UNEMPLOYMENT INSURANCE – Leaving employment voluntarily and early retirement: Les Brownlee, Acting Secretary, U.S. Dept. of the Army; and United States of America v. Commonwealth of Kentucky, Unemployment Insurance Commission; et al. (SC 6/25/2009)

Les Brownlee, Acting Secretary, U.S. Dept. of the Army; and United States of America v. Commonwealth of Kentucky, Unemployment Insurance Commission; et al.
2007-SC-000126-DG June 25, 2009
Opinion by Justice Noble. All sitting; all concur.

In 2002, the Army decided to hire a private contractor to perform the job functions of 160 civilian employees. These employees were offered continued employment for the following year and a half with no guarantees after that. Alternatively, employees were offered an early retirement package, which included a $25,000 incentive payment. The Appellees in this case were all employees who accepted early retirement and then sought unemployment benefits. The benefits were initially denied, but the employees prevailed on appeal before the KUIC, Circuit Court and Court of Appeals.

The Supreme Court reversed, noting the general rule that employees who leave employment voluntarily cannot receive unemployment benefits except upon “good cause attributable to the employment.” In Murphy, the Court defined the phrase to mean “circumstances so compelling as to leave no reasonable alternative but loss of employment.” The Court observed that Murphy had been applied inconsistently in the past and held that a showing of “good cause attributable to the employment” must amount to constructive discharge for the claimant to prevail. The Court held Appellees’ voluntary decision to leave employment with the Army did not amount to “good cause attributable to the employment,” therefore they were not entitled to unemployment benefits.

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