Philadelphia Parking Authority v. Unemployment Compensation Bd. of Review

• Decision Date: 01 February 1995
• Citation: 654 A.2d 280
• Parties: PHILADELPHIA PARKING AUTHORITY, Petitioner, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 280

654 A.2d 280

PHILADELPHIA PARKING AUTHORITY, Petitioner, v. UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Respondent.

Commonwealth Court of Pennsylvania.

Submitted Dec. 9, 1994.

Decided Feb. 1, 1995.

Michael D. Jones, for petitioner.

Randall S. Brandes, Asst. Counsel, and Clifford F. Blaze, Deputy Chief Counsel, for respondent.

Before PELLEGRINI and FRIEDMAN, JJ., and RODGERS, Senior Judge.

FRIEDMAN, Judge.

Philadelphia Parking Authority (Employer) appeals from a decision of the Unemployment Compensation Board of Review (Board) affirming a referee's award of benefits to Francis J. Dillon (Claimant). We affirm.

The Board found the facts as follows. From December 1985 through April 22, 1993, Employer employed Claimant as a construction engineer/accident investigator. Several months prior to Claimant's separation from this employment, Employer informed its employees that it intended to make a serious effort to downsize its operation and would lay off a considerable number of employees. Employer did not apprise its employees of proposed organizational changes; therefore, a particular employee could not reasonably ascertain whether his job would be eliminated. Consequently, the employees were under the impression that they could be laid off at any moment, without prior notice. Moreover, Employer was aware of these fears.

In March of 1993, Employer laid off approximately 115 people. Thereafter, Employer offered an early retirement incentive program to certain employees but failed to identify and inform those individual employees who would be laid off if they failed to accept the plan. However, Employer's former Director of Labor Relations told Claimant that he was on a list of approximately 100 people who could be laid off. ¹ Claimant did not have any reasonable assurance that his position would not be eliminated. Furthermore, he feared that if he did not accept the financial incentive, and his position was indeed eliminated, he would lose the financial benefits of having accepted the retirement plan. ² Thus, although not coerced into taking early retirement, Claimant accepted that incentive offer.

Subsequently, Claimant filed for unemployment compensation benefits, and the Philadelphia Northeast Job Center (Job Center) denied benefits pursuant to Section 402(b) of the Unemployment Compensation Law (Law), Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(b). ³ Claimant appealed, and following a referee's hearing, the referee reversed the Job Center's decision and awarded benefits to Claimant. Employer appealed, and following an initial remand hearing, ⁴ the Board affirmed the referee's award of benefits.

Employer now asks us to determine whether the Board erred in affirming an award of benefits by concluding that Claimant quit his employment for reasons which were necessitous and compelling. ⁵

When a claimant voluntarily terminates employment, that claimant is ineligible for unemployment compensation benefits unless he left his employment for reasons which are necessitous and compelling. Section 402(b) of the Law, 43 P.S. § 802(b). The burden of proving such cause is upon the claimant. Department of the Navy v. Unemployment Compensation Board of Review, --- Pa.Commonwealth Ct. ----, 650 A.2d 1138 (1994).

Although the Law does not define the terms "necessitous and compelling," our Supreme Court has described it as follows:

"[G]ood cause" for voluntarily leaving one's employment (i.e. that cause which is necessitous and compelling) 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.

Taylor v. Unemployment Compensation Board of Review, 474 Pa. 351, 358-59, 378 A.2d 829, 832-33 (1977) (emphasis added). The focus of the inquiry is the impact of those circumstances upon the employees, National Freight, Inc. v. Unemployment Compensation Board of Review, 34 Pa.Commonwealth Ct. 161, 382 A.2d 1288 (1978), which circumstances must be examined in order to determine whether they rise to the level of "necessitous and compelling." Anchor Darling Valve Co. v. Unemployment Compensation Board of Review, 143 Pa.Commonwealth Ct. 171, 598 A.2d 647 (1991).

Relying on Peoples First Nat'l Bank v. Unemployment Compensation Board of Review, 159 Pa.Commonwealth Ct. 134, 632 A.2d 1014 (1993), Employer maintains that Claimant's belief here, that his employment would be terminated if he did not accept the voluntary early retirement package, is speculative and, therefore, not cause of a necessitous and compelling nature. We disagree.

In Peoples First Nat'l Bank, the employer offered an early retirement package in an effort to reduce overhead costs. During a meeting at which all eligible employees were offered the package, the employer informed the employees that if they did not accept the offer, they may be laid off. Not wanting to be laid off, the claimant accepted the early retirement incentive. Thereafter, the claimant filed for unemployment benefits. At the referee's hearing, when asked if the employer ever told the claimant that he might be laid off if he did not accept the retirement plan, the claimant responded, "They said it was a possibility, but they didn't think so." Id. at 140, 632 A.2d at 1018 (emphasis in original). Moreover, the employer never indicated that claimant's job would be eliminated. In fact, the employer offered evidence that continued work was available. Accordingly, we reversed the Board's award of benefits, holding that the claimant's purely speculative belief that a layoff was imminent created a voluntary choice to leave his employment in order to avoid the possibility of being laid off in the future.

However, unlike the case in Peoples First Nat'l Bank, Claimant's belief here was more than pure speculation. Rather, based on its fact matrix, this case appears to be analogous to our decision in Eby v. Unemployment Compensation Board of Review, 157 Pa.Commonwealth Ct. 10, 629 A.2d 176 (1993). In Eby, the employer informed certain employees, including the claimant, that they were in a group that may be laid off. The employer offered those employees a voluntary separation incentive, the purpose of which was to reduce the number of employees through voluntary means thereby minimizing the need for an involuntary reduction of force. Moreover, the employer did not offer any evidence that continuing employment was available or that the claimant was told that he would not be terminated if he rejected the early retirement proposal. Under these circumstances, we held that the claimant had a necessitous and compelling reason to accept the incentive package and leave work. Thus, he was entitled to an award of benefits.

As in Eby, Employer here did not demonstrate either to Claimant or at the hearing that continuing work would be available to Claimant. See Department of the Navy; Flannery v. Unemployment Compensation Board of Review, 125 Pa.Commonwealth Ct. 64, 557 A.2d 52 (1989). ⁶ Indeed, at the hearing, Employer's own witness and counsel admitted that: (1) it was a natural fear, after 115 people had been laid off, to be afraid of losing one's job; and, (2) Employer expected more lay offs. Employer's counsel stated that, under the circumstances, it would be a natural response to be afraid that your job was next to be eliminated and to accept the retirement package. Employer's witness admitted that Employer knew that those workers who were offered the incentives to retire were afraid their jobs were next to be eliminated, and that there were rumors as to who would be laid off next; however, Employer refused to address those fears. ⁷ Moreover although Employer did not notify its employees who would be at risk of being laid off, a representative of Employer told Claimant that he was on a list of people who could be laid off. In fact, Employer did lay off several people from that list. Furthermore, Claimant testified that he believed he would be terminated if he did not accept the incentive. ⁸ As such, Claimant had necessary and compelling reason to leave his employment and acted reasonably where Employer created real and substantial pressure on its employees that would compel a reasonable person to act as Claimant did. See Bliley Electric Co. v. Unemployment Compensation Board of Review, 158 Pa.Superior Ct. 548, 45 A.2d 898 (1946).

Accordingly, the Board's order is affirmed.

PELLEGRINI, J., concurs in the result only.

ORDER

AND NOW, this 1st day of February, 1995, the order of the Unemployment Compensation Board of Review, dated June 16, 1994, at Decision No. B-326350, is hereby AFFIRMED.

1 In fact, some of the 100 people on that list had been laid off at the time of the initial referee's hearing. (Board's Finding of Fact, No. 11.)

2 The Board notes that certain co-workers of Claimant who failed to accept the early retirement package were laid off shortly after Claimant's departure. (Board's Finding of Fact, No. 16.)

3 Section 402 of the Law, 43 P.S. § 802, provides in relevant part:

An employe shall be ineligible for compensation for any week--

....

(b) In which his employment is due to voluntarily leaving work without cause of a necessitous and compelling nature....

4 The purpose of the remand hearing was to allow Claimant to appear with counsel in order to cross-examine Employer's witnesses and present further testimony. (R.R. at 119a.) However, Claimant appeared at the hearing without an attorney. (R.R. at 123a.)

5 Our scope of review in an unemployment compensation appeal is limited to a determination of whether constitutional rights were violated, whether an error of law was committed, or whether necessary findings of fact...