Lafferty v. Review Board of the Indiana Department of Employment & Training Services

SHIELDS, Judge,

dissenting.

I dissent.

Indiana Code 22-4-15-1 disqualifies an individual from receiving unemployment benefits if he "voluntarily left his employment without good cause in connection with the work." IC 22-4-15-1(@a) (1992 Supp.). However, there is an exception:

An individual shall not be subject to disqualification because of separation from his prior employment if he left to accept with another employer previously secured permanent full-time work which offered reasonable expectation of betterment of wages or working conditions and thereafter was employed on said job for not less than ten (10) weeks.

IC 22-4-15-1(c)(1) (1992 Supp.) - Based upon the legislative and judicial history of these provisions, I agree with Lafferty's claim that the Board erred in determining he left his position with Wal-Mart without good cause in connection with the work; his reasons for leaving Wal-Mart-quanti-fiably better pay and working conditions were objective and job-related, thereby meeting the standard set forth in Gray v. Dobbs House, Inc. (1976), 171 Ind. App. 444, 446, 357 N.E.2d 900, 903. The Dobbs House standard requires a worker to show that his or her reasons for quitting were related to the employment and objective in character, and were such as would impel a reasonably prudent person to quit under the same or similar circumstance.

Indiana's first unemployment compensation legislation, Acts 1936, ch. 4, SEC. 6(£), disqualified workers who "left work voluntarily without good cause."3 Without the "in connection with work" modifier, leaving a job for better pay could have constituted good cause. For example, in DeVillez v. Review Bd. of the Indiana Employment Sec. Div. (1965), 136 Ind.App. 642, 204 N.E.2d 369, the job for which an employee quit his existing employment failed to materialize. The Board determined the employee was ineligible, but did so because the employee quit his job without a second job in hand, not because the employee quit one job for a better one.

In 1967, the disqualification section of the unemployment legislation was amended to deny benefits to a worker who "left work voluntarily without good cause attributable to the employer." Acts 1967, ch. 310, SEC. 19.4 The ten-week requalifica *1384tion rule was enacted at the same time. Id.5 By adding "attributable to the employer," the legislature chose to restrict the circumstances under which benefits would be available to an employee who quit his employment. This result was recognized in Jones v. Review Bd. (1968), 143 Ind.App. 64, 238 N.E.2d 291, where this court affirmed the Board's decision denying benefits to a worker who quit one job in favor of another job and who failed to hold the second job for at least ten weeks.

The last amendment relevant to our discussion occurred in 1971, when the disqualification provision was amended to disqualify a worker who has "voluntarily left his employment without good cause in connection with the work." Acts 1971, P.L. 355, SEC. 35.6 Case law subsequent to the 1971 amendment merely emphasizes that a qualifying voluntary termination requires objective good cause related to the employment and does not comment upon whether the change from "good cause attributable to the employer" to "good cause in connection with work" is significant. See Marozsan v. Review Bd. of the Indiana Employment Sec. Div. (1982), Ind.App., 429 N.E.2d 986, 990 ("It is only when the demands placed upon employees are unreasonable or unfair, so much so that a reasonably prudent person would be impelled to leave that the Act will provide compensation to employees who voluntarily quit their jobs."); Wicker v. Review Bd. of the Indiana Employment Security Division (1977), 173 Ind.App. 657, 365 N.E.2d 787 (Good cause that justifies benefits in a voluntary termination of employment must be related to the employment.); Gray, 171 Ind.App. at 447, 357 N.E.2d at 903 (The objective reasons relat ed to employment for abandoning employment must be those that would compel a reasonably prudent person to do the same under the same or similar circumstances.); Geckler v. Review Bd. of the Indiana Employment Sec. Div. (1963), 244 Ind. 473, 477, 193 N.E.2d 357, 359 (Good cause does not include personal and subjective reasons that are unique to the employee.).

Based in part upon this legislative history, I conclude that under the pre-1971 language, an employee who accepted employment at a $4.55 per hour wage would not be eligible for benefits if the employee quit his or her employment to accept a higher paying permanent job-termination to accept a higher wage would not be for good cause attributable to the employer, because the employee knew his or her wage when he or she accepted the employment. Under the present language, an employee who knows his or her wage when he or she accepts employment, as did Lafferty, and who terminates that employment to accept other higher paying permanent employment, is not necessarily ineligible for benefits. Wages are connected to "work" and, therefore, the employee may be quitting for reasons "in connection with work" if the circumstances are such that no reasonable person could find fault with the quitting.

Thus, the pre-1971 disqualifying language imposed a stricter standard than the present standard, i.e., the "attributable to the employer" standard required the reason for quitting to relate to the employer while the "in connection with the work" standard requires only that the reason be job-related. Based thereon, I conclude the legislature amended the modifier of "good *1385cause" from "attributable to the employer" to "in connection with the work" to expand the circumstances constituting good cause or, alternatively, to restrict the disqualifying personal reasons that precluded a determination of good cause. As a result, an employee who leaves one employer to accept other permanent employment that pays a higher wage is not necessarily excluded from benefits. The legislature realized that an employee who leaves his or her job, paying a marginal wage, for another permanent job that pays a higher wage is in a different situation from the employee who quits his or her job without first securing another job merely because he or she is paid the expected wage or, as explained infra, from the employee who quits one job to accept another job with the reasonable expectation that the second job will, at some future time, pay a higher wage or provide better working conditions, or, indeed, from an employee who quits his or her job, paying a reasonable wage, for another permanent job that pays a higher wage.

Certainly, there is nothing within the purposes of the unemployment compensation scheme that supports the claim the legislature intended to encourage people not to seek and obtain higher paying jobs. Not disqualifying an employee who leaves one marginally paying job to go to other permanent employment for a higher wage does not encourage the type of job-hopping that contravenes the purpose of unemployment insurance. Changing to a permanent job that improves the employee's position is not censurable conduct or conduct that should be discouraged. In addition, the affirmance of the Board's decision necessarily results in an employee being paid less than the market value for his or her labor, and offers no incentive for employers who pay less than market rate to improve their employees' situation. The form of job-hopping that is to be discouraged is that which inappropriately draws upon the unemployment compensation system, e.g., quitting a permanent job for temporary employment even though it may pay a higher wage or quitting a job for another that is more interesting or where a higher wage or better working conditions are only anticipated, or hopping from one well-paying position to another. Job-hopping in this latter sense is discouraged by the determination the reason for quitting is not good cause in connection with the work, thereby disqualifying an employee for unemployment benefits.

Arguably, the failure of IC 22-4-15-1(a) to require that the less than ten (10) week termination be for good cause on behalf of the employer might be read to indicate a legislative intent to disqualify any employee who quits his or her job-even though he or she quits for good cause, including better wages at a new permanent job-and is terminated within ten weeks of commencing the new job. However, that argument is negated by the policy underlying unemployment - insurance - compensation. The policy of providing benefits to persons finding themselves unemployed through no fault of their own, including employees who leave one job for better jobs (much in the "American" way) and yet, through no fault of their own, are unable to work for at least ten weeks in the second job, coupled with the mandate that the legislation be given "a liberal construction in favor of employees because it is social legislation meriting such construction in order to promote its underlying humanitarian purposes," Horvath v. Review Bd. of Indiana Employment Sec. Div. (1987), Ind.App., 503 N.E.2d 441, 443, compels the determination that the legislature's silence should and must be construed to require that the disqualification resulting from less than ten weeks of employment occurs only if the termination is for cause by the employer or without good cause by the employee.

Thus, if the new employment is terminated by the employer for cause or by the employee without good cause, policy concerns of "fault" dictate a legislative intent that the employee is disqualified from benefits until he or she becomes otherwise qualified for unemployment benefits. However, if the new employment is terminated by the employer without cause or by the employee with good cause, the lack of "fault" is served by not disqualifying the *1386faultless employee. Incidentally, this construction does not render the requalifying language of IC 22-4-15-1(c)(1) superfluous as suggested by in the majority opinion. I read that subsection as applying to individuals who leave one employment to accept previously secured permanent full-time work with another employer which only offers the reasonable expectation of better wages or working conditions. I accept the common meaning of the word "expectation," ie., a future benefit or something that with a degree of probability will occur in the future. See Random House Webster's College Dictionary (1991). In other words, an individual who quits one employment for another becomes requalified if the second employment was previously secured, is permanent and full-time, and offers a reasonable expectation (in the future) of better wages or working conditions only after the individual is employed on the second job for at least ten weeks. Of course, Lafferty's better wages were not an expectation; they were a reality.

In conclusion, an employee is not disqualified from unemployment insurance benefits as a matter of law merely because the - employee is compelled to quit one job to accept another job for better wages or better working conditions. Rather, the issue is whether the voluntary termination is objective in character in that it is related to the work and would "similarly affect persons of reasonable and normal sensitivity" or is subjective in character in that it is a purely personal and subjective reason which is unique to the employee.7 Geckler, 244 Ind. at 477, 193 N.E.2d at 359. See Ball v. Review Bd. of the Indiana Employment Sec. Div. (1984), Ind.App., 464 N.E.2d 1312, 1314 ("'The Review Board should not look to the peculiarities of each claimant but should apply an objective standard to determine whether a reasonable, prudent person would leave work under similar circumstances.").

Here, Lafferty found himself in a situation where reasonably, prudent and normally sensitive persons would be compelled to agree that Lafferty was compelled by his disadvantageous economic cireumstances-supporting a family on wages that are 65% of the poverty level-to change jobs for a new job that was permanent and full-time and both paid a higher wage and offered better working conditions. Under such circumstances Lafferty's reason for leaving is indeed objective in contrast to the subjective reasons the employee terminated her employment with her first employer in Vicari v. Review Bd. of the Indiana Dep't of Employment and Training Services (1991), Ind.App., 568 N.E.2d 1061. In Vz-cori, the Board found that claimant left her first employment "because she was unhappy with the work. The claimant felt that other employees placed work on her desk when she was away from her work station. Further, the claimant felt that the distribution of the work was unfair." Id. at 1062. These findings support the Board's conclusion "that the claimant voluntarily left the employment of [her first employer] because *1387of personal dissatisfaction with her working conditions and without [objective] good cause in connection with the work." Id.

In conclusion, it is my opinion the Board erred in denying Lafferty benefits and I vote to reverse the decision of the Board and remand the cause to the Board for further proceedings consistent with this opinion.

. Acts 1936, ch. 4, SEC. 6(F)(1) read:

Disqualification for benefits. An individual shall be ineligible for benefits:
(1) For the week in which he has left work voluntarily without good cause or been discharged for misconduct, and for the three next following weeks, (in addition to the waiting period). -

. Acts 1967, ch. 310, SEC. 19 reads:

An individual shall be ineligible for any waiting period or benefit rights based upon wages earned from any employer whose employ he *1384has left voluntarily without good cause attributable to the employer or from which he has been discharged for misconduct in connection with his work....

. Acts 1967, ch. 310, SEC. 19 further provided: If an individual leaves work voluntarily with out good cause attributable to his employer for the purpose of accepting permanent, full-time work with another employer that offers reasonable expectation of betterment of earnings or working conditions, and thereafter was employed on said job for not less than ten (10) weeks, then upon his becoming unemployed under non-disqualifying circumstances any previously cancelled wages from the prior employment shall be restored to the individual and any benefits paid under these circumstances shall be paid from the fund and not charged to the experience account of any employer; ...

. The 1971 amendment did not change the provision that "any benefits paid under these circumstances shall be paid from the Fund and not charged to the experience account of any employer. ..." Acts 1971, PL. 355, SEC. 35.

. Incidentally, this construction of the statute fulfills our mandate to reject that alternative construction which presents serious constitutional difficulties. See Fields v. Evans (1985), Ind.App., 480 N.E.2d 575, 578.

However, I note that neither a suspect classification nor a fundamental right is implicated and, therefore, the appropriate standard of judicial scrutiny of an equal protection challenge to the ten (10) week employment requirement is the rational basis standard review. Under that standard a statutory classification which singles out a group of persons for disparate treatment must be rationally based on differences that are real and not illusory and must be reasonably related to a legitimate state interest; it must not be arbitrary or unreasonable and a fair and substantial relationship must exist between the classification and the purpose of the statute creating the classification. Johnson v. St Vincent Hosp., Inc. (1980), Ind., 404 N.E.2d 585, 600; Winder v. Review Bd. of the Indiana Employment Sec. Div. (1988), Ind.App., 528 N.E.2d 854, 856. The legitimate state interests asserted by the Board, encouraging individuals to keep their present job and preventing unnecessary tax rate increases of the past employer, do not appear reasonable. There is nothing reasonable in discouraging an employee from bettering his or her status, in terms of wages or working conditions, when the change is permanent and full-time under conditions that any reasonable person would be compelled to make the change. Similarly, the state cannot have an interest in preventing unnecessary tax rate increases to the past employer when the payments to the employee is not charged to that employer. See IC 22-4-11-1(d).