Agency erred in adjusting experience account rates after merger

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The Indiana Court of Appeals has ordered the Department of Workforce Development to reinstate the original contribution rates for unemployment insurance experience accounts of a parent company and its subsidiaries. The DWD should not have combined the accounts and adjusted the rates following a merger.

Boulder Acquisition Corp., a subsidiary of Xerox Corp., merged with Affiliated Computer Services Inc. BAC acquired equity interests in various subsidiaries of ACS, 26 of which operate in Indiana, and those entities became subsidiaries of BAC. Those Indiana subsidiaries kept their own employees, had their own unemployment insurance accounts that were separate from ACS’s account, and each still operated as an individual legal entity.

After BAC reported the merger to the DWD, the agency determined BAC became the “successor employer” of the subsidiaries under state law and combined the experience accounts of all the subsidiaries with BAC. This resulted in a higher contribution rate of 3.7 percent and a higher combined unemployment insurance tax for the companies. The DWD also assessed a penalty against BAC for failure to timely pay the appropriate fees.

A liability administrative law judge within the DWD upheld the determination BAC was the successor employer to the subsidiaries, citing I.C. 22-4-10-6 and 22-4-11-7.

In Boulder Acquisition Corp. (n/k/a Affiliated Computer Services, LLC), et al. v. Unemployment Insurance Appeals of the Indiana Dept. of Workforce Development, 93A02-1202-EX-127, BAC argued that it did not acquire “the organization, trade or business, or substantially all the assets” of each of the subsidiaries, as defined in statute. The DWD claimed that I.C. 22-4-11.5-7 applies, so the experience accounts should have been recalculated and combined. The agency admitted that the relationship between the subsidiaries and its parent company didn’t change with the merger, but believed that the account setup prior to the merger was an error that it merely corrected once it learned of the merger.

This issue is one of first impression in Indiana. The Court of Appeals found guidance in Franklin Electric, although that decision doesn’t govern the COA’s interpretation of I.C. 22-4-10-6(a) because of Franklin Electric’s narrow holding.  

The judges concluded that BAC did not acquire the organization, trade or business, or substantially all the assets of any of the subsidiaries, nor did the subsidiaries transfer all or a portion of their trade or business to BAC. The subsidiaries remained separate legal entities and can be separate employers from their parent company.

The subsidiaries should be permitted to maintain their own employment experience accounts, Chief Judge Margret Robb wrote. She noted the court’s decision remains the same when interpreting I.C. 22-4-11.5-7.

The judges remanded for the DWD to adjust BAC’s and the subsidiaries respective experience accounts and refund any overpayment by BAC and/or the subsidiaries.



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  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  3. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

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