## Facts

- Rene Zambrano worked as a seasonal cannery employee for a Wisconsin vegetable processor from June to October 1999, earning about $10,290.98.
- After the season ended, he applied for unemployment compensation in April 2000.
- Wisconsin applied a statutory “Cannery Rule” governing unemployment eligibility for seasonal fruit and vegetable processors.
- Under the Cannery Rule, a seasonal cannery worker could receive benefits only if at least one condition applied: (1) work occurred outside the active processing season; (2) the worker otherwise satisfied general eligibility requirements under state law; or (3) the worker earned more than $200 from another employer during a defined pre-cannery period.
- The agency found Zambrano did not satisfy any of the Cannery Rule’s alternatives and denied benefits.
- Zambrano sued the state workforce agency’s secretary in federal court, asserting conflicts with federal unemployment statutes and a constitutional equal protection violation.

## Issues

1. Whether the Cannery Rule violates the Social Security Act’s “When Due” requirement, 42 U.S.C. § 503(a)(1), by depriving eligible claimants of timely unemployment benefits.
2. Whether the Cannery Rule violates FUTA, 26 U.S.C. § 3304(a)(10), by cancelling or reducing unemployment wage credits or benefit rights.
3. Whether the Cannery Rule violates the Equal Protection Clause by treating seasonal cannery workers differently without a rational basis.

## Decision

- The Seventh Circuit affirmed summary judgment for the state official and upheld the Cannery Rule.
- The Cannery Rule was treated as a substantive eligibility limitation, not an administrative timing rule; therefore it did not violate the Social Security Act’s “When Due” clause.
- FUTA § 3304(a)(10) was not violated because the rule did not cancel or reduce vested wage credits or benefit rights; it defined the conditions under which eligibility arises.
- Under rational-basis review, differential treatment of seasonal cannery workers was justified by the state’s interest in ensuring benefit recipients have sufficient attachment to the state labor market.

## Legal Principles

- The Social Security Act’s “When Due” requirement targets the administration and timing of payments once benefits are owed; it does not bar states from setting substantive eligibility criteria defining when benefits become owed.
- FUTA § 3304(a)(10) prevents cancellation or reduction of already-earned wage credits or established benefit rights, but does not prohibit state rules that limit eligibility before any such rights vest.
- A classification affecting unemployment eligibility that does not involve a suspect class or fundamental right is reviewed for a rational relationship to a legitimate state interest.
- A state may require certain seasonal workers to show additional labor-market attachment as a condition of unemployment eligibility.

## Conclusion

The court upheld Wisconsin’s Cannery Rule as a permissible eligibility restriction consistent with federal unemployment statutes and rationally related to the state’s legitimate interest in limiting benefits to workers with demonstrated attachment to Wisconsin’s labor market.


Zambrano v. Reinert, 291 F.3d 964 (7th Cir. 2002)