IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2008 Term
____________
No. 33440
____________
GARY W. CHILDRESS and
ARTHUR C. BOGGS,
Petitioners Below, Appellees
v.
QUETTA MUZZLE, Acting Commissioner of
West Virginia Bureau of Employment Programs;
JAMES C. DILLON, Chairman, Board of Review,
Bureau of Employment Programs; and
CLEARON CORP.,
Respondents Below
CLEARON CORP.,
Appellant
______________________________________________________
Appeal from the Circuit Court of Kanawha County
Hon. Paul Zakaib, Jr., Judge
Case No. 04-AA-81
REVERSED
______________________________________________________
Submitted: January 23, 2008
Filed: March 19, 2008
Bradley J. Pyles, Esq.
Christopher L. Slaughter, Esq.
Robert J. Smith, Esq.
Robert L. Bailey, Esq.
Pyles, Haviland, Turner & Smith
Steptoe & Johnson
Charleston, West Virginia
Charleston, West Virginia
Attorneys for Appellee Arthur C. Boggs
Attorneys for Appellant
Gary W. Childress, Pro se
JUSTICE STARCHER delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “The findings of fact of the Board of Review of the West Virginia
Department of Employment Security are entitled to substantial deference unless a reviewing
court believes the findings are clearly wrong. If the question on review is one purely of law,
no deference is given and the standard of judicial review by the court is
de novo.” Syllabus
Point 3,
Adkins v. Gatson, 192 W.Va. 561, 453 S.E.2d 395 (1994).
2. “Unemployment compensation statutes, being remedial in nature, should
be liberally construed to achieve the benign purposes intended to the full extent thereof.”
Syllabus Point 6, Davis v. Hix, 140 W.Va. 398, 84 S.E.2d 404 (1954).
3. The word voluntarily as used in W.Va. Code, 21A-6-3(1) means the free
exercise of the will.
4. The term “good cause” as used in W.Va. Code, 21A-6-3(1) means cause
involving fault on the part of the employer sufficient to justify an employee's voluntarily
leaving the ranks of the employed and joining the ranks of the unemployed.
5. Under W.Va. Code, 21A-6-3(1) individuals who accept an early
retirement incentive package are disqualified from receiving unemployment compensation
benefits unless they (1) establish a well-grounded fear of imminent layoff supported by
definitive objective facts involving fault on the part of the employer and (2) establish that
they would suffer a substantial loss by not accepting the early retirement incentive package.
6. “Interpretations of statutes by bodies charged with their administration
are given great weight unless clearly erroneous.” Syllabus Point 4, Security Nat. Bank &
Trust Co. v. First W.Va. Bancorp., Inc., 166 W.Va. 775, 277 S.E.2d 613 (1981).
7. “While the interpretation of a statute by the agency charged with its
administration should ordinarily be afforded deference, when that interpretation is unduly
restrictive and in conflict with the legislative intent, the agency's interpretation is
inapplicable.” Syllabus Point 5, Hodge v. Ginsburg, 172 W.Va. 17, 303 S.E.2d 245 (1983).
Starcher, J.:
The appellant, Clearon Corp., is appealing a trial court order holding that the
appellees, Arthur C. Boggs and Gary W. Childress, were entitle to State unemployment
benefits. The trial court order reversed the Board of Review of the West Virginia Bureau of
Employment Programs holding that the appellees were disqualified from receiving
unemployment compensation benefits. The Board of Review ruling was based upon a
finding that the appellees voluntarily quit their jobs when they accepted a Clearon Corp. offer
for early retirement benefits.
For the reasons stated, infra, we reverse the trial court.
I.
Facts & Background
The appellant, Clearon Corp. (“Clearon”), is a small chemical manufacturer
located in South Charleston, West Virginia. In 2003 Clearon had eighty-eight employees.
Prior to their retirement, the appellees, Arthur C. Boggs and Gary W. Childress, had been
employed by Clearon since 1995.
In October 2003, in order for Clearon to remain competitive as a chemical
manufacturer, Clearon determined that it needed to reduce costs. Rather than laying off
employees, Clearon decided to offer a voluntary early retirement package to employees who
were at least fifty-five years old and had at least ten years of service with Clearon, or in
combination with Clearon and its predecessor corporations. Of Clearon's eighty-eight
employees, fifty-seven were eligible for the early retirement package. And of the fifty-seven
eligible employees, twenty-nine, including the appellees, accepted Clearon's offer. As a
result of their acceptance of Clearon's offer, both Boggs and Childress terminated their
employment on November 30, 2003. (See footnote 1)
The early retirement package accepted by the appellees included a cash bonus
of $16,000.00 and pension incentives in which Clearon agreed to waive certain penalty
reductions in retirement benefits for those persons accepting the early retirement package.
A four percent reduction penalty was waived with respect to appellee, Childress's pension
and a twenty-eight percent reduction penalty was waived with respect to appellee, Bogg's
pension. Clearon's retirement plan also had a Social Security offset provision which was
waived by Clearon. The record is not clear with respect to whether or not the Social Security
offset provisions benefitted the appellees.
Because of the large number of employees accepting the early retirement
package, Clearon never faced having to lay off any employees. After the appellees left their employment with Clearon, both appellees applied
to the West Virginia Bureau of Employment Programs (“BEP”) for unemployment
compensation benefits.
On March 5, 2004, a BEP deputy determined that appellee, Gary W. Childress
was eligible for unemployment compensation benefits. On March 17, 2004, a BEP deputy
determined that the appellee, Arthur C. Boggs, was eligible for unemployment compensation
benefits. The BEP deputy decision was then appealed by the appellant, Clearon, and on
April 7, 2004, an evidentiary hearing was conducted by an administrative law judge with
respect to both appellees. On April 21, 2004, the administrative law judge entered his
decision reversing the BEP deputy decision and found that the appellees were not entitled to
unemployment compensation benefits. Subsequently the appellees appealed the decision of
the administrative law judge to the Board of Review of the West Virginia Bureau of
Employment Programs (“BOR”), and on June 8, 2004, the BOR conducted a hearing on the
appeal. On June 9, 2004, the BOR entered orders affirming the decision of the administrative
law judge denying the appellees unemployment compensation benefits.
On July 7, 2004, the appellees appealed the BOR decision to the Kanawha
County Circuit Court. On August 3, 2004, Arthur Boggs and Gary Childress filed a motion
in the trial court to consolidate their cases, and the cases were consolidated by an order of the
trial court entered on November 12, 2004. On November 3, 2006, the trial court entered an
order reversing the BOR decision and ordered that the appellee, Arthur C. Boggs, was
eligible for unemployment compensation benefits, and on November 9, 2006, the trial court
entered an order reversing the BOR decision and ordered that the appellee, Gary W.
Childress, was eligible for unemployment compensation benefits. With the exception of the
names and dates both trial court orders were the same.
It is from the circuit court orders dated November 3, 2006 and November 9,
2006, that Clearon appeals.
II.
Standard of Review
In Syllabus Point 3
of
Adkins v. Gatson, 192 W.Va. 561, 453 S.E.2d 395 (1994)
this Court held:
The findings of fact of the Board of Review of the West
Virginia Department of Employment Security are entitled to
substantial deference unless a reviewing court believes the
findings are clearly wrong. If the question on review is one
purely of law, no deference is given and the standard of judicial
review by the court is de novo.
With these principles in mind we proceed to consider the appellant's appeal.
III.
Discussion
W.Va. Code, 21A-1-1 [1978] sets forth the legislative purpose of the
Unemployment Compensation Law (“Act”) as follows:
The purpose of this chapter is to provide reasonable and
effective means for the promotion of social and economic
security by reducing as far as practicable the hazards of
unemployment. In the furtherance of this objective, the
Legislature establishes a compulsory system of unemployment
reserves in order to:
(1) Provide a measure of security to the families of unemployed
persons.
(2) Guard against the menace to health, morals and welfare
arising from unemployment.
(3) Maintain as great purchasing power as possible, with a view
to sustaining the economic system during periods of economic
depression.
(4) Stimulate stability of employment as a requisite of social and
economic security.
(5) Allay and prevent the debilitating consequences of poor
relief assistance.
While we have held that “[u]nemployment compensation statutes, being
remedial in nature, should be liberally construed to achieve the benign purposes intended to
the full extent thereof” (
See Syllabus Point 6 of
Davis v. Hix, 140 W.Va. 398, 84 S.E.2d 404
(1954)), we believe that it is also important for the Court to protect the unemployment
compensation fund
(See footnote 2) against claims by those not entitled to the benefits of the Act. Also, we
believe that the basic policy and purpose of the Act is advanced both when benefits are
denied to those for whom the Act is not intended to benefit, as well as when benefits are
awarded in proper cases. Additionally, we believe that the Act was clearly designed to serve
not only the interest of qualifying unemployed persons, but also the general public.
(See footnote 3)
The unemployment compensation program is an insurance program, and not
an entitlement program, and is designed to provide “a measure of security to the families of
unemployed persons”
(See footnote 4) who become involuntarily unemployed through no fault of their own.
“The [Act] is not intended, however, to apply to those who 'willfully contributed to the cause
of their own unemployment.'”
See Hill v. Board of Review, 166 W.Va. 648, 651, 276 S.E.2d
805, 807 (1981) (
quoting Board of Review v. Hix, 126 W.Va. 538, 541, 29 S.E.2d 618, 619
(1944). From our reading of the Act, we believe the obligation of employees under the Act
is to do whatever is reasonable and necessary to remain employed.
These basic principles have long been observed by this Court. In State v. Hix,
132 W.Va. 516, 523, 524, 54 S.E.2d 198, 201,202 (1949), this Court stated:
. . . We think it fair to assume that the purpose of the
Unemployment Act of 1936 was to encourage employment,
because upon employment and the wages paid to employees
depends the solvency of the fund built up for the protection of
employees against the risks of unemployment. Any
interpretation of the act, which encourages people not to work,
can scarcely be considered as having been within the intent of
the Legislature or of the proponents of the unemployment
compensation system. . . .
The operative statutory provision of the Act which applies in the instant
case is
W.Va. Code, 21A-6-3(1) [2005]
(See footnote 5) which states, in relevant part, as follows:
Disqualification for benefits. Upon the determination of the
facts by the Commissioner, an individual shall be disqualified
for benefits:
(1) For the week in which he or she left his or her most recent
work voluntarily without good cause involving fault on the part
of the employer and until the individual returns to covered
employment and has been employed in covered employment at
least thirty working days.
This Court in Gibson v. Rutledge, 171 W.Va. 164,166, 298 S.E.2d 137, 139
(1982), a case involving the application of W.Va. Code, 21A-6-3, observed that most states
have disqualifying provisions in their unemployment compensation law which are similar to W.Va. Code, 21A-6-3. In Gibson, in discussing the purpose of such disqualifying provisions,
we stated that:
. . . one of the primary purposes of the West Virginia
Unemployment Compensation Act, . . . is to compensate
individuals who are involuntarily unemployed. W.Va. Code,
21A-6-3(1) is included in the Act to disqualify those employees
who are voluntarily unemployed and who therefore should not
be entitled to the same benefits and treatment as involuntarily
unemployed individuals.
Gibson v. Rutledge, 171 W.Va. at 166, 298 S.E.2d at 140 (citations omitted).
The applicable portion of W.Va. Code, 21A-6-3(1), under which the trial court
found that the appellees were entitled to unemployment benefits includes the word,
“voluntarily,” and the instant case rests, in part, upon the proper application and meaning of
this word. While the word “voluntary” is not defined in the Act, this Court has had occasion
to discuss its meaning. In State v. Hix, 132 W.Va. 516, 522, 54 S.E.2d 198, 201 (1949) we
concluded that “voluntarily” means “the free exercise of the will.” From an examination of
the statute and cases decided in this and other jurisdictions, we believe that this definition
satisfies the legislative intent of the Act. Therefore, we hold that the word voluntarily as
used in W.Va. Code, 21A-6-3(1) means the free exercise of the will.
In this case the Court must also consider what is a proper application of the
term “good cause.” In applying W.Va. Code, 21A-6-3(1) a court must differentiate between
an individual who voluntarily quits work with good cause involving fault on the part of the
employer and an individual who quits work “voluntarily without good cause involving fault
on the part of the employer.” (Emphasis added.) Just as “voluntarily” is not defined in the
Act, neither is the term “good cause” defined in the Act, W.Va. Code, 21A-1-1 et seq.
We do not find any West Virginia case that discusses “good cause” in the
context of early retirement incentive packages. However, the case of Brady v. Board of
Review, 152 N.J. 197, 704 A.2d 547 (1997), a case that does involve an early retirement
incentive package is instructive on the term “good cause” as it relates to our case. In Brady the New Jersey court said that the term “good cause” was likewise not defined in their
statutes, but acknowledged prior holdings of the court that found the term “good cause” to
mean “cause sufficient to justify an employee's voluntarily leaving the ranks of the employed
and joining the ranks of the unemployed.” Brady, supra, 152 N.J. at 214, 704 A.2d at 556.
Brady went on went on to explain:
. . . The test of “ordinary common sense and prudence” must be
utilized to determine whether an employee's decision to leave
work constitutes good cause. Such cause “must be compelled
by real, substantial and reasonable circumstances not imaginary,
trifling and whimsical ones.” A claimant has the “responsibility
to do whatever is necessary and reasonable in order to remain
employed.”
Brady, supra, 152 N.J. at 214, 704 A.2d at 556 (citations omitted).
Brady applied a two part test to determine whether or not a claimant can satisfy
the good cause requirement under the New Jersey statute. Under Brady, when a claimant
accepts a retirement incentive package, the claimant is disqualified for unemployment
benefits unless the claimant can
. . . establish by “definitive objective facts,” (1) a well-
grounded fear of “imminent layoff” and (2) that they “would
suffer a substantial loss by not accepting early retirement.”
Brady, supra, 152 N.J. at 222, 704 A.2d at 560. See also In re N.J.A.C. 12:17-9.6 ex rel.
State Dept. of Labor, 395 N.J.Super. 394, 400, 928 A.2d 956, 959 (2007).
We believe that the definition of good cause and the two-part test as discussed
in Brady are compatible with our West Virginia Unemployment Compensation Law.
Accordingly, we hold that the term “good cause” as used in W.Va. Code, 21A-6-3(1) means
cause involving fault on the part of the employer sufficient to justify an employee's
voluntarily leaving the ranks of the employed and joining the ranks of the unemployed. We
further hold that under W.Va. Code, 21A-6-3(1) individuals who accept an early retirement
incentive package are disqualified from receiving unemployment compensation benefits
unless they (1) establish a well-grounded fear of imminent layoff supported by definitive
objective facts involving fault on the part of the employer and (2) establish that they would
suffer a substantial loss by not accepting the early retirement incentive package.
On April 10, 2002, the BEP issued a department memorandum that provided
the BEP staff guidance with interpreting
W.Va. Code, 21A-6-3, as it relates to employer
initiated voluntary separations. The appellees argue that this BEP's April 10, 2002 Local
Office Letter 2200
(See footnote 6) applies to the circumstances of this case and qualifies the
appellees for unemployment compensation benefits under
W.Va. Code, 21A-6-3.
When this Court is required to review an interpretation of a statute by a state
agency we have held that: “[i]nterpretations of statutes by bodies charged with their
administration are given great weight unless clearly erroneous.” See Syllabus Point 4 of Security Nat. Bank & Trust Co. v. First W.Va. Bancorp., Inc., 166 W.Va. 775, 277 S.E.2d
613 (1981). See also Syllabus Point 4 of State ex rel. ACF Industries, Inc. v. Vieweg, 204
W.Va. 525, 514 S.E.2d 176 (1999) and Martin v. Randolph County Board of Education, 195
W.Va. 297, 465 S.E.2d 399 (1995).
Notwithstanding this general rule of statutory construction, however, we held
in Syllabus Point 5 of Hodge v. Ginsburg, 172 W.Va. 17, 303 S.E.2d 245 (1983) that:
While the interpretation of a statute by the agency charged with
its administration should ordinarily be afforded deference, when
that interpretation is unduly restrictive and in conflict with the
legislative intent, the agency's interpretation is inapplicable.
Applying these principles, we first determine whether or not Local Office
Letter 2200 is consistent with W.Va. Code, 21A-6-3.
Local Office Letter 2200, written in 2002, was an attempt to interpret W.Va.
Code, 21A-6-3 in situations where an employer offers employees early retirement incentives
“when layoffs become necessary.” We find Letter 2200 to be instructive where it states:
. . .
An employee shall not be disqualified [from receiving
unemployment benefits] in situations where an employer notifies
employees that some employees will be laid off, and allows the
employees to take a mutually agreed upon election rather than
involuntary selection. A claimant who volunteers for a layoff
shall not be disqualified from receiving benefits if the employer
has an established workforce reduction plan that allows the
employee to volunteer to be laid off due to a lack of work situation, and the claimant's separation actually resulted from a lack of work.
. . .
(Emphasis added.)
Further insight for purposes of interpretation of Local Office Letter 2200 is
found in the opinion of the administrative law judge in the instant case where the judge
states:
. . .
. . . Under Local Office Letter 2200 an individual is not
disqualified where an employer notifies employees that layoffs
are going to occur and allows employees to elect to take an early
retirement rather than the prospect of a layoff. The key element
is a nexus between an announced layoff and the early retirement
option. The employer must have in place a plan of layoff in
which the workforce will be reduced.
The evidence in this case does not establish the existence of the
elements required by Local Office Letter 2200 to support a
finding of no disqualification. There is evidence that a layoff
plan was in existence when the claimant [appellees] exercised
the option to retire early but because of his seniority, the
claimant [appellants] would not have been laid off by the
employer. Instead, the evidence establishes that the claimant
could have continued to have worked for the employer in the
same job and under the same terms and conditions which were
in existence prior to the claimant [appellees] accepting the early
retirement package. Therefore, because the claimant would not
have been laid off by the employer at the time of the claimant
[appellees] accepted the early retirement package, Local Office
Letter 2200 would not be applicable.
. . .
Based on the above, we believe the intention of Local Office Letter 2200 was
to allow benefits to employees who were faced with the choice of accepting a company offer
of early retirement incentives or being subjected to the prospect of being laid off from
employment under a specific workforce reduction plan. We further believe that the Letter
was intended to deny benefits to those who elect to accept an early retirement package when
the affected employee would not have been laid off under the workforce reduction plan.
Furthermore, we believe that the interpretation of Local Office Letter 2200 by the appellees
is contrary to the intention of the Legislature and the purposes of the Act.
(See footnote 7)
Finally, we observe that whether a particular state permits an award of
unemployment compensation benefits to an employee electing to accept an early retirement
incentive plan depends on the laws of that state. Consistent with our interpretation of W.Va.
Code, 21A-6-3 and Local Office Letter 2200, many states have adopted similar results. See Davila v. Unemployment Compensation Bd. of Review, 926 A.2d 1287 (Pa. Cmwlth., 2007)
(holding that a claimant accepting deferred retirement option plan when she was not
threatened with a loss of her job was not entitle to benefits); In re N.J.A.C. 12:17-9.6 ex rel.
State Dept. of Labor, 395 N.J.Super. 394, 928 A.2d 956 (2007) (holding that a regulation
providing unemployment benefits for employees leaving employment pursuant to an early
retirement incentive package in order to allow co-workers to retain their jobs was in
contravention of the New Jersey Act); In re Scism, 27 A.D.3d 938, 811 N.Y.S.2d 479 (2006)
(holding that an employee accepting early retirement incentives when she knew her job was
not in jeopardy was not entitled to unemployment benefits); In re Felice, 24 A.D.3d 992, 805
N.Y.S.2d 487 (2005) (holding that a claimant who voluntarily accepted early retirement
incentive package with the knowledge that her job was not threatened was not entitled to
unemployment benefits); In re Fontaine, 239 A.D.2d 641, 657 N.Y.S.2d 216 (1997) (finding
that claimant who accepted early retirement incentive from the Air Force in face of
downsizing, but who was never told her position would be abolished, had voluntarily left her
employment without cause); Kehoe v. Minnesota Dept. Of Economic Sec., 568 N.W.2d 889
(Minn.App., 1997) (holding that employee who terminated employment to take advantage
of early retirement incentive program did not quit with good cause attributable to employer); Staub v. Unemployment Compensation Bd. of Review, 673 A.2d 434 (Pa. Cmwlth., 1996)
(denying unemployment benefits to a claimant because continuing work was available had
he not accepted early retirement); Uniroyal Goodrich Tire Co. v. Oklahoma Employment Sec.
Com'n, 913 P.2d 1377 (Okl.App. 1996) (holding that the claimant was not entitled to
unemployment benefits upon his voluntary acceptance of employer's offer of enhanced early
retirement benefits); Matter of Astrom, 362 So.2d 312 (Fla. App., 1978) (reasoning that
although claimant's election of early retirement was reasonable in light of the impending
close of operations, the employer never ascertained the date that employees would be
terminated and work was available at the time the claimants elected to accept the benefits
offered for early retirement).
In the instant case the appellees' jobs were not threatened by Clearon's plan
to reduce costs. If the appellees had not accepted the early retirement incentive package
offered by Clearon, the appellees could have remained working for Clearon under the same
or similar terms and conditions under which they were working at the time they accepted the
early retirement incentive package. (See footnote 8) We see little difference in the appellees' position in this
case and that of Philyaw v. Gatson, 195 W.Va. 474, 466 S.E.2d 133 (1995) where the
claimant had the opportunity to choose between terminating her employment or continuing
to work in her job. In Philyaw this Court held that the claimant's decision to terminate
employment when she had the option to continue to work constituted leaving work
“voluntarily without good cause involving fault on the part of the employer.”
Because the appellees' jobs were not threatened at the time of their acceptance
of the early retirement incentive package they are unable to establish a well-grounded fear
of imminent layoff supported by definitive objective facts involving fault on the part of the
employer. The mere fact that Clearon was attempting to cut costs in the face of competition
is insufficient, standing alone, to satisfy this aspect of their claim. For the foregoing reasons
we find this aspect of the appellees' claim without merit.
Finally, the appellees assert that Clearon made changes to the appellees'
retirement plan, vacation policy, disability policy and workers compensation which
constituted good cause under Wolford v. Gatson, 182 W.Va. 674, 391 S.E.2d 364 (1990) and Murray v. Rutledge, 174 W.Va. 423, 327 S.E.2d 403 (1985). Syllabus Point 2 of Murray,
in part, states:
[S]ubstantial unilateral changes in the terms of employment
furnish “good cause involving fault on the part of the employer”
which justify employee termination of employment and preclude
disqualification from the receipt of unemployment compensation
benefits.
The appellees apparently rely upon copies of a visual presentation used at an
employee meeting in which Clearon's cost reduction plans were discussed. No record of the
meeting was introduced as evidence. Furthermore, it is not clear from the record whether the
changes discussed at the employee meeting were ever actually made or whether the matters
discussed were simply potential changes which could occur if an insufficient number of
employees did not accept the early retirement incentive package. Also, the record contains
no documentation of the impact of the matters discussed upon the appellees _ financial or
otherwise.
We observe that the trial court made certain findings of fact (See footnote 9) regarding
Clearon's representation to its employees. The trial court did not, however, make any
findings indicating that the findings of fact of the Board of Review of the West Virginia
Bureau of Employment Programs were clearly wrong. The June 9, 2004, orders of the BOR
affirmed the administrative law judge's decision in both cases and included the following: The Board of Review, having reviewed all documents in this
matter, finds the Administrative Law Judge has made a proper
ruling and adopts the finding of the Judge, by reference in its
entirety.
The administrative law judge's decision contained the following finding:
If the claimant had not accepted the voluntary separation
program offered by the employer, the claimant could have
remained working as an employee for the employer at a similar
rate of pay, benefits and responsibilities and other terms and
conditions of employment previously enjoyed as an employee.
This finding by the administrative law judge was adopted by the BOR, and was not addressed
by the trial court but rather was left undisturbed.
We therefore find no support in the record for the appellees' contention that
Clearon had made substantial unilateral changes in the terms of appellees' employment such
that we can conclude that good cause involving fault on the part of the employer existed
which justified the appellees terminating their employment. Accordingly, we conclude that
this aspect of the appellees' argument is without merit.
IV.
Conclusion
Based on the foregoing we conclude that under W.Va. Code, 21A-6-3(1) and West Virginia Bureau of Employment Programs Local Office Letter 2200, individuals who
leave their employment to accept voluntary retirement incentive packages when their jobs
are not threatened are disqualified for unemployment compensation benefits unless they (1)
establish a well-grounded fear of imminent layoff supported by definitive objective facts
involving fault on the part of the employer and (2) establish that they would suffer a
substantial loss by not accepting the early retirement incentive package.
In the instant case the record does not support a finding that the appellees' jobs
were threatened, nor does it support a finding that they would have suffered a substantial loss
if they remained employed by Clearon.
Accordingly, the decision of the trial court is reversed and the Board of Review
of the West Virginia Bureau of Employment Programs decision is reinstated.
Reversed.
At the time of his retirement, appellee, Arthur C. Boggs, was fifty-five years old and
was being paid $22.60 per hour.
At the time of his retirement, appellee, Gary W. Childress, was sixty-one years old
and was being paid $21.00 per hour.
Footnote: 2
W.Va. Code, 21A-6-3 was amended by the Legislature in 1990 and again in 2005;
however, the relevant language of the statute applicable to the instant case was not changed
by the 2005 amendment.
Footnote: 6
Following is the complete text of the West Virginia Bureau of Employment Programs
Local Office Letter 2200, dated April 10, 2002:
TO: Claims Offices and UC Supervisory Personnel
FROM: Daniel Light, Director of Unemployment Compensation
SUBJECT: Employer-Initiated Voluntary Separations
Due to a recent legal opinion, a new policy is being established
to address situations where an employer initiates a separation by
providing employees with the option of voluntarily leaving their
employ when layoffs become necessary. An employee shall not
be disqualified in situations where an employer notifies
employees that some employees will be laid off, and allows the
employees to take mutually agreed upon election rather than
involuntary selection. A claimant who volunteers for a layoff
shall not be disqualified from receiving benefits
if the employer
has an established workforce reduction plan that allows the
employee to volunteer to be laid off due to a lack of work
situation, and the claimant's separation actually resulted from a
lack of work. The employer becomes the moving party when
they offer the voluntary election package. For example, an
employer has to reduce the number of employees due to
downsizing and, therefore, offers workers having seniority the
option to accept layoff ahead of more recently hired individuals
who normally would be separated first. Regardless of the
employer's reason for permitting a worker to elect to be laid off,
the worker who does elect to be laid off has
not left work
voluntarily. This is true even though work may still have been
available to that individual if the option to be laid off has not
been taken. Such action was, however, with good cause
involving fault on the part of the employer, since the employer
was in the process of downsizing and offered employees an
incentive to leave voluntarily.
Previously, it has been our policy to deny these individuals
under West Virginia Code § 21A-6-3, which provides, “Upon
the determination of the facts by the commissioner, an
individual shall be disqualified for benefits: (1) for the week in
which he left his most recent work voluntarily without good
cause involving fault on the part of the employer and until the
individual returns to covered employment and has been
employed in covered employment at least thirty days.”
Effective immediately, after the appropriate fact finding,
individuals who are determined to have elected to leave
employment under these conditions will be considered to have
left work voluntarily with good cause involving fault on the part
of the employer. If otherwise qualified for unemployment
compensation benefits, they would not be disqualified under the
above-mentioned section of Law. The decision should state that
the claimant left work voluntarily, with good cause, involving
fault on the part of the employer since the employer was the
moving party in the separation and under § 21A-6-3(1), no
disqualification can be imposed.
This new policy applies only to individuals separated as a
result of an employer initiated workforce reduction plan. It does
not affect situations where the employer did not initiate the
separation and individuals leave their employment while
continuing work is still available to them. Example: A company
announces its intention to lay off employees. However, the
employer has no layoff plan in place and does not offer
employees the choice of who will be laid off. Several
employees approach the employer and ask to be laid off. As a
result of requesting to be laid off, they are separated from
employment. Since the claimants initiated the request for layoff,
they are the moving party in this scenario and, thus would be
disqualified under the above section of law.
Revisions relating to this change in procedure will be
incorporated into the
West Virginia Claims Manual and
Policy
and Precedent Manual at a later date. If there are any questions
regarding the changes in procedure, please contact UC Benefits
& Technical Support (Mail Code 5106) or telephone 558-3309.
Footnote: 7 We feel compelled to say that we find the language of Local Office Letter 2200 to
be confusing and somewhat contradictory. Since a reduction in force is not an uncommon
event in today's employment climate, the commissioner may find it helpful to address and,
perhaps, update the language of Local Office Letter 2200.
Footnote: 8 That the appellees' jobs were not threatened is supported by the testimony of
Clearon's human resource manager, Bill Konopasek, as follows:
Now our contention is, from what I'm looking at is, should they
had not taken the early retirement, they would never have been
laid off anyway. Mr. Childress is the number one oldest
employee in the whole plant, and Mr. Boggs is, I think number
five.
Further supporting a finding that the appellees would not have lost their jobs is the
testimony of appellee, Arthur C. Boggs, as follows:
. . . I didn't think I would have lost my job.
If I lost mine, Like Bill [Konopasek] said, everyone
probably would have lost theirs too. There was never a threat
that they were going to . . ..
Footnote: 9
The trial court made the following finding:
In order to reduce the number of employees, the employer
initiated an early retirement income plan. The plan provided for
enhanced retirement benefits. It included a lump-sum payment
and removal of the early retirement reduction penalty. In
addition, the employer announced the outsourcing of substantial
work in the maintenance department. Vacation plans were
altered, the employer's match to the 401-k plan was suspended,
bank days for 2004 were eliminated, holiday carryover was
eliminated and changes were made to the disability policy. . . .