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Superior Glass, Inc. v. Johnson

Court of Appeals of Minnesota

May 1, 2017

Superior Glass, Inc., Relator,
v.
Lucas Johnson, Respondent (A16-1433), Shawn Strang, Respondent (A16-1504),

         Department of Employment and Economic Development File Nos. 34637255-3, 34673933-3

          Steven C. Overom, Christopher S. Davis, Jr., Maki & Overom, Ltd., Duluth, Minnesota (for relator)

          Lucas Johnson, Wright, Minnesota (pro se respondent) Shawn Strang, Cloquet, Minnesota (pro se respondent)

          Lee B. Nelson, Keri A. Phillips, Department of Employment and Economic Development, St. Paul, Minnesota (for respondent department)

          Considered and decided by Kirk, Presiding Judge; Schellhas, Judge; and Bratvold, Judge.

         SYLLABUS

         I. When an employee performs more than 50% of his or her total hours during a calendar quarter in Minnesota, the employment was "performed primarily in Minnesota" and therefore the employee's entire employment during the calendar quarter is "covered employment, " as defined in Minn. Stat. § 268.035, subd. 12(a)(1)(i) (2016).

         II. A business is not subjected to double taxation in violation of the Dormant Commerce Clause by application of Minn. Stat. § 268.035, subd. 12(a) (2016).

          OPINION

          SCHELLHAS, Judge

         In this consolidated certiorari appeal, relator argues that unemployment-law judges (1) erred in determining that its employees are eligible for unemployment-insurance benefit accounts in Minnesota, and (2) applied Minn. Stat. § 268.035, subd. 12(a), to result in double taxation of relator in violation of the Dormant Commerce Clause. We affirm.

         FACTS

         Relator Superior Glass Inc. is a Wisconsin company with company headquarters in Superior, Wisconsin. Respondent-employees Lucas Johnson and Shawn Strang performed work for Superior Glass in both Minnesota and Wisconsin during 2015 and 2016, but Superior Glass laid them off for a period of time in 2016. Both employees applied for unemployment-insurance benefits with respondent Minnesota Department of Employment and Economic Development (DEED) because they lived in Minnesota.

         The employees earned wages during 2015 and 2016, and in support of their benefits applications, provided DEED with detailed logs of hours worked, broken down by day and by job. Based on that information, DEED determined how many hours each employee had worked in Minnesota and established base periods for the determination of benefits. See Minn. Stat. § 268.035, subd. 4 (2016) (defining "base period" and explaining how to determine base period). DEED determined that both employees were eligible to receive unemployment-insurance benefits because both worked more than 50% of their hours in Minnesota during certain calendar quarters in the base periods and therefore performed their employment primarily in Minnesota during those quarters. DEED further determined that, for the quarters during which Johnson and Strang performed their employment primarily in Minnesota, their entire employment with Superior Glass was "covered employment, " as defined in Minn. Stat. § 268.035, subd. 12(a)(1)(i).[1] As to each employee, DEED notified Superior Glass that "[u]nder Minnesota Statute section 268.047, subd. 1, any unemployment benefits paid will be used in computing the future unemployment tax rate of SUPERIOR GLASS."

         Superior Glass appealed DEED's determinations of eligibility. Unemployment-law judges (ULJs) conducted telephone hearings, affirmed DEED's determinations, and affirmed their decisions after reconsideration. This consolidated certiorari appeal follows.

          ISSUES

         I. Did the ULJs err in determining that the employees' entire employment during calendar quarters in which the employees performed work primarily in Minnesota was "covered employment, " as defined in Minn. Stat. § 268.035, subd. 12(a)(1)(i)?

         II. Does the ULJs' application of Minn. Stat. § 268.035, subd. 12(a), subject Superior Glass to double taxation in ...


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