Thompson v. Director, Arkansas Employment Security Department

Wendell L. Griffen, Judge. Dedra Thompson, Jeff My-natt, Shana Mynatt, and Paul Albert appeal a decision from the Board of Review which denied them unemployment benefits after they accepted a voluntary severance package from their employer rather than risk being laid off in a reduction-in-force.1 The Board, affirming the decision from the Arkansas Employment Security Department (ESD), relied on Billings v. Director, Employment Security Dep’t, 84 Ark. App. 79, 133 S.W.3d 399 (2003), and found that appellants left their jobs voluntarily and without good cause. We reverse and remand for an award of benefits. The facts are not disputed. Appellants were employees at Arkansas Eastman, and each had been so employed for more than ten years. Each was informed that Eastman intended to layoff approximately fifty employees. The layoffs were to be determined by a combination of salary grade and length of service, but no individual knew definitely whether or not he or she would be terminated. To reduce the number of involuntary layoffs, Eastman offered many of the employees a “voluntary-severance package.” Gary McDonald, manager of administration for Arkansas Eastman, described the severance package in his testimony as involving two weeks’ pay for every four years’ service, four months’ continuation of health, life, and dental insurance coverage, a retraining allow-anee of up to $5,000, and assistance in getting into a job-displacement program. He also testified that Arkansas Eastman was notified in November 2002 by the local division office of the ESD that the division had changed its interpretation of the eligibility requirements concerning applicants for unemployment compensation by voluntary-severance-package recipients. Cassondra Sherrell, manager with the ESD, testified that the division changed its policy regarding eligibility of voluntary-layoff claimants in October 2002. By that time, appellants had already accepted the severance packages offered them by Arkansas Eastman based on the previous division position whereby voluntary-layoff workers were deemed eligible to receive unemployment benefits. Employees had to apply for the packages, and Eastman would accept or reject the application depending on the needs of the employee. Appellants opted to take the package. They testified that they were aware of past layoffs where Eastman offered similar packages and that those employees had later received unemployment benefits. Eastman, relying on the stated policy of the ESD, told each employee that they would also be eligible for unemployment benefits. Sherrell also testified that had appellants filed their claim prior to October 11, 2002, they could have drawn unemployment benefits. However, because they worked at Eastman for such a long time, they had more severance pay to draw, which meant that they did not seek unemployment benefits until they had exhausted the severance pay. By that time, the division had changed the policy that existed when appellants were offered the voluntary-severance package. Appellant Jeff Mynatt testified that he did not feel that he would have lost his job had he not taken the severance package; however, his job requirements and duties would have changed. He further stated that he did not feel secure in his job, as this was the third layoff in three years. Appellant Shana Mynatt testified that her department head told her that her department would be among the first to be targeted by the reduction-in-force. Appellant Dedra Thompson testified that she took the severance package based on past layoffs as well as the assurances from Eastman that she would be able to draw unemployment benefits. The Board of Review relied on Jackson v. Daniels, 267 Ark. 685, 590 S.W.2d 63 (Ark. App. 1979) and Billings v. Director, Employment Security Dep’t, 84 Ark. App. 79, 133 S.W.3d 399 (2003), in reaching its decision that appellants left their jobs voluntarily and without good cause so as to be disqualified from receiving benefits. Ark. Code Ann. § ll-10-513(a)(l) (Repl. 2002). This appeal followed. We review the evidence in the light most favorable to the Board’s findings and will affirm its decision if it is supported by substantial evidence. Billings, supra. Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Id. The review is limited to whether the Board could reasonably reach its decision upon the evidence before it. Id. Appellants frame the issue as a possible inconsistency between Jackson, supra, and Billings, supra. In Jackson, the employer announced that he had to lay off one of his employees. The claimant in that case told the employer that, if someone had to be laid off, she preferred that it were her and not one of the two recently hired employees. The claimant was eventually laid off and made a claim for unemployment benefits. In reversing the Board’s decision to deny her benefits, we said, “We see an appreciable difference in an employee communicating directly to an employer that he wishes to be laid off and what occurred in this case.” Jackson, 267 Ark. at 687, 590 S.W.2d at 64. We made it clear that the appellant in that case lost her job because of a reduction-in-force and not for personal reasons. In the present case, the Board relied on Billings, supra, in its decision to deny benefits. That case also involved employees who accepted severance packages pending a reduction-in-force layoff. In an effort to reduce the number of people involuntarily laid off, the employer offered packages to its more senior employees and continued offering packages until enough people left their jobs. There was further testimony in that case that had not enough people taken the packages, the least senior employees would have been laid off. Many of the employees who took the packages were not in danger of losing their jobs. This court affirmed the denial of benefits, finding the layoffs truly voluntary. In resolving these cases we need not overrule our decision in Billings or embrace appellants’ argument that our decisions in Billings and Jackson are inconsistent. The cases before us today present facts that plainly are different from both Billings and Jackson. Appellants left their jobs in May and June 2002 after deciding to accept the voluntary-severance package offered by their employer. At that time, ESD policy allowed former employees to receive unemployment benefits when they voluntarily left their jobs after taking a severance package in light of a reduction-in-force. When appellants decided to accept the severance package, they acted in reliance on that policy and the understandable belief that their lives would be more secure by leaving voluntarily with the severance package rather than waiting to see if the proverbial axe would fall. We hold, on these facts, that it would be unfair and inequitable for appellants to be denied unemployment benefits after they acted in reliance on explicit ESD policy. For these reasons, we reverse the decision of the Board and remand this case for an award of benefits. Reversed and Remanded. Stroud, C.J., and Hart, J., agree. Barer, J., concurs. Robbins and Vaught, JJ., dissent. Footnotes [1] The case involved five separate employees. Only four employees are involved in this appeal. The same facts and decisions pertain to each of them.