the court therein. (5)   The commission did not file a petition for supreme court review in Linde because its decision allowing benefits was affirmed and because it considered the court of appeals discussion of this point to be dicta. Indeed, it appears that the commission would probably have been unsuccessful in any attempt to petition for supreme court review, since the Linde decision affirmed the commission and was technically not adverse to it.  Section 808.10 and Rule 809.62 (1), Stats. Nonetheless, the majority now concludes reluctantly that the language in question was not dicta, but part of a binding, judicial act of a reviewing court in a published decision.

 

PAMELA I. ANDERSON, CHAIRMAN, (Concurring):

I agree in the result but I write separately because I have differences with the majority in this area of the law. I agree that the court of appeals should be followed on the question of whether one should apply "new work" for additional assignments. The result in Linde was controlled by the majority's fact finding that he quit with good cause attributable because the job offers had reduced wages.

I have tried to consistently apply Section 108.04 (7)(f) when an employer transfers an employe to a job paying less than two-thirds of his immediately preceding job. Thus, I have been reluctant to apply a good cause attributable standard to reductions in wages that are less than contemplated in (f). I do find that the good cause attributable standard applies if there was an agreement between the temporary help agency and the employe that the employe would only take work paying $5.00 per hour or more and the employer violates the agreement.

The employe knew that he would receive a variety of assignments when he applied for work at the temporary help agency. The employe could have limited the kinds of work he would accept and the amount of pay he required to take a particular job.

It is good cause attributable when the employer violates a condition of hire. If the employer agrees to allow the employe a particular day off or only schedule him on certain shifts, that agreement can only be changed by mutual consent. If the employer changes the agreement unilaterally and the employe quits for that violation of the conditions of hire, then there is good cause attributable to the employer for the employe to quit. Unlike the majority, without the Linde decision I would have looked at these assignments to see if they were substantially less favorable to the individual than those prevailing for similar work in he locality. The analysis would include looking narrowly at the wages for similar work not just the large category called "general labor" which is so broad as to be meaningless. Did this individual have a history of low paying jobs and was he an entry level employe? The purpose of the labor standards provision is to prevent artificial lowering wages. An employe who never has worked above the minimum wage is not treated less favorably when he is offered a temporary help job at $5.00 per hour. An employe who has earned $10.00 an hour will likely be treated substantially less favorably when he is offered a job that pays $5.00 an hour if the prevailing rate for those jobs in the employe's labor market is $7.00.

I agree with the result that Linde requires that we find the employe quit and not within an exception to allow the immediate payment of benefits.

Pamela I. Anderson, Chairman

cc:
Gregory Frigo/Joyce Mahan
Bureau of Legal Affairs

James Buchen
Wisconsin Manufacturers & Commerce


[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]


Footnotes:

(1)( Back ) Only one of the offers involved a reduction in wages. The employe, who did not appear at the hearing, failed to establish that his reasons for refusing the other offers amounted to good cause attributable to the employer under sec. 108.04 (7)(b), Stats. Consequently, that exception does not apply in this case.

(2)( Back ) Continents Travel Agency, Inc. v. LIRC and Piotrowski, Dane County Circuit Court, case no. 88-CV-5764 (April 27, 1989), slip opinion at page 6 and 7; June R. Hoff v. Manipower Temporary Services of Eau Claire, (LIRC, 12/11/89); Marvin A. Bush v. Milwaukee Personnel World, (LIRC 2/19/91);  Memorandum no 324 to District Examiners from Wisconsin Industrial Commission, page 2 (August 2, 1950); Federal Security Agency, Social Security Administration, UC program letter no. 130 (June 6, 1947); and DILHR's UC Manual, volume 3, part vii, chapter 1 pages 47-48.

(3)( Back ) The court of appeals noted that a second assignment could be new work if it is made after an indefinite layoff, citing Allen-Bradley v. DILHR, 58 Wis. 2d 1, 6 (1973) . The commission has also recognized that a subsequent assignment, even if made immediately, would be "new work" (triggering the direct application of sec. 108.04 (9) (b), Stats.,) if "the duties, terms or conditions of the work offered by an employer are not consistent with the existing contract of hire between the employer and the worker." Kabacinski v. Cornwell Personnel Associates. Ltd., case no. 89601811MW (LIRC, January 18, 1990). In this case, of course, there was no indefinite layoff, and the record does not establish that the assignments offered were outside the original contract of hire.

(4)( Back ) Notably Shane Dupor, supra, and John Hwaleck, supra.

(5)( Back ) One effect of the court of appeals' interpretation of sec. 108.04 (7)(e), Stats., is to cut off the application of the exception early in the large number of cases where a first assignment lasts less than ten weeks. The court of appeals' decision opens the door to manipulation by less scrupulous employers who might deliberately give very short initial assignments, although the commission by no means suggests such manipulation occurred in this case. At the very least, the court of appeals' interpretation treats a temporary help worker differently than a worker employed by a more traditional employer and who always gets the full ten weeks of protection. Likewise, under the Linde decision, a temporary help employe fares worse than a worker who simply applies on his own to different employers. Finally, the court of appeals' decision suggests that immediate offers of successive placements are neither the same work as that originally offered by the temporary help employer nor "new work." The majority has difficulty following that reasoning.


uploaded 2001/03/14