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Employees of Intalco Aluminum Corp. v. Employment Security Dep't of the State of Washington6/13/2005
Employees who accepted voluntary severance packages were denied unemployment benefits. Because there was no written layoff announcement and the employer did not take the final action to grant the severance, the employees do not qualify for benefits under the employer-initiated layoff rule. The employees' acceptance of voluntary severance did not constitute good cause to quit. The employees are therefore disqualified from benefits. We reverse the superior court and reinstate the commissioner's ruling denying benefits.
BACKGROUND
In response to power shortages and rapidly rising energy prices, the Bonneville Power Administration reached an agreement with Intalco Aluminum Corporation under which Intalco agreed to a temporary reduction in its power allotment. This resulted in a plan to halt aluminum production at Intalco's Ferndale smelter for two years, from October 1, 2001 through September 30, 2003. The BPA in return agreed to pay Intalco for not using the curtailed power.
To address the production halt, Intalco reached an agreement with the union representing its production and maintenance workers whereby 24 employees with less than two years' seniority would be laid off, the remaining employees would be paid their base rate of pay during the shutdown, and Intalco would offer voluntary severance programs to all hourly employees. Intalco sent a memorandum to hourly employees announcing three voluntary severance programs (voluntary severance, early retirement, and furlough), advising that any employee could elect to participate in one of the programs during a six-week sign-up period. An employee who elected one of the programs had seven days thereafter to change his or her mind. Intalco did not reserve the right to reject an employee's election. Of 930 employees, 280 elected to accept one of the programs and terminate their employment with Intalco.
After accepting the voluntary severance program, 48 employees applied for unemployment benefits. The Employment Security Department (the Department) denied benefits on grounds that the employees voluntarily terminated their employment. An administrative law judge (ALJ) from the Office of Administrative Hearings affirmed the Department's decision, and that ruling was affirmed by the commissioner.
One employee appealed to Thurston County Superior Court, and the other 47 appealed to Whatcom County Superior Court. Both superior courts reversed the Department and granted benefits. Division Two reversed the Thurston County Superior Court case and reinstated the commissioner's decision. We now consider the appeal from Whatcom County.
ANALYSIS
Standard of Review
The findings of a commissioner are reviewed under chapter 34.04 RCW, the Administrative Procedure Act. The appellate court reviews the findings and decision of the commissioner, not the superior court decision or the underlying ALJ order. This review is performed de novo. The commissioner's decision is presumed prima facie correct and the petitioner has the burden of proving otherwise.
Employer Initiated Lay-Off Rule. Generally, unemployed workers are eligible for benefits unless they are disqualified by statute. A worker is disqualified if he or she voluntarily leaves work without good cause. One exception to this rule is the so-called employer initiated layoff rule, which provides that after a layoff has been announced, an employee may volunteer to be among those laid off, and still be eligible for benefits.
The question is whether this exception applies here.
The employer initiated layoff rule is found in WAC 192-150-100:
(1) You will not be consi
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