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


STEVE D MROZ, Claimant

TRADE ACT DECISION
Hearing No. 00605191MW


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 makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

This case arises under the Trade Act of 1974, 19 U.S.C. § 2101 et seq., a federal law intended to ameliorate the effects on workers from foreign competition which adversely affects businesses in the U.S. The Trade Act provides various benefits to workers displaced by the effects of foreign competition, one of which is "trade readjustment allowances" (TRA), which are, like unemployment insurance benefits, weekly payments intended to partially replace lost wages. (1) The claimant in this case has been determined to be potentially eligible for TRA benefits, and this is not in dispute. Rather, the issue presented concerns the determination of the weekly amount of those benefits.

Background - The claimant initiated a claim for unemployment insurance benefits and as a result, a benefit year was established for him which covered the period from week 43 of 1998 through week 42 of 1999. The benefit rate established for this benefit year was $226 per week, and the potential benefit entitlement during this benefit year was 26 weeks of benefits.

The claimant claimed and received benefits during a number of weeks, and he then returned to work at some point. After he was laid off again, in week 41 of 1999, he resumed claiming unemployment insurance benefits, and he received benefits for week 42 of 1999.

Because of the fact that the claimant had returned to work at some point, he did not end up claiming all 26 weeks of benefit entitlement in his benefit year. His claim for week 42 of 1999 was only the 13th week for which he had claimed benefits. That week was also the last week of the benefit year (week 43 of 1998 to week 42 of 1999) that had been established for the claimant when he filed his claim in 1998.

Even though he had only claimed and received 13 of the 26 weeks of benefit entitlement which had been determined for him when he filed his claim in 1998, with the expiration of his benefit year as of the end of week 42 of 1999, claimant had no further entitlement to the remaining 13 weeks of (unclaimed) benefit entitlement for that benefit year. (2) However, as of week 43 of 1999, claimant was eligible to establish a new benefit entitlement and a new benefit year, because he had been employed for a sufficient number of weeks in the previous year (as a result of having been recalled to work) to qualify. The department established a benefit year for him extending from week 43 of 1999 through week 42 of 2000. The benefit rate applicable to this benefit year, was $297 per week. Again, the claimant's potential benefit entitlement during this new benefit year (week 43 of 1999 through week 42 of 2000) was 26 weeks of benefits.

Claimant claimed and received unemployment insurance benefits during a number of weeks in his new benefit year. Again, he was apparently recalled to work at some point, but he was then laid off again in week 4 of 2000, and he resumed claiming. He claimed and received the last of his 26 weeks' entitlement as of week 28 of 2000 (the week ending July 8, 2000).

The claimant has worked for an employing unit, US Leather, which was certified under the Trade Act as an adversely affected employer. In 1999, claimant had returned to work with the US Leather, but he was laid off from his employment there during week 41 of 1999. That separation from employment constituted a "qualifying separation" within the meaning of the Trade Act, because it occurred during the certification period applicable to US Leather. Because of this, claimant was potentially eligible to receive Trade Readjustment Allowances (TRA benefits) under the Trade Act, once he was no longer receiving state unemployment insurance benefits.

In June, 2000, while the claimant was still receiving UI benefits, the department issued a determination holding that once the claimant exhausted his entitlement to UI benefits he would be eligible for TRA benefits, by reason of his layoff from US Leather in week 41 of 1999. This initial determination also held that the weekly benefit rate for those TRA benefits would be $226 per week, which was the amount of the claimant's weekly UI benefit rate at the time of his "first qualifying separation" in week 41 of 1999.

The claimant filed a timely appeal of the determination that his TRA benefit rate would be $226 per week. Pursuant to that appeal, a hearing was held before an administrative law judge, who on August 4, 2000 issued a decision affirming the initial determination insofar as it determined the TRA benefit rate to be $226 per week, and amending the determination in another respect. (3) The claimant then filed a petition for review which has brought the case before the commission.

The issue for decision is the amount of the weekly TRA benefit to which claimant would have been, or may be, entitled, if and when he files claims for TRA benefits. (4)

Discussion - Section 232 of the Trade Act [19 U.S.C. § 2292], entitled "Weekly amounts of readjustment allowance", provides in relevant part:

(a) Formula

Subject to subsections (b) and (c) of this section (5), the trade readjustment allowance payable to an adversely affected worker for a week of total unemployment shall be an amount equal to the most recent weekly benefit amount of the unemployment insurance payable to the worker for a week of total unemployment preceding the worker's first exhaustion of unemployment insurance (as determined for purposes of section 231(a)(3)(B) [19 U.S.C. § 2291(a)(3)(B)] of this title)...

(emphasis added). This formula is also incorporated into the regulations which have been promulgated under the Trade Act by the U. S. Department of Labor. See, 20 C. F. R. § 617.13 (a).

The important issue in this case is when the claimant's "first exhaustion of unemployment insurance" occurred, for purposes of and within the meaning of that term as used in this formula.

The administrative law judge concluded that the claimant's "first exhaustion of unemployment insurance" occurred as of the end of week 42 of 1999, when the benefit year which had been established for the claimant in week 43 of 1998 expired. This was consistent with the approach suggested by the department's witness, a "monetary technician" employed by the department, who testified:

Q  So, you are interpreting the word "exhaustion" to mean the end of his benefit year?

A  Yes. End of benefit year or when he runs out of benefits. (6)

Synopsis, p. 5. Because the weekly benefit amount of the UI payable to the claimant for the benefit year which ended with week 42 of 1999 was $226, the administrative law judge concluded that this should be used as the weekly amount of the TRA benefit.

Claimant argues that because he was eligible for unemployment insurance benefits up to the very end of the benefit year which expired at the end of week 42 of 1998 and continued to be eligible for unemployment insurance benefits as of week 43 of 1998 due to the establishment of a new benefit year, he did not "exhaust" his entitlement to UI in week 42 of 1999, within the meaning of the applicable formula. The claimant asserts that the "first exhaustion of unemployment insurance" in fact did not occur until week 28 of 2000 -- at which point the weekly benefit amount of the UI payable to him was $297. This amount, he asserts, should therefore be used as the weekly amount of the TRA benefit.

As noted above, the significant issue of interpretation in this case has to do with the term, "first exhaustion of unemployment insurance". The administrative law judge stated that the Code of Federal Regulations provided a definition for exhaustion of unemployment insurance, and to illustrate this he quoted from 20 C. F. R. § 617.11 (a)(2)(v). However, that provision is not a definition of the term "exhaustion of unemployment insurance";  it is simply a use of that term in the course of describing qualifying requirements for TRA. There are, in fact, express definitions of the terms "exhaustion of unemployment insurance" as well as "first exhaustion of unemployment insurance", in 20 C. F. R. § 617.3 subsections (p) and (s), respectively. It is those definitions which govern interpretation of the terms.

The term "exhaustion of UI" is defined in 20 C.F.R. § 716.3 (p) as follows:

(p) Exhaustion of UI means exhaustion of all rights to UI in a benefit period by reason of:

(1) Having received all UI to which an individual was entitled under the applicable State law or Federal unemployment compensation law with respect to such benefit period; or

(2) The expiration of such benefit period.

20 C.F.R. § 617.3 (s) defines "first exhaustion of UI" as follows:

(s) First exhaustion of UI means the first time in an individual's first benefit period that the individual exhausts all rights to UI; first exhaustion shall be deemed to be complete at the end of the week the exhaustion occurs.

As was noted above, the department's witness testified that she believed that the term "exhaustion of UI" was to be interpreted as meaning "[e]nd of benefit year or when [the claimant] runs out of benefits", and it appears that this is the approach which was taken by the administrative law judge. The heart of claimant's argument, is that the definitions of "exhaustion of UI" and "first exhaustion of UI" use the term "benefit period" rather than "benefit year", and that the term "benefit period" is defined in a way which makes it clear that it is not necessarily the same as "benefit year".

The term "benefit period" is defined in 20 C.F.R. § 617.3 (h), as follows:

(h) Benefit period means, with respect to an individual:

(1) The benefit year and any ensuing period, as determined under the applicable State law, during which the individual is eligible for regular compensation, additional compensation, extended compensation, or federal supplemental compensation, as these terms are defined by paragraph (oo) of this section; or

(2) The equivalent to such a benefit year or ensuing period provided for under the Federal unemployment insurance law.

The claimant argues that the phrase, "and any ensuing period, as determined under the applicable State law, during which the individual is eligible for regular compensation, additional compensation, extended compensation, or federal supplemental compensation" encompasses a subsequent benefit year which begins immediately upon the expiration of the first benefit year when there is still a remaining benefit entitlement as of the last week of that previous benefit year - as occurred in this case.

The commission does not agree with the claimant's argument. The commission believes that it is significant, that the regulation in question uses the word "ensuing" rather than the word "subsequent". The word "ensuing" denotes a connection which is more than chronological: it means that the period in question "ensues" from, or comes out of or issues from, the chronologically preceding benefit year.

This reading of the language in question is supported by the fact that there are provisions in "the applicable State law", which create precisely such types of periods of continuing eligibility which "ensue" out of a benefit year which has ended.

Wis. Stat. § 108.141, "Extended Benefits", provides for an additional period of eligibility for an employee who has established a benefit year, which extends past the end of that (52 week) benefit year. If there is a "extended benefit period" in effect, (7) an individual has an "eligibility period" which consists of "the weeks in the individual's benefit year which begin in an extended benefit period and, if the individual's benefit year ends within such extended benefit period, any weeks thereafter which begin in such period". Wis. Stat. § 108.141 (1)(a). Such an extended benefits "eligibility period" does more than follow a previous benefit year chronologically; it "ensues" from it because it owes its existence to the fact that there was such a previous benefit year. It is an "ensuing period" of eligibility. In essentially the same fashion, Wis. Stat. § 108.142, "Wisconsin Supplemental benefits", provides for an additional period of eligibility for an employee who has established a benefit year, which extends past the end of that benefit year. Again, a Wisconsin Supplemental benefits "eligibility period" includes weeks after the end of a benefit year if the benefit year ended within a Wisconsin Supplemental benefit period; again, the Wisconsin Supplemental benefits "eligibility period" does not merely follow a previous benefit year chronologically, but "ensues" from it. These are both "ensuing period[s], as determined under the applicable State law".

The commission believes that if the intent of 20 C.F.R. § 617.3 (h)(1) had been to provide that a benefit period could consist of a benefit year and a subsequent benefit year under the circumstances argued here by claimant, this would have been clearly stated. It is not. On the contrary, what is stated in the regulation is most apparently related to situations in which a benefit year is extended pursuant to the Extended Benefits and Supplemental Benefits programs. The commission believes that these two special benefit programs are what is contemplated by the relevant language in 20 C.F.R. § 617.3 (h)(1).

For the reasons given above, the commission finds that the claimant's "benefit period", within the meaning of 20 C.F.R. § 617.3 (h)(1), expired as of the end of week 42 of 1999, with the end of the claimant's "benefit year". The commission further finds that the claimant thus first exhausted his UI benefit entitlement, within the meaning of 20 C.F.R. § 716.3 subsections (p) and (s), as of that week. The most recent weekly benefit amount of the UI payable to the claimant for a week of total unemployment preceding that week, was $226. Therefore, the commission finds that the claimant's weekly benefit rate for TRA purposes was $226 during his eligibility period.

DECISION

The department deputy's initial determination is affirmed in part, and amended only as to the maximum weeks payable to increase the number of weeks from 26 to 32. Accordingly, the claimant is entitled to a weekly TRA benefit rate of $226 for his eligibility period.

Dated and mailed October 9, 2000
mrozste.trr : 110 :   BR 305  TRA

David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

NOTE: The commission had no disagreement with the Findings of Fact made by the ALJ; as the claimant has noted, the facts in this matter are not in dispute. The commission has issued its own decision in order to be able to more fully articulate the reasons that it agrees with the result reached by the ALJ.

cc:
Attorney Jeffery R. Myer
Legal Action of Wisconsin


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Footnotes:

(1)( Back ) The Trade Act provides that its programs which provide benefits to workers displaced by the effects of foreign competition are to be administered by the states through their unemployment insurance agencies.

(2)( Back ) No benefits are payable to a claimant for any week of unemployment not occurring during the benefit year for which the entitlement to those benefits was established. See, Wis. Stat. § 108.06 (2)(c). The only exceptions to this provision concern Extended Benefits (Wis. Stat. § 108.141) and Wisconsin Supplemental Benefits (Wis. Stat. § 108.142), neither of which were applicable to claimant herein.

(3)( Back ) The initial determination also stated that those benefits would be payable for 26 weeks and that the total maximum payable in such TRA benefits would be $7,318. It is undisputed, that this was an error; the number of weeks of benefits payable should have been 32. In his decision, the administrative law judge amended the initial determination in order to change the number of weeks of benefits payable from 26 to 32. The commission has incorporated this amendment of the initial determination into its order.

(4)( Back ) Although the claimant pursued this appeal of the June, 2000 determination that his TRA benefit rate would be $226 per week, he did not actually begin filing claims for TRA benefits after his UI benefits ended in July, 2000. A claimant may not receive TRA benefits for a week unless he or she complies with the department's weekly benefit claim procedures. However, the claimant's TRA eligibility period extends through to January, 2002, so he may still be able to receive some or all of his TRA benefit entitlement, if he is otherwise eligible in, and files claims, for weeks during that period.

(5)( Back ) Subsections (b) and (c) relate to situations involving training which are not presented in this case. In addition, the language quoted here continues by listing two possible circumstances in which the benefit amount is reduced, but these too are not relevant to the situation presented in this case.

(6)( Back ) This is not necessarily verbatim rendering of the testimony; it is excerpted from the Synopsis of the testimony prepared from the hearing tapes by the department's Hearing Records Unit. At this point in the Synopsis, the testimony was rendered in question-and-answer format.

(7)( Back ) An "extended benefit period" goes into effect when certain national or state-wide economic "indicators" are triggered; see, Wis. Stat. § 108.141 (c).