Wis.LIRC UC Decision: Kleczka - October 13, 2000 - ET 491 - Family corporation: Director, officer, stockholder; VL 1054.09 - Voluntary Quitting - Sale of interest in business, cessation or suspension of business, corporate entity - employee owning or controlling interest in family corporation leaves work voluntarily unless cessation of business is involuntary

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

KEVIN O KLECZKA, Employee

LA CHALET TAVERN & RESTAURANT, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 00606649WK

An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, the employee is ineligible for benefits beginning in week 27 of 2000, and until four weeks have elapsed since the end of the week of quitting and the employee has earned wages in covered employment performed after the week of quitting equaling at least four times the employee's weekly benefit rate which would have been paid had the quitting not occurred.

Dated and mailed October 13, 2000
kleczke.usd : 105 : 1 ET 491 VL 1054.09

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

It is not strictly true, as the appellant has asserted, that he was paying "insurance" for a benefit (unemployment benefits) he could never collect. It is true that the legislature has limited the circumstances in which one in the appellant's circumstances is eligible for unemployment insurance. That limitation is found in Wis. Stat. � 108.04(7)(r), which governs involuntary cessation of a family corporation. Pursuant to that provision, in certain circumstances an employee who owns or controls an ownership interest in a family corporation may be eligible for unemployment insurance if his or her employment is terminated because of involuntary cessation of the business. The statute which governs the circumstances in which this can occur, is Wis. Stat. � 108.04(1)(gm). Involuntary cessation includes dissolution of the corporation due to economic inviability, filing for corporate bankruptcy, filing for personal bankruptcy by owners of the corporation, and disposition of 75 percent or more of the assets in assignment to creditors, surrender to creditors or sale due to economic inviability. In other words, the transfer of the corporation must be due to some form of economic duress, which makes it involuntary for purposes of the quit statute. In the present case, by contrast, there was no financial force requiring the sale of the business. As such, that sale was a voluntary quit of the employment under Wis. Stat. � 108.04(7)(a).

For these reasons, and those stated in the appeal tribunal decision, the commission has affirmed that decision. The commission notes, finally, that like the administrative law judge the commission also does not have the legal authority to declare invalid statutory provisions.

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