KENNETH HOLT, Employee

ART UNLIMITED LLC, Employer

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.

The decision of the administrative law judge is affirmed. Accordingly, the employee is ineligible for benefits beginning in week 3 of 2001, and until four weeks have elapsed since the end of the week of quitting and the employee has earned wages in covered employment performed after the week of quitting equaling at least four times the employee's weekly benefit rate which would have been paid had the quitting not occurred.

Dated and mailed June 20, 2001
holtken . usd : 135 : 1 VL 1054.09

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

The initial inquiry in this case is whether the employee is entitled to unemployment benefits as a result of his employment separation. The employee contends he was laid off. This contention cannot be sustained. As an owner of the business, the employee participated in the decision to cease business operations, doing so on a voluntary basis. Having concluded that the employee voluntarily terminated his employment with the employer, the remaining issue is whether the employee's quitting was for any reason constituting an exception to the quit disqualification found at Wis. Stat. § 108.04(7)(a).

The most relevant statutory exception permitting benefits can be found at Wis. Stat. § 108.04(7)(r) which provides that the quit disqualification does not apply if the department determines that the employee owns or controls, directly or indirectly, an ownership interest, however designated or evidenced, in a family corporation and the employee's employment was terminated by the employer because of an involuntary cessation of the business of the corporation under one or more of the conditions specified in subsection (1)(gm). Some of the relevant factors relating to an involuntary cessation include dissolution of the corporation due to economic inviability, filing for either corporate or personal bankruptcy, assignment for the benefit of creditors, surrender to lien holders or selling the business due to economic inviability.

Thus, while the ALJ may have focused on the bankruptcy issue, as noted by the employee in his petition, she did so in effort to determine whether subsection (1)(gm), applied to the employee's voluntary termination. However, as the ALJ noted, even if the non-subject employer, Kenneth Lynn LLC, were considered a family corporation, the employee has not satisfied the condition found at Wis. Stat. § 108.04(1)(gm). At the time of the hearing, the business had not been dissolved, neither the employee nor the employer had filed for bankruptcy and there had not been a disposition of any assets or sale of the business.

Under the circumstances, it must be held that the employee quit a non-subject employer but not for a reason which would allow payment of benefits. Effectively, the employee quit his job with an out-of-state employer when he participated in the decision to close the business knowing full well that this would result in the loss of his employment. Although the employee may have had valid personal reasons for closing the business, those reasons do not meet any of the exceptions provided for in the statute. The commission is required to apply the statute as it is written and has no authority to deviate from its plain language. While such language results in a decision adverse to the employee, it reflects the Legislature's intent in cases such as these. Accordingly, the commission may not overturn the appeal tribunal decision.

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uploaded 2001/06/21