STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

LARRY R POMASL, Employee

THE PROCTER/GAMBLE PAPER PRODUCTS CO, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 05400280GB


On January 15, 2005, the Department of Workforce Development issued an initial determination which held that the employee's quit was not for a reason allowing for immediate eligibility for unemployment insurance. The employee filed a timely request for hearing on the adverse determination, and hearing was held on February 16, 2005 in Green Bay, Wisconsin before a department administrative law judge. On February 18, 2005, the administrative law judge issued an appeal tribunal decision affirming the initial determination. On March 25, 2005, the commission affirmed the appeal tribunal decision. The employee petitioned for reconsideration following the commission's decision in Tickler v. Procter/Gamble Paper Products Co., UI Dec. Hearing No. 05400696GB (LIRC August 17, 2005). The commission considers that its March 25, 2005 decision in the present case was error, and pursuant to Wis. Stat. § 108.09(6)(c) sets it aside and, pursuant to Wis. Stat. § 108.09(6)(d), reissues it below.

Based upon the applicable law and the records and other evidence in the case, the commission issues the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked approximately seven years as a technician for the employer, a paper product manufacturer. His last day of work was August 25, 2004 (week 35), when his employment ended pursuant to an early retirement package he accepted, and the issue is whether the separation from employment falls within Wis. Stat. § 108.04(7)(am). The commission concludes that it does, and so reverses the appeal tribunal decision.

The employee worked at the employer's Fox River Plant in Green Bay, which is adjacent to the employer's East River Plant. The employer moved the product manufactured at the East River plant to a plant in Canada. This resulted in the employer's decision to close the East River Plant. In order to meet staff reduction targets, the employer gave employees at both plants, based on seniority, the option of taking a separation package offered by the employer. At a meeting of workers affected by the plant closing, the employer told the group including the employee that, if an insufficient number of employees did not take the separation package, the employer would have to institute layoffs. Written materials the employer distributed about the offer also stated that the purpose of the program was to achieve what the employer referred to as "staffing targets." In addition, the employer provided the employees with a written document stating that employees would be eligible for 26 weeks of unemployment insurance and that, within certain time constraints, they would also be eligible for TAA and TRA. On June 22, 2004, the employee accepted the separation package offered by the employer; his last day of work originally was to be March 31, 2005. The employer approved his leaving the employment earlier, August 25, 2004, in order to attend training in a different field of work.

The employee could have remained employed had he not accepted the employer's early retirement offer. The separation from employment thus was a quit by the employee. Generally, pursuant to Wis. Stat. § 108.04(7)(a), a quit of employment is disqualifying for unemployment insurance purposes. One exception to this general disqualification is Wis. Stat. § 108.04(7)(am), which provides:

(am) Paragraph (a) does not apply if the department determines that the suspension or termination of the claimant's work was in lieu of a suspension or termination by the employer of another employee's work. The claimant shall not be deemed unavailable for the claimant's work with the employer by reason of such suspension or termination.

The employer was closing the plant next to the one the employee worked at, which closing necessarily created an influx of excess workers at the remaining plant. Its staffing targets were due to the plant closing. In addition the employer, through supervisory personnel conducting the informational meetings regarding the separation package, specifically informed employees that the employer would institute layoffs if an insufficient number of employees took separation packages. At the same time, the employer controlled the number of separation packages it agreed to, because of employer concerns that too many people would take the package and cause the employer to suffer a business hardship. In other words, the employer was only allowing individuals to take a separation package who were "expendable" as a result of the closing of the East River plant. Given these factors, the most reasonable inference is that the employer's acceptance of the employee's separation package application avoided the necessity of the employer's having to lay off a co-worker of the employee. This brings the employee's quit within Wis. Stat. § 108.04(7)(am).

The commission therefore finds that, in week 35 of 2004, the employee terminated his employment in lieu of the termination by the employer of another employee's work, within the meaning of Wis. Stat. § 108.04(7)(am).


DECISION

The appeal tribunal decision is reversed. Accordingly, the employee is eligible for unemployment insurance beginning in week 35 of 2004, if he is otherwise qualified.

Dated and mailed September 28, 2005
pomasla . urr : 105 : 4  VL 1054.01

/s/ James T. Flynn, Chairman

/s/ Robert Glaser, Commissioner

NOTE: The commission did not confer with the administrative law judge before determining to reverse the appeal tribunal decision in this case. The commission's reversal is not based upon a differing credibility assessment from that made by the administrative law judge. Moreover, the majority of the commission believes the facts of this case are distinguishable from the legal precedent on this issue, Berry v. LIRC, 213 Wis. 2d 397, 570 N.W.2d 610 (Ct. App. 1997). In Berry, it was uncertain whether any layoffs would necessarily occur, even if no employees took the separation packages offered by the employer in that case. By contrast, in the present case the evidence establishes that employees would have been laid off had a sufficient number of employees (including the employee) not taken the separation packages offered by the employer. What distinguishes the present case from Berry is the fact that this was the closing of one of two adjacent plants, so there is no question but that approximately half of the employees of the two plants overall would be losing their jobs. It thus is not the case here, as it was in Berry, that the claimants accepted the separation packages without knowing whether any of them would be involuntarily suspended or terminated. Berry, 213 Wis. 2d at 404.

 

DAVID B. FALSTAD, Commissioner, (dissenting):

I respectfully dissent from the majority opinion in this case, for the following reasons. First, the employee could not point to a specific employee or specific group of employees who would remain employed because the employee took the early retirement package. The separation thus does not meet the legal requirements enunciated in Berry v. LIRC, 213 Wis. 2d 397, 570 N.W.2d 610 (Ct. App. 1997). There also is no evidence that the employee's acceptance of the separation package saved any other worker from layoff. This is not surprising. Despite the adjacent plant's closing, there were mechanisms which might have avoided the necessity of layoffs: separations by workers for reasons unrelated to the plant closing. These would include coincidental retirements and voluntary separations, and separations for cause, for example. Second, the time frame for the early retirement packages was too broad for application of Wis. Stat. § 108.04(7)(am). The early retirement package in question was offered to the group of workers including the employee, in January of 2004. Employees could accept the offer and then leave the employer as late as June 30, 2005. For these reasons, it is speculative to assert that the employee's acceptance of the early retirement package allowed the employer to avoid laying off a co-worker. The employee's quit thus cannot be considered to fall within Wis. Stat. § 108.04(7)(am).

__________________________________________
/s/ David B. Falstad, Commissioner

 

cc: Procter & Gamble (Green Bay, Wisconsin)


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