Massachusetts High Court Rules Whether Employee that Accepted Lay-Off Package Gets Unemployment In so ruling, the Court considered the fact that the plaintiff:- Was not forced to apply for the separation package; she volunteered;- Did not believe her job was in jeopardy; and- Left, in part, for personal reasons.Purpose of Unemployment Benefits The SJC explained that the purpose of unemployment insurance is to “afford benefits to [individuals] who are out of work and unable to secure work through no fault of their own.” Unemployment benefits generally are not available when the former employee has resigned, unless she can show she had “good cause” to leave attributable to the employer, such as a reasonable belief that discharge was imminent.Case Background Connolly worked as a customer service representative at Verizon’s Lowell facility.
Verizon determined that Connolly’s department was overstaffed, and offered employees an opportunity to participate in a voluntary lay-off. Employees, like Connolly, applied for participation in the lay-off, and were granted severance pay in exchange for their resignations. Connolly’s decision to apply for, and accept, the separation package was influenced by her dislike of her job; the length of her commute, and; her concern that Verizon would transfer her to its Andover facility. Connolly was not concerned that her job was in jeopardy, and after Connolly’s resignation, Verizon did not conduct any involuntary lay-offs.
The Ruling Connolly did not leave her job for “good cause” attributable to Verizon.A Look Back The SJC considered prior cases analyzing this issue to conclude that Connolly did not have a reasonable belief that her job was in jeopardy, and therefore, did not leave Verizon for good cause.In White v. Dir. Of the Div. of Employment Sec., 382 Mass. 596 (1981), White accepted his employer’s early retirement incentive offer. In exchange for taking the package, the employer paid White $3,000. White accepted the package because he had heard a rumor that involuntary layoffs were imminent, and he concluded that based on his seniority, he would be one of the first to be let go.
White petitioned for unemployment benefits, and the SJC ruled if he held a reasonable belief that his job was in jeopardy, he was entitled to the benefits.In Morillo v. Dir. Of the Div. of Employment Sec., 394 Mass. 765 (1985), the employer announced that it would be laying off 12 employees, and asked for volunteers. Morillo volunteered because he was “dissatisfied with the safety of the machines” he operated. Morillo’s employer did not offer any separation pay. Initially, Morillo was denied unemployment benefits because the Department ruled that he had resigned, that is, that he had not left his position for good cause attributable to his employer. In reversing the Department’s decision, the SJC ruled that:- “The first and last steps in the termination process . . . were by the employer”;- The purpose of the unemployment statute was to encourage employees to volunteer to be among those laid off;- The employer would have to pay into the unemployment compensation fund, regardless of the identity of the employees laid off.In State St. Bank v. Deputy Dir. Of the Div. of Employment and Training, 66 Mass. App. Ct. 1 (2006), the employer announced that it was going to decrease its numbers by 1,800 employees in two phases: first a voluntary lay off, with incentive pay, and then, with an involuntary lay off. State Street did not provide information to its employees about when and who would be laid off during phase two. In the end, State Street did not implement phase two because more than 1,800 employees volunteered to be part of the first phase reduction. Certain members of the phase one lay off applied for unemployment benefits. Reversing a district court decision, the Appeals court ruled that State Street hindered the plaintiffs’ ability to make a realistic assessment about whether, when and who would be affected by the phase two layoffs if they did not accept the voluntary package.
The plaintiffs were entitled to unemployment benefits.Take -AwaysThe take-away is to consider whether the employee’s departure is primarily the employer’s decision or the employee’s. The following may assist employers in analyzing the likelihood that a departing employee will be eligible for unemployment benefits:- The employee was laid off or terminated, but not “for cause” ? Eligible.- The employer is offering incentive benefits to the departing employee, but also announces that there will be involuntary layoffs at a later date. Employee accepts the incentive package, and also reasonably believes her job is in jeopardy ? Eligible.- The employee accepts a voluntary early-retirement or lay off package because she wants to leave her job, and is attracted to the exit package. She does not reasonably fear the loss of her job ? Ineligible.
- The employer announces imminent layoffs and asks for volunteers ? Eligible.Due to the decline in the unemployment rate in Massachusetts, the maximum number of weeks Massachusetts is permitted to offer for EB will be reduced from 20 weeks to 13 weeks.Upcoming Change on Federal-State Extended Benefits (EB) Effective July 9, 2011 ABOUT THE AUTHOR: Allyson Kurker Kurker Law is an employment law firm located in Concord, Massachusetts, and serving clients throughout Greater Boston. Having worked at a multi-national Boston law firm before founding Kurker Law, Allyson Kurker has worked with a variety of clients, from Fortune 500 companies to family-owned businesses, and many in between. While Allyson’s clients are varied, her approach is consistent: understand her client’s business objectives; counsel clients so they can prevent employment disputes; find early resolutions when possible; litigate tenaciously when necessary.
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