Katsianos v. Maryland Employment Security Administration

402 A.2d 144, 42 Md. App. 688, 1979 Md. App. LEXIS 339
CourtCourt of Special Appeals of Maryland
DecidedJune 12, 1979
DocketNo. 1236
StatusPublished
Cited by1 cases

This text of 402 A.2d 144 (Katsianos v. Maryland Employment Security Administration) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Katsianos v. Maryland Employment Security Administration, 402 A.2d 144, 42 Md. App. 688, 1979 Md. App. LEXIS 339 (Md. Ct. App. 1979).

Opinion

Couch, J.,

delivered the opinion of the Court.

Sir Isaac Newton, in 1686, expounded his Laws of Motion, the third of which has been simplified as follows: Every action has an equal and opposite reaction.1 In this case we are called [689]*689upon to decide whether the Court of Appeals decision in Waters v. Maryland Unemployment Insurance Fund, 220 Md. 337, 152 A. 2d 811 (1959) (hereinafter cited as Waters) prompted the Maryland Legislature to enact Section 17(d) of Article 95A in 1960. Appellant, Mrs. Katsianos, contends initially that there was no legislative reaction to Waters and, in the alternative, the new legislation does not affect the Court of Appeals’ holding in that case. Appellee, the Maryland Employment Security Administration (ESA), naturally contends otherwise.

The specific issue raised is whether ESA may recoup unemployment insurance benefits paid when a claimant is later awarded back pay by the National Labor Relations Board.

Judith A. Katsianos, formerly an employee of the Federal Yeast Corporation of Baltimore City,2 was terminated from her employment on October 1,1975. She subsequently applied for and received unemployment insurance benefits of $89 per week for the period beginning November 8, 1975 and ending December 18, 1976. The amount of benefits received by appellant totaled $4,094.

Following her discharge appellant filed an unfair labor practice charge with the National Labor Relations Board (NLRB) against her former employer, which resulted in a stipulated settlement. The NLRB issued a formal order embodying the terms of settlement. The order awarded appellant $9,520.60 in “back pay”, a letter of recommendation from Federal and a letter offering her reinstatement. Additionally, Federal was required to post a notice concerning its labor activities. The order required of appellant that she reject Federal’s offer of reinstatement, withdraw all other actions she had pending against Federal, and elicited from her a promise to desist from any future actions against the company.

The record discloses that the monetary award was the exact amount of wages appellant would have earned from the [690]*690company were it not for the termination, plus interest. In her request for withdrawal of a charge of discrimination filed with the Equal Employment Opportunity Commission, appellant specifically stated she had drawn $9,767.67, which represented back pay and interest; this sum was paid in January, 1977. In April, 1977, Federal notified the Employment Security Administration of this “back pay” settlement and felt that its account should be credited following appellant’s repayment of the benefits she had received. This notice then triggered action by the Administration in the form of a “non-monetary determination” that appellant was ineligible to receive benefits because she was not unemployed and therefore resulted in an overpayment of $4,094. Appellant promptly noted an appeal. The appeal was heard by a hearing officer in June, 1977, who reversed the decision of the claims examiner. Federal thereupon noted an appeal to the Board of Appeals and a hearing was held in November, 1977. The Appeals Board reversed the decision of the hearing officer (Appeals Referee), basing its determination upon its finding that appellant was not unemployed during the period she received benefits and thus was disqualified from receiving them. Appellant then appealed to the Superior Court of Baltimore City. That court, after a hearing, agreed with the decision of the Board of-Appeals, and this appeal followed.

Appellant argues appellee was not entitled to recoup the unemployment benefits she had received because (1) she was eligible for the benefits when she received them, and (2) the “back pay” award did not constitute wages within the terms of the Maryland Unemployment Security law. We have little difficulty in affirming the conclusion reached by the Superior Court and the Board of Appeals with regard to the second reason. The record clearly demonstrates that the amount of the award was identical to the wages appellant would have received had she not been terminated; the NLRB compliance officer’s letter to Federal referred to the award as “back pay”. She herself referred to it as “back pay” in her Equal Employment Opportunity Commission withdrawal notice, and we find no evidence that she complained when Federal, in [691]*691payment of the award, deducted Federal and State withholding taxes and FICA taxes. We recognize that appellant testified that the award was merely a settlement of a larger claim against her employer. Nevertheless, we believe there was ample evidence before the Board, as indicated above, to support its conclusion that the award of $9,520.60 represented back pay.

We have more difficulty with the first ground set forth by appellant but, nevertheless, conclude that we can afford her no relief. Appellant’s argument here reduces itself to this: since, in actuality, she was terminated and unemployed when she received the unemployment benefits, she was an eligible person and, by implication at least, the fact of receiving the back pay would not change her eligibility. We think this argument ignores the clear import of the 1960 legislative action which we also believe to have been a reaction to the 1959 Waters decision.

In Waters, an employee was discharged and drew unemployment benefits but only after his claim therefor, which was resisted by his employer, had been approved by the Department of Employment Security (the Department). As a result of an arbitration proceeding pursuant to a collective bargaining agreement between his employer and his union, the arbitrator “directed that Waters be ... made whole for the time lost by reason of his discharge.” This award included back pay. Upon learning this the Department made a redetermination and found that the benefits paid to Waters constituted an overpayment and sought to recover the amount so paid under Section 16 (d) of the Act, Md. Code Ann. art. 95A, § 17 (d) (1957), which reads as follows:

“Any person who, by reason of the non-disclosure or misrepresentation by him or by another of a material fact (irrespective of whether such non-disclosure or misrepresentation was known or fraudulent) has received any sum as benefits under this Article while any conditions for the receipt of benefits imposed by this Article were not fulfilled in his case, or while he was disqualified from receiving benefits, shall, in the discretion of the Board, either [692]*692be liable to have such sum deducted from any future benefits payable to him under this Article or shall be liable to repay to the Board for the unemployment compensation fund, a sum equal to the amount so received by him, and such sum shall be collectible in the manner provided in Section 14 (f) of this Article for the collection of past-due contributions.”

The Court of Appeals posed three questions it felt had to be addressed under the 1957 statute:

“[Wjhether the claimant was ‘unemployed’ within the meaning of the Act during the period for which unemployment benefits were paid out of the Fund; second, whether the payment of such benefits was the result of any non-disclosure or misrepresentation of a material fact; and third, whether recovery can be had on behalf of the Fund on a theory of unjust enrichment, even though neither non-disclosure nor misrepresentation of a material fact be shown.”

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Related

Jones v. Mississippi Employment Security Commission
648 So. 2d 1138 (Mississippi Supreme Court, 1995)

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Bluebook (online)
402 A.2d 144, 42 Md. App. 688, 1979 Md. App. LEXIS 339, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katsianos-v-maryland-employment-security-administration-mdctspecapp-1979.