Josey v. Employment Security Commission

WEBB, Justice. The first question posed by this appeal is whether the appellant is properly in this Court. The appellee argues that in his petition to the Employment Security Commission the appellant asked only that the respondent exercise its discretion pursuant to N.C.G.S. § 96-14(10) and reduce the period of his disqualification. He did not petition the Commission to interpret N.C.G.S. § 96-14(10) and hold that the 1984 disqualification did not apply to [298] his 1987 entitlement. The appellee says that because the petitioner did not ask the Commission to interpret the statute he cannot ask the courts to do so on appeal. For this reason the appellee argues the appeal should be dismissed. It is true the claimant’s petition to the Commission may be interpreted to ask only that the Commission exercise its discretion to reduce his period of disqualification but in his memorandum of law in support of the petition he asked the Commission to interpret the statute and hold that the 1984 disqualification did not affect his later entitlement. The Commission interpreted the statute to hold that the 1984 disqualification was not suspended by the 1987 entitlement. The Commission has passed on the question which the appellant argues in this Court. We have jurisdiction to determine it. The appellee also contends that in his petition to the superior court for review the appellant did not allege that the Commission abused its discretion in not reducing his disqualification. The appellee, relying on In re Employment Security Comm., 234 N.C. 651, 68 S.E. 2d 311 (1951), says that the appellant by failing to allege the Commission had abused its discretion has not taken exception to the findings of the Commission. For that reason, says the appellee, the appellant’s case may not be determined in the courts. Employment Security Comm, is not helpful to the appellee. In that case the employee’s claim was dismissed because he did not file a statement of the grounds for which review was sought. In this case the appellant filed a paper which set forth the grounds upon which he sought review. It is true he did not except to the failure of the Commission to exercise its discretion but that is not a ground upon which relief was sought in the appeal. The superior court was correct in hearing the case and the appeal is properly in this Court. The Commission has ruled that the appellant’s permanent disqualification in 1984 was not removed by his earning a new entitlement to unemployment compensation in 1987. The Commission’s determination depends on the interpretation of N.C.G.S. § 96-14 which provides in pertinent part: An individual shall be disqualified for benefits: [299] (2) For the duration of his unemployment . . . if it is determined by the Commission that such individual is, at the time such claim is filed, unemployed because he was discharged for misconduct connected with his work. (10) Any employee disqualified for the duration of his unemployment due to the provisions of . . . (2) . . . above may have that permanent disqualification removed if he meets the following three conditions: a. Returns to work for at least five weeks and is paid cumulative wages of at least 10 times his weekly benefit amount; b. Subsequently becomes unemployed through no fault of his own; and c. Meets the availability requirements of the law. We hold that the plain words of this statute require that the order of the Commission be affirmed. N.C.G.S. § 96-14(2) provides that the appellant be denied unemployment benefits for the duration of his unemployment if he is discharged for misconduct connected with his work. This is what happened to the petitioner. An unemployed person may have this disqualification removed under N.C.G.S. § 96-14(10) if he meets three requirements, one of which is that he subsequently becomes unemployed through no fault of his own. The appellant did not subsequently become unemployed through no fault of his own. We believe N.C.G.S. § 96-14(10) fits this case specifically. It refers to a subsequent employment which will remove disqualification under certain circumstances. Those circumstances did not occur and the disqualification was not removed. The appellant contends there is no reason to believe the General Assembly intended the words “duration of unemployment” in N.C.G.S. § 96-14(2) to include periods of unemployment two or more years after the appellant’s original period of unemployment. He argues that the “duration of unemployment” refers to the unemployment from the job at Gold Bond. He established a new eligibility at Gang-Nail and he says the disqualification from his Gold Bond employment does not affect it. [300] The difficulty with this argument is that it ignores the plain words of the statute. The statute provides that disqualification may be removed by later employment and a discharge through no fault of the claimant. There was a later employment in this case but the claimant was at fault for this discharge. The appellant next contends the interpretation of the statute by the Commission violates federal law. The federal government provides a part of the funds for unemployment compensation and the state law has to comply with federal requirements in the administration of the employment security funds. The appellant, relying on California Dept. of Human Resources v. Java, 402 U.S. 121, 28 L.Ed. 2d 666 (1971), argues that the disqualification to receive benefits based on his 1987 entitlement because of his 1984 disqualification violates the requirements of 42 U.S.C. §§ 501-503. In Java the United States Supreme Court held that a federal requirement of state employment security programs is that payments must commence when they are first administratively allowed after a hearing of which the parties have notice and are permitted to present their respective positions. In this case the appellant has not been administratively determined to be eligible for unemployment compensation. He was not so determined, as contended by the appellant, when the appeals referee found on 13 March 1987 that he was discharged from Gang-Nail for substantial fault with mitigating circumstances. At that time he was ineligible for compensation because of his discharge from Gold Bond. Java has no application to this case. The appellant also relies on Intern. Union v. Michigan Employment Comm., 517 F. Supp. 12 (E.D. Mich. 1980). In that case a Michigan statute provided that if a person obtained unemployment benefits by fraud he would be penalized in certain circumstances if he subsequently received unemployment compensation by not receiving the first six weeks of compensation. A federal district court held that this provision violated the federal requirements. We are not bound by this case and its reasoning is not persuasive to us. The judgment of the superior court is Affirmed.