Wisconsin Labor and Industry Review Commission --
Summary of Wisconsin Court Decision relating to Unemployment Insurance

Subject: Carrillo et al. v. LIRC, Agrilink Foods, Dean Foods, and Larsen, Case 99 CV 3071 (Wis. Cir. Ct., Dane Co., December 7, 2000)

Digest Codes:  ET 483.02 - Excluded private employment - Agricultural labor - processing season exclusion

Plaintiffs worked during the 1998 processing season for a canning operation. The canning operation was sold in the middle of the processing season. The plaintiffs’ employment continued without interruption notwithstanding the change in ownership. They eventually applied for benefits when the season ended. Because they worked in fresh vegetable processing plaintiffs were subject to the “processing season exclusion”, 108.02 (15)(k)14, which looks to the amount of wages earned from an employer during the season to determine if the work is covered “employment”. If plaintiffs had been treated as if they had worked for one employer during the season, their wages would have been adequate to allow benefits; however, because plaintiffs technically worked for two different employers during the processing season (the original owner of the operation, and the new owner to whom it was sold during the processing season), each period of employment was evaluated separately. The application of the “processing season exclusion” thus resulted in initial determinations that plaintiffs did not have adequate base period wages from either of those employers to allow them to receive benefits. ATD and LIRC affirmed the determination denying eligibility, rejecting plaintiffs’ argument that the purchasing employer had been an optional successor under 108.16 (8)(b), such that the employment during the entire season could be treated as having been for a single employer, based on a letter to the department in which it referred to itself as a successor. ATD and LIRC noted that the “Report Of Business Transfer” form expressly indicated that the purchasing employer did not elect optional successorship.

In court, plaintiffs continued to argue that the purchasing employer should have been found to be an optional successor. Plaintiffs also argued that the decision was contrary to a provision in FUTA, 26 U.S.C. 3304 (a)(10), stating that compensation shall not be denied to any individual by reason of cancellation of wage credits or total reduction of benefit rights for any other reason than discharge for misconduct, fraud, or receipt of disqualifying income.

Held: Affirmed. LIRC reasonably concluded that the purchasing employer was not an optional successor. Consideration of the substance and source of the letter containing the “successor” reference and comparison to the “Report Of Business Transfer” support the decision.

The court also sua sponte decided that it would refuse to address plaintiffs’ argument that the decision violated 26 U.S.C. 3304 (a)(10) because, the court stated, that argument was “never even suggested in the proceedings before the ALJ or LIRC”. The court cited precedent to the effect that parties waive the right to raise legal argument in judicial review of administrative agency decisions if the arguments are not raised before the administrative agency.

Please note that this is a summary prepared by staff of the commission, not a verbatim reproduction of the court decision.

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