Opinion
No. 11–P–1406.
2012-07-10
MJM MANAGEMENT, INC. v. DEPARTMENT OF UNEMPLOYMENT ASSISTANCE.
By the Court (COHEN, GRAINGER & MILKEY, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
A hearing examiner of the Department of Unemployment Assistance (department) found that the plaintiff, MJM Management, Inc. (MJM), is a successor business pursuant to G.L. c. 151A, § 14N( a ), and, therefore, its rate of contribution to the Statewide unemployment compensation fund must be calculated with reference to its predecessor's account. See G.L. c. 151A, § 14N( c ). The department's board of review affirmed, as did a judge of the Boston Municipal Court. On further appeal to this court, we, too, affirm.
The facts found are not challenged on appeal and, in any event, are supported by substantial evidence. See Guarino v. Director of Div. of Employment Sec., 393 Mass. 89, 92 (1984). In June, 2009, MJM purchased an existing D'Angelo's restaurant franchise from Zebec Management, Inc. (Zebec), for $185,000. The sole corporate officer, director, and shareholder of Zebec was John Shea, whose sons, Michael and Matthew, incorporated MJM and were its officers.
It is acknowledged by the department that this was an arm's length transaction, and that John did not provide financial assistance to his sons in acquiring the business, or play any operational role after the transfer. At issue is the agency's interpretation and strict application of G.L. c. 151A, § 14N, the purpose of which is to safeguard the interests of the government against the possible loss of revenue that would result from evasion of proper unemployment fund contributions. See Lincoln Pharmacy of Milford, Inc. v. Commissioner of the Div. of Unemployment Assistance, 74 Mass.App.Ct. 428, 436 (2009). Our review is highly deferential; we give “due weight to the experience, technical competence, and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it.” Flint v. Commissioner of Pub. Welfare, 412 Mass. 416, 420 (1992), quoting from G.L. c. 30A, § 14(7). “[T]he [department's] interpretation and application of a statutory provision entrusted to it for enforcement are entitled to appropriate respect.” Anheuser–Busch, Inc. v. Alcoholic Bevs. Control Commn., 75 Mass.App.Ct. 203, 209 (2009).
Michael was MJM's president and treasurer, and Matthew was its secretary and director.
Here, the department's interpretation and application of the statute are consistent with its plain language. Section 14N( a ), inserted by St.2005, c. 138, § 4, requires the department to transfer the account of the business's transferor to its transferee, if there was “substantially common ownership, management or control of the transferor and transferee.” Pursuant to § 14N( k )(2), “ ‘[c]ommon management or control of corporations' means a chief executive officer, chief financial officer, or any other person holding similar authority for the transferring employer, served as, or had a continuing family relationship with, a chief executive officer, chief financial officer or person holding similar authority for the transferee employer” (emphasis added). Thus, under the plain terms of the statute, the intra-family transfer between John and his sons satisfied the § 14N( a ) criteria for “common ... management or control.”
With emphasis upon the word “substantially,” MJM argues that a more refined analysis would take into account factors like the arm's length nature of the transaction and the absence of John's financial or operational participation in MJM's business. However, even assuming that the statute can be interpreted to authorize such an analysis, where, as here, the department's interpretation is based upon clear statutory language, is consistent with the objectives of the statute, and has the virtue of easy administration, we defer to its administrative judgment.
Judgment affirmed.