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When Can an Employee Collect Unemployment Compensation?

Most managers and employees have a pretty fair understanding of the basic premise of Unemployment Compensation law. Unemployment Compensation benefits are intended for those who find themselves out of work through no fault of their own, and not for those who quit their jobs for reasons of their own. This is the general rule of Unemployment Compensation entitlement. But there are exceptions, and some of those exceptions may come as a surprise even to experienced HR professionals.

The Pennsylvania Unemployment Compensation Law at 43 P.S. §802(b) provides that an employee shall be ineligible for unemployment compensation benefits for any week “in which his unemployment is due to voluntarily leaving work without cause of a necessitous and compelling nature….” Unemployment Compensation referees and the Pennsylvania courts have been called upon repeatedly to interpret these three key words – “necessitous and compelling” – and in doing so have developed a number of significant precedents of interest to employers and employees alike.

Once it is determined that an employee voluntarily terminated her employment, the employee bears the burden of proving a necessitous and compelling reason for quitting. The reasons offered can be many and varied, but the following scenarios are instructive.

Harassment

It is not uncommon for an employee to claim he was essentially forced to quit a job due to on-going harassment. But harassment, like beauty, often lies in the eye of the beholder. What is harassment to an employee may be, to the employer, no more than aggressive management supervision of staff or strict enforcement of workplace rules.

The courts are understandably reluctant to second-guess every instance of workplace supervision. Thus, neither disagreement with the employer’s policies nor dissatisfaction with working conditions based on differences with the employer constitutes a necessitous and compelling reason for an employee to quit a job so as to justify an award of unemployment compensation benefits. Even when an employer calls an employees’s customers to see if they are satisfied, switches some of her accounts and excludes her from participation in certain employee seminars, such conduct could be viewed as within the realm of management prerogative, and therefore not a necessitous and compelling to quit. Blackwell v. Commonwealth, Unemployment Compensation Board of Review, 124 Pa.Cmwlth. 9, 555 A.2d 279 (1989).

In order for harassment to rise to the level of a necessitous and compelling reason to voluntarily quit a job, the employer’s conduct, or co-worker conduct known by and tolerated by the employer, must be so clearly beyond the scope of either management prerogative or tolerable behavior that it would cause mental stress or distress to a person of reasonable sensibilities. It is not enough that the claimant himself was subjectively offended. The question, in lay terms, is whether the conduct was so outrageous as to cause a person of ordinary sensitivity unbearable work-related stress.

When the harassment is perpetrated by co-workers rather than by management, the employer must generally be aware of the harassment and fail to act on it before it will give rise to a necessitous and compelling reason to quit. Repeated sexual harassment, known or condoned by the employer, will likewise provide a necessitous and compelling reason for an employee to terminate her employment and receive unemployment compensation benefits (in addition to the potential claim for sexual harassment itself).

Health Conditions

While the employer must be at fault in bringing about an employee’s work-related mental stress before the employee can use that stress as a basis for collecting unemployment compensation, there is no such limitation on entitlement to benefits for an employee unable to work a particular job due to a medical condition. Medical problems can provide a necessitous and compelling reason to quit a job where some condition peculiar to the particular workplace causes or exacerbates the employee’s health problems, even when there is nothing the employer could reasonably change in the work environment to help alleviate the medical condition. When, for example, an employee can no longer function in a particular workplace because of an allergic reaction after prolonged exposure to a chemical in the work environment, the employee may be able to collect unemployment compensation after quitting the job, even if most employees have no negative reaction to the chemical and even if there is nothing the employer could reasonably do to eliminate the chemical from the workplace. Of course, the employee might also be entitled to seek workers’ compensation benefits for such an exposure.

However, the right to collect unemployment benefits because of a medical disability is not without limits. First and foremost, the unemployment compensation law was never intended to provide health or disability benefits for individuals who are not physically able and available to participate in the work force. Accordingly, the employee must be able to work and be available for work generally in order to be able to collect unemployment benefits on account of his medical incompatibility with the particular job in question. Genetin v. Com., Unemployment Compensation Board of Review, 499 Pa. 125, 451 A.2d 1353 (1982).

Further, in order to establish health as a compelling reason to quit a job, the employee must offer competent medical evidence that there is in fact a health reason to justify termination, must have informed her employer of the condition and given the employer an opportunity to accommodate the condition, and must be available to work when the employer makes reasonable accommodation to enable the employee to work in conditions not inimical to her health. Reyes v. Com., Unemployment Compensation Board of Review, 71 Pa.Cmwlth. 135, 454 A.2d 215 (1983).

Refusals of Employment and Changes in Employment.

An employee’s failure to look for suitable employment or his failure to accept an offer of suitable employment can provide a basis for the termination of the employee’s unemployment compensation benefits. See 43 P.S. § 802(a). Likewise, an employee’s failure to accept an offer of suitable full-time employment in order to pursue seasonal or part-time employment renders an employee ineligible for benefits. See 43 P.S. § 802(a)(1).

The question is: what employment is “suitable.” Two of the key considerations for determining suitability are the amount of the employee’s previous earnings and the length of time she has been unemployed. Thus, a minimum-wage job in the fast food industry might be suitable employment for a laid-off retail clerk even if it involves a small pay cut, though probably not suitable employment for a mid-level corporate manager who previously drew a five-figure salary. However, the longer the mid-level manager is without suitable work, the lower the threshold for determining what work would be suitable.

It is little more than common sense that an employee will not be permitted to continue collecting unemployment benefits if he is turning down other suitable jobs. The results may be a bit more surprising in a nearly opposite situation, where the employee voluntarily quits one job to accept a higher-paying job elsewhere. The question that arises is whether the employee can collect unemployment compensation from the account of the employer he voluntarily quit if the higher-paying job later falls through.

The courts have held that the prospect of better employment which is contingent upon passing an entrance exam is not a necessitous and compelling reason to quit a job, particularly where the second job falls through before the employee quits the first. However, the courts have also held that an employee is eligible for unemployment compensation benefits if she quits one job to accept a firm offer of better employment, even if that latter offer falls through. See, e.g. Empire Intimates v. Unemployment Compensation Board of Review, 655 A.2d 662 (Pa.Cmwlth. 1995). The question in these cases, somewhat counter-intuitively, is not whether the employee voluntarily quit a job. The question tends to boil down to whether the offer of better employment was sufficiently firm that the employee acted reasonably in relying upon the new offer.

There are any number of scenarios in which the application of the “necessitous and compelling” rule can be tricky when determining whether a former employee is entitled to unemployment benefits. The examples noted above are not intended to provide an exhaustive catalog. If entitlement to unemployment compensation benefits becomes an issue for you or your business, do not assume the question is an easy one. Play it smart, and call attorneys of Wolf, Baldwin & Associates, P.C.. Click here now to contact us and to schedule an appointment. We will be happy to advise you about your unemployment rights under Pennsylvania law.


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