PECO Energy Co. v. Unemployment Compensation Board of Review

682 A.2d 49
Commonwealth Court of Pennsylvania·Decided August 16, 1996·Published·Cited by 14 cases

Opinion

LORD, Senior Judge.

PECO Energy Company (PECO) petitions this Court for review of Unemployment Compensation Board of Review (Board) orders affirming a referee’s award of benefits to claimants Thomas L. Supplee, Edward J. Galligan, Jr. and John C. Nagle pursuant to Section 402(b) of the Unemployment Compensation Law (Law), Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(b) [relating to the voluntary termination of employment for cause of a necessitous and compelling nature].

On April 14, 1994, PECO offered its employees either a voluntary separation incentive plan or a voluntary retirement incentive plan, both of which afforded separation and retirement benefits beyond those available under existing company policies. Employees who would be fifty years old by December 31,1995, who had given at least five years of service, were offered both plans; all employees were offered the voluntary separation plan. Employees had a window of time from July 5, 1994 to September 16, 1994 to decide whether to accept one of the plans.

The voluntary separation plan afforded employees a lump sum equal to three weeks of pay for every one year of service with PECO, up to sixty-five weeks of pay or $100,-000.00. This plan also continued company-paid medical and dental benefits for one year. The enhanced retirement plan amended PECO’s retirement pension plan. Before the amendment, PECO employees could retire at sixty years old with full pension benefits or any time after reaching fifty-five years old with early retirement pension discounts of four percent per .year. After the amendment, an employee could retire at fifty years old with one hundred percent of his pension intact. The plan still provided for PECO’s one-hundred-percent funding of the pension without employee contributions. Pursuant to the enhanced retirement plan, an employee retired with full medical benefits paid for by PECO.

In the event an employee did not accept one of these plans and was later laid off for lack of work, the employer had a reduction-in-force policy providing employees with two weeks of pay for every one year of service with PECO, up to fifty-two weeks. This policy also afforded employees a continuation of company-paid medical and dental benefits for one year.

Eventually, more than twenty-five-hundred employees opted for one of the enhanced separation plans, including Supplee, Galligan and Nagle, who were engineers with PECO. Supplee, who was fifty-six years old when he separated from employment, opted for the early retirement plan; Galligan and Nagle, ages thirty-two and forty-seven respectively at the time of separation, chose the voluntary separation plans. All three men applied for unemployment benefits.

The Office of Employment Security (OES) awarded benefits to the three men, and the referee affirmed, deciding that each claimant [51]*51had a reasonable belief he was in danger of losing his job and, therefore, each claimant acted reasonably in opting for one of the plans. The referee also determined that the employer could not prove that continuing work existed for the claimants had they not chosen one of the plans. On appeal, the Board affirmed, relying for its decisions on the referee’s findings of fact and conclusions of law. PECO’s petitions for review to this Court followed. These cases were consolidated for argument and disposition.

PECO raises one issue for our consideration. That is, whether certain employees who accepted voluntary separation packages offered to all employees had necessitous and compelling cause to terminate their employment.1, 2 However, before we begin our discussion of the circumstances surrounding the separation from employment of each claimant involved in this consolidated appeal, we acknowledge the complexities inherent in deciding whether a claimant confronted with a corporate downsizing and an uncertain future had necessitous and compelling cause to leave his employment. Of course, our task in determining whether a claimant who opts for a separation package should receive unemployment benefits under section 402(b) is not made any easier by the fact that, most times, an employer cannot assure its employees of jobs until it sees what number of them have opted for the separation package. Equally, an employee who accepts a separation package often cannot know whether continuing work would have been available to him had he decided to remain employed.

After undertaking an in-depth examination of the pertinent law in this area, specifically, Philadelphia Parking Authority v. Unemployment Compensation Board of Review, 654 A.2d 280 (Pa.Cmwlth.1995), Department of the Navy v. Unemployment Compensation Board of Review, 168 Pa.Cmwlth. 356, 650 A.2d 1138 (1994), Peoples First National Bank v. Unemployment Compensation Board of Review, 159 Pa.Cmwlth. 184, 632 A.2d 1014 (1993), Eby v. Unemployment Compensation Board of Review, 157 Pa. Cmwlth. 10, 629 A.2d 176 (1993) and Flannery v. Unemployment Compensation Board of Review, 125 Pa.Cmwlth. 64, 557 A.2d 52 (1989), we explained in Staub v. Unemployment Compensation Board of Review, 673 A.2d 434 (Pa.Cmwlth.1996) as follows.

We glean from the foregoing decisions that speculation pertaining to an employer’s financial condition and future layoffs, however disconcerting, does not establish the requisite necessitous and compelling cause. Instead, the relevant inquiry is whether surrounding circumstances at the time an employee voluntarily leaves indicate a likelihood that fears about his or her job security will otherwise materialize, that serious impending threats to the employee’s job will be realized and that the employee’s belief that his job is imminently threatened is well founded.

Id., 673 A.2d at 437.

No. 1696 C.D. 1995

As we have already stated, Supplee was fifty-six years old at the time he retired. There can be no doubt on this record that he felt compelled to do so, because he believed that if he did not, he would lose his job before obtaining any of the extra benefits to which he was entitled under PECO’s en[52]*52hanced early retirement plan. The referee considered Supplee’s testimony as well as the testimony of PECO’s witnesses and resolved all pertinent conflicts in his favor. The referee found, inter alia, that PECO never told Supplee his job would not be eliminated if he failed to accept the early retirement plan; that Supplee opted for the retirement plan due to his low seniority in his position, his lack of an engineering degree, and his understanding that his job duties would be eliminated in the reorganization; that Supplee had a good faith belief he would be furloughed due to PECO’s new reduction-in-force policy; and that continuing work was not available to Supplee when he opted to retire.

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PECO Energy Co. v. Unemployment Compensation Board of Review, 682 A.2d 49 (Pa. Ct. App. 1996).

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