Middletown Tp. v. UNEMP. COMPENSATION BD.
40 A.3d 217
| Pa. Commw. Ct. | 2012Background
- Claimant Raymond Stepnoski was Middletown Township’s township manager under an auto-renewing contract; last day of work July 8, 2010, after the Board voted not to renew.
- The Board’s nonrenewal letter was sent June 8, 2010, with automatic renewal set for July 9, 2010 absent notice.
- Subsequent to nonrenewal, the Township sought a new contract with unilateral changes (lower pay, fewer benefits, car allowance eliminated, medical-benefit contributions, revised severance).
- Claimant provided a counter-offer; the Board rejected it.
- UC Service Center initially found Claimant quit; Referee later reversed, granting unemployment benefits, concluding necessitous and compelling reasons existed for leaving due to unilateral changes.
- Board, on review, found a discharge not for willful misconduct but allowed alternative analysis under 402(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board’s finding of discharge for willful misconduct was supported by substantial evidence | Claimant argues Board’s finding of discharge was supported | Employer argues discharge was improper under 402(e) or not supported | Board’s 402(e) analysis was error; substantial evidence supports discharge only if applicable, but? court ultimately rejects under 402(e) and proceeds under 402(b) (alternate grounds) |
| Whether the proper legal framework is 402(e) (willful misconduct) or 402(b) (voluntary quit with necessitous/compelling reason) | Claimant/Claimant’s position aligned with Hospital Service Association line for applying 402(b) | Employer contends Board erred by applying 402(b) after treating as discharge; 402(e) should apply | Court agrees the correct framework is 402(b) for this dispute (and 402(e) applied in error) |
| Whether substantial unilateral contract changes after nonrenewal constitute necessitous and compelling reason to quit | Counter-offer rejected; unilateral changes greater than in Accu-Weather justify quitting | Employer argues changes insufficient or not properly tied to quit | Court affirms, finding substantial unilateral changes (eliminating automatic renewal, pay raises, car allowance, health-benefit contributions, severance) constitute necessitous and compelling cause to quit under 402(b) |
| Whether Claimant remained employed long enough to be eligible given the timing of termination and negotiations | Claimant had not yet signed new contract when terminated | Employer argues termination occurred prior to new contract acceptance | Findings show termination effective July 8, 2010; negotiations occurred post-termination; supports 402(b) viability |
| Whether the Board’s alternative conclusion that Claimant quit with necessitous and compelling reasons is supported | Claimant’s refusal to accept unilateral changes justified quitting | Employer argues no necessitous and compelling basis under facts | Court agrees there is substantial basis for necessitous and compelling cause, supporting benefits under 402(b) |
Key Cases Cited
- Hospital Serv. Ass'n of Ne. Pa. v. Unemployment Comp. Bd. of Rev., 476 A.2d 516 (Pa. Cmwlth. 1984) (refusal of continued employment can invoke 402(b))
- Delaney v. Unemployment Compensation Bd. of Rev., 574 A.2d 1198 (Pa. Cmwlth. 1990) (offer of continued employment; necessity of 402(b) applicability)
- Shrum v. Unemployment Compensation Bd. of Rev., 690 A.2d 796 (Pa. Cmwlth. 1997) (voluntary resignation analysis under 402(b) after offer refusal)
- Mack Trucks, Inc. v. Unemployment Compensation Bd. of Rev., 465 A.2d 87 (Pa. Cmwlth. 1983) (control framework when employee is terminated prior to accepting/rejecting new contract; 402(e) applicability clarified)
- Accu-Weather, Inc. v. Unemployment Compensation Bd. of Rev., 634 A.2d 818 (Pa. Cmwlth. 1993) (take-it-or-leave-it offer and necessitous/compelling considerations)
- Brunswick Hotel & Conf. Ctr. v. Unemployment Comp. Bd. of Rev., 906 A.2d 657 (Pa. Cmwlth. 2006) (substantial unilateral changes may establish necessitous and compelling reasons)
- Griffith Chevrolet-Olds, Inc. v. Unemployment Compensation Bd. of Rev., 597 A.2d 215 (Pa. Cmwlth. 1991) (substantial wage reductions can be necessitous and compelling depending on circumstances)
- Pacini v. Unemployment Compensation Bd. of Rev., 518 A.2d 606 (Pa. Cmwlth. 1986) (small pay cuts generally insufficient to establish necessitous/compelling)
- A-Positive Electric v. Unemployment Compensation Bd. of Rev., 654 A.2d 299 (Pa. Cmwlth. 1995) (unilateral changes can be necessitous and compelling when significant)