STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

JOSEPH P CAHILL, Employee

R L I TECHNOLOGY INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 05401420AP


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

The decision of the administrative law judge is affirmed. Accordingly, the employee is ineligible for benefits beginning in week 16 of 2005, 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 August 5, 2005
cahiljo . usd : 132 : 1   ET 491 VL 1054.09

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

MEMORANDUM OPINION

The employee has petitioned for review of the appeal tribunal decision that found he voluntarily terminated his employment but not for any reason permitting immediate benefit payment. The employee states in his petition that he has been denied unemployment benefits unfairly as he would have been able to draw immediately if he had just given up and filed in February. This is incorrect. Whether the employee filed in February or April he was ineligible for benefits because he participated as a shareholder in the decision to dissolve the corporation. The commission and the courts over the last 30 years have consistently denied unemployment insurance benefits to individuals such as the employee, who are officers and shareholders in a corporation, and participate in the decision to dissolve that corporation.

The commission notes that a potential statutory exception to the quit disqualification does exist if the employee was employed by a family corporation. A family corporation is one in which the employee owns 25 percent or more of an ownership interest in the corporation, or in which 50 percent or more of the ownership interest in the corporation was owned or controlled by certain family members. The employee did not own 25 percent or more of the corporation nor did any family member set forth in Wis. Stat. § 108.04(7)(r) and Wis. Stat. § 108.02(15m), have sufficient ownership interest to constitute a family corporation. Because the employee was not employed by a family corporation, the statutory exception to the quit/disqualification does not apply to the employee.

The employee testified that another owner with a 14 percent interest was allowed benefits. Department records do reflect that that individual was found eligible for benefits. The determination found that that individual had an ownership interest in a family corporation. The commission can only assume, as that case is not before it, that the individual either personally owned sufficient ownership interest or was related to individuals with sufficient ownership interest to constitute a family corporation.

This case does point out a seeming inequity in the law, namely, an individual such as the employee who owns less than 25 percent of a corporation, and who is not related to individuals who own 50 percent or more of the corporation is not eligible for benefits, but an individual who owns 25 percent or more of the corporation, or is related to someone who owns 50 percent or more of the corporation, may be eligible for benefits. The commission cannot change the law and must apply the law as it is written. The commission will bring this seeming inequity to the attention of the Unemployment Insurance Advisory Council which has the ability to recommend UI law changes to the Legislature.



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uploaded 2005/08/08