Employees who decide to accept their employer’s offer for early retirement can’t also collect unemployment compensation. So said the North Carolina Supreme Court in a decision based on a simple concept: The employee would still have a job if he or she hadn’t chosen instead to take the enhanced retirement benefits offered as an incentive to leave early.
Recent case: Herman Roberts worked for Carolina Power & Light as a field service representative. The company offered a voluntary early retirement plan to Roberts (and several other employees), and he accepted. The company never told Roberts he would lose his job if he didn’t retire, nor was he guaranteed one if he stayed.
When Roberts was turned down after filing for unemployment compensation, he appealed, and the case eventually made its way to the state Supreme Court.
The High Court concluded that Roberts wasn’t eligible for unemployment because he had no compelling reason to quit. Instead, he was voluntarily leaving because he wanted the early retirement package. The justices pointed out that employees who quit after being told that their jobs will be eliminated aren’t eligible for unemployment because they left early—so the same is true for early retirement plans, too. (Carolina Power & Light v. Employment Security Commission of North Carolina, No. 441A08, North Carolina Supreme Court, 2009)
Final note: Your attorney can help you design an early-retirement incentive plan that doesn’t violate age or other discrimination laws and reduces your potential legal liability.
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