Seltzer v. Industrial Claim Appeals Office

ROTHENBERG, J.

Petitioner, Larry Seltzer (claimant), seeks review of a final order of the Industrial Claim Appeals Office (Panel) that affirmed a hearing officer’s decision disqualifying him from receiving Temporary Extended Unemployment Compensation (TEUC-A) benefits, which are available to certain airline-related workers pursuant to the Emergency Wartime Supplemental Appropriations Act (Act), Pub.L. No. 108-11, § 4002(a), 117 Stat. 559, 607 (2003). We set the Panel’s order aside and remand for further proceedings.

I.

Claimant was employed as a technical analyst and performed computer programming work for Galileo International (employer). He worked on and wrote computer programs, including programs for individual airlines, that enabled passengers to book airline flights on the Internet.

Employer laid claimant off in October 2001. The hearing officer initially determined that his separation was caused by a “lack of work result[ing] from a reduction in business for the employer because the public and corporate customers stopped flying as a result of [the events of September 11, 2001].” However, the hearing officer found that claimant was not entitled to receive TEUC-A benefits because his “layoff was not due to a reduction in services provided by the certified air carriers but was caused by a reduction in business when people stopped booking airline seats thereby not using the employer’s services.”

Claimant appealed the decision, contending he was not notified he would have to prove his employer’s loss of revenue was due to a decrease in air flights. The Panel agreed with claimant that “he was not provided with notice of the dispositive factual issue” and remanded for additional proceedings to allow “claimant the opportunity to present relevant evidence concerning whether his separation from employment was attributable to a reduction in services provided by an air carrier.”

On remand, claimant presented evidence that after September 11, 2001, his workload decreased because airlines scheduled fewer flights and because fewer people were flying.

The hearing officer issued a modified decision that again denied claimant benefits. The hearing officer found that (1) “claimant’s testimony establishes that it was the flying public’s reluctance to fly [after September 11, 2001] and the reduction in the purchase of airline tickets that caused the reduction in flights”; (2) “claimant’s lack of work was not due to a reduction in service by a certified air carrier, but was due to the public’s reluctance to fly”; (3) “[e]ven on reduced schedules, airlines were flying at only 40% of capacity, leaving 60% of the seats unsold”; and (4) these circumstances caused claimant’s job separation. On review, the Panel affirmed.

II.

Claimant contends the Panel erred in affirming the hearing officer’s determination that he was not entitled to TEUC-A benefits. We agree.

“[T]he TEUC Act of 2002 created federally funded unemployment compensation benefits for individuals who have exhausted their state and federal unemployment compensation benefits and who qualify to receive TEUC benefits.” Chiccitt v. Unemployment Comp. Bd. of Review, 842 A.2d 540, 542 (Pa.Commw.Ct.2004).

In 2003, the Act was amended, and special rules were created for determining eligibility for certain displaced airline-related workers who may qualify for additional benefits identified as TEUC-A benefits. See Workforce Security Programs: Unemployment Insurance Program Letter Interpreting Federal Law (UIPL No. 30-02, Changes 2 & 3), 68 Fed.Reg. 35429 (June 13, 2003). The Department of Labor(DOL) issued a letter with the stated purpose “to provide State Workforce Agencies (SWAs) instructions for implementing the changes to the TEUC program related to displaced airline and related *1160workers.” The instructions state that “SWA’s are required to continue to follow the [DOL’s] interpretation of the TEUC Act.” 68 Fed.Reg. at 35429.

The DOL instructions recognize that certain procedures “may differ from state law provisions.” For example, the instructions provide that late information received from the employer must be considered, and if it supports a denial of benefits, “a redetermination must be issued.” 68 Fed.Reg. at 35441. To the extent state law differs from the DOL instructions, the DOL instructions control in determining a claimant’s eligibility for TEUC-A benefits.

To be eligible to receive TEUC-A benefits here, claimant was required to demonstrate “qualifying employment” under the Act. That showing had two components. First, he had to establish that his employment was sufficiently tied to the airline industry. As pertinent here, he had to demonstrate that his employment was “with an upstream producer or supplier for an air carrier.” See Pub.L. No. 108-11, § 4002(a)(2)(A).

The hearing officer found that claimant established the first requirement by showing a sufficient nexus between his employment and the airline industry. As the Panel noted in its initial order, the hearing officer found, in effect, that employer provided contract services to an air carrier. Although this was an issue during the first hearing, by the time of the second hearing, it appears that employer’s status as an upstream producer or supplier for an air carrier was no longer in dispute.

The second requirement is that claimant establish he became separated from his employment based upon a qualifying reason. Specifically, he was required to show his separation was “due, in whole or in part, to ... reductions in service by an air carrier as a result of a terrorist action or security measure.” See Pub.L. No. 108-11, § 4002(a)(2)(B)(i) (emphasis added). The Act defines “terrorist action or security measure” as “a terrorist attack on the United States on September 11, 2001, or a security measure taken in response to such attack.” See Pub.L. No. 108-11, § 4002(a)(7).

The DOL instructions require that a form be sent to the employer requesting information regarding the claimant’s eligibility for TEUC-A benefits. The record in this case includes the form sent to claimant’s employer asking whether he was laid off from employment “due to a loss of business, in whole or in part, caused by [among other reasons]: [t]he reduction in airline services following the events of September 11, 2001, or related security measures.” Employer answered “Yes” to this question.

The DOL instructions also explain what occurs where, as here, the state disagrees with the employer’s conclusion regarding a claimant’s TEUC-A eligibility:

Question: Information provided by the employer indicates that the employment is “qualifying employment,” but the state has reason to doubt the accuracy of this information. Is the state required to accept the employer’s statement?
Answer: No. However, the state must have credible information to refute the employer’s assertion and to support a determination of TEUC-A ineligibility.

68 Fed.Reg. at 35443 (emphasis added).

Thus, once the employer asserts that a claimant is eligible for TEUC-A benefits, the state must present credible information to refute that assertion. At issue here is whether the hearing officer erred in finding that the Division made such a showing, and whether, in doing so, it properly applied the federal statute. We conclude the hearing officer and the Panel erred as a matter of law in construing the statute. Accordingly, we remand for further proceedings so that the hearing officer may apply the proper standard and determine whether the Division refuted employer’s assertion of eligibility.

The hearing officer is the sole arbiter of conflicting evidence, and the hearing officer’s factual findings are binding on appeal if they are supported by substantial evidence or plausible inferences from the record. Davison v. Indus. Claim Appeals Office, 84 P.3d 1023 (Colo.2004); Postlewait v. Midwest Barricade, 905 P.2d 21, 24 (Colo.App.1995).

However, the question of statutory construction is the traditional province of the courts. Colo. Dep’t of Labor & Employment v. Esser, 30 P.3d 189 (Colo.2001); Bd. of *1161County Comm’rs v. Vail Assocs., Inc., 19 P.3d 1263 (Colo.2001).

In Salomon Forex, Inc. v. Tauber, 8 F.3d 966, 975 (4th Cir.1993) discussed the analysis used to determine the meaning of a federal statute:

The analysis begins, as with the interpretation of any legislative enactment, with the language of the Act, and if that conclusively reveals Congress’ intent, the analysis ends. In arriving at the plain meaning, we apply long recognized principles of interpretation. We assume that the legislature used words that meant what it intended; that all words had a purpose and were meant to be read consistently; and that the statute’s true meaning provides a rational response to the relevant situation. Conversely, we presume that language added by amendment was not mere sur-plusage; that undefined terms mean no more than the language imports; and that a statute is not self-contradictory or otherwise irrational.

At the remand hearing in this case, claimant presented uneontroverted evidence that after the events of September 11, 2001, his workload was reduced because there were fewer scheduled flights; people were afraid to fly, and therefore fewer people were doing so; and as a result, there was significantly less use of employer’s computer system, which resulted in his job layoff.

The Division did not call any witnesses with personal knowledge of the facts. But two Division representatives at the hearing reiterated the Division’s position that a shortage of passengers wanting to book flights was insufficient to show a “reduction in service.”

The hearing officer asked the Division representative: “You gave a definition of reduction in service. Where did that come from?” The Division representative answered:

This came from the continual updates that we get from the federal government clarifying the airline extension program, who’s eligible, who isn’t, some questions and answers, explaining why somebody might be eligible versus why somebody else might not be eligible for the program.
In this particular case, they are talking about security screeners who lost their jobs because of a loss of contract and the dispute was whether that loss of contract was due to increased security measures
[[Image here]]

During cross-examination of the Division representative, claimant’s counsel asked: “And you’re equating reduction in flights to reduction in services?” He answered: “[Y]es, that’s true. The federal government has said a reduction in flight[s] is a reduction in — or reduction in services is a reduction in flights.”

There are no exhibits in the record from the hearing, and both parties have attached the same version of the DOL instructions to their briefs. The only reference to security screeners in these instructions is as follows:

Question: The [Transportation Security Administration] announced that later this year it will cut 11% of the security screen-ers at the nation’s airports. Does this employment at airports with the TSA constitute a “qualifying employment” for TEUC-A purposes?
Answer: No. These layoffs are not due to a qualifying reason for separation, i.e., layoffs due to a reduction in service by the certified air carrier due to the September 11, 2001, terrorist actions ....

68 Fed.Reg. at 35443.

We assume, however, the Division is referring to an attachment to its brief filed October 7, 2003, which is a forwarded e-mail to an unidentified person from an unidentified person. According to the Division’s brief, the attachment provides guidance concerning security screeners and states, “There has to be a connection between the individual’s separation and a reduction in service by the air carrier (i.e., less flights, no need for the individual’s services) or the closure of an airport, rather than simply security measures undertaken as a result of the 9/11 terrorist attacks.” Although neither party has cited any portion of the Federal Register verifying this language, claimant’s attorney did not question its existence at the hearing. Thus, we have no reason to doubt its validity.

*1162The hearing officer found that there was, in fact, a reduction in scheduled flights and that such reduction was caused by “the flying public’s reluctance to fly and the reduction in the purchase of airline tickets.” But the hearing officer adopted the legal position of the Division that a shortage of passengers wanting to book flights was insufficient. The Panel adopted the same interpretation, stating that “there must be a causal connection between any reduction in flights and the claimant’s unemployment,” and that a “shortage of passengers wanting to book flights” was insufficient (emphasis added).

The phrase “reductions in service” is not defined in the Act itself, and the only two reported cases we have found addressing TEUC-A benefits offer no guidance on this issue. See Hempfling v. Unemployment Comp. Bd. of Review, 850 A.2d 773, 777 (Pa.Commw.Ct.2004)(employer disputed claimant’s request and presented credible evidence that her unemployment was due to an economic decline in technology-related industries in general; claimant’s evidence was “entirely hearsay” and uncorroborated); Chiccitt v. Unemployment Comp. Bd. of Review, supra (employer asserted that claimant was separated from employment because employer could not afford to continue to employ him).

Because the federal statute does not specifically define the phrase “reductions in service,” we must construe it in accordance with its ordinary or natural meaning. See Smith v. United States, 508 U.S. 223, 113 S.Ct. 2050, 124 L.Ed.2d 138 (1993); United States v. Floyd, 81 F.3d 1517, 1523 (10th Cir.1996) (“In interpreting Congressional intent, a reviewing court must determine whether the language used in a statute is ambiguous, or whether it has an ordinary meaning.”).

“Reduction” means “the amount by which something is lessened or diminished.” American Heritage Dictionary 1167 (4th ed.2002). “Service” means “the employment in duties or work for another,” American Heritage Dictionary, supra, at 1267, and “useful labor that does not produce a tangible commodity.” Webster’s Ninth New Collegiate Dictionary 1076 (1989).

Based upon these definitions, we conclude the phrase “reductions in service by an air carrier” is not limited to a decrease in the number of flights offered or provided by such a carrier, but is broad enough to include reductions in other services offered or provided by an air earlier.

Under the hearing officer’s and the Panel’s interpretation, if, for example, a catering company whose sole business is providing 1000 flight meals per week to an airline, needed only 250 meals per week after September 11, and was forced to lay off three of its four cooks, the separated cooks would receive benefits if the airline reduced the number of flights offered. But they would not receive benefits if the airline maintained its existing schedule and simply had fewer people on each flight. Yet, the effect on the employer and the workers would be identical under either scenario.

While Congress obviously did not intend to provide TEUC-A benefits to all airport-related employees, we doubt that it intended such an illogical result when it provided emergency economic relief to unemployed workers under the TEUC. See Bird v. United States, 187 U.S. 118, 23 S.Ct. 42, 47 L.Ed. 100 (1902); Salomon Forex, Inc. v. Tauber, supra; U.S. v. Blasius, 397 F.2d 203, 207 n. 9 (2d Cir.1968)(“There is a presumption against construing a statute as containing superfluous or meaningless words or giving it a construction that would render it ineffective.”).

We therefore conclude the hearing officer and the Panel erred as a matter of law in interpreting the statute so narrowly. The findings that there was a substantial drop in flight demand and passenger traffic, and that there was a corresponding reduction in the demand for employer’s services, did not preclude a determination that claimant’s separation was “due, in whole or in part, to reductions in service by an air carrier” and thus a finding that claimant was eligible for TEUC-A benefits.

Because the hearing officer and the Panel applied an incorrect legal standard to the facts, the case must be remanded for further proceedings. See Colo. Div. of Employment & Training v. Parkview Episcopal Hosp., *1163725 P.2d 787 (Colo.1986); ABC Disposal Servs. v. Fortier, 809 P.2d 1071 (Colo.App.1990)(courts are not bound by an agency’s decision that misconstrues or misapplies the law).

Given our determination, we need not address claimant’s remaining arguments.

The Panel’s order is set aside, and the case is remanded with directions to remand to the hearing officer for further proceedings and a determination whether claimant’s separation was due, at least in part, to reductions in service by a certified air carrier.

Judge CASEBOLT concurs. Judge CARPARELLI dissents.