Title: Carolina Power & Llight Co. v. Employment Sec. Comm'n of N.C.
Citation: 363 N.C. 562
Docket Number: 441A08
State: north-carolina
Issuer: north-carolina Supreme Court
Date: August 28, 2009

CAROLINA POWER & LIGHT COMPANY, Petitioner v. EMPLOYMENT SECURITY
COMMISSION OF NORTH CAROLINA and HERMAN D. ROBERTS, Respondents
No. 441A08
FILED: 28 AUGUST 2009
Unemployment Compensation--acceptance of voluntary early retirement package--left
employment without good cause attributable to employer
The Court of Appeals erred by concluding that an employee who accepts a
Voluntary Early Retirement Package (“VERP”), offered by the employer as part of a company-
wide downsizing, is eligible for unemployment insurance benefits under N.C.G.S. Ch. 96, and
the case is remanded to that court for further remand to the superior court with directions for that
court to remand this matter to the Employment Security Commission for further proceedings not
inconsistent with this opinion, because under these facts of this case, claimant left his
employment without good cause attributable to the employer when: (1) the emphasis placed by
the Commission and claimant on the failure of claimant’s supervisor to tell claimant whether he
would have a job after a downsizing was completed was misplaced since to construe the failure
to answer that question as good cause assumes that claimant, who from the record appeared to
have been an employee at will, was entitled to an assurance tantamount to a contract
guaranteeing him a job after the downsizing was completed; (2) claimant presented no evidence,
and the Commission made no finding, that the employer knew the answer to claimant’s question
(concerning whether he would have a job after the downsizing was completed) before the
deadline for accepting the VERP had expired; (3) the mere offering of the VERP by the employer
as part of its efforts to downsize cannot be a good cause entitling claimant to benefits in that
claimant had to submit a written application in order to accept the program; (4) if, under
N.C.G.S. § 96-14(1), the employee who has been told that he or she will be terminated on a
certain date is disqualified from receiving benefits when he or she leaves before the stated date,
then permitting the employee who has not been told that he or she will be terminated to leave and
obtain unemployment benefits on the basis that the employee accepted the offer of enhanced
early retirement would create an inconsistency and inequity in the law; and (5) an employee can
leave work for “good cause” under circumstances which make continued work logistically
impractical including scheduling and transportation problems that outweigh the benefits of
employment, or an employee can leave work for “good cause” when the work or work
environment itself is intolerable, but neither situation was applicable in the instant case.
Appeal pursuant to N.C.G.S. § 7A-30(2) from the
decision of a divided panel of the Court of Appeals, 192 N.C.
App. ___, 665 S.E.2d 141 (2008), affirming a judgment entered 28
August 2006 by Judge A. Leon Stanback, Jr. and an order entered
19 July 2007 by Judge Paul G. Gessner, both in Superior Court,
Wake County.  Heard in the Supreme Court 25 February 2009.
Cranfill Sumner & Hartzog LLP, by Norwood P. Blanchard,
III, for petitioner-appellant.
Thomas S. Whitaker, Chief Counsel, and Thomas H.
Hodges, Jr. for respondent-appellee Employment Security
Commission of North Carolina.
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PARKER, Chief Justice.
The sole issue on this appeal is whether an employee
who accepts a Voluntary Early Retirement Package (“VERP”),
offered by the employer as part of a company-wide downsizing, is
eligible for unemployment insurance benefits under Chapter 96 of
the North Carolina General Statutes.  We reverse the Court of
Appeals and hold that the employee is ineligible for benefits.
Herman D. Roberts (claimant) was employed by Carolina
Power & Light Company (“CP&L”) as a field service representative. 
In January 2005 CP&L offered voluntary early retirement to
several employees, including claimant.  Claimant accepted the
VERP, and his last day of work with CP&L was 31 May 2005.
After retiring, claimant filed an initial claim for
unemployment insurance benefits effective the week beginning 24
July 2005.  His claim was denied by the Employment Security
Commission (“Commission”) adjudicator.  The appeals referee
reversed the adjudicator.  CP&L appealed to the Commission which
upheld the decision of the appeals referee.  CP&L next appealed
to Superior Court, Wake County, which affirmed the decision of
the Commission awarding benefits.  CP&L gave notice of appeal to
the Court of Appeals, which, in a divided opinion, affirmed the
decision of the Superior Court.  Based on the dissenting opinion
in the Court of Appeals, CP&L appealed to this Court.
Inasmuch as CP&L has not challenged the Commission’s
findings of fact, this Court is bound by those findings, and the
only question is whether the findings of fact support the
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conclusions of law.  See, e.g., State ex rel. Employment Sec.
Comm’n v. Jarrell, 231 N.C. 381, 384, 57 S.E.2d 403, 405 (1950). 
We review the Commission’s conclusions of law de novo.
The Commission made the following findings of fact:
2[.]  The claimant began working for the
employer on March 21, 1981[.]  He last worked
for the employer on May 31, 2005, as a field
service representative[.]
3[.]  The employer began downsizing its field
service representative positions in January
2005[.]  During this time, the claimant was
informed that his position as field service
representative had been eliminated and he was
going to be assigned to a temporary position
in Clinton, North Carolina[.]  The claimant
was told that he would be in Clinton until
the downsizing was completed[.]
4[.]  The claimant asked his supervisor and
operations manager if he was going to be
transferred back to his field service
representative position in Whiteville, North
Carolina, or if he was going to Wilmington,
North Carolina.  The claimant was never given
an answer[.]
5[.]  In January 2005, the employer offered
several employees, including the claimant, an
early retirement package[.]  The claimant
asked his supervisors if he would still have
a job if he did not accept the early
retirement package[.]  The claimant’s
question was never answered so he accepted
the early retirement package.
Based on these findings, the Commission concluded as a
matter of law that claimant “left work within the meaning of the
law” and that he did so for “good cause attributable to the
employer.”
The statutory provisions applicable to this appeal are
N.C.G.S. § 96-14(1) and (1a).  A claimant is disqualified from
receiving benefits if the claimant is “at the time such claim is
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filed, unemployed because he left work without good cause
attributable to the employer.”  N.C.G.S. § 96-14(1) (2007). 
Further, “[w]here an individual leaves work, the burden of
showing good cause attributable to the employer rests on said
individual, and the burden shall not be shifted to the employer.” 
N.C.G.S. § 96-14(1a) (2007).
In this case the Commission’s conclusion that claimant
left work is undisputed.  Thus, to resolve this appeal we must
determine whether claimant’s acceptance of the VERP which
triggered his departure amounted to good cause for leaving his
employment and if so, whether the good cause was attributable to
CP&L.  This Court has defined “good cause” as “a reason which
would be deemed by reasonable men and women valid and not
indicative of an unwillingness to work.”  Intercraft Indus. Corp.
v. Morrison, 305 N.C. 373, 376, 289 S.E.2d 357, 359 (1982)
(citing In re Watson, 273 N.C. 629, 161 S.E.2d 1 (1968)).  A
separation is attributable to the employer if it was “‘produced,
caused, created or as a result of actions by the employer.’” 
Couch v. Employment Sec. Comm’n, 89 N.C. App. 405, 409-10, 366
S.E.2d 574, 577 (quoting In re Vinson, 42 N.C. App. 28, 31, 255
S.E.2d 644, 646 (1979) (internal quotation marks omitted)), aff’d
per curiam, 323 N.C 472, 373 S.E.2d 440 (1988).  Within the
framework of these definitions, the Commission’s findings of fact
point to three possible actions attributable to the employer that
could have been factors in claimant’s acceptance of the VERP,
namely, (i) the downsizing of the workforce, (ii) the
supervisor’s failure to answer claimant’s question about his
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future employment, and (iii) the employer’s offering of the VERP. 
The question then becomes whether any one of these actions as a
matter of law constituted good cause for claimant to accept the
VERP and leave his employment.  We conclude that none of them
does.
Downsizing of the workforce is a recognized means by
which corporations and businesses maintain their productivity and
profitability.  Although downsizing may ultimately lead to the
loss of some jobs, downsizing to a desired number of employees is
often achieved through attrition.  Downsizing or a reduction in
force does not automatically trigger layoffs.  In fact, the
evidence in this case and the findings by the Commission based
thereon would suggest that CP&L was utilizing this process, a
part of which was the offering of an enhanced early retirement
package.  When claimant’s position in Whiteville, North Carolina,
was eliminated, claimant was moved to Clinton, North Carolina,
and, as the Commission found, was told that he would be there
until the downsizing was completed.  Nothing in that process
suggests that claimant was to be terminated.  The emphasis placed
by the Commission and claimant on the failure of claimant’s
supervisor to tell claimant whether he would have a job after the
downsizing was completed is misplaced.  To construe the failure
to answer that question as good cause assumes that claimant, who
from the record appears to have been an employee at will, was
entitled to an assurance tantamount to a contract guaranteeing
him a job after the downsizing was completed.  An employee who
has no such guarantee of a job before the employer begins
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downsizing certainly has no legal basis to use the failure of the
employer to give such assurances as good cause entitling him to
unemployment benefits when he voluntarily accepts an enhanced
early retirement package.  Moreover, claimant presented no
evidence, and the Commission made no finding, that CP&L knew the
answer to claimant’s question before the deadline for accepting
the VERP had expired.  Finally, the mere offering of the VERP by
CP&L as part of its efforts to downsize cannot be a good cause
entitling claimant to benefits in that claimant had to submit a
written application in order to accept the program.  The
Commission made no finding that CP&L forced claimant or any other
employee to accept the VERP.
While this case appears to be one of first impression
in this jurisdiction, our conclusion that claimant is
disqualified from receiving benefits is consistent with the
policy enunciated by our General Assembly and the holdings of
this Court.  Under N.C.G.S. Chapter 96, section 14:
Where an employee is notified by the
employer that such employee will be separated
from employment on some future date and the
employee leaves work prior to this date
because of the impending separation, the
employee shall be deemed to have left work
voluntarily and the leaving shall be without
good cause attributable to the employer.
N.C.G.S. § 96-14(1).  If, under this statute, the employee who
has been told that he or she will be terminated on a certain date
is disqualified from receiving benefits when he or she leaves
before the stated date, then permitting the employee who has not
been told that he or she will be terminated to leave and obtain
unemployment benefits on the basis that the employee accepted the
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offer of enhanced early retirement would create an inconsistency
and inequity in the law.  See Poteat v. Employment Sec. Comm’n,
319 N.C. 201, 202, 353 S.E.2d 219, 220 (1987) (noting the
enactment of this statutory provision and holding that the
employee was not entitled to benefits for the period of time she
was unemployed before the termination would have become
effective).
Although not necessarily in the context of applying
N.C.G.S. § 96-14(1), an examination of our jurisprudence as to
what constitutes “good cause” reveals two broad categories. 
First, an employee can leave work for “good cause” under
circumstances which make continued work logistically impractical. 
Such circumstances include scheduling and transportation problems
that outweigh the benefits of employment.  See Barnes v. Singer
Co., 324 N.C. 213, 217-18, 376 S.E.2d 756, 758-59 (1989) (finding
that the employee still qualified for benefits after quitting her
job because the employer moved and the employee did not have
transportation to the new location); Intercraft Indus. Corp. v.
Morrison, 305 N.C. at 377, 289 S.E.2d at 360 (accepting that the
inability to find child care could constitute “good cause” for
missing scheduled work days); Couch v. Employment Sec. Comm’n, 89
N.C. App. at 412, 366 S.E.2d at 578 (finding that when the
employer reduced the employee’s hours so that the commute was no
longer worth the wages, the employee had good cause to quit);
Milliken & Co. v. Griffin, 65 N.C. App. 492, 497, 309 S.E.2d 733,
736 (1983) (finding that an employee quit with “good cause” when
health reasons prevented her from working shifts of the length
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required in her particular position), disc. rev. denied, 311 N.C.
402, 319 S.E.2d 272 (1984).
Second, an employee can leave work for “good cause”
when the work or work environment itself is intolerable. 
Examples of circumstances making work environments intolerable
include racial discrimination, tensions following an offensive
confrontation, and assignments that violate professional ethics. 
See Poteat v. Employment Sec. Comm’n, 319 N.C. at 204, 353 S.E.2d
at 221 (holding that an employee did not have “good cause” to
leave before a scheduled termination date when nothing
“suggest[ed] that notice of impending termination was so
offensive as to embarrass or humiliate the claimant”); In re
Bolden, 47 N.C. App. 468, 471-72, 267 S.E.2d 397, 399 (1980)
(remanding for findings as to whether claimant left her job on
account of racial discrimination which would constitute good
cause); In re Clark, 47 N.C. App. 163, 167, 266 S.E.2d 854, 856
(1980) (holding claimant had good cause to quit when she “felt
that she could no longer ethically continue her employment”).
In the case at bar, claimant left work even though
continued work was neither logistically impractical nor
intolerable.  CP&L eliminated claimant’s original position and
moved him to a new position in a new location.  However, the
Commission made no finding of fact that this change made
claimant’s ability to report for work each day logistically
impractical.  From the record, we can only conclude that he
reported to work in Clinton each day without difficulty and that
nothing would have prevented his continued attendance beyond his
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eventual retirement date.  Even if some logistical difficulty
beyond the scope of the record were introduced, it would be hard
to show how such difficulty resulted from CP&L’s decision to
offer enhanced retirement packages.
Further, claimant left the job even though continued
work was in no way intolerable.  While claimant’s position had
changed, nothing in the Commission’s findings of fact suggests
that the new position was in any way disagreeable, even though it
was in a new location and was temporary in nature.  Further,
CP&L’s offer of an early retirement package did not in any way
affect the quality of the position claimant occupied when he left
work.  Claimant presented no evidence that the program’s
existence created a hostile or unpleasant work environment, or
somehow negatively affected the quality of the work itself. 
Thus, the retirement program does not constitute “good cause” for
the separation.
Moreover, the conclusion we reach today is consistent
with decisions from other jurisdictions that have addressed this
issue.  While not binding on this Court, the decision in Anheuser
Busch, Inc. v. Goewert, 82 Wash. App. 753, 919 P.2d 106 (1996),
disc. rev. denied, 131 Wash. 2d 1005, 932 P.2d 644 (1997), is
instructive.  In Goewert the employer set a goal of a ten percent
reduction in force and offered an early retirement package to
employees over age fifty-three.  Id. at 755, 919 P.2d at 108. 
The employer stated that if the goal was not achieved by late
1994, the employer would institute involuntary terminations.  Id. 
Goewert attempted to ascertain whether he would be laid off, but
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the employer could not guarantee Goewert a job before the
deadline for accepting early retirement.  Id. at 755-56, 919 P.2d
at 108.  The court held that Goewert had voluntarily brought
about his own unemployment and was not entitled to benefits.  The
court stated:  “While Goewert’s fears about the possibility of
future involuntary terminations were understandable, these fears
are personal reasons for leaving work, not ‘work connected
factors.’  In order to qualify for benefits, the reasons for
quitting must be work related and must be external and separate
from the claimant.”  Id. at 761-62, 919 P.2d at 111 (footnote
omitted); see also Shields v. Proctor & Gamble Paper Prods. Co.,
164 S.W.3d 540, 544-45 (Mo. Ct. App. 2005) (holding that when the
employer had no plans to implement involuntary layoffs if its
retirement packages did not achieve the desired reduction in the
workforce, the claimant did not have good cause for leaving his
employment by accepting the offer of early retirement); In re
Claim of Joseph, 246 A.D.2d 944, 944-45, 667 N.Y.S.2d 849, 849
(App. Div. 1998) (mem.) (holding that participating in an early
retirement program when continuing work is available does not
constitute good cause for leaving one’s employment even though
the employee testified that he opted for early retirement
“because he thought he would be laid off”); George v.
Unemployment Comp. Bd. of Review, 767 A.2d 1124, 1129 (Pa. Commw.
Ct. 2001) (holding that a claimant’s speculation that he would
possibly be laid off as part of a reduction in force did not
establish “necessitous and compelling reasons for accepting the
early retirement incentive and voluntarily terminating his
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employment”).  But see White v. Dir. of Div. of Employment Sec.,
382 Mass. 596, 598-99, 416 N.E.2d 962, 964 (1981) (remanding to
the division to determine if the claimant “reasonably believed
his discharge was imminent” when he accepted the early
retirement).
The Commission made no finding of fact that CP&L had
announced layoffs.  Claimant had a job.  Claimant, a twenty-four
year veteran employee, elected to accept the VERP and thereby
terminate his employment.  The Commission made no finding that
claimant would not have continued to have a job.  Under these
facts, for the reasons stated above, we conclude that claimant
left his employment without good cause attributable to the
employer and is, therefore, disqualified from receiving
unemployment insurance benefits.  N.C.G.S. § 96-14(1).
The decision of the Court of Appeals is reversed, and
the case is remanded to that court for further remand to the
Superior Court, Wake County, with directions that that court
remand this matter to the Employment Security Commission for
further proceedings not inconsistent with this opinion.
REVERSED AND REMANDED.