Shields v. Proctor & Gamble Paper Products Co.

• Decision Date: 14 June 2005
• Docket Number: No. ED 84970.,ED 84970.
• Court: Missouri Supreme Court
• Parties: Stanley SHIELDS, Respondent, v. PROCTOR & GAMBLE PAPER PRODUCTS COMPANY, Appellant, and Division of Employment Security, Respondent.

164 S.W.3d 540

Stanley SHIELDS, Respondent, v. PROCTOR & GAMBLE PAPER PRODUCTS COMPANY, Appellant, and Division of Employment Security, Respondent.

No. ED 84970.

Missouri Court of Appeals, Eastern District, Division Three.

June 14, 2005.

Cynthia A. Quetsch, Jefferson City, MO, for respondent Labor and Industrial Relations Commission.

Stanley Shields, Chaffee, MO, pro se.

Daniel M. O'Keefe, St. Louis, MO, for appellant.

OPINION

GLENN A. NORTON, Judge.

Proctor & Gamble Paper Products Company ("P & G") appeals the Labor and Industrial Relations Commission's determination that Stanley Shields was not disqualified from receiving unemployment benefits. We reverse.

I. BACKGROUND

P & G decided to downsize its work force as a result of productivity improvements, so it offered its employees voluntary separation packages. P & G had a certain number of packages to offer. It announced that the packages were available to any technician; those who were interested were to request a package. More employees requested packages than were available, so P & G prioritized who would receive an offer. P & G began by prioritizing, in order of seniority, all of the employees who would qualify for regular and early retirement. Then the remaining employees were prioritized by seniority.

Shields had requested a separation package. He had worked as an electrician at P & G for almost 25 years and was eligible for early retirement. By virtue of his seniority, Shields was high enough on the prioritized list of early retirement-eligible employees and was offered a separation package. The separation agreement provided that Shields would voluntarily end his employment with P & G and would receive a cash separation allowance and other benefits. Under the agreement, Shields could revoke his acceptance within seven days of his signature. But if he did not revoke his acceptance within that time, then the agreement would become effective and enforceable by both parties immediately upon the expiration of those seven days. Shields signed the agreement and never revoked his acceptance.¹

Shields testified that he left P & G because he was going to be assigned to work on a new production line for which he had no formal training. He did not feel comfortable doing that job with only on-the-job training, so he took the separation package.² According to Shields, no one told him that he had to take the separation package, "but the plant manager... said that there was going to be some changes made, they had to get the productivity level at a certain rate so they could cut costs, and if the people didn't want to accept these changes they should only consider the separation packages."

Shields applied for unemployment benefits. P & G sought an eligibility determination, arguing that Shields had voluntarily retired. A deputy for the Division of Employment Security determined that Shields was not disqualified from receiving benefits because he had voluntarily quit with good cause attributable to P & G's requirement that he work on the new line without proper training. P & G appealed to the appeals tribunal for the Division, contending that Shields voluntarily quit under the separation agreement and that work was still available to him if he had chosen not to quit. Shields and a P & G human resources manager testified at the hearing, after which the appeals tribunal made the following findings of fact:

The employer was in the process of reducing its work force by offering employees an option of accepting a separation package. Employees who chose the separation package have not been replaced by other employees. The employer's process consisted of allowing the most senior of its employees the package option first. The process continued to lower level seniority employees as needed to reach its staffing level goal. The claimant chose to accept the employer's offer of a separation package.

It concluded that P & G intended to reduce its work force because it did not have enough work for all of its employees; the fact that P & G used separation packages to achieve this reduction did not change the intent. Thus, the tribunal concluded, Shields's unemployment resulted from lack of work. The tribunal held that Shields was discharged, not for misconduct, and that he was not disqualified from receiving benefits. P & G appealed to the Commission, again contending that Shields was not discharged, but had voluntarily quit under the separation agreement. The Commission affirmed and adopted the determination of the appeals tribunal. P & G appeals to this Court.³

II. DISCUSSION

A. Standard of Review

Our review of the Commission's decision in an unemployment compensation case is governed by Article 5, Section 18 of the Missouri Constitution and section 288.210 RSMo 2000.⁴ Winco Manufacturing, Inc. v. Partee, 141 S.W.3d 34, 37 (Mo.App. E.D.2004). We may modify, reverse, remand for rehearing, or set aside the Commission's decision only where: (1) the Commission acted without or in excess of its powers; (2) the decision was procured by fraud; (3) the facts found by the Commission do not support the award; or (4) there was no sufficient competent evidence in the record to warrant the making of the award. Section 288.210. In the absence of fraud, the Commission's factual findings are conclusive and binding on this Court if supported by competent and substantial evidence. Section 288.210. "Our function is to determine whether the Commission, based upon the whole record, could have reasonably made its findings and reached its result." Winco, 141 S.W.3d at 37.

Neither party contends that the Commission's findings of fact were procured by fraud or are unsupported by the evidence. Rather, the only issue is whether the Commission reached the correct conclusion of law as to the nature of Shields's separation from employment. This Court is not bound by the Commission's conclusions of law or its application of the law to the facts. Id. Further, where, as here, there is no dispute about the essential facts⁵ and the issue is the application of the statute to virtually uncontroverted facts, the issue is one of law. Id. We find that on the whole record in this case, the Commission's conclusion that Shields was discharged is erroneous, and this error of law requires reversal.

B. Cause of Separation

Under section 288.050.1, a claimant is not eligible for unemployment benefits if he voluntarily leaves employment without good cause attributable to the work or the employer. One leaves work voluntarily, as opposed to being discharged, when he leaves of his own accord and volition. Moore v. Swisher Mower & Machine Company, Inc., 49 S.W.3d 731 737 (Mo.App. E.D.2001). "[J]udicial interpretations of the unemployment statutes have required that an employee not have caused his dismissal by his wrongful action or inaction or his choosing not to be employed." Missouri Division of Employment Security v. Labor & Industrial Relations Commission of Missouri, 651 S.W.2d 145, 149 (Mo. banc 1983). The causation envisioned by the statutes "is that having as its direct and immediate consequence the claimant's unemployment." Id. at 150. When unemployment occurs in the context of the employer's attempt to downsize through a voluntary separation program, causation depends on whether the final act needed to effectuate separation was committed by the employee or by the employer. See id.; see also St. Joseph's Health Center v. Missouri Labor and Industrial Relations Commission, 768 S.W.2d 123, 125 (Mo.App. W.D.1988).

In Missouri Division of Employment Security, the employer announced that certain jobs would be eliminated on a specific date and sought volunteers — who otherwise would have been entitled to keep their jobs because of seniority — to be laid off. Id. at 146, 150. The employer then selected which of the volunteers would be laid off according to the employer's perceived needs. Id. Only those volunteers who were not seen as necessary for effective operation of the plant were selected for layoff. Id."The claimants' volunteering for layoff did not have their unemployment as its direct and immediate result. A further event — the employer's choosing them for layoff — was required." Id. Thus, the Court found that the claimants had left work voluntarily with good cause attributable to the employer and were not barred from receiving unemployment benefits. Id.

In St. Joseph's Health Center, the employer announced that it was downsizing and offered cash bonuses in exchange for voluntary resignations. 768 S.W.2d at 124. The employer explained that resignation was voluntary, that the employer was not trying to force anyone to quit and that the decision whether or not to resign was entirely up to the employee. Id. There was no evidence that the employer sought to reduce its work force by any particular number and no evidence that it had threatened involuntary layoffs or otherwise pressured employees to resign. Id. at 125. Although only the first 15% of employees in each department were allowed to...