Thursday, January 22, 2015

UC - voluntary quit - loss of commuting benefit

Morgan v. UCBR – Cmwlth. Court (en banc, 5-2) – January 14, 2015



Claimant quit his job when his employer unilaterally and without warning took away his employer-provided transportation, which had a value of about $90 day, which was about ½ of claimant’s earnings.  


The Court affirmed the UCBR’s denial of benefits, holding that the claimant had not explored alternatives before quitting.  The Board also found that the claimant “could commute with the employer’s director,” as he had done when he had first started working.  This finding was based on testimony of the employer’s manager that the director “can give you a ride home, you can, you can figure out something else, but you’re just not going to do it on the company dime anymore.”  The Court found that “the Board could logically and reasonably infer that Manager’s statement that Claimant could get a ride home with Director was a suggestion to commute with Director.”    The court also upheld the Board finding that Claimant had not explored alternative solutions to the transportation problem and the loss of 50% of his earnings before quitting.



The dissent (Leavitt and Pelligrini) thought that the employer statement just concerned getting a ride home that single day, when claimant was at a work and was “deprived on the means to return home.  After that, Claimant had to ‘figure out something else’ without any financial support from Employer.”  A substantial reduction in pay constitutes a necessitous and compelling reason to leave employment and, thus, does not affect eligibility for unemployment compensation. A-Positive Electric v. Unemployment Compensation Board of Review, 654 A.2d 299, 302 (Pa. Cmwlth. 1995). “[W]here an employee benefit has special significance and intrinsic value to a claimant, an employer’s unilateral alteration of that benefit and corresponding reduction in compensation gives a claimant necessitous and compelling cause for terminating employment.” Id. Because there is “no talismanic percentage” for determining a substantial reduction, each case turns on its own circumstances. Id.


In Steinberg Vision Associates v. Unemployment Compensation Board of Review, 624 A.2d 237, 238-39 (Pa. Cmwlth. 1993), six years after the claimant was hired, the employer notified her that it would no longer reimburse her health insurance premium of $235.16 per month. The loss of this reimbursement effected “a 14.2% reduction in earned compensation.” Id. at 240. We held that “the [e]mployer’s unilateral alteration of that benefit and corresponding reduction in compensation” constituted a necessitous and compelling reason to quit. Id. See also Chavez (Token) v. Unemployment Compensation Board of Review, 738 A.2d 77, 82 (Pa. Cmwlth. 1999); A-Positive, 654 A.2d at 302-03.


In this case, from the time of his initial hire in 2010 and throughout his employment Employer assumed the cost of Claimant’s commute. Claimant’s evidence established that the value of the Employer-provided vehicle, and reimbursement of fuel and tolls was approximately $90 per day.  Employer did not contest this figure. Claimant established that his gross salary at the time of his separation was $176 per eight-hour day.  On Claimant’s claimant’s last day of work, the employer unilaterally eliminated his commuting benefit without warning. Employer offered no evidence that the loss of Claimant’s benefit was negotiable or capable of revision.


Claimant was not obligated to continue working under Employer’s new terms. It is true, as the majority notes, that a claimant seeking to establish a necessitous and compelling reason for quitting must demonstrate, inter alia, that he made a reasonable effort to preserve his employment. Brunswick Hotel & Conference Center, LLC v. Unemployment Compensation Board of Review, 906 A.2d 657, 660 (Pa. Cmwlth. 2006). However, a unilateral reduction in compensation in and of itself provides a necessitous and compelling reason for quitting, if the reduction is substantial. See, e.g., Steinberg Vision Associates, 624 A.2d 237; Morysville Body Works, Inc. v. Unemployment Compensation Board of Review, 430 A.2d 376 (Pa. Cmwlth. 1981) (salary reduction of 25%); Ship Inn, Inc. v. Unemployment Compensation Board of Review, 412 A.2d 913 (Pa. Cmwlth. 1980) (claimant’s $67.80 weekly salary reduced by $15). In these cases, this Court held that the claimants’ salary reductions were substantial and provided a necessitous and compelling cause to immediately quit. Claimant’s 50% reduction in compensation in the present case should compel the same result.