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Philadelphia Regional Port Authority v. Unemployment Compensation Board of Review

Commonwealth Court of Pennsylvania

July 20, 2018

Philadelphia Regional Port Authority, Petitioner
v.
Unemployment Compensation Board of Review, Respondent

          Argued: June 6, 2018

          BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE ELLEN CEISLER, Judge

          OPINION

          MARY HANNAH LEAVITT, PRESIDENT JUDGE

         The Philadelphia Regional Port Authority (Employer) petitions for review of an adjudication of the Unemployment Compensation Board of Review (Board) that granted benefits to Rosemary Boyle (Claimant). In doing so, the Board affirmed the decision of the Referee that Claimant was eligible for benefits under Section 402(b) of the Unemployment Compensation Law (Law)[1] because she opted to participate in a voluntary separation incentive program offered by Employer. For the following reasons, we affirm the Board.

         Background

         Claimant began working for Employer as an administrative assistant on May 28, 2002. On January 20, 2017, Claimant separated from Employer as a result of her participation in a "Voluntary Separation Incentive Program" offered by Employer. Certified Record (C.R.) Item No. 9, Exhibit C-1, at 1. Claimant applied for unemployment compensation benefits, stating she was forced to "retire for downsizing reasons." C.R. Item No. 2, at 3. On February 21, 2017, the Scranton UC Service Center issued a Notice of Determination finding Claimant eligible for benefits under Section 402(b) of the Law because "she accepted an incentive" for a layoff. C.R. Item No. 5, at 1. Employer appealed, and a hearing was conducted by a Referee.

         At the hearing, Claimant presented a November 28, 2016, written memorandum that Employer sent to all employees stating that Employer would reduce its workforce by 30 percent and would eliminate positions "across all levels and functional areas." C.R. Item No. 9, Exhibit C-1 at 1. The memorandum stated that under its Voluntary Separation Incentive Program, any employee who participated would receive $1,500 for each year of service, up to a maximum of $25,000. Claimant testified that she believed that her position would be eliminated because she "had a supervisor that constantly asked [her] when [she was] retiring." Notes of Testimony (N.T.), 3/29/2017, at 7. Further, management had advised several employees that they were "safe" from the forthcoming terminations, but Claimant did not receive this assurance. N.T. at 9. For these reasons, Claimant opted to participate, and on December 19, 2016, she executed a Separation and Release Agreement. However, on December 28, 2016, Claimant sent a note to Employer's human resources department, stating that she executed the Separation and Release Agreement under duress and would have preferred to continue to work. On cross-examination, Claimant conceded that she did not know with certainty that her position would be eliminated, but chose to participate in the incentive program because she feared losing her job and her health insurance.

         Edward Henderson, Director of Finance, testified on behalf of Employer. Because of overstaffing, Employer developed the Voluntary Separation Incentive Program to minimize involuntary terminations. Claimant received $22,050 for her participation. Henderson could not say whether Claimant would have been involuntarily terminated had she chosen to stay.

         The Referee affirmed the determination of the Service Center. The Referee held that Claimant was eligible for benefits under the Voluntary Layoff Option (VLO) Proviso of Section 402(b) of the Law, which states as follows:

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). The Referee explained the significance of the VLO Proviso as follows:

The Pennsylvania Courts have held the [VLO] Proviso applies to claimants who leave employment voluntarily pursuant to a labor management contract agreement or pursuant to an established employer plan, program or policy, regardless of whether the layoff is temporary or permanent in nature, and includes employer initiated early retirement packages offered pursuant to a workforce reduction.
Here, the Referee finds that the Employer's Voluntary Separation Incentive Program which was established due to a 30% reduction in staff that the Employer was anticipating falls within the provisions of the VLO Proviso. The Claimant resigned to accept a financial incentive as part of an employer-initiated workforce reduction plan.
The Claimant is "otherwise eligible" as she remained able and available for suitable work. The Referee credits the testimony of the Claimant that she wanted to continue working for the Employer and advised the Human Resources Director that she believed that her position would be eliminated, ...

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