Tech. v. ICAO

2020 COA 29

• Court: Colorado Court of Appeals
• Decided: February 13, 2020
• Docket: 19CA0638, Keysight
• Status: Published

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

SUMMARY February 13, 2020

2020COA29

No. 19CA0638, Keysight Tech. v. ICAO — Labor and Industry — Colorado Employment Security Act — Premiums and Coverage — Transfer of Experience and Assignment of Rates

On a matter of first impression, a division of the court of

appeals considers whether the Division of Unemployment Insurance

was required to transfer the experience — essentially the claims

history for purposes of calculating a statutory employer’s

unemployment insurance premium rate — of a predecessor

employer to a successor employer that had spun off several years

earlier. The division holds that the Division of Unemployment

Insurance was not required to transfer the predecessor employer’s

experience pursuant to section 8-76-104(2)(b), C.R.S. 2019. The

division additionally holds that, under applicable Division of

Unemployment Insurance regulations, the successor employer’s experience transfer/rate modification request was untimely. The

division, thus, affirms. COLORADO COURT OF APPEALS 2020COA29

Court of Appeals No. 19CA0638 Industrial Claim Appeals Office of the State of Colorado DD No. 46273-2018

Keysight Technologies, Inc.,

Petitioner,

v.

Industrial Claim Appeals Office of the State of Colorado and Division of Unemployment Insurance,

Respondents.

ORDER AFFIRMED

Division VII Opinion by JUDGE LIPINSKY Fox and Berger, JJ., concur

Announced February 13, 2020

Akerman LLP, Brian M. Nugent, Melissa L. Cizmorris, Denver, Colorado, for Petitioner

No Appearance for Respondent Industrial Claim Appeals Office

Philip J. Weiser, Attorney General, Krista Maher, Assistant Attorney General, Denver, Colorado, for Respondent Division of Unemployment Insurance ¶1 This unemployment compensation tax appeal presents a

narrow question: Is the Division of Unemployment Insurance

(Division) required to transfer the “experience” — essentially the

claims history for purposes of calculating a statutory employer’s

unemployment compensation insurance premium rate — of a

predecessor employer, Agilent Technologies, to a successor

employer, the petitioner, Keysight Technologies, Inc., which had

been spun off from Agilent several years earlier?

¶2 The Industrial Claim Appeals Office (Panel) concluded that

several statutory provisions, including, as pertinent here, section

8-76-104(2)(b), C.R.S. 2019, do not require transferring Agilent’s

experience to Keysight. We agree with the Panel’s construction of

the statute. We also conclude that, under applicable Division

regulations, Keysight’s experience transfer/rate modification

request was untimely. Consequently, we affirm the Panel’s order.

I. Background

¶3 Keysight was created and spun off from Agilent in 2014.

Keysight, which is wholly owned by Agilent, was not an active

business before the spinoff. Keysight acquired 75% of Agilent’s

Colorado employees and half of Agilent’s infrastructure, and became

1 a Colorado statutory employer. Keysight applied for its own

Colorado unemployment compensation insurance account. The

Division notified Keysight of its account number and premium rate

in October 2014.

¶4 More than three years later, in 2018, Keysight asked the

Division to transfer Agilent’s experience to Keysight and “revise

Keysight’s unemployment tax rates starting on its liability date

forward.” (A statutory employer’s unemployment compensation tax

rate is based on a number of factors, including the unemployment

compensation benefit payments made to its former employees over

the twelve-month period before the “computation date.” § 8-76-

102.5(3), C.R.S. 2019.)

¶5 The Division denied Keysight’s request. After a series of

appeals, hearing officer decisions, and Panel remand orders, the

hearing officer entered a decision addressing whether certain

subsections of section 8-76-104 authorize the transfer of Agilent’s

experience to Keysight.

¶6 The hearing officer concluded that section 8-76-104(3), which

addresses an employer’s transfer of a “clearly segregable unit” of its

business to a successor, does not apply because Keysight “was not

2 a segregable unit” of Agilent. (The hearing officer further concluded

that, because section 8-76-104(3) does not apply, the sixty-day

statutory time limit for applications to transfer unemployment

compensation experience under this subsection also does not apply.

See § 8-76-104(3)(g).)

¶7 The hearing officer further concluded that section

8-76-104(1)(a), which addresses entities that become employers by

acquiring “all of the organization, trade, or business or substantially

all of the assets of one or more employers,” does not apply because

Keysight had acquired 75% of Agilent’s Colorado employees and

only half of its infrastructure.

¶8 The hearing officer concluded, however, that section

8-76-104(2)(b) applies. That subsection addresses an employer’s

transfer of all or part of its trade or business to another employer

where there is substantially common ownership, management, or

control of the two employers immediately following the transfer.

The hearing officer determined that the Division must transfer

Agilent’s experience to Keysight and recalculate Keysight’s premium

rate “made effective immediately upon the date of the transfer of the

trade or business” from Agilent.

3 ¶9 The Panel affirmed in part and reversed in part. The Panel

upheld the hearing officer’s determination that subsections (1) and

(3) of section 8-76-104 do not apply to allow transfer of Agilent’s

experience to Keysight. However, contrary to the hearing officer’s

decision, the Panel also concluded that subsection (2)(b) does not

apply. Specifically, it concluded that section 8-76-104(2), including

subsection (2)(b), only addresses situations in which the

successor/transferee employer was already a statutory employer

before it acquired all or part of the predecessor/transferor

employer’s trade or business. Because Keysight did not exist before

the transfer from Agilent, the Panel concluded that subsection (2)(b)

does not apply and that Keysight does “not qualify for a transfer of

experience under this section.”

II. Discussion

A. Section 8-76-104(2)(b)

¶ 10 Keysight contends that the Panel incorrectly interpreted

section 8-76-104(2)(b) as applying only when the successor

employer was an existing statutory employer before the trade or

business was transferred to it. We perceive no error.

4 ¶ 11 When construing statutes, we seek to give effect to the General

Assembly’s intent. Colo. Med. Bd. v. McLaughlin, 2019 CO 93, ¶ 22,

451 P.3d 841, 845. We read words and phrases in context,

according them their plain and ordinary meanings. Id.; see also

Rooftop Restoration, Inc. v. Am. Family Mut. Ins. Co., 2018 CO 44,

¶ 12, 418 P.3d 1173, 1176. If the language is clear, we apply it as

written and need not resort to other tools of statutory

interpretation. Colo. Med. Bd., ¶ 22, 451 P.3d at 845.

¶ 12 “A ‘cardinal principle of statutory construction’ is that no

clause, sentence, or word is ‘superfluous, void, or insignificant.’”

Falcon Broadband, Inc. v. Banning Lewis Ranch Metro. Dist. No. 1,

2018 COA 92, ¶ 31, ___ P.3d ___, ___ (quoting TRW Inc. v. Andrews,

534 U.S. 19, 31 (2001)). “Statutory interpretation presents a

question of law that we review de novo.” Colo. Med. Bd., ¶ 22, 451

P.3d at 845.

¶ 13 Section 8-76-104(2)(b) provides, in relevant part, as follows:

If an employer transfers all or a portion of its trade or business to another employer and, at the time of the transfer, there is substantially common ownership, management, or control of the two employers, the unemployment experience attributable to the predecessor employer shall be transferred to the successor

5 employer. The rates of both employers shall be recalculated and made effective immediately upon the date of the transfer of the trade or business.

(Emphasis added.)

¶ 14 The Division argues, and we agree, that subsection (2)(b)’s

language requiring that the premium rate of the successor employer

be “recalculated” necessarily contemplates that the successor

employer had a Division-calculated premium rate before the

transfer. Importantly, the word “recalculate” means “to calculate or

estimate again.” Webster’s Third New International Dictionary 1893

(2002). And having a pre-existing Division-calculated premium

rate, in turn, contemplates that the successor employer was already

a statutory employer. See generally § 8-76-102.5 (setting forth the

methods and procedures for calculating employer premium rates).

¶ 15 Keysight relies on section 8-76-104(2)(a), which addresses

transfers between employers where “there is no substantial

common ownership, management, or control of the two employers.”

Keysight specifically points to this subsection’s language, stating

that it applies “if the successor employer was an employer . . . prior

to the date of acquisition.” Keysight argues that, because

6 subsection (2)(b) does not contain similar language, it does not

require that the successor employer was a pre-existing statutory

employer.

¶ 16 The Panel concluded, however, that when subsections (2)(a)

and (2)(b) are read together, both address “situations where an

employer transfers all or a portion of its trade or business to

another already existing employer,” and the difference in the two

subsections’ applicability turns merely on “whether there is

substantial common ownership between the two employers.”

¶ 17 We acknowledge that subsection (2) is not a model of clarity.

Even so, reading subsections (2)(a) and (2)(b) together, and

considering subsection (2)(b)’s requirement that the premium rate

of the successor employer be “recalculated,” we perceive no error in

the Panel’s conclusion that subsection (2)(b), like subsection (2)(a),

addresses circumstances where the transferee/successor employer

was an existing employer at the time of the transfer.

¶ 18 Keysight argues that the Panel’s interpretation of subsection

(2)(b) leads to unfair results, conflicts with the SUTA Dumping

Prevention Act, see 42 U.S.C. § 503 (2018), and places Colorado at

risk of losing federal funds. (“SUTA” stands for the State

7 Unemployment Tax Act. Colo. Div. of Emp’t & Training v. Accord

Human Res., Inc., 2012 CO 15, ¶ 20 n.4, 270 P.3d 985, 990 n.4.)

Assuming, without deciding, that these arguments are correct, we

must still interpret the statute as written. Any modification of the

statute required to make it “fairer” or make it better comport with

federal law is a task for the General Assembly, not for a division of

this court. See Jenkins v. Pan. Canal Ry. Co., 208 P.3d 238, 243-44

(Colo. 2009) (noting that, insofar as the General Assembly made a

mistake in reenacting a statute without considering the effect on

another statute, “that mistake is for the General Assembly to

remedy, not this court”); Nelson v. Indus. Claim Appeals Office, 219

P.3d 416, 420 (Colo. App. 2009) (concluding that “the effect of [a]

statute is a policy consideration within the province of the General

Assembly and not this court”), aff’d sub nom. Specialty Rests. Corp.

v. Nelson, 231 P.3d 393 (Colo. 2010).

¶ 19 Because section 8-76-104(2)(b) contemplates that the

successor employer was an existing statutory employer before it

acquired all or part of the predecessor employer’s trade or business,

and because Keysight was not a statutory employer before it

acquired part of Agilent’s trade or business, the Panel correctly

8 concluded that this subsection did not require the Division to

transfer Agilent’s experience to Keysight and recalculate its

premium rate.

B. Keysight’s Request Was Untimely

¶ 20 The Division argues that a separate basis for affirming the

Panel’s order is that Keysight did not timely request revision of its

premium rate through the transfer of Agilent’s experience. We

agree.

¶ 21 Section 8-76-113(2), C.R.S. 2019, provides, in relevant part,

that an employer wishing to protest a notice of premium rate “shall

file a request for redetermination with the [D]ivision, in accordance

with rules promulgated by the director of the [D]ivision.” In October

2014, when the Division notified Keysight of its premium rate,

Division regulations provided as follows:

An employer who wishes to protest a notice of his or her premium rate shall file a written request for redetermination of the premium rate. The written request for redetermination must be received by the Division within twenty calendar days of the date the rate notice was issued.

Dep’t of Labor & Emp’t Reg. 11.1.4, 7 Code Colo. Regs. 1101-2

(2014); see Westfall v. Town of Hugo, 851 P.2d 299, 303 (Colo. App.

9 1993) (appellate court may properly take judicial notice of state

administrative regulations).

¶ 22 Keysight does not argue that Regulation 11.1.4’s twenty-day

time limit did not apply to its request. The record shows that

Keysight apparently filed the request because it believed the

Division had assigned it an erroneous tax rate. Indeed, at one of

the hearings, a Keysight witness testified that Keysight requested

the experience transfer when it discovered that the Division had

allegedly “assigned an incorrect tax rate.”

¶ 23 Keysight instead argues that the Division waived any

timeliness challenge under Regulation 11.1.4 because it did not

raise the argument during the administrative proceedings. But an

appellee may defend the underlying judgment or ruling on any

ground supported by the record, so long as the appellee’s rights are

not thereby increased. See Farmers Grp., Inc. v. Williams, 805 P.2d

419, 428 (Colo. 1991); Regency Realty Inv’rs, LLC v. Cleary Fire

Prot., Inc., 260 P.3d 1, 7 (Colo. App. 2009); Olsen & Brown v. City of

Englewood, 867 P.2d 96, 99 (Colo. App. 1993), aff’d, 889 P.2d 673

(Colo. 1995).

10 ¶ 24 The record shows that Keysight waited more than three years

to request the change in its premium rate, well beyond Regulation

11.1.4’s twenty-day deadline. Consequently, we agree with the

Division that Keysight’s untimely request provides a separate basis

for upholding the Panel’s ruling. See Stevenson v. Indus. Comm’n,

705 P.2d 1020, 1021 (Colo. App. 1985) (affirming disqualification

from benefits under alternative statutory subsection on which Panel

did not rely).

III. Conclusion

¶ 25 The Panel’s order is affirmed.

JUDGE FOX and JUDGE BERGER concur.