FORD MOTOR COMPANY,
APPELLEE,
vs.
ADMINISTRATOR, OHIO
BUREAU OF EMPLOYMENT SERVICES, ET AL.,
APPELLANTS
No. 90-242
SUPREME COURT OF OHIO
571 N.E.2d 727, 59 Ohio St. 3d 188
May 15, 1991, As Amended
APPEAL from the Court of Appeals for
Hamilton County, No. C-880734.
HEADNOTE
Unemployment compensation -- Employee elects voluntary
termination under plan adopted by employer to reduce number of
employees due to lack of work -- Employee entitled to unemployment
compensation under R.C. 4141.29(D)(2)(ii).
STATEMENT OF THE CASE
An employee who elects voluntary termination under a plan or policy
adopted by the employer to reduce the number of its employees due
to a lack of work in the employer's overall work force is entitled
to unemployment compensation under R.C. 4141.29(D)(2)(a)(ii).
Landra L. Guy was employed by appellee Ford Motor Company>
("Ford") at its Sharonville plant as a salaried manufacturing
clerk. Ford management determined that it would need to reduce its
salaried work force by twenty percent by 1990. In particular, the
company expected largescale layoffs at Sharonville in the near
future. On September 26, 1986, Ford announced a voluntary
termination plan ("VTP") to reduce the size of its salaried work
force without resorting to involuntary layoffs. Under the VTP, an
employee electing termination received a substantial lump sum
payment, continuation of company medical and life insurance for a
year, assistance in finding another job, and certain favorable
adjustments to the employee's retirement benefits.
After discussions with her employer, Guy elected to participate
in the VTP, even though she did not face the possibility of layoff
due to her high seniority. She also applied for and received
unemployment compensation from appellant, the Ohio Bureau of
Employment Services. The award of benefits was affirmed, with some
modifications, by the Unemployment Compensation Board of Review
("board").
Ford appealed to the Court of Common Pleas of Hamilton County,
which reversed> the board's decision as "unlawful, unreasonable,
and against the manifest weight of the evidence." The Court of
Appeals for Hamilton County affirmed.
The cause is before this court pursuant to the allowance of a
motion to certify the record.
COUNSEL
Taft, Stettinius & Hollister, Martin
McHenry and David S. Shankman, for
appellee Ford Motor Company.
Lee I. Fisher, attorney general, and
Merl H. Wayman, for appellants Administrator, Ohio
Bureau of Employment Services, and Unemployment Compensation Board
of Review.
Stewart Jaffy & Assoc. Co., L.P.A., and
Stewart R. Jaffy, urging reversal for
amici curiae, Ohio AFL-CIO and United
Autoworkers.
Walter J. Mackey, urging affirmance for
amici curiae, Ohio Manufacturers' Association,
Ohio Chamber of Commerce, and Ohio Council of Retail Merchants.
JUDGES
H. Brown, J. Moyer, C.J., Holmes and Wright, JJ., concur. Sweeney,
Douglas and Resnick, JJ., concur in part and dissent in part.
AUTHOR: BROWN
OPINION
{*189} This court has recognized that an employee who,
pursuant to a labor-management agreement, accepts termination in
lieu of a reassignment or involuntary layoff is entitled to
unemployment compensation benefits. Bockover v.
Ludlow Corp. (1986), 23 Ohio St. 3d 190, 23 OBR
352, 492 N.E.2d 149. This case asks us to decide whether an
employee is entitled to unemployment benefits where the employer,
due to lack of work for its employees, offers a plan of voluntary
termination and an employee, who because of seniority would not
have been laid off or reassigned, consents to termination under the
terms of the employer's plan. For the reasons which follow, we
conclude that the employee is eligible and reverse the judgment of
the court below.
I
Eligibility
In general, an employee who leaves voluntarily without just
cause -- a so-called "voluntary quit" -- is ineligible to receive
unemployment compensation benefits. See R.C. 4141.29(D)(2)(a).
Before 1974, this rule applied to employees who accepted a layoff
under the terms of a collective bargaining contract or an
established employer policy which provided the option of accepting
a lower-rated job or of "bumping" into a position held by a fellow
employee with less seniority. See former R.C. 4141.29 (134 Ohio
Laws, Part I, 91, 128-129); Legislative Services Commission,
Analysis of Am. Sub. S.B. 52 (July 25, 1973) 4 ("LSC Summary").
In 1973, the General Assembly enacted a series of amendments to
R.C. 4141.29(D), effective in 1974, to create exceptions to the
"voluntary quit" rule. 135 Ohio Laws, Part I, 201, 242-243;
Bockover, supra, at 194, 23 OBR at 355, 492 N.E.2d
at 149.1
One such exception is found in R.C. 4141.29(D)(2)(a)(ii). This
statute states in pertinent part:
"* * * [N]o individual may serve a waiting period or be paid
benefits under the following conditions:
"* * *
"(2) For the duration of his unemployment if the administrator
finds that:
"(a) He quit his work without just cause or has been discharged
for just cause in connection with his work, provided division
(D)(2) of this section does not apply to the separation of a person
under any of the following circumstances:
"* * *
"(ii) Separation from employment pursuant to a labor-management
contract or agreement, or pursuant to an established
employer plan, program, or policy, which permits
the employee, because of lack of work, to accept a
separation from employment[.]" (Emphasis added.)
Landra Guy was not personally {*190} faced with the
possibility of being laid off or of being forced to accept a
lowerrated job. However, it is undisputed that Ford offered the VTP
in order to reduce the number of its employees due to a lack of
work. In other words, lack of work necessitated the elimination of
some employees; the question was: which employees? Thus, we come to
the central question posed by this appeal: does the phrase "lack of
work" in R.C. 4141.29(D)(2)(a)(ii) refer to a lack of work for the
particular claimant, or for the employer's work force as a
whole?
Ford and its supporting amici contend that the
phrase "lack of work" in R.C. 4141.29(D)(2)(a)(ii) refers to a lack
of work for the particular employee who files for unemployment
compensation, and that the statute is intended to protect only
employees who choose not to accept reassignment or exercise
"bumping" rights. This interpretation renders the statute
meaningless. Employees who choose not to accept reassignment or
exercise "bumping" rights are protected by R.C.
4141.29(D)(2)(b)(i), which was also enacted as part of the 1974
amendments. 135 Ohio Laws, Part I, at 243; Bockover,
supra. If there is no work for a particular employee,
there is no reason for the employer to offer that employee an
incentive to leave -- the employer will simply lay the employee
off. Even before the 1974 amendments, an employee in this situation
would qualify for unemployment compensation.
On the other hand, if we read this phrase as referring to a lack
of work in that portion of the employer's work force covered by the
VTP, then R.C. 4141.29(D)(2)(a)(ii) serves to create an exception
to the "voluntary quit" rule for participants in a VTP. As a matter
of economics, an employer will not reduce its work force, by
layoffs or other means, unless it has more employees than it needs
-- in other words, a "lack of work" for some of its employees. When
such a reduction becomes necessary, the employer may (as Ford did
in the instant case) choose to ask more senior employees to
volunteer to leave before involuntarily laying off employees in
inverse order of seniority. If the employer deems it advantageous
to make such an offer, the employer must provide some sort of
incentive to encourage employees to volunteer. The advantage to the
employer lies in the elimination of employees who draw higher
salaries and require more expensive health care insurance, thus
saving the employer money in the long run. Whether it is a senior
employee who volunteers to leave (such as the claimant in the
instant case, Landra Guy) or a junior employee who is laid off
because no one volunteered, the job has still been eliminated due
to a "lack of work" within the employer's work force.
"The presumption always is, that every word in a statute is
designed to have some effect, and hence the rule
that, 'in putting a construction upon any statute, every part shall
be regarded, and it shall be so expounded, if practicable, as to
give some effect to every part of it.'" (Emphasis
sic.) Turley v.
Turley (1860), 11 Ohio St. 173, 179 (citing
Commonwealth v. Alger [Mass.
1851], 7 Cush. 53, 89); see, also, R.C. 1.47(B) ("In enacting a
statute, it is presumed that * * * [t]he entire statute is intended
to be effective * * *.").
As we have noted, R.C. 4141.29(D)(2)(a)(ii) would be rendered
meaningless if we accept Ford's construction of the statute.
Further, by the plain language of the statute, an exception to the
"voluntary quit" rule is created for an employee who accepts
termination under a plan offered by the employer due to a lack of
work. {*191} Landra Guy is precisely such an employee.
Accordingly, in order to give meaning to the statute at issue,
we hold that an employee who elects voluntary termination under a
plan or policy adopted by the employer to reduce the number of
employees due to a lack of work in the employer's overall work
force is entitled to unemployment compensation under R.C.
4141.29(D)(2)(a)(ii).
II
Setoff
Ford and its supporting amici further argue, in
support of their construction of the statute, that it would be
inequitable for Landra Guy to draw unemployment compensation while
also receiving a substantial sum from her employer. While R.C.
4141.29 does not contain any financial or equitable criteria for
unemployment compensation eligibility, the General Assembly has
provided> in R.C. 4141.31(A)(4) for a setoff in the amount of
any "* * * separation or termination pay paid to an employee at the
time of his separation from employment[.]" A question of fact is
presented: is a payment to a departing employee "separation or
termination pay" within the meaning of R.C. 4141.31(A)(4) or the
sale of an asset, namely, the sale of the employee's seniority and
pension rights?> See Budd Co. v.
Mercer (1984), 14 Ohio App. 3d 269, 14 OBR 298,
471 N.E.2d 151; Krupa v. Western Union
Tel. Co. (1951), 90 Ohio App. 90, 46 O.O. 443, 103 N.E.2d
784; Schleicher v. General
Motors Corp. (June 22, 1984),
Trumbull C.P. No. 83-CV-884, unreported; Sigley v.
Bd. of Review (Nov. 14, 1984), Trumbull C.P. No.
83-CV-1112, unreported.
In its initial appeal to the court of common pleas, Ford
asserted that the payments it made to Guy under the VTP should have
been set off against her unemployment compensation benefits. In the
court of appeals, Ford argued the setoff issue as an alternative
ground for affirmance in the event the court reversed on the issue
of eligibility. Our review of the record indicates that this issue
was not considered by either of the courts below. Whether the
payments to Guy were a purchase of assets or constitute separation
pay is primarily a question of fact. The determination should be
considered first by the trial court. Accordingly, we remand the
case for consideration of the setoff issue.
Judgment reversed and cause remanded.
DISPOSITION
Judgment reversed and cause
remanded.
DISSENT
DOUGLAS, J., concurring in part and dissenting in part.
I concur in the syllabus and the well-reasoned discussion of the
majority in Part I of the opinion, finding that Landra Guy,
pursuant to R.C. 4141.29(D)(2)(a)(ii), is entitled to unemployment
compensation benefits. I respectfully dissent from the judgment and
discussion of the majority, as found in Part II of the opinion, to
remand the cause to the trial court for a determination as to
whether R.C. 4141.31(A)(4) permits the payments made to Guy under
the voluntary termination plan ("VTP") to be set off against her
unemployment compensation benefits. I feel compelled to dissent
because what the majority gives with its left hand in Part I of the
opinion, it takes away with its right hand in Part II of the
opinion.
With respect to Part II of the opinion, it is questionable, in
my mind, {*192} whether this court has jurisdiction to
remand the issue of setoff to the trial court. Ford did not
cross-appeal this issue nor did Ford succinctly advance this issue
as an assignment of error, pursuant to R.C. 2505.22,2 in either the
court of appeals or to this court. Therefore, even though Ford in
its second proposition of law before this court asserts that Guy's
benefits must be reduced by the amount of separation pay Guy
received from Ford, it is indeed arguable whether the right to
setoff pursuant to R.C. 4141.31(A)(4) is properly before us.
However, even if it were appropriate to remand this issue to the
trial court, I believe R.C. 4141.31(A)(4), by its own terms,
clearly is not applicable to the case at bar.
In 1963, R.C. 4141.31 was amended to include subsection (A)(4).
See Am. Sub. H.B. No. 222, 130 Ohio Laws 978. R.C. 4141.31(A)(4)
provided (and currently provides) that:
"Benefits otherwise payable for any week shall
be reduced by the amount of remuneration a
claimant receives with respect to such week as
follows:
"* * *
"(4) Remuneration in the form of separation or
termination pay paid to an employee at the time of his
separation from employment[.]" (Emphasis added.)
Literally construed, R.C. 4141.31(A)(4) only provides for a
reduction in weekly unemployment compensation benefits when an
employee receives remuneration in the form of separation or
termination pay for that week. It is clear that the
payments made to Guy by Ford pursuant to the VTP were not
remuneration in the form of separation pay or
payments for any particular week.
Ford, in an attempt to reduce its work force, created a
voluntary termination plan. The plan was specifically designed to
entice higher salaried and seniority workers to accept a separation
from employment. Ford's likely objective was to retain workers with
a lower salary and seniority which would effectively reduce its
payroll. At the time of her separation, Guy was forty-four years
old and had been employed by Ford for thirteen years. Upon learning
that Ford did not intend to promote her, Guy accepted the terms of
the VTP although she was not faced with the possibility of a layoff
because of her high seniority. By agreeing to the VTP and accepting
the payments thereto, Guy gave up her job with her employer and,
consequently, sold her employment rights, her
seniority rights, and all reasonably anticipated benefits such as a
full retirement pension. It is clear that the payments made to Guy
were, in actuality, the purchase and sale of assets (Guy's rights
to employment and benefits), and not severance or termination pay
as contemplated by R.C. 4141.31(A)(4).
Furthermore, R.C. 4141.31(A)(4) is clearly inapplicable because
the statute is irreconcilable and cannot be harmonized with R.C.
4141.29(D)(2)(a)(ii). In 1973 (approximately ten years
after R.C. 4141.31 was amended by [A][4]), the
General Assembly substantially amended R.C. 4141.29(D)(2)(a) by
adding subsection (ii). See Am. Sub. S.B. No. 52, 135 Ohio Laws,
Part I, 201, 242-243. Subsection (ii) removes the
disqualification for {*193} unemployment benefits
when an employee has accepted a separation from employment under
the terms of a labor contract or employer plan because of a lack of
work. At the time, the General Assembly took no action to amend
R.C. 4141.31(A)(4). Neither statute contains a cross-reference to
the other. If R.C. 4141.31(A)(4) is found to provide for setoff,
then the statutes are irreconcilable and cannot be harmonized. R.C.
1.52(A) requires that when two statutes are irreconcilable, the one
last enacted must prevail. Thus, R.C. 4141.29(D)(2)(a)(ii) must
prevail over R.C. 4141.31(A)(4). Accordingly, the judgment of the
court of appeals should be reversed and the decision of the board
reinstated.
ALICE ROBIE RESNICK, J., concurring in part and dissenting in
part.
I concur in the syllabus and Part I of the majority opinion. I
must respectfully dissent, however, from the latter portion of that
opinion which remands this cause to the trial court for a
determination as to whether the payments to Guy were a purchase of
assets or separation pay.
Ford argued to the trial court that the payments to Guy were
separation pay, and as such Ford should be entitled to a setoff
against her unemployment benefits. In its decision, the trial court
stated that it "* * * considered all of the evidence, brief of
Appellant, Ford Motor Company, * * * and the arguments of the
parties * * *." From the very wording of the trial court's
decision, it is readily apparent that said court considered Ford's
argument regarding any possible setoff. Indeed, the reason Ford
made this argument is because the Unemployment Compensation Board
of Review's referee had held that the payment "which * * * [Landra
Guy] received in lump sum termination pay at the time of her
separation, is in effect the purchase and sale of an asset, and not
payment for services rendered. * * *" The board of review concluded
that the referee was correct in holding that "the lump sum payment
* * * is not deductible from unemployment compensation payments * *
*." Therefore, the record establishes that the issue regarding
setoff has been litigated and decided at all levels. While the
court of appeals did not expressly state it considered Ford's
argument concerning a setoff, it is not beyond reason to assume
that an appellate court has examined any and all arguments made to
that court. Therefore, I cannot agree with the majority's
declaration that "the record indicates that this issue was not
considered by either of the courts below. * * *"
The majority concludes that "[w]hether the payments to Guy were
a purchase of assets or constitute separation pay is primarily a
question of fact." Although this may be an accurate statement, the
referee and the board of review have already decided the question.
As noted above, both the referee and the board determined that the
payments to Guy were essentially the purchase of assets and not
separation pay. Hence, there is no need to remand this case to the
trial court. In this type of administrative appeal, the trial court
does not sit as the trier of fact. Rather, R.C.
4141.28(O) states that "* * * [i]f the [trial] court finds that the
decision was unlawful, unreasonable, or against the
manifest weight of the evidence, it shall reverse and
vacate such decision or it may modify such decision * * *;
otherwise such court shall affirm such decision. * * *"
Consequently, there is no issue to be resolved. The order of the
board of review should be reinstated.
OPINION FOOTNOTES
1 This legislation was apparently spawned as part of a
comprehensive proposal for reform of the unemployment compensation
laws, submitted by the Unemployment Compensation Advisory
Commission (established by R.C. 4141.08). According to this
proposal as it appears in the appendix to the brief of appellee
filed in this court, the commission stated:
"The proposal updates the law by recognizing that it is
desirable in many industries to keep productive efficiency by
stabilizing the work force to reduce the movement of skilled
personnel from their particular skills during a reduction in work
force; and, at the same time, to give protection to those workers
who have acquired equities in their employment through length of
service. The proposal does not vitiate the qualifications for
benefit eligibility but only makes them amenable to our industrial
practice."
DISSENT FOOTNOTES
2 R.C. 2505.22 provides that:
"In connection with an appeal of a final order, judgment, or
decree of a court, assignments of error may be filed by an appellee
who does not appeal, which assignments shall be passed upon by a
reviewing court before the final order, judgment, or decree is
reversed in whole or in part. The time within which assignments of
error by an appellee may be filed shall be fixed by rule of
court."