International Spike, Inc. v. Kentucky Unemployment Insurance Commission, Department for Human Resources

609 S.W.2d 374, 1980 Ky. App. LEXIS 392
CourtCourt of Appeals of Kentucky
DecidedDecember 5, 1980
StatusPublished
Cited by7 cases

This text of 609 S.W.2d 374 (International Spike, Inc. v. Kentucky Unemployment Insurance Commission, Department for Human Resources) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Spike, Inc. v. Kentucky Unemployment Insurance Commission, Department for Human Resources, 609 S.W.2d 374, 1980 Ky. App. LEXIS 392 (Ky. Ct. App. 1980).

Opinion

LESTER, Judge.

This is an unemployment compensation case in which International Spike, Inc. appeals from judgments of the Bourbon Circuit Court affirming orders of the Kentucky Unemployment Insurance Commission holding that Walfina Mae Tubbs and Henrietta White (in 80-CA-655-MR) and Diane Clay Tubbs (in 80-CA-656-MR) had good cause for voluntarily quitting their jobs and thus, were not disqualified from receiving unemployment compensation benefits.

Each of the claimants worked as spike packagers for appellant. All three quit their jobs when appellant transferred them from the plant food spike line, where they earned wages of $2.65 per hour plus a production bonus, to the tree food spike line, where they earned $3.30 per hour where such a bonus was unavailable.

Henrietta White and Walfina Tubbs had worked for appellant for over 14 months when, according to their testimony, they were notified that they were being moved permanently to the tree food line, where they could earn a gross pay of $132.00 for their 40-hour week. In comparison, because they were among the appellant’s fastest packers, they had each grossed $195.00 per week, including production bonuses, for the past six months on the plant food spike line. Thus, these claimants faced a 32% reduction in gross weekly pay. By way of brief, International Spike attempts to divert this court from the total earnings concept to one of higher wages by repeated references to increased hourly income on the tree food line when in actuality, the gross pay on the plant spike packing line is greater by virtue of the production bonus.

After determining that appellant intended their shift to be permanent, the claimants quit their jobs on November 21, 1978, rather than accepting the pay reduction. Subsequent to separate hearings (at which only the claimant appeared in each case), a commission referee, reversing notices of adjusted determination, concluded that the substantial pay reduction gave the claimants good cause to quit their jobs. Reasoning that an ordinarily prudent person would have quit under those circumstances, the referee disqualified neither claimant from receiving compensation. By appropriate orders, the Commission affirmed the referee. Appellant sought review in the Bourbon Circuit Court, which found sufficient evidence in the record to justify the claimants in leaving their jobs thus affirming the Commission.

Diane Tubbs’ case comes to this Court in a similar posture with the same supportive reasoning. The claimant had worked for [376]*376appellant for two years, grossing $167.60 per week on the plant food spike line, and quitting after she was transferred to the $132 per week tree food spike line. Because she earned less in production bonuses than the claimants in 80-CA-655-MR, the shift would have caused a 21% reduction in her gross pay. This employee, who had worked on the tree food line for one year previously, in addition to some days when other employees were absent, testified before the referee that she would have accepted a temporary transfer to the tree food line. However, she stated that her production manager informed her the change would be permanent. Although appellant’s general plant manager, who testified before the referee, believed that the transfer to the tree food line was temporary, he had no knowledge of what the employee’s immediate supervisor had told her. The general plant manager emphasized that the tree food spike line, unlike the plant food line, was not conducive to quota work.

The two appeals have been consolidated.

The applicable subsections of KRS 341.-370 provide:

(2) A worker shall be disqualified from receiving benefits for the duration of any period of unemployment with respect to which:
(c) He has left his most recent suitable work voluntarily without good cause. '

Appellant first argues that the work offered the claimants was suitable under the statute, but this is an idle contention for no one denies that position. The crux of the litigation revolves around whether a substantial reduction of income is “good cause” for voluntarily leaving employment when viewed in the light of the test set forth in Kentucky Unemployment Insurance Commission v. Murphy, Ky., 539 S.W.2d 293 (1976), to the effect that such a reason “exists only when the worker is faced with circumstances so compelling as to leave no reasonable alternative but loss of employment,” and in a voluntary quit case, the burden of proving good cause rests on the employee. Kentucky Unemployment Insurance Commission v. Day, Ky., 451 S.W.2d 656 (1970).

The pivotal issue of this litigation has yet to be decided by an appellate court of this jurisdiction where there is no element of a collectively bargained agreement. International Spike, relying heavily upon Murphy, supra, argues that at every level below the administrative agency and the court reached erroneous conclusions, but it fails to point out why substantial reduction of salary is not good cause within the Murphy test. Appellant refers to certain alternatives that were open to the appellees such as continued employment at a lower pay while seeking other employment, but this would foster a practice of consistently reducing wages by varying job assignments without hope of recovering unemployment benefits if we were to accept appellant’s arguments.

When looking to foreign jurisdictions, we observe that they have reached opposite results on the question presented here. Denying benefits are Minnesota in Lewis v. Minneapolis Moline, Inc., 288 Minn. 432, 181 N.W.2d 701 (1970), a 7% reduction in wages; Washington in In re Anderson, 39 Wash.2d 356, 235 P.2d 303 (1951), a 12% reduction; and Wisconsin in Roberts v. Chain Belt Company, 2 Wis.2d 399, 86 N.W.2d 406 (1957), where $71.00 to $95.00 was lowered to $64.00 per week. See also Pennington v. Dudley, 10 Ohio St. 90, 226 N.E.2d 738 (1967), a 15% drop in income. On the other hand, California would grant benefits in a 25% wage cut, Bunny’s Waffle Shop v. California Employment Commission, 24 Cal.2d 735, 151 P.2d 224 (1944), as would Missouri for a 44% reduction, Armco Steel Corp. v. Labor & Industrial Relations Commission, 553 S.W.2d 506

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Bluebook (online)
609 S.W.2d 374, 1980 Ky. App. LEXIS 392, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-spike-inc-v-kentucky-unemployment-insurance-commission-kyctapp-1980.