Ford v Warren Truck Assembly Plant – 10.117

Ford v Warren Truck Assembly Plant
Digest no. 10.117

Sections 27(c), 29(1)(a), 48

Cite as: Ford v Warren Truck Assembly Plant, 2010 BR 212131 (B2002-10190).

Appeal pending: No
Claimant: Jacinta L. Ford
Employer: Warren Truck Assembly Plant
Docket no.: B 2010-10190-212131W
Date of decision: November 24, 2010

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HOLDING: Where an employee leaves her job pursuant to a buyout agreement that is offered after the employee is indefinitely laid off and as part of the employer’s plan to separate a substantial number of workers from employment, the employee is not disqualified from unemployment benefits.

FACTS: Claimant was indefinitely laid off from her job at Chrysler on May 1, 2009. She officially left her employment with Chrysler pursuant to a voluntary termination buyout plan that was offered after she was indefinitely laid off, and she applied for benefits. UIA found Claimaint ineligible for benefits because she voluntarily left her employment without good cause attributable to her employer, and an ALJ affirmed the redetermination finding. Claimant appealed to the Board of Review.

DECISION: Claimant is not disqualified from benefits under Section 29(1)(a), as although she left her employment voluntarily, there was good cause attributable to her employer. However, Section 48(2) requires that Claimant’s buyout payment will be used to offset the benefit payment that she received that same week.

RATIONALE: In this case, claimant left her employment voluntarily. However, since it was well known in Michigan that Chrysler would be terminating a substantial number of workers in the height of the recession, and Claimant had already been laid off indefinitely, the Board of Review found that the employer’s actions in offering a buyout package would have caused a reasonable, average, and otherwise qualified worker to give up his or her employment.

Additionally, this is distinguishable from McArthur v. Borman’s, 200 Mich App 686 (1993), in which a worker accepted a buyout package instead of two more years of employment, because in the present case it was clear that a large number of employees would soon be terminated. Also, MESA was amended in 2002 to provide in Section 48(2) that remuneration or other monetary consideration provided pursuant to a buyout is to be considered in determining whether an individual is employed and what benefits that individual is entitled to. This amendment clarifies the legislative intent for voluntary buyouts to not per se disqualify a claimant from benefits.

Finally, under 29(1)(a), a claimant who is disqualified is subject to “rework” provisions under 29(3)(f) which require claimants to join the workforce again and earn at least twelve times their weekly benefit amount to requalify for unemployment benefits. The taking of a buyout package is performing a sort of service for an employer, and employees are induced by the employer to take a buyout package. Accordingly, the Board of Review believed that applying 29(1)(a) to such employees was contrary to the spirit of the Act.

Digest Author: Nick Phillips
Digest Updated: 8/14