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Judges: early retirement ends unemployment benefits

November 5, 2010

The Indiana Court of Appeals affirmed the termination of unemployment benefits for an auto worker who accepted an early retirement package after she was laid off.

S.A. worked at Daimler Chrysler from 1999 until February 2008 when she was laid off. Chrysler still paid her some wages and she also received unemployment benefits. S.A. eventually accepted an early retirement package and no longer was an employee in May 2009.

Shortly thereafter, her unemployment benefits were suspended because a claims deputy determined she voluntarily left Chrysler without good cause in connection with the work. An administrative law judge and the Board of Review of the Indiana Department of Workforce Development also concluded that S.A. was ineligible to continue receiving benefits.

In S.A. v. Review Board, No. 93A02-1004-EX-568, S.A. argued that the board erred in determining she left her job without good cause in connection to the work. She claimed she felt pressure to retire because her benefits were running out and she was told there was no chance of her getting back to work and she needed the insurance the retirement would offer.

She also argued that she had been receiving unemployment benefits for 15 months before she took the retirement package and she was already unemployed at the time and accepting the package didn’t change her status.

The appellate court affirmed the board’s decision, finding it properly cited Indiana Code Section 22-4-14-1(c). That section says it does not apply “to a person who elects to retire in connection with a layoff or plant closure and receive pension, retirement, or annuity payments.”

The judges found her case to be similar to York v. Review Board of the Indiana Employment Security Division, 425 N.E.2d 707, 711 (Ind. Ct. App. 1981), in which the appellate court held an employee who accepted an early retirement package left his job without good cause in connection with the work. York argued he was forced to retire and by taking the retirement agreement, he had merely mitigated his economic losses.

“Although York predates the addition of subsection (c), we agree with its reasoning; therefore, we affirm the Board’s decision,” wrote Judge Terry Crone.

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