State Supreme Court Deals Blow to UI System, Employers

As reported by the Association of Washington Business in a recent unanimous opinion that is nothing short of astonishing the Washington Supreme Court bluntly erased a thoroughly negotiated battleground tested foundational component of our states Unemployment Insurance system -- its statutory exclusive list of reasons for voluntary quits.

Voluntary quits are an issue in unemployment insurance because the historical purpose of the system is to provide a social safety net with partial wage replacement for a temporary period that an individual is unemployed through no fault of his or her own and is able willing and looking for work. Allowing benefits for individuals who choose to quit work runs afoul of that purpose.

But in a landmark 2003 compromise bill the Legislature specified ten (and in 2008 added an 11th) clear reasons why a voluntary quit may still result in benefit eligibility. Things like relocation of a military spouse protection of family from domestic violence certain substantial reductions in pay or hours and so on. This was the other half of legislation that fundamentally altered the collection of UI taxes from employers and addressed other benefit costs. It was part of a business-labor compromise brokered by then Gov. Gary Locke and set against the backdrop of serious economic competitiveness concerns and the states efforts to win assembly of Boeings new commercial airliner.

This will likely be an administrative nightmare for the Employment Security Department both going forward and potentially having to reassess benefit claims since 2003 that were turned down because the voluntary quit did not fall within one of the ten reasons.

The UI system has already become a hot topic for the 2009 Legislature because of a US Department of Labor determination that the Employment Security Departments tax collection system is out of conformity with federal law -- a problem the Legislature must fix.

Now on the benefit side todays decision elevates the voluntary quits issue to a similar prominence as the Department stakeholders and Legislature figure out whether and how to pick up the pieces.