ILNews

Court rules on early retirement benefits case

Back to TopCommentsE-mailPrintBookmark and Share

Employees who accept early retirement even in the worst economic times aren’t entitled to continued unemployment assistance, the Indiana Court of Appeals ruled today.

A 2-1 ruling came from the appellate court in C.G. LLC v. Review Board of the Indiana Dept. of Workforce Devel., et al., 93A02-1004-EX-441, involving an economically battered auto parts company that instituted an early retirement plan for both working and non-working employees at factories in Indiana and nationwide.

The company began reducing its workforce and laying off workers in 2008 and instituted the voluntary termination program to those who’d worked in late 2008 and early 2009. Those who accepted resigned from CG and relinquished their recall and seniority rights. Additionally, some received variations of a package including lump some payout amounts, a vehicle voucher, and six months of continuing health insurance coverage.

Some of those workers had been actively working while others were previously laid off, and some still received benefits at the time the program was offered. After taking the early retirement offer, some employees were denied unemployment benefits when they later applied, and previously laid-off workers who’d been receiving benefits found their benefits were cut off.

They appealed to an administrative law judge who determined that employees who’d been on indefinite layoff when joining the early retirement program were still entitled to unemployment benefits, but those who were on temporary layoff or were actively working at the time could not receive benefits. Both sides appealed.

The review board rejected the ALJ’s distinction between actively working employees and those laid off for purposes of eligibility for benefits, determining that all lacked good cause to voluntarily leave when they took the early retirement and resigned. The board concluded that all of the employees remained eligible for unemployment benefits pursuant to Indiana Code 22-4-14-1(c).

But the Court of Appeals majority disagreed, reversing and remanding the case saying that workers shouldn’t be able to receive continued benefits. Senior Judge John Sharpnack and Judge Elaine Brown specifically decided that the workers didn’t have good cause to voluntarily leave their employment because there weren’t specific threats or plans of future plant closings or layoffs, despite the overall economic climate and uncertainty facing the auto industry.

The majority relied heavily on York v. Rev. Bd. of Ind. Employment Sec. Div., 425 N.E. 2d 707 (Ind. Ct. App. 1981) as helpful guidance in constituting Indiana Code 22-3-14-1(c), which specifically applies to those who elect to retire in connection with a layoff or plant closure and receive compensation for that. That court held that employees who left due to risk of possible future changes but not direct threat of layoff were not entitled to benefits.

Judge James Kirsch dissented, writing that he believes the majority decision to deny unemployment compensation benefits to these workers goes against legislative directive and ignores what many face in these economic times.

“The Great Recession has had a catastrophic effect on this country and this state. Few, if any, industries were harder hit than automotive manufacturing, and the thousands of workers affected are unemployed through no fault of their own,” the judge wrote. “To say that the workers who accepted EVTEP retired for personal reasons is to ignore economic reality. This economic reality was marked by layoffs and plant closings … those layoffs and plant closings drove the decision of the claimants in this case to accept EVTEP.”

Judge Kirsch wrote that he would defer to the board’s judgment and expertise in employment matters and affirm its decision in all respects.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

ADVERTISEMENT