Unemployment benefits through the Unemployment Insurance Agency (UIA); Settlement agreement containing a release; Attorney fees & costs; Michigan Office of Administrative Hearings & Rules (MOAHR); Michigan Employment Security Act (MESA)

The trial court correctly ruled that defendant violated the parties’ “settlement agreement by submitting documents to the ALJ stating that plaintiff was not entitled to unemployment benefits because she was terminated for misconduct.” But it found “the trial court awarded plaintiff an excessive amount of attorney fees and costs because the settlement agreement only contemplates that attorney fees and costs that are directly incurred in judicial litigation are awardable.” Defendant (plaintiff’s former employer) argued that the trial court erred by ruling that it violated the 8/23/21 settlement agreement (which contained a release and prohibited the parties from disparaging each other) “by submitting documents to the ALJ within the [MOAHR] stating that plaintiff was not entitled to unemployment benefits because she was terminated for misconduct.” The court noted that according “to defendant, MCL 421.20(a)(2) and MCL 421.54(a) of the MESA, taken together, implicitly require an employer to comply with requests for information from the UIA.” Thus, defendant asserted, “it was required to submit documentation to the ALJ indicating the reason why plaintiff was terminated.” The court found that “the parties would have been better served to expressly reference plaintiff’s ongoing claim for unemployment benefits in the settlement agreement.” Nonetheless, it agreed “with plaintiff and the trial court that paragraph 4 is sufficiently broad to encompass defendant’s conduct in the administrative proceedings after the [8/23/21] date of the settlement agreement.” While defendant strenuously argued “that it is required under the MESA to comply with UIA requests for information,” the court noted that “the administrative case was transferred to a separate agency, the MOAHR, on about [1/5/22], when plaintiff appealed the Notice of Redetermination. Thus, the MESA provisions relied upon by defendant do not shield its conduct after that date.” Further, defendant did “not argue that it was required, by statute or administrative rule, to submit incriminating documentation about plaintiff to the ALJ. To the contrary, the [3/18/22], ‘Notice of Telephone Hearing’ states that defendant may provide documentation ‘[i]f you wish.’” The court held that the “trial court correctly ruled that defendant violated paragraph 4 of the settlement agreement by continuing to challenge plaintiff’s claim for unemployment benefits, and that its violation in this regard was not excused by the MESA.” Affirmed in part, reversed in part, and remanded for further proceedings.