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Morrow v. South Carolina Department of Employment & Workforce

Court of Appeals of South Carolina

May 28, 2014

Kimberly M. Morrow, Respondent,
v.
South Carolina Department of Employment and Workforce and A Wing and A Prayer, Inc., Defendants, Of whom South Carolina Department of Employment and Workforce is the Appellant, and A Wing and A Prayer, Inc. is also the Respondent. Appellate Case No. 2012-207406

Heard February 4, 2014

Appeal From The Administrative Law Court Shirley C. Robinson, Administrative Law Judge

Eugene Belton McLeod, III, and Debra Sherman Tedeschi, of South Carolina Departement of Employment and Workforce, both of Columbia, for Appellant.

Kimberly M. Morrow, pro se, of Spartanburg.

KONDUROS, J.

The South Carolina Department of Employment and Workforce (SCDEW) appeals the Administrative Law Court's (ALC) reversal of the SCDEW Appellate Panel's (Panel) finding that Kimberly Morrow was ineligible for unemployment benefits. The SCDEW argues the ALC exceeded its scope of review when substantial evidence supported the Panel's decision to deny Morrow unemployment benefits and the ALC erred in failing to consider Morrow's controlling interest in her employer as a relevant factor in creating her own unemployment. We affirm.

FACTS/PROCEDURAL HISTORY

A Wing and a Prayer, Inc. (Employer) was incorporated in 2005. Employer issued 10, 000 shares of stock with Raymond Hicks owning 6, 500 shares and Christopher Morrow, Morrow's husband, owning the remaining 3, 500 shares. Employer operated under the trade name "Blue Star BBQ" as a restaurant and catering business in Spartanburg, South Carolina. Morrow testified she worked as the manager of Blue Star BBQ and "basically ran the restaurant." Blue Star BBQ closed on January 23, 2011. In the year and a half before the closing of the restaurant, the business lost $113, 000.

As a result of the closing, Morrow applied for unemployment benefits on January 30, 2011. On her application for unemployment benefits, Morrow listed her position as Vice President and she stated she owned one-third of the business. On the application, Morrow wrote that the President, Vice President, Secretary, and Treasurer made the decision to close the business due to slow business and a lack of revenue. Regarding the future of the business, Morrow stated the business planned to reopen as soon as possible but no reopening date was set. She also provided she was involved in efforts to reopen the business, and she was looking for smaller locations to open a new restaurant. She estimated she spent twenty hours each week looking for a new location. In response to the question, "How much time (per week) will you contribute to the operation of the business during your period of unemployment?" Morrow answered, "None[.] Business is closed." In response to the question, "Do you expect to be reemployed with the business?" Morrow answered, "Yes" and stated her anticipated date of reemployment was "ASAP" as the Vice President.

On March 11, 2011, Morrow was notified that a claims adjustor with the SCDEW determined she was ineligible for unemployment benefits because:

As an officer of a corporation, [Morrow] had control over [her] employment insurance benefits. Since unemployment insurance benefits are meant for those who are unemployed through no fault of their own, [Morrow is] ineligible for benefits under the South Carolina Code. [Morrow is] ineligible for benefits beginning 01/30/11.

Morrow appealed to the SCDEW Appeal Tribunal (Tribunal), and a hearing was held on April 13, 2011. During the hearing, Morrow testified she had no controlling interest in Employer and Employer was no longer in business and had no plans to reopen. Morrow stated she spent approximately twenty hours per week in an effort to find a location to open a new restaurant. She also testified she attended classes for sixteen hours each week to earn her GED; however, she would be willing to stop going to school if she found full-time employment.

Christopher Morrow appeared at the hearing as an Employer witness. He testified Morrow was not an owner of Employer. He stated he owned one-third of Employer and Hicks owned two-thirds of Employer, while his wife was "only the operating manager and at the time [the restaurant was closed she] was on paper as the vice president just for paperwork." He stated Hicks, as the controlling partner, made the decision to close the restaurant and Morrow "really [had] no say so in that decision."

The Tribunal found Morrow did not have unrestricted exposure to the labor market and was ineligible for unemployment benefits based on her time spent seeking to open a new business and her enrollment in school. Morrow appealed the decision to the Panel, which affirmed the Tribunal's ruling. The Panel held Morrow's intention to open a new business in ...


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