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Diehl v. Unemployment Compensation Board of Review

September 20, 2010

HAROLD G. DIEHL, JR., PETITIONER
v.
UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT



The opinion of the court was delivered by: Judge Simpson

Submitted: July 2, 2010

BEFORE: HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE JIM FLAHERTY, Senior Judge.

OPINION

In this appeal,*fn1 Harold G. Diehl, Jr. (Claimant) asks whether the Unemployment Compensation Board of Review (Board) erred in denying him unemployment benefits. The Board denied Claimant benefits on the ground that he voluntarily quit his employment to accept an early retirement incentive and continuing work was available to Claimant.

Claimant primarily argues the Board's decision ignored the clear and unambiguous language of the "voluntary layoff option" proviso (VLO proviso) contained in Section 402(b) of the Unemployment Compensation Law*fn2 (Law) ("no otherwise eligible claimant shall be denied benefits for any week in which his unemployment is due to exercising the option of accepting a layoff, from an available position pursuant to a labor-management contract agreement ..). He also asks that this Court overrule our en banc decision in Renda v. Unemployment Compensation Board of Review, 837 A.2d 685 (Pa. Cmwlth. 2003), appeal denied, 581 Pa. 685, 863 A.2d 1151 (2004), which, according to Claimant, holds the VLO proviso does not apply where a claimant accepts a financial incentive for a voluntary layoff. Alternatively, he asserts Renda is factually distinguishable. Claimant further maintains the Board capriciously disregarded evidence that he had good cause to voluntarily leave his employment. Discerning no error in the Board's decision, we affirm.

I. Factual and Procedural History

The Board found the following facts. Claimant worked for ESAB Welding and Cutting Products (Employer) as a shipping clerk for over 15 years at a final rate of pay of $20.06 per hour. Claimant's last day of employment was February 9, 2009.

Employer offered certain employees an early retirement package as an incentive to reduce its workforce and, therefore, minimize company-wide layoffs.

The early retirement package provided payment for unused vacation days and paid health insurance for five years after retirement.

Claimant was a high-seniority employee. Claimant was in no danger of being laid off by Employer because continuing work would have been available to him as a high-seniority employee. Claimant voluntarily quit his position to help the company and because of the incentives in Employer's early retirement package.

Claimant subsequently applied for unemployment benefits, which were initially denied. Claimant appealed. A referee conducted a hearing at which Claimant and the union's recording secretary testified. Although Claimant was unrepresented at the hearing, the president of Claimant's union assisted Claimant and also testified as a witness. In addition, Claimant presented two documents: (1) a memorandum from Employer to Claimant's union listing 20 employees who Employer would layoff; and, (2) a letter from Employer's Human Resource Manager, which stated, "[t]he retirement packages offered to all hourly employees this year have been part of an overall reduction of force. The reductions of force have been necessary in response to deteriorating business conditions." Certified Record, Ex. C-2. Neither document specifically referenced or identified Claimant. Employer did not appear at the hearing. Ultimately, the referee affirmed the initial denial of benefits. Claimant, represented by counsel for the first time, appealed to the Board.

Initially, the Board issued a decision denying benefits under Section 402(b) of the Law. Claimant filed a request for reconsideration, asserting the Board did not address the applicability of Section 402(b)'s VLO proviso. The Board subsequently issued an order vacating its initial decision. About a month later, the Board issued a new decision again denying benefits. In so doing, the Board expressly considered, but declined to apply, the VLO proviso based on this Court's decision in Renda. Claimant's appeal to this Court followed.

II. Issues

On appeal,*fn3 Claimant essentially presents four issues. First, he asserts the Board erred in denying benefits under Section 402(b) of the Law where he exercised an option of accepting a layoff from an available position pursuant to an agreement between Employer and his labor union. Next, Claimant contends the Board capriciously disregarded evidence that he had necessitous and compelling cause for leaving his employment. Additionally, Claimant contends that, prior to leaving his employment, he received assurances from the local UC service center that he would qualify for benefits. Finally, Claimant argues that awarding benefits in this situation would be "revenue neutral" for the unemployment compensation fund because, had he not accepted a layoff, Employer would have laid off another employee who would be receiving the benefits Claimant now seeks.

III. Discussion

A. Application of VLO Proviso/Renda

Claimant's central argument is that the Board's decision blatantly ignores the clear and unambiguous language of Section 402(b)'s VLO proviso. Claimant also notes that, like the VLO proviso, Section 401(d) of the Law, 43 P.S. §801, affirmatively provides that employees who voluntarily accept a layoff pursuant to a labor-management contract are entitled to unemployment benefits.

Claimant contends that, in declining to apply the VLO proviso, the Board here relied on our decision in Renda. He asserts Renda stands for the proposition that the VLO proviso does not apply where a claimant accepts a financial incentive for a voluntary layoff. Claimant maintains we should overrule Renda because it conflicts with clear statutory language of the VLO proviso, which does not prohibit claimants from accepting financial incentives in exchange for voluntary layoffs. Claimant argues the proviso states only that a claimant, who accepts a voluntary layoff from an available position due to a labor management contract agreement, is eligible for benefits.*fn4

Alternatively, Claimant contends Renda is factually distinguishable because the claimants in that case received cash payouts for accepting voluntary layoffs, while Claimant here accepted only medical benefits and no cash payout.

The VLO proviso, which the legislature added in 1980, is contained within Section 402(b) of the Law. It states:

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

(b) In which his unemployment is due to voluntarily leaving work without cause of a necessitous and compelling nature .. Provided further, That no otherwise eligible claimant shall be denied benefits for any week in which his unemployment is due to exercising the option of accepting a layoff, from an available position pursuant to a labor-management contract agreement, or pursuant to an established employer plan, program or policy ..

43 P.S. §802(b) (emphasis added); see W.R. Grace & Co. v. Unemployment Comp. Bd. of Review, 455 A.2d 729 (Pa. Cmwlth. 1983) (applying VLO proviso).

In W.R. Grace, this Court upheld the unemployment compensation authorities' award of benefits to a claimant under the VLO proviso. There, the claimant worked for the employer as a "packer/stacker." Id. at 729. Because of an economic downturn, and because the claimant did not have sufficient seniority, the employer bumped the claimant from her first shift duties, offering her similar employment for the second and third shifts, or the option of taking a voluntary layoff with recall rights under an oral agreement between the employer and its employees. The claimant chose the voluntary layoff option. Analyzing and applying the VLO proviso, this Court explained:

The terms of Section 402(b) are unambiguous. They provide that what might otherwise be a basis for ineligibility, leaving work without necessitous and ...


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