UC - VQ - demotion - justification v. substantial change analysis
Diversified Management Care v. UCBR -- Commonwealth Court - October 21, 2005 (2-1 decision)
Claimant (CL) quit her job when she was demoted. There was a reduction in her responsibilities but no reduction in pay or benefits. The employer (ER) demoted CL over an incident in which her son was arrested and faced criminal charges. During this period, she used ER phones to discuss what the UCBR found were "pressing legal and financial matters." There was no ER policy about using phones for personal reasons. The Board found no misconduct or even poor judgment on CL's part.
The ER claimed that the UCBR should have used the "substantial change analysis" to decide the case, and that the CL had failed to show that her job duties had substantially changed as a result of her demotion.
The court cited Allegheny Valley School District v. UCBR, 697 A.2d 243 (Pa. 1997) as setting forth the "appropriate standard" for determining whether a claimant has good cause to quit a job after a demotion. In that case, the court said that the focus in such a case should be "the justification for the demotion." If the demotion was justified, the claimant should get no benefits. If it wasn’t, benefits should be granted. The Commonwealth Court thus upheld the UCBR's application of the justification analysis and its refusal to use the change-of-circumstances analysis.
The Court also upheld the UCBR's reliance on the fact that the ER had no policy prohibiting the way that CL used the phones. The "Board did not err when it based its decision in part on the fact that Employer had no telephone policy, or, more important, that the demotion was unjustified."
Dissenting opinion -- Judge Leavitt filed a dissenting opinion, arguing that the Allegheny Valley case was factually different from instant case. The former involved both a reduction in responsibilities and in salary. The instant case involved only a reduction in responsibilities. The dissent felt that, for that reason, the correct analysis should have been substantial change. She felt that the justification analysis is appropriate if there is a reduction in duties and salary -- whether both of those factors are present so as to constitute a demotion. If so, then the justification analysis is applicable.
Because the instant case only involved a reduction in responsibilities and not in salary, the dissent felt that Allegheny Valley was "distinguishable...and…inapposite. In other words, inquiry into the justification for Claimant's so-called demotion is unnecessary." The Board didn't make findings about substantial change. Without those, and the impact that such changes had on her, "it is impossible to determine whether those changes were substantial and whether 'like circumstances would compel a reasonable person' to voluntarily quit." Judge Leavitt also disagreed with putting the burden on the employer to prove that the demotion was justified, given that in VQ cases, the burden is on the claimant. Overall, the dissent felt that the majority had undermined the goal of the Allegheny Valley court "to avoid intruding upon the ability of employers to make 'valid demotion'….The test should not be whether the Board agrees with the Employer's decision to relieve Claimant of her supervisory responsibilities but whether Employer can show that its stated reasons for a demotion can be factually supported."
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