Court Opinion

ID: 4533514
Source: CourtListenerOpinion
Date Created: 2020-05-12 15:11:24.558145+00
Date Added: 2024-06-11T12:33:08.710168
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Ryan Kuck,                                    :
                     Petitioner               :
                                              :
              v.                              :
                                              :
Unemployment Compensation                     :
Board of Review,                              :   No. 862 C.D. 2019
                 Respondent                   :   Submitted: March 24, 2020

BEFORE:       HONORABLE P. KEVIN BROBSON, Judge
              HONORABLE MICHAEL H. WOJCIK, Judge (P.)
              HONORABLE CHRISTINE FIZZANO CANNON, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON                           FILED: May 12, 2020

              Ryan Kuck (Claimant) petitions for review from the May 22, 2019
decision of the Unemployment Compensation Board of Review (Board) that
affirmed the Referee’s decision finding Claimant ineligible for unemployment
compensation benefits pursuant to Section 402(b) of the Unemployment
Compensation Law (Law).1 The Referee concluded that Claimant’s decision to
leave his employment was personal rather than necessitous and compelling. Upon
review, we affirm.
              Greensgrow Philadelphia Project (Employer) is a non-profit
organization located in Philadelphia, Pennsylvania, that operates a farm that

       1
         Section 402(b) of the Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as
amended, 43 P.S. § 802(b) provides, “[a]n employe shall be ineligible for compensation for any
week . . . [i]n which his unemployment is due to voluntarily leaving work without cause of a
necessitous and compelling nature . . . .”
provides fresh food to Philadelphians, as well as garden centers that sell plants, trees
and shrubs. Certified Record (C.R.) Item No. 9, Transcript of Testimony (T.T.),
4/1/19 at 5. Employer relies on the funds it receives from grants and sales to
maintain operations. C.R. Item No. 10, Referee’s Decision/Order mailed 4/2/19,
Findings of Fact (F.F.__) 2; T.T. 5. Employer employed Claimant from May 1, 2006
through December 31, 2018. F.F. 1. Initially, Claimant was a project manager for
Employer responsible to obtain grants, but in 2016, he accepted the role of executive
director. F.F. 3-4; T.T. 5. As executive director, Claimant earned $70,000 per year,2
F.F. 1, and he was responsible for all pay and hiring decisions for Employer. T.T.
3.
              When Claimant accepted the position as executive director, there were
financial challenges facing the organization. T.T. 5. To increase operating revenue,
Claimant decided that Employer had to focus on sales rather than rely on grants.
F.F. 5; T.T. 5. In the spring of 2018, Claimant hired a new employee, Megan
DeBrito (DeBrito), to operate the garden centers, or sales side, at $60,000 per year.
T.T. 6.
              In August 2018, Employer had a debt that “came due” which forced
Employer to do an “immediate” restructuring to focus on sales and required
Claimant to lay off some employees. T.T. 6. Additionally, in September 2018,
Employer received notice that it was denied a large federal grant. Id. at 8. Claimant
explained that had Employer received this grant, he would have “stayed on and
managed that project.” Id. When the grant was denied, Claimant stated that it “no
longer made sense to have somebody running the business [DeBrito] and [to have]
a non-profit director at the same time.” Id. In November 2018, Claimant decided

       2
         Claimant testified that he was hired at a rate of $75,000, but he took a voluntary pay
decrease in 2017. T.T. 3.
                                              2
not to take pay because Employer was “out of cash” and he wanted to allow other
employees, who were paid much less, to receive a paycheck. Id. at 10. On
November 13, 2018, Claimant submitted his resignation to the Board of Directors,
via email, effective December 31, 2018. F.F. 7-8; T.T. 4.
             On January 1, 2019, Claimant applied for unemployment compensation
benefits. See Claimant Internet Initial Claims. On February 28, 2019, the Erie
Unemployment Compensation Service Center (Center) issued a notice of
determination denying Claimant benefits. C.R. Item No. 5, Notice of Determination.
Claimant timely appealed the determination to the Referee. C.R. Item No. 6,
Claimant’s Petition for Appeal. On April 1, 2019, the Referee held a hearing on the
matter.
             Though Employer did not appear at the hearing, Employer indicated on
Employer’s Request for Separation and Wage Information form that Claimant “quit
after [the] birth of his child.” C.R. Item No. 3, Employer’s Request for Separation
and Wage Information at 1. Employer also stated in its Employer Questionnaire that
Claimant quit for “[p]ersonal [r]easons” as he “decided it would be best for the
organization if he stepped down [and] made room for new leadership.” C.R. Item
No. 3, Employer Questionnaire at 4.
             Claimant testified that he resigned because Employer no longer needed
an executive director with his experience. T.T. 6-7. Claimant testified that he never
operated a garden center and does not possess knowledge of plants. Id. at 6.
Claimant further explained:

             [N]ot only was the pay change different when we effected
             this transition in December or throughout December, but
             also the nature of the organization, the responsibilities for
             that leadership role were going to be—it wasn’t going to
             be grants focused anymore or food focused, it was going
                                          3
             to be garden center and business line focused which, again,
             someone else is better suited for.
Id. at 6-7. Claimant also explained that he had no intention of leaving, but the
organization could not afford to keep him. Id. at 9.
             Claimant indicated that his options to remain with the organization
were limited. Specifically, Claimant testified that he could have accepted a position
with the organization as facilities manager for $35,000, but that position would not
be “intellectually stimulating” and the pay would not suffice. Id. at 6-7. Claimant
indicated he could have tried to raise additional funds, but he had been trying that
for two years and was unable to obtain the grant that would have continued the food
program for another three years. Id. at 7-8. Claimant testified that he discussed with
DeBrito the possibility of having two leaders at once and paying Claimant $60,000
or $70,000, while paying DeBrito similarly, but it was not a feasible plan because
Employer could not afford another $70,000 salary. Id. at 11. At the hearing,
Claimant offered a letter from DeBrito dated March 15, 2019, wherein she
explained:
             I am writing to inform you that in 2019 [Employer] began
             restructuring its model and to this end [Claimant’s] skill
             set was not fully relevant to the new needs of the
             [e]xecutive [d]irector position. At the time we could not
             afford to retain his services in another role at the
             organization, we exhausted all possibilities of these
             options.

See T.T., Claimant’s Exhibit 1. Finally, Claimant denied he was offered a position
as a part-time, independent contractor grant person while he was still employed and
maintained that this option was discussed only after Claimant resigned. T.T. 12.

                                          4
               Following the hearing, the Referee affirmed the Center’s determination.
In so concluding, the Referee credited Claimant’s testimony entirely but did not find
that Claimant “established that his decision to leave the employment was necessitous
and compelling.” Referee’s Decision/Order at 3. The Referee explained:

               While the Referee understands the Claimant’s testimony
               that it was his belief that his resignation would be in the
               best interest of the organization, the Referee finds that
               there is not competent evidence in the record to establish
               that the Claimant exhausted all options available.

               Indeed, the organization has hired new individuals in
               different management roles, and the Referee is not
               convinced that the Claimant was unable to perform
               different roles within the organization. Therefore, the
               Referee finds that the Claimant’s decision to leave the
               employment was personal in nature, and not necessitous
               and compelling for the purposes of Section 402(b) of the
               [Law].
Id.   Claimant appealed the Referee’s decision to the Board, which affirmed. C.R.
Item No. 13, Board’s Decision dated 5/22/19 at 1.                   The Board adopted and
incorporated the Referee’s findings and conclusions. Id. The Board also noted that
at the hearing, Claimant acknowledged Employer explored adding him as a part-
time grant manager after he left his employment, and, based on this
acknowledgment, agreed with the Referee’s determination that Claimant failed to
demonstrate that he had no alternative but to leave his employment. Id. Claimant
petitioned this Court for review.3

       3
         This Court’s review is limited to determining whether constitutional rights were violated,
whether an error of law was committed, or whether necessary findings of fact are supported by
substantial evidence. St. Clair Hosp. v. Unemployment Comp. Bd. of Review, 154 A.3d 401, 404
n.3 (Pa. Cmwlth. 2017).
                                                5
             Claimant argues on appeal to this Court that he should be deemed
eligible for benefits because there is no allegation that he engaged in any misconduct
pursuant to Section 402(e) of the Law and/or that he was laid off in a “qualifying
separation” or for “downsizing.” Claimant’s Brief at 11-12 & 15-16. Claimant,
however, waived these issues for failure to raise them before the Board. Board’s
Brief at 9 n.3. See Pa.R.A.P. 1551 (“[n]o question shall be heard or considered by
the court which was not raised before the government unit”); Schneider v.
Unemployment Comp. Bd. of Review, 523 A.2d 1202, 1204 (Pa. Cmwlth. 1987)
(explaining that issue is waived if claimant “failed to raise th[e] issue before the
Board and attempts to assert it for the first time on appeal to this Court”).
             Claimant properly preserved a single issue for our consideration, i.e.,
that he had a necessitous and compelling reason to quit because Employer “no longer
had money to pay his salary.” Claimant’s Brief at 14. As executive director,
Claimant asserts that he was in a “unique situation” and states:
             If an employee’s boss appears to them [sic] and informs
             the employee that they [sic] are no longer going to [get]
             paid a salary but they [sic] are not being terminated, it
             would be reasonable for that employee to quit. [Claimant]
             was the sole decision maker in the organization. He was,
             at the time, acting as [e]mployer and [e]mployee. As the
             [e]mployer, he made the determination that the
             organization could no longer pay the [e]xecutive [d]irector
             salary. As [e]mployee, he made the decision to end his
             employment because of this.
Id. at 14-15. Claimant asserts that he and his colleagues contemplated “multiple
alternatives” to keep him employed but “no alternatives were viable.” Id. at 15.
Further, Claimant challenged the Board’s reliance on his testimony that Employer
“explored adding him as a part-time grant manager after he left his employment” to

                                           6
support its conclusion that he was ineligible for benefits because this option was not
viable at the time of his separation and no position has since been added. Id.
             When evaluating whether a claimant is eligible for unemployment
compensation benefits, we must be mindful that the overarching purpose of the Law
is to “aid those who through no fault of their own become unemployed.” Section 3
of the Law, 43 P.S. § 752; Schechter v. Unemployment Comp. Bd. of Review, 491
A.2d 938, 940 (Pa. Cmwlth. 1985). Our Supreme Court has directed us to consider
the purpose of the Law when considering eligibility for benefits under any section
of the Law. Preservation Pa. v. Unemployment Comp. Bd. of Review, 673 A.2d
1044, 1046 (Pa. Cmwlth. 1996) (citing Gillins v. Unemployment Comp. Bd. of
Review, 633 A.2d 1150 (Pa. 1993)). For this reason, where an employee without
action by his employer quits work, the employee’s action is considered voluntary
under the Law and the employee is ineligible for benefits. Spadaro v. Unemployment
Comp. Bd. of Review, 850 A.2d 855, 859 (Pa. Cmwlth. 2004) (citing Charles v.
Unemployment Comp. Bd. of Review, 552 A.2d 727, 729 (Pa. Cmwlth. 1989)); Ryan
v. Unemployment Comp. Bd. Review, 448 A.2d 713, 714 (Pa. Cmwlth. 1982).
             However, in cases where the employee or claimant asserts that he quit
his employment, an employee or claimant may still be eligible for benefits if he
meets his burden of showing that he had a necessitous and compelling reason to quit
under Section 402(b) of the Law. St. Clair Hosp. v. Unemployment Comp. Bd. of
Review, 154 A.3d 401, 404 (Pa. Cmwlth. 2017); Spadaro, 850 A.2d at 859. To meet
his burden, the claimant must produce evidence showing that: (1) circumstances
existed which produced real and substantial pressure to terminate employment; (2)
such circumstances would compel a reasonable person to act in the same manner;
(3) the claimant acted with ordinary common sense; and (4) the claimant made a

                                          7
reasonable effort to preserve his employment. See Morgan v. Unemployment Comp.
Bd. of Review, 108 A.3d 181, 188 (Pa. Cmwlth. 2015). Whether a claimant had a
necessitous and compelling reason for quitting his job is a legal conclusion and is
fully reviewable by this Court. Id. With these principles in mind, we now consider
Claimant’s argument.
               Here, Claimant argues that he had a necessitous and compelling reason
to quit work because Employer had no funds and could no longer pay his salary.
Claimant’s Brief at 15. However, Claimant was the executive director for Employer
and his job was to make “all the pay and hiring decisions.” T.T. 3. Claimant testified
that he made the decision not to take a salary in November 2018 because Employer
was “out of cash” and this decision allowed other employees, who were paid much
less, to keep getting paid. Id. at 10. While Claimant’s decision was considerate of
the lesser paid employees, he made the decision not to pay himself and he had the
authority to make all pay and hiring decisions. See Schechter, 491 A.2d at 940
(explaining that to ascertain eligibility for benefits, a determination must be made
whether the employee’s decision to quit was necessitated by actions beyond the
employee’s control to render him eligible for benefits or whether the decision was
based on “purely personal preference” to render him ineligible for benefits); see also
Preservation Pa., 673 A.2d at 1046. Claimant further made the decision to resign
from his employment. These decisions by Claimant, which evidence a “purely
personal preference” on his part, render him ineligible for benefits. Schechter, 491
A.2d at 490.
               In this regard, Claimant did not show that he made a reasonable effort
to preserve his employment. Morgan, 108 A.3d at 188. In his resignation email to
the Board of Directors, Claimant stated that “I will be stepping down as [e]xecutive

                                           8
[d]irector at the end of the year.”4 Claimant provided to the Board of Directors a
future “management proposal” for Employer to consider in his resignation email.
Claimant nominated two employees that could act as co-directors and represented
that these changes were financially “achievable.” C.R. Item No. 3 Employer
Separation Information, Email from Claimant to the Board of Directors dated

       4
           Claimant’s resignation email to the Board of Directors provided as follows:

              Thank you for your support of [Employer] and your continued
       dedication to our success.

               As mentioned at the meeting today I will be stepping down as
       [e]xecutive [d]irector at the end of the year. It has been an incredibly
       challenging and rewarding two years, and I am proud of how we as a team
       weathered the emotional and financial turmoil left behind following Mary’s
       death to keep the farm afloat and the community engaged. I am grateful for
       the ways each of you have supported me, and the org, [sic] during this
       difficult time as we worked to position [Employer] for the future.

               I am very optimistic about where we are headed, and also cognizant
       of the adaptations the organizations [sic] needs to make to move confidently
       forward. The management proposal outlined today represents what I think
       is the best plan to operate with clarity and decisiveness, developing a
       leadership team with the necessary capacities and commitment to
       [Employer] and its community.

               Attached are the resumes for Meg DeBrito and Ari Rosenberg – the
       proposed co-directors – as well as a draft org chart [sic] and role
       responsibilities. The draft budget I circulated this week reflects these
       changes and is achievable. I know they are eager to discuss these items with
       you, and in their time at [Employer] have gone above and beyond in
       demonstrating their ability to contribute positively to this organization and
       its people. My goal is to leave [Employer] better than where I found it, and
       I believe this proposal achieves that.

               I am committed to seeing this process through, and will be available
       to help with the transition.

                 Thank you.

C.R. Item No. 3, Employer Questionnaire, Claimant’s Resignation Email to Board of Directors
dated 11/13/18.
                                                  9
11/13/18. Based upon the foregoing, Claimant still had options available to him to
preserve his employment, if he so desired.
             Claimant could have, in the exercise of his authority as the executive
director, taken on other roles so that he could receive a paycheck. Instead of hiring
new management to focus on sales, Claimant could have attempted to perform the
sales work. Alternatively, Claimant could have performed several smaller roles so
that he could receive a paycheck instead of proposing additional hiring to the Board
of Directors when he resigned. C.R. Item No. 3 Employer Separation Information,
Email from Claimant to the Board of Directors dated 11/13/18; T.T. 4 (testifying
that “I hired other people to fill the new roles that we were going to create at a much
lower rate of pay and a different set of responsibilities”).
             Notably, the Referee, and the Board, did not accept Claimant’s
explanation that he could no longer perform other roles with Employer. Referee’s
Decision/Order at 3; Board’s Decision at 1.            The Referee found that “the
organization has hired new individuals in different management roles, and the
Referee is not convinced that the Claimant was unable to perform different roles
within the organization.” Referee’s Decision/Order at 3 (emphasis added). The
Board adopted and incorporated the Referee’s findings and conclusions in its order.
Board’s Decision at 1. The Board is the ultimate finder of fact and questions
regarding the weight of evidence and witness credibility are solely within its
province and will not be disturbed by this Court. See Morgan, 108 A.3d at 188; A-
Positive Elect. v. Unemployment Comp. Bd. of Review, 654 A.2d at 299, 301 (Pa.
Cmwlth. 1995).
             However, we agree with Claimant that the Board erred by relying on
the following to support its decision: “[C]laimant acknowledged that the [E]mployer

                                          10
explored adding him as a part-time grant manager after he left his employment.”
Board’s Decision at 1. When evaluating whether a claimant has a compelling and
necessitous reason to quit his job, we are to look at the circumstances that existed
when the claimant quit to ascertain whether there was real and substantial pressure
to terminate employment. Morgan, 108 A.3d at 187. To the extent the Board relied
on what occurred after Claimant quit to affirm the Referee, such was error. The
error was harmless though as there were other management roles Claimant could
have performed at the time of his voluntary separation. Since the Board adopted the
Referee’s findings and conclusions to support its decision, Board’s Decision at 1,
we affirm the Board’s decision to the extent it relied on the Referee’s determination
that Claimant failed to make a reasonable effort to preserve his employment by
exhausting all options available before quitting.
             Because Claimant could have performed other roles for Employer, the
Board’s conclusion that Claimant failed to meet his burden of showing that he quit
for necessitous and compelling reasons is supported by the record. Therefore, the
Board did not err when it concluded that Claimant quit for personal reasons and is
ineligible for benefits under Section 402(b) of the Law.
             Accordingly, we affirm.

                                       __________________________________
                                       CHRISTINE FIZZANO CANNON, Judge

                                         11
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Ryan Kuck,                             :
                   Petitioner          :
                                       :
             v.                        :
                                       :
Unemployment Compensation              :
Board of Review,                       :   No. 862 C.D. 2019
                 Respondent            :

                                  ORDER

             AND NOW, this 12th day of May, 2020, the May 22, 2019 order of the
Unemployment Compensation Board of Review is AFFIRMED.

                                     __________________________________
                                     CHRISTINE FIZZANO CANNON, Judge