2.3​Michigan Employment Security Act⁴⁶

The Michigan Employment Security Act (MESA) addresses venue and sets forth its own scope of judicial review of decisions by an administrative law judge (ALJ) and the Michigan Compensation Appellate Commission (MCAC). MCL 421.38(1). “The [Unemployment Insurance Appeals Commission (UIAC)] was created by the Governor’s Executive Order 2019-13, which among other things transferred the authority of the MCAC with respect to unemployment appeals to the UIAC.” Schulmeyer v Labor and Economic Opportunity Dep’t of/Unemployment Ins Agency, ___ Mich App ___, ___ (2025) (“Because the applicable statutes continue to refer to the MCAC and have not been updated to reflect the creation of the UIAC, we will use both names interchangeably.”). 

The Labor and Economic Opportunity Department of/Unemployment Insurance Agency (UIA) “is not statutorily required to attend hearings before an ALJ.” Schulmeyer, ___ Mich App at ___. “Instead, MCL 421.33 provides that an ALJ must ‘afford all interested parties a reasonable opportunity for a fair hearing.’” Schulmeyer, ___ Mich App at ___. “It further provides that if the appellant fails to appear or prosecute the appeal [to the UIAC], then the proceedings may be dismissed.” Schulmeyer, ___ Mich App at ___. “There is no language indicating that if the appellee fails to appear or defend its position that a default will be entered against the appellee that will preclude the appellee from challenging the factual findings or legal conclusions of the ALJ.” Id. at ___. “Moreover, under the doctrine of expressio unius est exclusio alterius (the expression of one thing is the exclusion of another) the fact that the Legislature expressly authorizes dismissal based upon the appellant’s failure to appear, but is silent as to the effect of the appellee’s failure to appear, indicates that the appellee’s failure to appear does not subject the matter to dismissal.” Id. at ___. “Indeed, MCL 421.33(2) provides that an interested party ‘may file an appeal’ to the UIAC.” Schulmeyer, ___ Mich App at ___. “There is no language limiting the right to appeal to interested parties that attended the hearing before the ALJ.” Id. at ___ (holding that “the mere failure to attend a hearing before the ALJ will [not] result in the UIA being precluded from challenging the factual findings and legal conclusions of the ALJ”). See Section 2.1(D) for information on venue and Section 2.1(B) regarding judicial review.

A.​Record on Appeal

“Within 42 days after the claim of appeal is served on the Michigan Compensation Appellate Commission [MCAC], or within further time as the circuit court allows, the [MCAC] must transmit to the clerk of the circuit court a certified copy of the record of proceedings before the administrative law judge and the [MCAC],” and “notify the parties that the record was transmitted.” MCR 7.116(F).

“The circuit court . . . did not err when it considered the certified record presented by the MCAC in its entirety,” including “files of the [Michigan Unemployment Insurance Agency] that were not presented to the ALJ”; “[b]ecause MCR 7.116 does not otherwise limit the scope of the record on appeal, the general definition of ‘record on appeal’ from an agency decision in MCR 7.109(A)(2) applies,” and “the record before the circuit court [therefore] properly included ‘all documents, files, pleadings, testimony, and opinions and orders’ of the tribunal and the agency.” Lawrence v Mich Unemployment Ins Agency, 320 Mich App 422, 432-435 (2017) (quoting MCR 7.210(A)(2) and noting that “[w]hile this expansive definition seemingly conflicts with the limited scope of the record described in MCL 421.34 and MCL 421.38” of the MESA, a court rule prevails in a purely procedural conflict between a court rule and a statute).Judicial Review

Procedures specific to appeals to the circuit court under the MESA are set forth in MCR 7.116. Unless provided otherwise in MCR 7.116, the rules set out in MCR 7.101—MCR 7.115 apply. MCR 7.116(A).⁴⁷ A party must file “[a]n appeal of right from an order or decision of the [MCAC] . . . within 30 days after the mailing of the commission’s decision.” MCR 7.116(B); see also MCL 421.38(1). “[T]he claim of appeal shall conform with MCR 7.104 and must include statements of jurisdiction and venue,”⁴⁸ and “proof that the claim of appeal was served on the [MCAC] and all interested parties must be filed in the circuit court.” MCR 7.116(C). “The unemployment agency is a party to any appeal under MCL 421.38(3), but the [MCAC] is not[.]” MCR 7.116(C). The appellee must file an appearance within 14 days of being served with the claim of appeal. MCR 7.116(E).

“A circuit court conducting a direct review of an administrative decision must decide whether the action was authorized by law and whether the decision was supported by competent, material, and substantial evidence on the record.” Schulmeyer v Labor and Economic Opportunity Dep’t of/Unemployment Ins Agency, ___ Mich App ___, ___ (2025). See Const 1963, art 6, § 28, MCL 421.38(1), and MCR 7.116(G). “It is axiomatic, therefore, that review should be limited to the record that was before the administrative tribunal.” In re Buchanan, ___ Mich App ___, ___ (2026).

“Substantial evidence is that which a reasonable mind would accept as adequate to support a decision. Substantial evidence is more than a mere scintilla but less than a preponderance of the evidence.” Trumble’s Rent-L-Center, Inc v Employment Security Comm, 197 Mich App 229, 233 (1992) (internal citation omitted). “A reviewing court is not at liberty to substitute its own judgment for a decision of the MCAC that is supported with substantial evidence.” Hodge v US Security Assoc, Inc, 497 Mich 189, 193-194 (2015).

“When reviewing a lower court’s review of agency action [the] Court [of Appeals] must determine whether the lower court applied correct legal principles and whether it misapprehended or grossly misapplied the substantial evidence test to the agency’s factual findings.” Schulmeyer, ___ Mich App at ___ (cleaned up). “A decision is subject to reversal if it is based on erroneous legal reasoning or the wrong legal framework.” Id. at ___ (quotation marks and citation omitted).“Although [the] Court [of Appeals] respectfully considers an agency’s interpretation of a statute that it administers, such an interpretation is not binding on the courts, and it cannot conflict with the Legislature’s intent as expressed in the language of the statute at issue.” Schulmeyer, ___ Mich App at ___ (noting that “the language of a statute—not an agency’s interpretation of it—must ultimately control”).

The UIA has “a right to seek judicial review of UIAC decisions.” Schulmeyer, ___ Mich App at ___. “MCL 421.34(7) expressly provides that interested parties must seek judicial review within 30 days or the decision of the UIAC will become final.” Schulmeyer, ___ Mich App at ___ (“[T]he UIA is statutorily defined as an interested party in matters before ‘a court . . . .’”). “The only limitation upon the ability of an interested party to seek judicial review is that it must be conducted as provided in MCL 421.38.” Schulmeyer, ___ Mich App at ___. “MCL 421.38 provides that the circuit court in the county in which the claimant resides or the circuit court in the county in which the claimant’s place of employment is or was located, or, if a claimant is not a party to the case, the circuit court in the county in which the employer’s principal place of business in this state is located, may review questions of fact and law on the record made before the administrative law judge and the UIAC involved in a final order or decision of the UIAC.” Schulmeyer, ___ Mich App at ___ (cleaned up). “MCL 421.38 contains no language expressly prohibiting the UIA from appealing a UIAC decision.” Schulmeyer, ___ Mich App at ___. “If the Legislature intended that the UIA not be permitted judicial review, then it could have included language in MCL 421.34(7) stating that any interested party, except the UIA, could appeal the decision to the circuit court within the 30-day limitations period.” Schulmeyer, ___ Mich App at ___ (refusing to “read such a limitation into the statute”).