Kentucky Unemployment Ins. Commission v. Kroehler Mfg. Co., BROWN-FORMAN

• Decision Date: 15 December 1961
• Docket Number: BROWN-FORMAN
• Citation: 352 S.W.2d 212
• Parties: KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION et al., Appellants, v. KROEHLER MANUFACTURING COMPANY of Kentucky et al., Appellees. KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION et al., Appellants, v.DISTILLERS CORPORATION, Appellee.
• Court: United States State Supreme Court — District of Kentucky

Page 212

352 S.W.2d 212

KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION et al., Appellants, v. KROEHLER MANUFACTURING COMPANY of Kentucky et al., Appellees.

KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION et al., Appellants, v. BROWN-FORMAN DISTILLERS CORPORATION, Appellee.

Court of Appeals of Kentucky.

Dec. 15, 1961.

Paul E. Tierney, Forest Smith, Clarence E. Powell, Dept. of Economic Security, Frankfort, for appellants.

James U. Smith, Jr., Louis E. Woolery, Smith & Smith, Louisville, for appellees Kroehler Mfg. Co. of Ky., and others.

Malcolm Y. Marshall, James S. Welch, Ogden, Brown, Robertson & Marshall, Louisville, for appellee Brown-Forman Distillers Corp.

Robert T. Caldwell, Ashland, for amicus curiae Associated Industries of Ky.

MONTGOMERY, Judge.

The Kentucky Unemployment Insurance Commission has appealed in these consolidated cases from judgments in favor of the appellees, disqualifying various claimants from receiving certain benefits, relieving appellees' reserve accounts of any payments made or to be made to the claimants, and reversing the orders of the Commission. In its findings of fact and conclusions of law, the court held that the various claimants left their employment voluntarily without good cause under KRS 341.370(1)(b), and without good cause attributable to the employment under KRS 341.530(3).

The appellees are Kroehler Manufacturing Company of Kentucky, Kroehler Manufacturing Company, Container Corporation of America, and Brown-Forman Distillers Corporation. The appeals arose from the decisions of the Commission, holding that the various claimants, former employees of the various appellees who had retired under the terms of their respective retirement plans, were eligible for unemployment compensation benefits and the payments so made were to be charged to the respective reserve accounts of appellees. Ten employees were involved. They will be referred to as claimants unless identified by name. No appeal was taken by the Commission from a similar judgment in favor of the American Radiator & Standard Sanitary Corporation.

The retirement systems involved are similar. They were instituted by the respective employers in 1945 and 1946 for the benefit of their employees. The systems were not begun by reason of union agreements but later were embraced in collective bargaining agreements. Employees were permitted to participate in the systems by making written requests, but were not compelled to join. The systems were financed by the joint contributions of employers and employees. The benefits payable to each retiree were based on compensation received during employment and on creditable years of employment. It was permissible for an employee to withdraw from the system prior to retirement with an accompanying withdrawal of his contributions.

The plan provided for retirement at age 65 upon written application having been made, unless a special request to continue in employment was made. Provision was made for early retirement at a reduced allowance.

Under these plans, the Commission insists that the claimants were compelled to retire upon reaching age 65 and that their leaving was involuntary and with good cause attributable to the employment.

In order to show that the employee was not compelled to retire at age 65 and that retirement was voluntary, appellees point to the voluntary initial participation in the plan and the options available to the employee to withdraw from the plan or to retire early. Further, it is pointed out that upon reaching age 65, the employee may request an extension of employment instead of retirement. The exercise of any of these options and the initial decision by the employee to participate in the plan are voluntary actions on his part which relieve the retirement at age 65 from being compulsory.

Oddly enough, this argument is consistent with two decisions of the Commission involving the same questions and one of the same retirement systems in the cases of Kroehler Manufacturing Company v. Florence, Commission Order No. 2978, and Mengel Company, Inc., v. Lukemeier, Commission Order No. 2979, both decided before the present cases and reported at 1A CCH Unemp.Ins.Rep. (Ky.) p8222.10. In the Florence case, the Commission said:

'Notwithstanding, it is our opinion that when this claimant personally and without compulsion or coercion elected to become covered by the savings and retirement plan offered by the company (one of the conditions of becoming a member being that he would retire at the age of sixty-five) we feel that he personally chose retirement rather than employment which is tantamount to voluntary quitting. Further, the conditions under which he quit to not relate to the employment and we have no reason to hold that his quitting was attributable to the employment. We conclude that his act was not attributable to the employment and that the reserve account of the appellant, the employer who furnished him his 'most recent' work should be relieved of charges for benefits paid.'

In the Lukemeier case, the Commission said:

'In this case, the facts show that the claimant voluntarily and of his own initiative entered into a plan whereby he elected to sever his relationship with the company upon reaching the age of sixty-five unless certain extensions were granted. Such action on the part of a worker must be considered as a voluntary quitting of his employment. His election to retire being the sole cause of his separation, and there being no condition of his work or factor concerning the employment furnished him by the appellant to motivate or cause his quitting, it must be concluded that his separation was not attributable to his employment and, consequently, the provisions of KRS 341.530(3) became effective and the appellant's reserve account should be relieved of charges for benefits paid to the claimant.'

Appellees have cited several decisions indicating that the Commission has held both ways on this question, both before and after the cases on appeal were decided. The...