Bernard v. Unemployment Compensation Review Commission, 994 N.E.2d 437

Claudia Bernard, a Wakeman Educational Foundation employee in 2009, elected to divert $900/month of her wages into a tax‑free medical flexible‑spending account (FSA) under her employer’s cafeteria plan, totaling $10,800 for the year.
After her December 31, 2009 termination, Bernard applied for unemployment compensation but ODJFS excluded the FSA amounts from “remuneration,” reducing her base‑period wages and disqualifying her for benefits due to insufficient average weekly earnings.
The Unemployment Compensation Review Commission and the Miami County Court of Common Pleas upheld ODJFS’s exclusion; the Second District Court of Appeals affirmed by 2–1.
Bernard argued the Unemployment Compensation Act should be liberally construed in her favor and that R.C. 4141.01(H)(1)(a) ambiguously includes all compensation as “remuneration.”
ODJFS and the majority held that R.C. 4141.01(H)(1)(a) imports the exclusions listed in 26 U.S.C. §3306(b), and payments/reimbursements under a qualified cafeteria plan for medical expenses are not “remuneration” for unemployment‑eligibility purposes.
The Ohio Supreme Court affirmed, holding the agency’s interpretation reasonable and lawful and therefore entitled to deference; earnings placed in the FSA are excluded when calculating unemployment remuneration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether amounts an employee elects to divert into an FSA under a cafeteria plan count as "remuneration" for unemployment‑eligibility	Bernard: all compensation (including diverted amounts) counts; the statute should be liberally construed in favor of benefits	ODJFS/Wakeman: R.C. 4141.01(H)(1)(a) incorporates 26 U.S.C. §3306(b)(5)(G) exclusions; FSA reimbursements for medical expenses are not wages/remuneration	Held: FSA amounts are not "remuneration" for unemployment‑compensation eligibility; agency interpretation is reasonable and affirmed
Whether courts must defer to the affected party’s interpretation when construing ambiguous unemployment statutes	Bernard: court must construe statutes favorably to claimants and defer to affected party	State: deference is owed to the administering agency’s reasonable interpretation, not to the private party	Held: Deference owed to administrative interpretation where reasonable; Bernard’s argument rejected
Whether the relevant statutory language (state and federal) is ambiguous	Bernard: R.C. 4141.01 and related federal provisions are ambiguous, favoring liberal construction	ODJFS (and concurrence): federal and state provisions clearly exclude qualified FSA reimbursements from wages	Held: Majority found ambiguity but deferred to reasonable agency interpretation; concurrence found statutes unambiguous and would apply them as written

Univ. Hosp., Univ. of Cincinnati College of Medicine v. State Emp. Relations Bd., 63 Ohio St.3d 339, 587 N.E.2d 835 (standard of de novo review for legal questions)
Swallow v. Indus. Comm., 36 Ohio St.3d 55, 521 N.E.2d 778 (courts give due deference to agency interpretations where agency has expertise)
State ex rel. McLean v. Indus. Comm., 25 Ohio St.3d 90, 495 N.E.2d 370 (deference owed to agency interpretations when reasonable)
Irvine v. Unemp. Comp. Bd. of Rev., 19 Ohio St.3d 15, 482 N.E.2d 587 (appellate standard for reviewing unemployment commission decisions)
Clark v. Scarpelli, 91 Ohio St.3d 271, 744 N.E.2d 719 (definition of statutory ambiguity)
Lang v. Ohio Dept. of Job & Family Servs., 134 Ohio St.3d 296, 982 N.E.2d 636 (refusal to reject lawful and reasonable agency decision)
Sherwin‑Williams Co. v. Dayton Freight Lines, Inc., 112 Ohio St.3d 52, 858 N.E.2d 324 (plain‑meaning rule: enforce clear statutory language)
Estate of Heintzelman v. Air Experts, Inc., 126 Ohio St.3d 138, 931 N.E.2d 548 (first duty is to determine whether statute is clear and unambiguous)