Smith v. Albion

542 N.W.2d 298, 214 Mich. App. 82
CourtMichigan Court of Appeals
DecidedOctober 20, 1995
DocketDocket No. 165647
StatusPublished
Cited by3 cases

This text of 542 N.W.2d 298 (Smith v. Albion) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Albion, 542 N.W.2d 298, 214 Mich. App. 82 (Mich. Ct. App. 1995).

Opinions

Taylor, J.

Claimants appeal as of right the circuit court order reversing the decision of the Michigan Employment Security Commission Board of Review. Claimants also challenge the order granting change of venue and denying their motion to dismiss or motion for summary disposition. Respondent asserts on appeal that this entire matter is preempted by federal law, § 301 of the Labor-Management Relations Act, 29 USC 185. We affirm.

At issue in this appeal is whether claimants’ vacation pay disqualified them for unemployment benefits during respondent’s two-week shutdown. The underlying facts of this case are undisputed. Claimants are members of the United Auto Workers employed by Hayes Albion. For the period relevant to this appeal, claimants were covered by a collective bargaining agreement with Hayes Albion that took effect May 20, 1985. This collective bargaining agreement provided in pertinent part:

90.0 Vacation Allowance
All employees who are covered by this Agreement who will be on the seniority list as of June 1, 1985 or December 31, 1985 and each June 1st or December 31st of each subsequent calendar year during the term of this Agreement shall be entitled to a vacation or pay in lieu of vacation based on the previous year’s gross earnings, excluding vacation pay of the previous year, in accordance with the following schedule:
[85]*85Years of Seniority % of Pay Vacation
One but less than three 4% 2 weeks
Three but less than five 5% 2 weeks
Five but less than ten 6% 3 weeks
Ten but less than fifteen 7% 3 weeks
Fifteen but less than twenty 8% 4 weeks
Twenty or more 9% 4 weeks
a. The spouse of an employee who dies will receive the vacation payment due the employee at the time of the employee’s death.
b. Employees who have five or more years of seniority as of the current vacation date will be allowed to receive pay for the amount of vacation to which the employee is entitled. Vacation pay for such employees will be available on February 15th.
c. Employees retiring after 1/1/86 will receive payment of all vacation pay due as of their retirement date.

In short, ¶ 90.0 provides that employees are entitled to vacation or pay in lieu of vacation based on the previous year’s gross earnings. The number of weeks of vacation depends on the employee’s years of seniority. This subsection also provides that vacation pay will be available on February 15 of each year.

The agreement further provides:

91.0 Scheduled Vacation Week
Vacation pay will be available at the end of the week immediately preceding a scheduled vacation, except as outlined in 90.0 above, or employees required to work during the Company’s scheduled vacation may have the option of receiving their check at a later date of their choice. Any employee who prefers a definite date for his vacation or part of his vacation shall notify the Company in writing, giving the time he prefers for his vacation prior to June 15. This request will be approved by [86]*86the employee’s Supervisor. Final determination will be made by the Personnel Department. The Company may, however, schedule all vacations during a time the plant is shut down. Notice of such scheduling shall be posted prior to June 15. Vacations are to be taken in the calendar year in which the employee qualifies and shall not be cumulative from year to year except that if the employee’s approved vacation is cancelled at Company request, it may extend into the next calendar year.

Pursuant to ¶ 91.0, respondent has the right to schedule all vacations during the time the plant is shut down and notice of the shutdown will be posted before June 15 of each year.

Hayes Albion scheduled a two-week plant shutdown for June 30, 1986, through July 11, 1986, and posted notices of this shutdown on June 9, 1986, pursuant to the requirements of the collective bargaining agreement. The notice indicated that earned vacation time and pay would be allocated to the shutdown period, and that the allocation of the vacation time may render the employees ineligible for unemployment benefits. Several Hayes Albion employees filed claims for unemployment benefits for this two-week period, which claims were either denied or never received, and eventually the parties agreed to consolidate all the claims in the present case.

After a hearing before a referee, in which the referee found that claimants were not entitled to unemployment benefits because the collective bargaining agreement gave respondent the right to allocate vacation pay to a specific period, this matter was appealed to the board. The board found that, because the claimants under the collective bargaining agreement retained the right to elect to receive pay in lieu of vacation, the com[87]*87pensation they received on February 15, 1986, and in June 1986, were bonuses that would not result in their ineligibility for unemployment benefits during the period of the shutdown.

The Michigan Employment Security Commission (mesc) was added as a party appellee by stipulation on February 21, 1992. Both respondent and the mesc filed an application for rehearing, which the board denied in a two-to-one decision. The board determined that

[t]he test for distinguishing vacation pay from bonuses is whether the employer had the contractual authority to designate a period of layoff for the allocation of vacation pay. Where the employee possesses the option to take payment in lieu of vacation, the employer’s allocation of payments will be treated as a bonus. . . . The determining factor is not whether the employer has the sole discretion as to when the vacation will be taken, but rather, whether the employer has the sole discretion to determine that vacations will be taken instead of payment in lieu of vacation. [Emphasis in original.]

The dissenting member of the board opined that, although the employees had the option to take payment in lieu of vacation pursuant to ¶ 90.0 of their contract, that option was extinguished when the employer scheduled a shutdown and declared that period to be a period of vacation pursuant to ¶ 91.0 of their contract. In essence, the dissent concluded that, because the contract in the instant case did not designate the period for the payment, the employer could, and did, properly designate the shutdown as the vacation period. Thus, the payments made in February and June 1986 became remuneration for the shutdown period in accordance with MCL 421.48(2); MSA 17.552(2).

[88]*88Respondent appealed the board’s decision to the circuit court, but erroneously filed its appeal in Clinton County rather than Calhoun County. To correct this, respondent filed a motion to change venue, and claimants filed a motion to dismiss or for summary disposition for lack of jurisdiction. The Clinton Circuit Court granted respondent’s motion to change venue and denied claimants’ motion to dismiss, thus transferring the case to Calhoun County.

The Calhoun Circuit Court conducted a hearing regarding respondent’s appeal from the board’s decision, finding that footnote 8 in

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Cite This Page — Counsel Stack

Bluebook (online)
542 N.W.2d 298, 214 Mich. App. 82, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-albion-michctapp-1995.