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Terry v. Employment Security Department

filed: July 22, 1996.


Superior Court County: Snohomish. Superior Court Cause No: 93-2-06156-9. Date filed in Superior Court: February 7, 1995. Superior Court Judge Signing: John Wilson.

Written by: Grosse, J. Concurred by: Agid, J., Ellington, J.

Author: Grosse

GROSSE, J. -- GTE Northwest, Inc. (GTE), notified Shirley J. Terry that it was eliminating her position and she needed to exercise her collective bargaining rights to "bump" a less senior employee, move to an existing vacancy, or the company would lay her off. Instead, Terry decided to accept the company's early retirement offer. The Commissioner of the Employment Security Department of the State of Washington (the commissioner) denied her unemployment benefits, concluding she did not have good cause to quit as required by the Employment Security Act because she chose early retirement for personal reasons, rather than seeking to remain employed at the company. We reverse and remand for a determination of whether Terry acted reasonably by leaving when faced with a reduction in her wages.


Terry worked at GTE for almost 26 years, January 1968 through May 1993. On May 10, 1993, GTE notified Terry by letter that she had been "identified as an employee to be laid off" as part of a "pending reduction in force." As part of this reduction in force, GTE was laying off employees and consolidating positions, targeting "older higher salaried or waged employees." GTE told Terry that she had "between May 14, 1993 and May 28, 1993 to exercise [her labor agreement] rights to bump a less senior employee or [to] an existing vacancy for which you are qualified."

As part of its company-wide effort to reduce its work force, GTE offered its employees early retirement as an incentive to induce them to quit voluntarily. GTE described the financial options under the early retirement program "as being far superior to any financial package attaching to a job separation after the [deadline] dates." The deadline to accept the early retirement offer was mid-May.

On May 26, 1993, the 55-year-old Terry elected to accept GTE's offer of early retirement with enhanced benefits. Terry did not try to exercise her seniority based "bumping rights." The Department of Employment Security concedes, and GTE does not refute, that there was not a position at her skill and pay level that Terry could bump into. Terry also did not try to bid on another potentially available position. Terry's position of test technician was merged with another less skilled position, repair technician, to create a new job, customer care technician. In order to obtain the new job, Terry needed to interview and test for it and would not "automatically get to move right into the job."

At her hearing, Terry explained that she did not test for the new position (which entailed some of the same work) because she would not be paid as much, going from $16.72 per hour to $13.99 per hour in the new position. Terry did not want to "mess up her retirement" with the downgrade in pay. Given what she heard about "jobs moving," Terry decided to opt for the retirement plan because of its benefits, reasoning that "between being laid off and taking the early out, at fifty-five, . . . you have to think of the future, when you're getting that close to Social Security, and that was a lot of my decision, because of the medical -- it was paid -- in the early out. The medical is what made my decision after the layoff letter."

The commissioner denied her unemployment benefits, determining that she quit voluntarily. The Office of Administrative Hearings conducted a consolidated hearing for five GTE employees and decided in Terry's favor, concluding that she quit voluntarily with good cause. The commissioner reversed, modifying the administrative law judge's findings and concluding that Terry did not qualify for benefits because she quit without good cause. The superior court affirmed. Terry appeals.


In reviewing a final administrative decision of the Employment Security Department, we examine the findings and conclusions of the commissioner.*fn1 To determine if the commissioner erred by determining that Terry voluntarily quit without good cause, we apply the mixed question of law and fact standard.*fn2 We review factual questions under the substantial evidence standard and review de novo questions of law and the application of the law to the facts.*fn3 Under the "substantial evidence" standard, we grant relief if the order is "not supported by evidence that is substantial when viewed in light of the whole record before the court."*fn4 If the "agency has erroneously interpreted or applied the law," we overturn its decision.*fn5 The commissioner's decision is prima facie correct, and Terry carries the burden to establish her right to benefits.*fn6

The Employment Security Act provides unemployment benefits to help those who have become unemployed through no fault of their own.*fn7 "Generally, unemployed workers are eligible for benefits unless they are disqualified by statute."*fn8 Under RCW 50.20.050(1), a worker may be disqualified from receiving unemployment benefits if the commissioner determines he or she voluntarily leaves work without good cause. In making this determination:

The commissioner shall only consider work-connected factors such as the degree of risk involved to the individual's health, safety, and morals, the individual's physical fitness for the work, the individual's ability to perform the work, and such other work connected factors as the commissioner may deem pertinent, including state and national emergencies.*fn9

Under the commissioner's interpretation of RCW 50.20.050(3), the employee must satisfy three factors to establish good cause: (1) that the employee left because of work-connected factors; (2) that the factors were sufficiently compelling to cause a reasonably prudent person to terminate employment; and (3) that the employee ...

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