Salzl v. Gibson Greeting Cards, Inc.

399 N.E.2d 76, 61 Ohio St. 2d 35, 15 Ohio Op. 3d 49, 1980 Ohio LEXIS 605

• Court: Ohio Supreme Court
• Decided: January 9, 1980
• Docket: No. 79-516
• Status: Published

Opinions

Per Curiam.

The issue before this court is whether an employee has either quit his work without just cause or has been discharged for just cause within the meaning' of R. C. 4141.29 (D) (2) (a) when, at the age of 65, he was involuntarily discharged pursuant to the provisions of a unilaterally enacted company retirement and pension plan. If so, the employee is ineligible for unemployment compensation benefits.

The relevant portions of R. C. 4141.29 read as follows:

“(D)***no individual may serve a waiting period or be paid benefits***

U * * *

“(2) For the duration of his unemployment if the administrator finds that:

“(a) He quit his work without just cause or has been discharged for just cause in connection with his work* * *.”

A claimant is rendered ineligible for unemployment benefits if he quits without just cause or if he is discharged with cause. The claimant in this cause did not quit his job; he was forced to retire. Therefore, the first clause of R. C. 4141.29 (D) (2) (a) is inapplicable. The issue then becomes whether the claimant was discharged for just cause.

In the case where an employee is retired or discharged pursuant to retirement provisions of a collective bargaining agreement entered into between the employer and the union representing the employee, the employee-claimant is considered to have been discharged for just cause in connection with his work and therefore not entitled to unemployment compensation benefits. See Dowler v. Bd. of Review (1976), 9 Ohio St. 2d 42; Ivy v. Dudley (1966), 6 Ohio St. 2d 261. Both of these cases relied on the reasoning of Marcum v. Ohio Match Co. (1965), 4 Ohio App. 2d 95.

Given factual components similar to those in the instant cause, appellate courts in the state have come to differing conclusions. See Garvin v. Giles (Lucas Co. 1977), 55 Ohio App. 2d 1 (benefits granted); Mayer v. Gray Drug Stores (Richland Co. June 29, 1978), No. CA 1716, unreported (benefits granted); May Co. v. Bd. of Review, supra (49 Ohio App. 2d 21) (benefits denied).

In May Co., supra, the appellate court held that no distinction existed between a non-union employee who was forced to retire at age 65 under a company pension program and the union member mentioned in Ivy and Dowler. Finding no distinction, the court denied the claimant unemployment benefits.

We disagree. There is a notable distinction between an employee who leaves work pursuant to a pension and retirement plan which was negotiated by his union and accepted as part of his contract and an employee who is forced to leave his employment because of a unilaterally enacted pension program calling for mandatory retirement at age 65. The decision in Marcum, supra, was based upon the concept that the employee’s agent, his union, entered into a contract which included the benefit of a retirement pension and the duty to retire at age 65. In return for receiving his pension benefits, he agreed to retire. Because the pension plan was a part of his contract with the employer, the employee’s termination was voluntary and self-imposed.

In the cause sub judice, the employee never agreed to retire; he was terminated against his will. It can hardly be said that the claimant agreed to the terms of the pension plan, for he was placed in the position of accepting the plan or leaving the company. There was no prior bargaining whatsoever and the plan was presented to him post facto. Consequently, we hold that the claimant in the instant cause has been discharged without just cause, and he is entitled to unemployment benefits. We have reviewed the cases in Annotation, 50 A.L.R. 3d 880, Unemployment Compensation: Eligibility of Employee Laid Off According To Employer’s Mandatory Retirement Plan, which find an implied agreement, but do not find them to be persuasive.¹

The above holding violates neither Section 26, Article II of the Ohio Constitution, nor Section 1 of the 14th Amendment to the United States Constitution.² As we recently stated in Bd. of Edn. v. Walter (1979), 58 Ohio St. 2d 368, at page 376: “***UneqUal treatment of classes of persons by a state is valid if the state can show that a rational basis exists for the inequity. Ordinarily, under a rational basis requirement, any classification based ‘upon a state of facts that reasonably can be conceived to constitute a distinction or difference in state policy***’ will be upheld. Allied Stores of Ohio v. Bowers (1959), 358 U. S. 522, 530.”

A rational basis exists for the distinction in the instant cause. As mentioned earlier, and as stated in the Court of Appeals’ opinion below, “[o]ur national recognition of the importance of collective bargaining makes manifest our acknowledgment that through union representation the employee’s interests are better protected. Furthermore, there is patently a difference between a plan negotiated at arm’s length and one unilaterally adopted by the employer.”

The case of Chambers v. Owens-Ames-Kimball Co. (1946), 146 Ohio St. 599, cited by the appellant is not controlling. The language in the case discussing uniformity is dictum since the instant cause deals with retirement, not refusing to accept a job when one is unemployed as was the case in Chambers.

R. C. 4141.46 states that the Unemployment Compensation Act is to be liberally construed. In allowing the claimant benefits in this cause, the purposes of the act are fulfilled. The act was intended to provide financial assistance to an individual who had worked, was able and willing to work, but was temporarily without employment through no fault or agreement of his own. The claimant fits this description. We find that R. C. 4141.29 (D) (2) (a) should be liberally construed to grant the claimant benefits.

The judgment of the Court of Appeals is affirmed.

Judgment affirmed.

Celebrezze, C. J., Herbert, W. Brown, P. Brown, Sweeney and Jackson, JJ., concur. Holmes, J. dissents. Jackson, J., of the Eighth Appellate District, sitting for Locher, J.

1 Appellant asserts that allowing the employee benefits would amount to an unconstitutional impairment of a contractual obligation. Since there was no agreement to retire in the instant cause, we find the contention to be without merit.

2 Claimant argues that the appellant should not be raising federal and state constitutional issues which were not raised in the appellate court. He concludes that this court should not consider those matters. Such a conclusion logically follows when the judgment of the trial court is affirmed by the appellate court. In a case where the intermediate appellate court reverses the judgment below the issue becomes the error that the Court of Appeals may or may not have committed. In the case sub judice, constitutional questions arose because of the appellate court’s construction of the benefits statute (R. C. 4141.29 [D] [2] [a]). It is only logical that we pass upon those questions in making our determination. See McKenzie v. Horr (1864), 15 Ohio St. 478, 481; and see the dictum in State, ex rel. Herbert, v. Ferguson (1944), 142 Ohio St. 496, 503.