A Washington state appellate court panel here has overturned the denial of unemployment benefits to a woman who set up an insurance agency in an attempt to become self-employed, but failed to open it.
In a ruling that reversed a Superior Court decision, the Spokane-based Division III Court of Appeals found that a state Employment Security Department hearings examiner applied the wrong legal standard to deny unemployment benefits to Kim Turnbow, of Liberty Lake.
Under state law, a self-employed person generally isn't entitled to unemployment benefits, but a self-employed person who remains available for work and whose start-up business remains "contingent" is entitled to benefits.
The appellate court said the question of contingency, in this context, refers to the difference between setting up a self-owned business and running one, and that Turnbow didn't progress beyond the first step. Also, it disagreed with a finding that she hadn't been willing or available to take another job.
Turnbow, who represented herself in the appeal, couldn't be reached for comment.
Court documents say, though, that she was a finance and insurance manager for new car dealerships until the decline of the auto industry in 2008, and in October of that year began seeking independent contracts as an insurance agent. She worked for Orion Insurance Group for a couple of months in the spring of 2009, then quit in May of that year because of a disagreement and filed a claim for unemployment benefits, the documents say.
That same month, Turnbow took steps to start her own insurance agency, forming a corporation and seeking appointments from insurance carriers, while also looking for work as an independent insurance agent at several insurance companies. She secured a contract as an insurance agent with Aflac Insurance in June, and accepted a sales job with a used-car lot a day later. The car dealership's owner told her, though, that he couldn't pay her the agreed-upon commission rate, so she never started the job, the documents say.
The Employment Security Department denied her claims for unemployment benefits on the grounds that she quit her job at Orion without good cause and that she was "not available for work as an employee" in May. On appeal, an administrative law judge ruled that her resignation from Orion didn't disqualify her from receiving unemployment benefits, but that she was ineligible because her self-employment venture wasn't contingent and she wasn't available for work.
The commissioner of the Employment Security Department then affirmed that decision, and a Superior Court judge affirmed the commissioner's decision.
The appeals court, though, agreed with Turnbow, saying she "was seeking self-employment but, even so, was unemployed and eligible for unemployment benefits."