PHILLIP C. EICKHOFF, Claimant

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 issued a decision on February 7, 2006, which set aside the decision of the ALJ and the department determination underlying it and remanded the matter to the department for further proceedings. The department commenced a proceeding for judicial review of the commission's decision. On December 8, 2006, the Circuit Court for Dane County, the Honorable Richard G. Niess presiding, entered an Order reversing the decision of the commission and remanding the matter to the commission for it to enter an order consistent with the decision of the Wisconsin Court of Appeals in DWD v. LIRC and Mary Robinson et al.,2006 WI App 241, 725 N.W.2d 304.

Pursuant to the Order of the Circuit Court, the commission now makes the following:

The claimant, Phillip Eickhoff, worked for Giddings & Lewis. This case concerns the question of the claimant's eligibility for benefits under the Trade Act, based on a January 7, 2004 certification of Giddings Lewis under the Trade Act (Petition TA-W-53520), following the claimant's layoff in October, 2004.

Giddings & Lewis had been certified as an adversely affected employer under the Trade Act in a prior certification, issued on August 1, 2001 and covering an impact period of from February 22, 2000 to August 14, 2003 (Petition TA-W-38826). In June, 2003, a department representative, Carol Holterman, came to Giddings & Lewis and gave a talk about potential benefits under the Trade Act, encouraging employees to apply for those benefits. At that time, Holterman gave Eickhoff a TAA-855 Form ("Claimant's Request For Determination Of Entitlement To TRA/NAFTA Under The Trade Act Of 1974, As Amended") to fill out. At the top, information about the certification resulting from Petition TA-W-38826, with the 2001-2003 impact date, had been typed in. Eickhoff signed the form on June 18, 2003; the form also bears Holterman's signature at the bottom. It can be inferred from other evidence in the record that Holterman took the form that Eickhoff had signed, and retained it in a department file.

Eickhoff did not receive any benefits under the Trade Act in 2003. He was not even unemployed at the time Holterman came to give her presentation at Giddings & Lewis in June, 2003, and while he did apparently have brief periods of layoff in August and September, 2003, he was recalled to work within a week or two in each case, periods which would have been covered by state unemployment insurance benefits, and he thus never actually received TRA benefits at that time.

The Trade Act has long provided that one of the requirements for eligibility for weekly Trade Readjustment Allowance (TRA) payments, is that claimants must either be enrolled in approved training, have completed such training, or have been granted a waiver of the training requirement. See, 19 U.S.C § 2291(a)(5). Amendments to the Trade Act made by the Trade Adjustment Assistance Reform Act of 2002 added a requirement under the "enrolled in" option of this provision, stating that the enrollment in training which that option concerned had to occur by the 16th week after the claimant's separation, the 8th week after the certification of the employer, or certain other defined dates. For convenience, this will be referred to herein as the "16/8-week deadline".

Giddings & Lewis was re-certified as an adversely affected employer under the Trade Act in a certification issued on January 7, 2004, covering an impact period of August 15, 2003 to January 6, 2006 (Petition TA-W-53520). The amendments to the Trade Act made by the Trade Adjustment Assistance Reform Act of 2002 had been made effective as to claims arising under certifications issued after the effective date of the Act. Because of the date of the new certification of Giddings & Lewis, any benefit claims made under it were subject to those amendments, including the 16/8-week deadline provisions.

In early February, 2004, the department mailed Eickhoff a form letter with information about his potential eligibility for benefits under the Trade Act based on the most recent certification of Giddings & Lewis. The letter informed Eickhoff that he had been scheduled for an appointment on February 10, 2004 to take his application. The text of the letter created the impression that the important deadline was 210 days after the last qualifying separation, suggested that even if the employee did not go to the scheduled appointment he could still "preserve rights" to certain benefits by completing an application at a local job center, described the applicability of the 16/8-week deadline only with respect to enrollment in training, and described the potential availability of a waiver of the training requirement in a way which suggested it could be waived during the period of the worker's UI claim and basic TRA entitlement and without indicating that this was subject to the 16/8-week deadline. In addition, the letter scheduled Eickhoff for an appointment to apply for benefits at a time when he was still employed full time and thus would have been ineligible for TRA payments because he was not unemployed and would also have been unable to participate in training because of his full-time employment. Because he was still working, Eickhoff did not go in to the appointment which had been scheduled for him in February, 2004.

On March 4 the department sent Eickhoff paperwork relating to claiming Trade Act benefits, including a waiver request form, an application for Trade Act benefits and a benefit rights interview form, along with instructions that he should report to a TAA coordinator as soon as possible to get the waiver signed. Copies of this paperwork are not contained in the record, and it is thus cannot be determined if they contained anything referring to or explaining 16/8-week deadline. Eickhoff was still working during this period.

Eickhoff was laid off from his employment with Giddings & Lewis on October 1, 2004. He initiated a claim for unemployment insurance with the department on October 4, 2004.

TRA benefits are paid out by the Unemployment Insurance Division of the department, and the documentation and information regarding Wisconsin employers and employees which is used in administering payment of TRA benefits is on the same computer systems as are used by the department for regular unemployment insurance benefits. The department can identify from those records whether a claimant has been laid off from a certified employer such as Giddings, and use the records to time its invitation to apply for benefits. The Trade Act requires agencies such as the department to advise each worker who applies for unemployment insurance of procedures and deadlines for applying for benefits under the Trade Act, see, 19 U.S.C § 2311(f), and federal regulations promulgated under the Act require agencies such as the department to provide prompt, individualized notice to workers who have been separated from adversely affected and are thus potentially eligible for benefits under the Trade Act, of the procedures and deadlines for applying for such benefits, see, 20 C.F.R. § 617.4(d)(1)(ii).

Eickhoff's separation from employment with Giddings & Lewis on October 1, 2004 was a qualifying separation under the Trade Act, making him potentially eligible for benefits under that Act, and triggering the running of the Act's 16/8-week deadline as to him. The department provided Eickhoff no notice, at or after the time of his separation from Giddings & Lewis and his initiation of a UI benefit claim in early October, 2004, that his entitlement to future benefits under the Trade Act was subject to a deadline that would expire in no more than 16 weeks.

Based on his October 1, 2004 date of separation, the 16/8-week deadline applicable to Eickhoff expired on January 22, 2005.

Eickhoff eventually contacted the department about applying for benefits under the Trade Act in late March, 2005, when his regular UI benefits were running out. He met with a department representative, Gerald Disterhaft, in early April. At that time, Disterhaft had Eickhoff complete a TAA-858 Form ("Application for Training and Additional Allowances While In Training Under The Trade Act Of 1974, As Amended"). Disterhaft completed the "Action On Request For Approved Training Or Waiver Of Requirement" portion of that form to indicate that the training requirement was waived, effective April 3, 2005, on the grounds that "[c]laimant has skills for suitable employment and there is a reasonable expectation of employment in the foreseeable future". Disterhaft signed that form under date of April 7. The grounds for waiver of the training requirement cited in this form was a paraphrasing of one of the six grounds recognized by the Trade Act upon which a waiver of the training requirement may be granted. These grounds for waiver of the training requirement are set out in 19 U.S.C. § 2291(c)(1).

Eickhoff then heard back from the department about a week later that there was a problem, and he went in again and met with Disterhaft again. At this meeting, Disterhaft took the TAA-855 form that had been begun by Carol Holterman in June, 2003 out of a file, made a copy of it, crossed out Holterman's signature and added his own, and completed parts of it that had apparently been left incomplete when Holterman took it. He also completed a more recent version of the TAA-858 form, indicating thereon that a waiver of the training requirement was granted, this time effective April 17, 2005, on the grounds, "worker possesses marketable skills". This was, again, a paraphrasing of the grounds for waiver of the training requirement which is recognized in 19 U.S.C. § 2291(c)(1)(B).

Subsequently, a different representative of the department issued a determination concluding that the claimant was not eligible for TRA benefits or the Health Coverage Tax Credit under the Trade Act, based on the 16/8-week deadline. The determination specifically relied on the grounds that:

The claimant failed to enroll in full-time approved training or to receive a training waiver within the 16th week of his most recent "qualifying" separation or the last day of the 8th week after the certification date.

This determination reflected an interpretation of the 16/8-week deadline according to which it was considered to apply not only to enrollment in training, but also to the matter of a claimant being granted a waiver of the training requirement. Pursuant to this interpretation, the department took the view that it lost the power to grant a waiver of the training requirement once the 16/8-week deadline had passed, without regard to whether any of the conditions stated in 19 U.S.C § 2291(c) which allowed the granting of a waiver of the training requirement, were satisfied. Thus, the department failed to make any formal determination as to whether any of those conditions, such as the "worker possesses marketable skills" grounds recognized in 19 U.S.C. § 2291(c)(1)(B) which had been previously cited by other department representatives, were satisfied.

The claimant appealed the department's determination, arguing that he was given inaccurate information by department representatives, and that he had indeed received a training waiver. Following a hearing, an ALJ acting as an Appeal Tribunal for the department issued a decision on August 12, 2005, reversing that determination. The ALJ held, referencing the commission's decision in Christine L. Tracy (LIRC, January 27, 2005), that the 16/8-week deadline did not apply to the issuance of training waivers and that a claimant who first obtained a waiver after that deadline had run was not disqualified provided that the waiver was appropriate under the applicable statutory criteria.

The department filed a petition for commission review, arguing that its interpretation of the effect of the 16/8-week deadline, reflected in the determination, was correct under the language of the statute. It also argued that the commission should give deference to Training and Employment Guidance Letters ("TEGLs") issued by the U.S. Department of Labor which stated that training waivers had to be issued within the 16/8-week deadline. It also argued that the commission was bound by contract to follow those TEGLs, based on an agreement the department entered into with the U.S. Department of Labor which requires that TEGLs be followed. Finally, the department argued that the ALJ improperly considered equitable estoppel against the department in arriving at his decision.

The Wisconsin Court of Appeals has recently held that the commission is contractually bound to accept and apply the interpretation of the language of the Trade Act which is relied on by the department. DWD v. LIRC and Mary Robinson, et al., 2006 WI App 241, 725 N.W.2d 304. As noted above, the Circuit Court which reviewed the commission's original decision in this matter reversed the commission's decision and remanded the matter to the commission for it to issue an order consistent with Robinson.

Because of the express terms of the mandate in the remand of the Circuit Court in this matter, and also because it is a final decision in a case in which the commission was a party and a published decision of the Court of Appeals, the commission is bound by the Robinson decision. The commission's decision in Christine L. Tracy (LIRC, January 27, 2005), on which the ALJ relied in this matter, was among the decisions reversed by the Court of Appeals in Robinson. Under the interpretation of the relevant provisions of the Trade Act which Robinson holds the commission is required to follow, the fact that the claimant had neither enrolled in full-time approved training or received a training waiver within the 16th week of his most recent "qualifying" separation or the last day of the 8th week after the certification date, requires the conclusion that he was ineligible for TRA benefits. For these reasons, the decision of the ALJ in this matter must be reversed.

Notwithstanding the circumstances described above relative to the department's handling of the claimant's situation, the commission is not free to reach any different result in this case based on equitable considerations. See, Christine L. Tracy (LIRC, January 27, 2005).

As a result of the ALJ's decision reversing the department's determination, the claimant received TRA benefits in the amount of $329 per week for weeks 16 through 41 of 2005, in the total amount of $8,554, for which he was not eligible and to which he was not entitled, within the meaning of and pursuant to 19 U.S.C. § 2315(a)(1). The claimant is required to repay that amount to the department.

The commission therefore finds that the claimant failed to enroll in full-time approved training or to receive a training waiver within the 16th week of his most recent "qualifying" separation or the last day of the 8th week after the certification date and that he was for that reason not eligible for trade readjustment allowances (TRA) under the Trade Act.

The commission further finds that the claimant received TRA benefits for weeks 16 through 41 of 2005, in the total amount of $8,554, for which he was not eligible and to which he was not entitled, within the meaning of and pursuant to 19 U.S.C. § 2315(a)(1), and that the claimant is required to repay that amount to the department.

Based on the foregoing, the commission now makes the following:

The decision of the administrative law judge is reversed. Accordingly, the claimant is not eligible for weekly trade readjustment allowances (TRA) or the Health Coverage Tax Credit (HCTC). The claimant is eligible to apply for training, relocation or job search assistance. The claimant is required to repay the sum of $8,554 to the department.

Dated and mailed February 2, 2007
eickhph2 . trr : 110 : 2 TRA

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

NOTE: Federal law allows waiver of an overpayment of trade readjustment allowances when the overpayment was not the fault of the claimant and recovery would cause extraordinary financial hardship. An application for waiver can be obtained by sending a letter to: Unemployment Insurance Division, TRA Unit, P.O. Box 7095, Madison WI 53707.

20 C.F.R. § 617.55, governing waiver of an overpayments of TRA, provides as follows:

§ 617.55 Overpayments; penalties for fraud.

(a) Determination and repayment. (1) If a State agency or a court of competent jurisdiction determines that any person or individual has received any payment under this part 617 to which the person or individual was not entitled, including a payment referred to in paragraph (b) or paragraph (c) of this section, such person or individual shall be liable to repay such amount to the State agency, and the State agency shall recover any such overpayment in accordance with the provisions of this part 617; except that the State agency may waive the recovery of any such overpayment if the State agency determines, in accordance with the guidelines prescribed in paragraph (a)(2) of this section, that:

(1) (i) The payment was made without fault on the part of such person or individual; and

      (ii) Requiring such repayment would be contrary to equity and good conscience.

(2)(i) (A) In determining whether fault exists for purposes of paragraph (a)(1)(i) of this section, the following factors shall be considered:

(1) Whether a material statement or representation was made by the person or individual in connection with the application for TAA that resulted in the overpayment, and whether the person or individual knew or should have known that the statement or representation was inaccurate.

(2) Whether the person or individual failed or caused another to fail to disclose a material fact, in connection with an application for TAA that resulted in the overpayment, and whether the person or individual knew or should have known that the fact was material.

(3) Whether the person or individual knew or could have been expected to know, that the person or individual was not entitled to the TAA payment.

(4) Whether, for any other reason, the overpayment resulted directly or indirectly, and partially or totally, from any act or omission of the person or individual or of which the person or individual had knowledge, and which was erroneous or inaccurate or otherwise wrong.

(5) Whether there has been a determination of fraud under paragraph (b) of this section or section 243 of the Act.

(B) An affirmative finding on any one of the factors in paragraphs (a)(2)(i)(A) of this section precludes waiver of overpayment recovery.

    (ii) (A) In determining whether equity and good conscience exists for purposes of paragraph (a)(1)(ii) of this section, the following factors shall be considered:

(1) Whether the overpayment was the result of a decision on appeal, whether the State agency had given notice to the person or individual that the case has been appealed and that the person or individual may be required to repay the overpayment in the event of a reversal on appeal, and whether recovery of the overpayment will not cause extraordinary and lasting financial hardship to the person or individual.

(2) Whether recovery of the overpayment will not cause extraordinary financial hardship to the person or individual, and there has been no affirmative finding under paragraph (a)(2)(ii)(A) of this section with respect to such person or individual and such overpayment.

(B) An affirmative finding on either of the foregoing factors in paragraphs (a)(2)(ii)(A) of this section precludes waiver of overpayment recovery.

(C)(1) For the purpose of paragraph (a)(2)(ii) of this section, an extraordinary financial hardship shall exist if recovery of the overpayment would result directly in the person's or individual's loss of or inability to obtain minimal necessities of food, medicine, and shelter for a substantial period of time; and an extraordinary and lasting financial hardship shall be extraordinary as described above and may be expected to endure for the foreseeable future.

(2) In applying this test in the case of attempted recovery by repayment, a substantial period of time shall be 30 days, and the foreseeable future shall be at least three months. In applying this test in the case of proposed recoupment from other benefits, a substantial period of time and the foreseeable future shall be the longest potential period of benefit entitlement as seen at the time of the request for a waiver determination. In making these determinations, the State agency shall take into account all potential income of the person or individual and the person's or individual's firm, organization, or family and all cash resources available or potentially available to the person or individual and the person's or individual's firm, organization, or family in the time period being considered.
 

cc:
Attorney Daniel J. LaRocque
Giddings & Lewis Machine Tools, LLC

Ed. Note: This decision is reproduced here as affected by a technical corrective amendment issued on February 8, 2007

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