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Rule Steel Tanks, Inc. v. Idaho Dept. of Labor

Supreme Court of Idaho., Boise

December 18, 2013

RULE STEEL TANKS, INC., Claimant-Appellant,
v.
IDAHO DEPARTMENT OF LABOR, Respondent.

Rehearing Denied Feb. 10, 2014.

Page 710

Michael R. Christian, Marcus Christian Hardee & Davies, LLP, Boise, argued for appellant.

Cheryl D. George, Deputy Attorney General, Boise argued for respondent.

EISMANN, Justice.

This is an appeal from an order of the Industrial Commission holding that the experience rating account for unemployment tax purposes was transferred from a predecessor employer to a successor employer pursuant to Idaho Code section 72-1351A(1)(a). We affirm the order of the Commission and award attorney fees on appeal to the Department of Labor.

Page 711

I.

Factual Background.

This appeal involves the transfer of the experience rating account for unemployment tax purposes from one employer to another pursuant to Idaho Code section 72-1351A(1)(a). Under the statute, the facts must show: (a) a covered employer; (b) transferred all or a portion of its trade or business to another employer; and (c) at the time of the transfer, there was substantially common ownership, management or control of the two (2) employers. After an investigation, the Department of Labor on September 19, 2011, issued a determination stating that effective January 1, 2010, the experience rating account of Diamond Z Trailer, Inc. (Diamond Z), which ceased operating in the spring of 2010, was transferred to Rule Steel Tanks, Inc. (Rule Steel), which hired the majority of the employees who were laid off by Diamond Z and which commenced marketing and manufacturing the same product that was manufactured by Diamond Z.

Rule Steel appealed that determination, and pursuant to Idaho Code section 72-1368(4)(a), the appeal was transferred to an appeals examiner. An evidentiary hearing before the appeals examiner was held by telephone on February 2, 2012. The hearing examiner found the relevant facts to be as follows:

1. Rule Steel Inc. is an Idaho corporation formed in 1980 (hereinafter referred to as " Rule" ).
2. Diamond Z Trailer, Inc. is an Idaho corporation formed in 1988. (hereinafter referred to as " Diamond" ).
3. Diamond's main business [in] 2008 and 2009 was the production of grinders used in construction.
4. Rule's main business in 2008 and 2009 was the production of steel containers.
5. Starting in 2008, the economic downturn caused Diamond to lose most of its business.
6. In May, 2009, Diamond laid off its remaining 60 employees.
7. In June, 2009, Rule hired 42 of Diamond's laid off employees.
8. Diamond had been leasing fabricating space from Rule. When Diamond laid off its employees, Rule took back the fabricating space. The employees hired from Diamond were housed in that space apparently.
9. In 2008, Steve Peel was the CEO and Secretary of Diamond. Gary Burkhart was the President of Diamond.
10. In 2009, Steve Peel was listed as Secretary for Diamond.
11. In 2009 Steve Peel was listed as the Secretary for Rule. Gary Burkhart was listed as the Treasurer and President for Rule.
12. In 2010, Steve Peel was listed as the Secretary for Rule, and Greg Burkhart was listed as the Treasurer and President.
13. Both Rule and Diamond have their respective logos and hyper-links on the website for each of them.
14. Both Rule and Diamond had the same physical address, 11299 Bass Lane, Caldwell, Idaho.
15. Les Pollard was listed as the HR contact person for both Rule and Diamond.
16. After Diamond ceased operations, Rule began offering grinders as ...

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