Old Forge Bank v. Unemployment Compensation Bd. of Review

• Decision Date: 20 October 1995
• Citation: 666 A.2d 761
• Parties: OLD FORGE BANK, Petitioner, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 761

666 A.2d 761

OLD FORGE BANK, Petitioner, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Respondent.

Commonwealth Court of Pennsylvania.

Submitted on Briefs Dec. 7, 1994.

Decided Oct. 20, 1995.

Louis A. Cimini, for petitioner.

Maribeth Wilt-Seibert, Assistant Counsel, and Clifford F. Blaze, Deputy Chief Counsel, for respondent.

Before DOYLE, McGINLEY, SMITH, PELLEGRINI, FRIEDMAN, KELLEY and NEWMAN, JJ.

DOYLE, Judge.

This is an appeal by Old Forge Bank (Employer) from an order of the Unemployment Compensation Board of Review (Board), granting unemployment compensation benefits to Nadine R. Giampetro (Claimant) pursuant to the Pennsylvania Unemployment Compensation Law (Law). ¹

Claimant was employed by Employer as a full-time bank teller from March 4, 1991 through April 9, 1993, during which time she was absent from work a total of fifty-two days, excluding vacation. Claimant testified that all of her absences were for medical reasons and that she provided a medical excuse for every absence that she had. Specifically, during her first year (from March 4, 1991 through December 31, 1991) Claimant was absent a total of twenty-one days and in July of 1991, Claimant was given a verbal warning regarding her absenteeism. Subsequently, on May 20, 1992, as a result of her persistent absenteeism, Employer placed Claimant on probation for 90 days, during which time she was absent two and a half days, resulting in a total of twenty-one days absent for 1992. Both parties agree, however, that after May 20, 1992, Claimant was required to provide a note from her doctor for even a one day absence, ² which, Claimant testified, was provided although not all of such notes from her physician, Dr. Lewis Druffner, were kept in her personnel file. From January 1, 1993 through March 19, 1993, Claimant missed a total of ten and a half days of work.

The Board, however, found only that "throughout her employment, the claimant was absent several days due to various medical reasons" (Board's Finding of Fact No. 4) without making a finding on whether all Claimant's absences were caused by illness. The Board also found that Claimant submitted "six [medical] excuses for approximately ten absences" subsequent to May of 1992.

On March 19, 1993, as a result of Claimant's extensive absenteeism, Employer sent Claimant a memorandum requesting a full medical report regarding her alleged medical condition and medical certification documenting that she had a continuing disability which prevented her from attending work as scheduled. On April 1, 1993, Claimant presented a note from her doctor, which stated that she had been treated for migraine headaches and was given medication for the same. However, the note did not specify that her condition was continuing or that it required her to miss work. On Friday, April 9, 1993, Employer advised Claimant that her hours were being reduced and that she was being demoted from full-time employment to a part-time position "to take care of her medical problems." Claimant objected to the reduction of her hours and informed her supervisor that she needed to work full-time. ³

On Monday, April 12, 1993, Claimant was scheduled to work her first part-time day. When she arrived at work, Claimant informed two of her supervisors that she felt her reduction in hours was not warranted and that she was taking the matter to "arbitration." ⁴ Thereafter, Claimant did not return to her employment, and applied for compensation benefits with the Bureau of Unemployment Compensation Benefits and Allowances (Bureau).

On April 28, 1993, the Bureau issued a determination granting unemployment compensation benefits, concluding that Claimant voluntarily left her employment for necessitous and compelling reasons. Employer appealed that determination to the referee who reversed the Bureau. Claimant then appealed to the Board, which reversed the referee and granted benefits, ⁵ holding that Claimant voluntarily left her employment for reasons of a necessitous and compelling nature because Employer had unilaterally changed Claimant's employment status from full-time to part-time, ⁶ and that such a substantial unilateral change had "the same effect [as] a demotion although not performed for the purpose of demoting the claimant." The Board further concluded that the Employer "also failed to provide adequate competent evidence that the Claimant's transfer was justifiable." Thus, Claimant was not disqualified from receiving benefits under Section 402(b) of the Law. ⁷ It is the order of the Board which Employer now appeals to this Court.

The sole issue on appeal ⁸ is whether the Board erred as a matter of law when it held that Employer's unilateral change of Claimant's employment status gave her good cause, that is, a necessitous and compelling reason, to terminate her employment. Specifically, Employer argues that Claimant failed to prove she quit for a necessitous and compelling reason because Employer was justified in changing Claimant's status from a full-time employee to a part-time employee.

An employee who voluntarily terminates employment has the burden to prove that the voluntary quit was for a necessitous and compelling reason, and whether the employee had such cause is a conclusion of law subject to appellate review. Malloy v. Unemployment Compensation Board of Review, 105 Pa.Cmwlth. 183, 523 A.2d 834 (1987). A necessitous and compelling cause is one that "results from circumstances which produce pressure to terminate employment that is both real and substantial, and which would compel a reasonable person under the circumstances to act in the same manner." Id., 523 A.2d at 836.

While a mere dissatisfaction with working conditions is not good cause for voluntary termination of employment, Griffith Chevrolet-Olds, Inc. v. Unemployment Compensation Board of Review, 142 Pa.Cmwlth. 242, 597 A.2d 215 (1991), it is well-established that a reduction in compensation, if substantial enough, will constitute the requisite cause to terminate. However, "there is no talismanic percentage figure that separates a substantial reduction from one that is not. Each case must be measured by its own circumstances." ⁹ Ship Inn, Inc. v. Unemployment Compensation Board of Review, 50 Pa.Cmwlth. 292, 412 A.2d 913, 915 (1980).

Employer argues, on appeal, relying upon Frankford Hospital v. Unemployment Compensation Board of Review, 66 Pa.Cmwlth. 452, 445 A.2d 256 (1982), and Unemployment Compensation Board of Review v. Tune, 23 Pa.Cmwlth. 201, 350 A.2d 876 (1976), that it was justified in "demoting" Claimant to part-time status because of her excessive absenteeism and that "without doubt, [she] brought the demotion on herself," thus advancing the principle that "a claimant who brings a demotion on himself is not eligible for benefits." (Employer's Brief at 14.) Such is not the law in Pennsylvania if by "demotion" is meant any discipline which an employer may care to measure out to its employee. While the correlative principle is certainly true, that an unjustified demotion in job position or reduction in pay will provide good cause for a voluntary termination, Frankford Hospital, simply because some discipline may be justified and warranted does not provide employers with unbridled leave to take unreasonable disciplinary measures against its employees; and it does not allow Employer in this case to reduce this Claimant's pay by 40% on the basis that it was helping her to overcome her medical problems.

If it is determined that the reason for the discipline was unjustified, as was the case in Frankford Hospital, ¹⁰ the Law places the parties in much the same position they would be in a non-disciplinary case, that is, where the employer unilaterally reduces a claimant's salary or transfers an employee to a new position as the result of adverse economic factors or "downsizing" to meet employer's market conditions. See Steinberg (employer determined that it could no longer afford to reimburse claimant for her health care coverage). A substantial employment change brought about by an unjust demotion is not reasonable as a matter of law and will afford an employee a necessitous and compelling reason to quit so as to entitle him/her to unemployment benefits.

Employer's reliance on Tune is likewise misplaced. In Tune, the claimant received both a five-day suspension and a demotion for fighting with a fellow employee over a gambling debt. Both were disciplined in the same manner, but Tune terminated his employment and applied for unemployment compensation benefits. While the Tune Court stated that the claimant brought the demotion upon himself (demoting from an assistant director of security to security supervisor), there was absolutely no evidence that Tune was reduced in pay (other than the five-day suspension) or that the discipline administered was in any way unreasonable; that issue was simply not presented in the case and, accordingly, no comment regarding that issue appears in the opinion.

Employer quotes in its brief the testimony of Employer's Compliance and Operations Officer, Allan Robinson, who participated in the decision to reduce Claimant's status to part-time employment, not for reasons of discipline but "to give her a chance to take care of her medical problems." The full text of the testimony in response to the question from Employer's counsel is as follows:

EL Now the decision to place her on part time status, why was that done, and was punishment involved?

EW2 To my knowledge, it was not a form of punishment. The intent was to give her a chance to take care of her medical problems, and hopefully get some medication or medical help that would enable her to become a full time productive worker again.

(N.T. at 21; R.R. at 34A); (emphasis added).

Buttressing that testimony is the testimony of the bank's Vice President and Claimant's supervisor, Sarah Lamar, establishing the fact that Claimant's "demotion" was not for...