Johnson v. Unemployment Compensation Board of Review

KELLEY, Judge.

In these consolidated appeals,1 the issue before this court is whether a claimant who is receiving unemployment compensation benefits during a work stoppage and chooses to retire should continue receiving benefits.

Kenneth Johnson and David Hallman (hereinafter referred to collectively as claimants) appeal from two separate orders of the Unemployment Compensation Board of Review which affirm the referee’s denial of benefits to claimants pursuant to section 402(b) of the Unemployment Compensation Law (Law).2 We affirm.

*732Johnson and Hallman worked for Occidental Chemical Corporation (employer) for thirty-eight years and forty years, respectively. Both were members of the United Steelworkers of America, Local 336, which was engaged in contract negotiations with employer. The collective bargaining agreement (CBA) expired at midnight on April 30,1996. One year later, when no agreement had been reached, employer initiated a lockout of hourly employees, which included claimants. The expired CBA between the parties provided full medical coverage to employees and their spouses during both employment and retirement. This CBA also provided that medical benefits would continue for a period of ninety days in event of a layoff, lockout or strike. During this ninety-day period, a bargaining unit employee could elect to voluntarily retire and maintain the benefits conferred by the expired CBA.

Claimants, along with the other locked-out employees applied for and received unemployment compensation benefits. However, on July 1, 1997, while the lockout was still in effect, claimants exercised their option to retire, electing to retain those benefits conferred by the expired CBA. As of claimants’ retirement date of July 1, 1997, a new CBA had not yet been reached. The union and employer agreed upon a new CBA in October 1997. Employees returned to work on November 4, 1997. Thus, from after claimants’ date of retirement on July 1, 1997, until November 4, 1997, they would have been in no danger of losing their unemployment compensation. Further, work would have been available to them, had they not chosen to retire.

Upon claimants’ retirement, employer sought a redetermination of their unemployment benefits. Following separate hearings, the referee denied Johnson and Hallman benefits from the date of their retirement forward, reasoning that claimants failed to offer a necessitous and compelling reason for their voluntary retirement. The board affirmed.3

On appeal to this court,4 claimants argue that the board erred as a matter of law in holding that they were no longer entitled to unemployment benefits from the time of their retirement because their unemployment was still “due to” employer’s lockout. Claimants further argue that the board erred in holding that loss or reduction of medical benefits did not constitute a necessitous and compelling reason for taking retirement.

First, claimants contend that they are entitled to benefits despite their voluntary retirement because their unemployment was “due to” employer’s lockout and not their subsequent voluntary retirement. Claimants rely on three cases, Campbell v. Unemployment Compensation Board of Review, 175 Pa.Super. 592, 106 A.2d 687 (Pa.Super.1954); Hayes v. Unemployment Compensation Board of Review, 86 Pa.Cmwlth. 114, 483 A.2d 1075 (Pa.Cmwlth.1984) and Coleman v. Unemployment Compensation Board of Review, 46 Pa.Cmwlth. 295, 406 A.2d 259 (Pa. Cmwlth.1979), to support their position. However, these cases were decided in a different context as these claimants were unemployed during a layoff, and not a work stoppage.

The Law expressly requires that a claimant’s eligibility for benefits be determined on a weekly basis stating, “an employe shall be ineligible for compensation for any week ... .” 43 P.S. § 802. Acceptance of claimants’ argument that eligibility for benefits be determined solely upon the initial cause of the unemployment, not only violates the language of the statute, but also fails to appreciate the policy underlying the requirement that benefits be determined on a weekly basis. The Law recognizes the potential *733for a change in circumstances after the initial determination, which alters the appropriateness of that initial determination.

When addressing situations where a claimant’s unemployment was caused by a work stoppage resulting from a labor dispute, Pennsylvania courts have consistently required that eligibility for unemployment be determined on a week-by-week basis. Hoffman v. Unemployment Compensation Board of Review, 524 Pa. 470, 574 A.2d 57 (1990); High v. Unemployment Compensation Board of Review, 505 Pa. 379, 479 A.2d 967 (1984). A claimant’s unemployment is a fluid situation and the initial cause of a work stoppage is not always controlling when determining eligibility for benefits for subsequent weeks of unemployment. In Hoffman, where a strike was converted to a lockout when the employer rejected the union’s offer to return to work, we recognized the principle that while one party may cause the initial unemployment, subsequent conduct may shift the blame to the other party, thereby rendering a claimant ineligible for unemployment benefits to which he was initially entitled, or vice-versa.

In fact, the Supreme Court expressly rejected the viewpoint that eligibility for benefits should be determined solely on the initial cause of the unemployment stating, that “[e]aeh week of unemployment compensation is the subject of a separate claim, the validity of which is determined by consideration of conditions existing within that week ... This rule is in accord with our Legislature’s clear mandate, as embodied in Section 402, that all determinations of benefits eligibility be made on a week-by-week basis.” High, 505 Pa. at 383, 479 A.2d at 968-69 (rejecting a claimant’s argument that the initial cause of a work stoppage is determinative of benefit eligibility for the entire duration). Thus, when Johnson and Hallman here chose to retire during the work stoppage, their eligibility for benefits from that week forward must be considered a separate claim for unemployment benefits and analyzed under the “necessitous and compelling” standard for voluntary quits.

Johnson and Hallman each gave then-reasons for retiring. Johnson retired because: 1) he believed that medical benefits provided by employer during the lockout would expire on August 1, 1997; and 2) that he feared the medical benefits provided under a new CBA would be significantly curtailed. Hallman retired to preserve the medical benefits for which he was eligible under the previous contract because he too believed that the medical benefits provided under a new CBA would be significantly curtailed.

The board determined that the reasons given by claimants for voluntarily retiring did not constitute “necessitous and compelling” reasons for severing the employment relationship. We agree.

In order to be entitled to unemployment benefits upon voluntarily retiring, a claimant must prove that he acted with ordinary common sense in retiring and made reasonable efforts to preserve the employment relationship. Stiffler v. Unemployment Compensation Board of Review, 64 Pa. Cmwlth. 44, 438 A.2d 1058 (Pa.Cmwlth.1982).

First, we note that on the day claimants elected to retire, they were not faced with the immediate threat of loss of medical benefits, as the CBA was not due to expire for another month. Second, with respect to Johnson, Johnson only considered his option of medical coverage under federal COBRA, which he determined would be unfeasible because of the cost and thus, he elected to retire. As we held in Pacini v. Unemployment Compensation Board of Review, 102 Pa.Cmwlth. 355, 518 A.2d 606 (Pa.Cmwlth. 1986), the potential curtailment of medical benefits during the negotiation for a new CBA does not meet the “necessitous and compelling” standard under section 402(b) of the Law.5 Thus, similar to the situation in Pacini, claimants’ reasons for their voluntary retirement fail to meet the “necessitous and compelling” standard. Therefore, we hold *734that the board correctly determined that claimants were ineligible for benefits upon their retirement.

Accordingly, we affirm.

ORDER

AND NOW, this 9 th day of December, 1998, the orders of the Unemployment Compensation Board of Review in the above-captioned consolidated matters are hereby affirmed.

. These appeals were consolidated by order of this court on September 9, 1998.

. Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(b). Section 402(b) provides that an employee who voluntarily terminates his employment without cause of a necessitous and compelling nature is ineligible for benefits.

. With respect to Johnson’s appeal, upon review of the record and evidence submitted, the board issued independent findings of fact. However, with respect to Hallman's appeal, upon review of the record and the evidence submitted, the board affirmed the referee’s decision without making any independent findings of fact.

. This court’s scope of review is limited to determining whether constitutional rights were violated, an error of law was committed, or necessary findings of fact are not supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704; Kirkwood v. Unemployment Compensation Board of Review, 106 Pa.Cmwlth. 92, 525 A.2d 841 (Pa.Cmwlth. 1987).

. In Pacini, a union employee chose to retire after learning that his pension benefits and compensation would be reduced in the successor CBA. One of the reasons we denied benefits was that the pressure to terminate employment was neither real nor substantial because the reductions in benefits were merely proposals.