Rio Supply, Inc. of PA v. Unemployment Compensation Board of Review
124 A.3d 401
| Pa. Commw. Ct. | 2015Background
- Claimant (warehouse manager since 2007) was demoted to driver after a resigning driver reported Claimant had encouraged him to quit; demotion cut pay from $30/hr to $18/hr and eliminated benefits.
- Claimant worked ~2 weeks after demotion and then voluntarily resigned citing substantial reduction in salary and benefits.
- Local service center found Claimant ineligible for unemployment benefits under 43 P.S. § 802(b); a referee affirmed, finding Claimant failed to act in good faith by not protesting demotion.
- The Unemployment Compensation Board of Review reversed, concluding Employer failed to prove the demotion was justified and that the pay/benefit reduction gave Claimant necessitous and compelling reason to quit.
- Employer appealed to this Court arguing the Board shifted the burden of proof to Employer and erred in its analysis; the Court affirmed the Board.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Claimant is ineligible under §402(b) for voluntarily quitting after demotion | Claimant: demotion unjustified; wage/benefit loss compelled resignation | Employer: demotion justified by resigning driver’s report; burden on Board to accept that | Held: Claimant met burden because Employer failed to present competent evidence that demotion was justified; Board properly found necessitous and compelling cause |
| Whether Board impermissibly shifted burden to Employer | Employer: Board required Employer to prove demotion was justified, shifting burden | Board: claimant bears burden to show necessitous/compelling reason; in demotion cases claimant meets burden by showing demotion unjustified | Held: No improper shift; claimant satisfied burden by showing demotion not justified given lack of competent corroboration of Employer’s evidence |
| Admissibility/weight of owner’s testimony recounting resigning driver’s statements | Employer: owner’s testimony sufficient to justify demotion | Claimant: owner’s testimony was hearsay and uncorroborated | Held: Owner’s recounting was hearsay; hearsay alone cannot support finding without corroborating competent evidence |
| Whether traditional necessitous-and-compelling factors apply after demotion | Employer: Board relied on traditional factors (e.g., pay/benefit loss) like in Brunswick | Board/Claimant: controlling inquiry is justification for demotion per Allegheny Valley School | Held: Court agrees focus is on justification for demotion; traditional factors are not controlling in demotion cases (but here Board’s conclusion on pay/benefits was supplemental and Court noted that analysis should center on justification) |
Key Cases Cited
- Allegheny Valley School v. Unemployment Compensation Board of Review, 697 A.2d 243 (Pa. 1997) (holding that after a demotion the inquiry focuses on whether the demotion was justified)
- Diversified Care Management, LLC v. Unemployment Compensation Board of Review, 885 A.2d 130 (Pa. Cmwlth. 2005) (applying Allegheny Valley School; employer’s lack of evidence rendered demotion unjustified)
- Brunswick Hotel & Conference Center, LLC v. Unemployment Compensation Board of Review, 906 A.2d 657 (Pa. Cmwlth. 2006) (discussing traditional factors used to assess necessitous and compelling cause)