Boucher v. Maine Employment Sec. Com'n

• Decision Date: 08 August 1983
• Citation: 464 A.2d 171
• Parties: Maurice P. BOUCHER v. MAINE EMPLOYMENT SECURITY COMMISSION.
• Court: Maine Supreme Court

Page 171

464 A.2d 171

Maurice P. BOUCHER v. MAINE EMPLOYMENT SECURITY COMMISSION.

Supreme Judicial Court of Maine.

Argued May 12, 1983.

Decided Aug. 8, 1983.

Alan A. Toubman (orally), Pine Tree Legal Assistance, Inc., Presque Isle, Thomas H. Kelley, Pine Tree Legal Assistance, Portland, for plaintiff.

Peter J. Brann (orally), Asst. Atty. Gen., Maine Employment Sec. Com'n, Augusta, for defendant.

Before GODFREY, NICHOLS, ROBERTS, VIOLETTE and WATHEN, JJ., and DUFRESNE, A.R.J.

ROBERTS, Justice.

Maurice P. Boucher appeals from a judgment of the Superior Court, Aroostook County, which affirmed a decision of the Maine Employment Security Commission disqualifying him from receiving unemployment benefits. Boucher contends that a substantial reduction in pay constitutes "good cause" for terminating employment under 26 M.R.S.A. § 1193(1)(A) (Supp.1982-1983). Because we agree, we reverse the judgment of the Superior Court.

I.

In July of 1980, Boucher was hired as a leather cutter by Viner Brothers, Inc., a shoe manufacturer. He was employed in that capacity for a year. As a leather cutter, Boucher was in Viner Brothers' highest labor grade of six, earning $4.80 per hour plus incentive pay based on his volume of piece work. Viner Brothers' Employee Handbook provided for such incentive pay. By the end of a year of employment, he was earning "close to $10.00 an hour."

In July of 1981 when Viner Brothers shut down, Boucher was laid off. Approximately two months later, Boucher was recalled from the layoff. The Employee Handbook provides that upon recall from the layoff employers will offer employees positions open in their labor grade. If no such positions are open, the employer may offer a position in the next lower labor grade. The process continues through the succeeding lower labor grades. ¹ According to the Handbook, employees are obligated to accept the recall job. ² Boucher was assigned to work "last pulling" which has a labor grade of one and which paid him minimum wage, $3.35 per hour, with no incentive pay.

On the day he returned to work, Boucher immediately complained to the foreman about the last-pulling job and the wage. Three days later he complained to the personnel manager. He also filed four written grievances complaining about the reduction in salary. Boucher complained about the job for approximately two months. When no one responded, he quit his employment on November 30, 1981.

Upon Boucher's claim for unemployment benefits, the Deputy determined that Boucher left his regular employment "voluntarily without good cause" and thus denied him benefits. Boucher appealed the Deputy's decision to the Appeal Tribunal, which determined that the appeal was not timely. Boucher then filed an appeal with the Commission, which found that the appeal was timely.

Boucher testified at a hearing before the Commission, but no representative of the employer appeared. Framing the issue, the Commission stated that it must determine whether Boucher left his regular employment voluntarily without good cause attributable to such employment, within the meaning of 26 M.R.S.A. § 1193(1)(A). The Commission then decided that Boucher left his employment without good cause attributable to his employment because the employer had complied with the recall policy articulated in the Employee Handbook. Accordingly, the Commission reasoned that the employer was free to offer the last-pulling job to Boucher upon being recalled from the layoff. Boucher was required to accept that job although it paid him minimum wage. In addition, the Commission determined that a "mere reduction of wages" does not constitute good cause. According to the Commission, "[t]he employer must be free to structure his labor costs in a manner which will keep the business viable. Thus the employer was acting within its reasonable discretion when it assigned the claimant a job paying wages lower than he had been receiving."

II.

We review the administrative record to determine whether there is any competent evidence to support the findings of the Commission. We must also determine whether within those findings the Commission has correctly applied the law. Smith v. Maine Employment Security Commission, 440 A.2d 1037, 1038 (Me.1982); Tobin v. Maine Employment Security Commission, 420 A.2d 222, 224-25 (Me.1980).

A. Acceptance of the Recall Job

The Commission based its decision, in part, upon Boucher's obligation, according to the recall provision of the Employee Handbook, to accept the offered recall position. The record is unclear as to whether the Commission found that Boucher in fact accepted the last-pulling job with a labor grade of one and thus was not entitled to his former wages. See Smith, 440 A.2d at 1038 (record supports finding that plaintiff accepted temporary position); Edwards v. Unemployment Compensation Board of Review, 35 Pa.Cmwlth. 647, 650, 387 A.2d 510, 511 (1978) (general rule is that when one accepts job, he admits suitability of that job). Assuming for the purposes of this discussion that the Commission did so conclude, that ruling was erroneous.

The right to compensation benefits is derived from the unemployment compensation law and not from the agreement between the employer and employee. Johns-Manville Products Corp. v. Board of Review, 122 N.J.Super. 366, 370, 300 A.2d 572, 575 (1973); see Therrien v. Maine Employment Security Commission, 370 A.2d 1385, 1389 (Me.1977) (Commission erred in treating collective bargaining agreement as standard for determining whether claimant should receive unemployment benefits); see also Moore v. Maine Employment Security Commission, 388 A.2d 516, 519 (Me.1978) (Commission erred by ruling that violation of reasonable company rule constitutes per se misconduct). Consequently, the Employee Handbook provision requiring employees to accept recall jobs cannot be used as the basis for a finding that Boucher in fact accepted the recall position. Moreover, it is clear from the record that Boucher never accepted the last-pulling job. The Commission found as a fact that Boucher complained to his foreman "immediately" upon being assigned the last-pulling job. The record further demonstrates that he continued to complain; he complained to the personnel manager and filed four written complaints. When no one took any action, he left his employment. Under the circumstances, Boucher clearly did not voluntarily accept the recall position.

The Commission also based its decision, in part, upon the recall provision of the Employee Handbook which provides that the employer may recall Boucher to "open jobs." The record is unclear, however, as to whether the Commission concluded that as a result of that recall provision Boucher was not entitled to his former position or former wage. If the Commission based its ruling on such reasoning, it erred.

Before Boucher was laid off, he occupied a leather-cutting position which had the highest labor grade and he earned $10.00 per hour. The Employee Handbook provided that Boucher would be given a last-pulling job, the lowest labor grade, only if there were no positions available in the department in his labor grade and in every "succeeding lower labor grade." Under the recall provisions of the Handbook, therefore, Boucher had good reason to believe that upon recall he would receive his former position. When he returned to work, he discovered that he did not receive his former position as leather cutter but rather received the lowest grade job. It was only then that the change in employment conditions occurred. Under the circumstances, Boucher had no reasonable expectation of being relegated to the lowest labor grade at minimum wage. Boucher was not required to continue his employment at that reduced rate as a consequence of the terms of section 1193(1)(A). The Commission erred in concluding that under the provisions in the Employee Handbook Boucher was entitled only to whatever position the employer decided to assign to him.

This case is distinguishable from Smith v. Maine Employment Security Commission, 440 A.2d 1037 (Me.1982). In Smith, the plaintiff was a permanent employee until February of 1980 when illness forced her to leave. She returned in October of 1980 as a temporary employee. She left that employment when her foreman told her that as a temporary employee she was not entitled to the fringe benefits received by permanent employees. The Court held that by accepting a temporary position, Smith was neither promised nor entitled to the fringe benefits received by permanent employees. Id. at 1037-39.

In this case, Boucher never accepted the last-pulling position. It cannot be said therefore that he accepted the reduction in wages. Moreover, under the applicable provisions of the Employee Handbook, Boucher could have reasonably believed that upon recall he would receive his former position or a comparable one.

B. Reduction in Pay as Good Cause

The Commission also concluded that a "mere reduction" did not constitute good cause. In this case, the Commission found that before the layoff Boucher was earning $10.00 per hour and upon recall from the layoff was earning $3.35 per hour. This constitutes a 66.5% reduction in pay. The Commission determined that this "mere reduction" is proper because the employer is free to structure labor costs to keep his "business viable."

Under 26 M.R.S.A. § 1193(1)(A) (Supp.1982-1983), ³ an employee who "voluntarily without good cause" terminates his employment is not entitled to receive unemployment benefits. See Therrien, 370 A.2d at 1389-90. It is clear that mere dissatisfaction with wages generally does not constitute "good cause." Smith, 440 A.2d at 1039 (citations omitted). We have not to date determined whether a substantial reduction in pay constitutes good cause under 26 M.R.S.A. § 1193(1)(A). See id. at 1039 n. 4 (we did not determine conditions under which changes in terms of employment made unilaterally by employer may...