Naval
Surface Warfare Center v. UCBR – Cmwlth. Court – December 12, 2014
Sec.
402(b) does not render a claimant ineligible where he leave under a
“Voluntary Layoff Option” (VLO), because his separation from employment was due
to his acceptance of a layoff pursuant to an established employer plan which is
part of a labor force reduction.
Following
the decision in Diehl v. UCBR, 57 A.3d 1209 (Pa. 2012), the court also
held the claimant does not have the burden to show a necessitous and compelling
reason for leaving a job where the VLO language of sec. 402(b) applies, i.e.
where the retirement offer made to Claimant was offered as a part of an established plan
by Employer that had the practical effect of a workforce reduction.
Section 402(b) of the Law provides that an employee shall be
ineligible for unemployment compensation in any week in which unemployment is
due to voluntarily leaving work without cause of a necessitous and compelling
reason. 43 P.S. § 802(b). However, the VLO Provision within Section 402(b)
cautions:
Provided further, That no otherwise eligible claimant shall
be denied benefits for any week in which his unemployment is due to exercising
the option of accepting a layoff, from an available position pursuant to a
labor-management contract agreement, or pursuant to an established employer
plan, program or policy.
In Diehl, the Supreme Court examined the language of
the VLO Provision and the intent of the General Assembly, as expressed in
Section 3 of the Law.6 The Court highlighted the broad humanitarian objective
of the Law expressed
in Section 3, and recognized that a cardinal principle of the Law is that the
eligibility sections must be construed liberally and the disqualification
sections construed narrowly so that an unemployed worker shall be denied
benefits only where the plain language of the Law unequivocally excludes the
worker from receiving unemployment compensation. Diehl, 57 A.3d at
1217-1218; see also Penn Hills School District v. Unemployment Compensation
Board of Review, 437 A.2d 1213, 1216 (Pa. 1981).
The Diehl
Court stressed that Section 402(b) establishes an exclusionary rule for
claimants who have left employment without a necessitous and compelling reason,
but that the VLO Provision is an eligibility carve-out from this
disqualification provision that must be construed broadly in favor of the
claimant seeking unemployment compensation. Diehl, 57 A.3d at
1221. Looking at the VLO language as a whole, the Court stated that “the
VLO Proviso applies to employees accepting employer offered early retirement
packages as part of a labor force reduction, because such programs are merely a
different way to accomplish the workforce reduction of a layoff.” Id. at
1222.
The
Commonwealth Court rejected the employer's argument that unemployment
compensation benefits are only available when employment is terminated due to a
RIF (reduction in force), as opposed to a VERA (voluntary early retirement
authority). This interpretation of the Law conflicts with the plain language of
the VLO Provision and was unequivocally rejected in Diehl, where the
Supreme Court overruled Commonwealth Court precedent and made clear that the
VLO Provision applies when a layoff is voluntary. Id. at 1221.
Following
Diehl, the issue of whether the separation was forced and whether a
claimant’s decision was motivated by an objective fear that if the voluntary
offer was not taken the separation from employment could later lead to a
termination of employment, are not determinative of whether a claimant is
eligible for UC benefits under the VLO Provision. Instead, the focus is on whether
the facts demonstrate that the separation was due to a claimant’s acceptance of
a “layoff.”
In the
instant matter, the evidence demonstrated that the offer of early retirement
was initiated at the will of Employer and accepted by Claimant, that Claimant
accepted the offer from an available position, and that the early retirement
offer was made pursuant to a plan established by Employer. (R. Item 17, Board
H.T. at 7, 8-9.) This evidence, along with the evidence that Claimant was
“otherwise eligible,” created a presumption that Claimant was eligible for
unemployment compensation under the VLO Provision. Diehl, 57 A.3d at
1222. The burden then shifted to Employer to demonstrate that the early
retirement offer was not a “layoff.” Employer failed to carry this burden.
The
evidence in the record "clearly supports the Board’s determination that
the practical effect of Employer’s plan was a layoff of Claimant.
Employer’s witness testified that under the VERA plan, employees in
various positions “were identified as the starting point for a restructuring
effort within [Employer’s] organization,” as “surplus or positions that were no
longer needed in the workforce.”
