Greenray Industries v. Unemployment Compensation Board of Review
135 A.3d 1140
| Pa. Commw. Ct. | 2016Background
- Greenray required employees to sign a non-disclosure / patent assignment agreement after 18 months of negotiation; deadline set for April 30, 2014 with warning of termination for refusal.
- Claimants Esterline (senior design engineer) and Hitt (systems engineer/IT manager) refused to sign because of concerns the agreement would claim ownership of their outside, private intellectual property; they were working when they refused and knew refusal would cost them their jobs.
- Employer discharged the two on April 30, 2014 for refusing to sign. Claimants applied for unemployment compensation (UC).
- The UC Service Center initially found Claimants ineligible under 43 P.S. § 802(b); Referee reversed and found them eligible under 43 P.S. § 802(e); UCBR affirmed the Referee.
- Employer appealed to this Court arguing (1) the Board should have analyzed the separations under § 402(b) (voluntary quit), and (2) the Board erred in applying § 402(e) (willful misconduct) to grant benefits.
- The Commonwealth Court held Claimants voluntarily terminated employment by refusing continued employment and failed to prove a necessitous and compelling reason to quit; the Board’s orders were reversed.
Issues
| Issue | Employer's Argument | Claimants/UCBR's Argument | Held |
|---|---|---|---|
| Whether UCBR failed to analyze separation under §402(b) (voluntary quit) | The refusals to sign constituted quitting while employed and should be analyzed under §402(b) | Referee and UCBR treated matter under §402(e) with parties' consent | Court: UCBR erred — voluntary termination analysis under §402(b) is proper |
| Whether Claimants had necessitous and compelling cause to quit under §402(b) | No — refusing to sign an NDA/patent assignment that didn’t change pay or duties is not a substantial unilateral change and did not create real and substantial pressure | Yes — agreement’s breadth allegedly threatened Claimants’ private IP, constituting a substantial change | Court: No — Claimants failed to meet the four-part test for necessitous and compelling cause; benefits denied under §402(b); court did not reach §402(e) |
Key Cases Cited
- Watkins v. Unemployment Comp. Bd. of Review, 65 A.3d 999 (Pa. Cmwlth. 2013) (claimant bears burden to prove separation was involuntary or for necessitous/compelling cause)
- Shrum v. Unemployment Comp. Bd. of Review, 690 A.2d 796 (Pa. Cmwlth. 1997) (conduct tantamount to voluntary termination suffices as a quit)
- Middletown Twp. v. Unemployment Comp. Bd. of Review, 40 A.3d 217 (Pa. Cmwlth. 2012) (refusal to accept continued employment while employed is deemed a quit subject to §402(b))
- Phila. Hous. Auth. v. Unemployment Comp. Bd. of Review, 29 A.3d 99 (Pa. Cmwlth. 2011) (unilateral imposition of a substantial change in terms/conditions can provide necessitous and compelling cause)
- Sears, Roebuck & Co. v. Unemployment Comp. Bd. of Review, 394 A.2d 1329 (Pa. Cmwlth. 1978) (quoting principle that conduct tantamount to resignation suffices)
- Miller v. Unemployment Comp. Bd. of Review, 83 A.3d 484 (Pa. Cmwlth. 2014) (scope of appellate review — errors of law, constitutional violations, or lack of substantial evidence)