Couch v. North Carolina Employment Sec. Com'n

• Decision Date: 05 April 1988
• Docket Number: No. 8715SC869,8715SC869
• Citation: 89 N.C.App. 405,366 S.E.2d 574
• Parties: Etta COUCH v. NORTH CAROLINA EMPLOYMENT SECURITY COMMISSION and Kid's World.
• Court: North Carolina Court of Appeals

Page 574

366 S.E.2d 574

89 N.C.App. 405

Etta COUCH v. NORTH CAROLINA EMPLOYMENT SECURITY COMMISSION and Kid's World.

No. 8715SC869.

Court of Appeals of North Carolina.

April 5, 1988.

North State Legal Services, Inc. by John L. Saxon, Hillsborough, for claimant-appellant.

No brief filed for Kid's World, appellee.

T.S. Whitaker, Chief Counsel, and Thelma M. Hill, Staff Atty., Raleigh, for Employment Sec. Com'n of North Carolina, appellee.

EAGLES, Judge.

The sole issue for our review is whether claimant has left her employment as a cook with Kid's World voluntarily without good cause attributable to her employer. Specifically, we must decide two questions: whether claimant left her job voluntarily and whether a reduction in her work hours constitutes "good cause attributable to the employer."

Initially we note that where, as here, appellant fails to except to the findings of fact, our review is limited to whether ESC and the court below correctly interpreted the law and correctly applied the law to the facts found. Bunn v. N.C. State University, 70 N.C.App. 699, 321 S.E.2d 32 (1984), disc. rev. denied, 313 N.C. 173, 326 S.E.2d 31 (1985). Here the referee found that:

1. Claimant last worked for Kids World on December 29, 1986. From January 18, 1987 until January 24, 1987, claimant has registered for work and continued to report to an employment office of the Commission and has made a claim for benefits in accordance with G.S. 96-15(a) as of the time the Adjudicator, Helen DeBerry, issued a determination which disqualified the claimant for unemployment benefits. The claimant filed a NIC claim effective January 18, 1987. The claimant's weekly benefit amount is $87.00. The claimant's maximum benefit amount is $1,479.00.

2. The claimant appealed the Adjudicator's determination and an evidentiary hearing was scheduled for March 3, 1987 before Jo Ann Weaver, Appeals Referee. The following individuals were present at the hearing: the claimant. The employer requested a continuance for business reasons. The continuance was denied.

3. Claimant left this job because her hours were cut and she did not feel that her pay justified the commute.

4. When claimant left the job, continuing work was available for claimant there.

5. The claimant originally worked five hours a day, five days a week.

6. The claimant's hours were cut to three hours a day for five days a week in December of 1986.

7. The claimant was paid an hourly rate.

8. The claimant lived approximately eight miles from her place of employment.

These facts are binding on appeal when, as here, there is competent evidence to support the findings. In re Cantrell, 44 N.C.App. 718, 263 S.E.2d 1 (1980). The referee's conclusions of law, as well as the conclusions of ESC, are fully reviewable. See id.

The trial court held "that the Employment Security Commission properly applied the law to [the] facts and the decision rendered was in accordance with the Employment Security Law." More specifically, ESC had concluded as a matter of law that a "reduction of hours does not give good cause for voluntarily leaving a job."

In its determination ESC relied upon G.S. 96-14(1) which, in pertinent part, states:

An individual shall be disqualified for benefits:

(1) For the duration of his unemployment ... if it is determined by the Commission that such individual is, at the time such claim is filed, unemployed because he left work voluntarily without good cause attributable to the employer. [Emphasis added.]

Our Supreme Court has construed this provision to mean that a claimant is disqualified from receiving unemployment compensation only if he voluntarily left his position and the leaving was without good cause attributable to the employer. In re Poteat v. Employment Security Comm., 319 N.C. 201, 353 S.E.2d 219 (1987).

We first address whether claimant's quit was voluntary. Neither the referee's decision nor ESC's decision spoke to this issue. Claimant argues that she was forced to quit because her employer reduced her hours and it became economically unfeasible for her to continue working there. We hold that claimant's quit was voluntary.

In In re Poteat the Supreme Court in discussing voluntary termination, quoted Eason v. Gould, 66 N.C.App. 260, 311 S.E.2d 372 (1984), aff'd per curiam by equally divided court, 312 N.C. 618, 324 S.E.2d 223 (1985), "an employee has not left his job voluntarily when events beyond the employee's control or the wishes of the employer cause the termination." In re Poteat, 319 N.C. at 205, 353 S.E.2d at 222. The court indicated that a review of voluntariness must focus on the "external factors motivating the employee's quit." Id.

Here claimant was not asked to resign nor was she told that she would be discharged within a few weeks. This court has previously ruled that in those factual circumstances an employee's quit would not be considered voluntary. Eason, supra; In re Werner, 44 N.C.App. 723, 263 S.E.2d 4 (1980). Instead, this employer made a conscious unilateral business decision which directly affected claimant and changed the working conditions under which she was initially employed. The employer's decision to reduce claimant's working hours, however, did not terminate her employment. In fact, the referee found that when claimant left her position, there was continuing work available at Kid's World. Furthermore, the record does not indicate that the employer's actions were an attempt to induce claimant to quit. Claimant's decision to leave her employment was not made under compulsion or coercion, but rather was a knowing, conscious response to the employer-imposed reduction in her working hours. Accordingly, we hold that claimant voluntarily quit her employment.

G.S. 96-14(1) disqualifies this claimant for benefits only if it can be shown that she voluntarily quit and that the quit was without good cause attributable to the employer. In re Poteat, 319 N.C. at 203, 353 S.E.2d at 221. Our Supreme Court has defined "good cause" as "a reason which would be deemed by reasonable men and women valid and not indicative of an unwillingness to work." Intercraft Industries Corp. v. Morrison, 305 N.C. 373, 376, 289 S.E.2d 357, 359 (1982). Additionally, "attributable to the employer" has been defined as "produced, caused, created or as a result of actions by the employer." In re Vinson, 42 N.C.App. 28, 31, 255 S.E.2d 644, 646 (1979). The facts here show that the employer created these circumstances by his decision to reduce claimant's working hours. The question, then, is whether a reduction in hours under these facts and circumstances would be deemed by reasonable men and women to be good cause to voluntarily quit. Our research discloses no North Carolina decision on this issue.

The majority rule among those states which have addressed this specific issue is that a substantial reduction in pay or hours worked may be good cause attributable to the employer so that the claimant is not disqualified as a matter of law from receiving unemployment benefits. In Bunny's Waffle Shop v. California Employment Com'n., 24 Cal.2d 735, 151 P.2d 224 (1944), San Francisco area restaurant owners unilaterally reduced the wages of their respective employees in a union dispute. Some employees quite their jobs because of this unilateral reduction in their wages. The employers brought the case before the California Supreme Court and described it as involving "workers who left their jobs because their employers substantially reduced wages and imposed less favorable conditions of work." Id. at 739, 151 P.2d at 226. After addressing the specific union issues, the court addressed whether the employee-claimants left work voluntarily without good cause. Justice Traynor noted that "[a] substantial reduction in earnings is generally regarded as good cause for leaving employment." Id. at 743, 151 P.2d at 228.

A Louisiana court also concluded that substantial reductions in pay could be regarded as good cause for leaving employment. Robertson v. Brown, 139 So.2d 226 (La.App.1962). That court concluded that any other result would allow an employer to prevent any employee from receiving unemployment benefits by simply reducing the employee's wages or hours rather than discharging them outright. The court reasoned that while a substantial pay or work reduction would compel the normal, reasonable employee to leave his job, it would at the same time make him ineligible for any unemployment benefits.

A number of other foreign jurisdictions follow this general rule. Tombigbee Lightweight Aggreg. Corp. v. Roberts, 351 So.2d 1388 (Ala.Civ.App.1977) (reduction in earnings from minimum of $165 per week to maximum of $130 per week was good cause for leaving employment); Kyle v. Beco Corp., 109 Idaho 267, 707 P.2d 378 (1985) (wage cut from $7.50 per hour to $3.35 per hour could be good cause for leaving employment); Keystone Consol. Ind. v. Illinois Dept. of Labor, 37 Ill.App.3d 704, 346 N.E.2d 399 (1976) (reductions in wages of 30% to 47% can be good cause); International Spike, Inc. v. Ky. Unemployment Ins., 609 S.W.2d 374 (Ky.App.1980) (salary reductions of 21% and 32% resulting from transfer within the plant produced circumstances compelling quit); Boucher v. Maine Employment Sec. Com'n., 464 A.2d 171 (Me.1983) (unilateral 66.5% reduction in pay after recall from layoff was good cause); Scott v. Photo Center, Inc., 306 Minn. 535, 235 N.W.2d 616 (1975) (per curiam), (25% pay cut gave claimant good cause to quit employment); Tate v. Mississippi Employment Sec. Com'n., 407 So.2d 109 (Miss.1981) (claimant whose work hours were reduced approximately 50% to below what it would cost claimant for child care had good cause to voluntarily leave); Armco Steel Corp. v. Labor & Indus. Rel. Com'n., 553 S.W.2d 506 (Mo.App.1977) (demotion and resulting pay reduction of 44% gave claimant good cause to leave); Johns-Manville Prod. Corp. v. Board of Review, Etc., 122 N.J.Super., 366, ...