| Date: | 11/09/2018 |
|---|---|
| Organization: | Division of Administrative Law Appeals |
| Docket Number: | CR-12-509 |
The Petitioner, who received a termination letter that would have involuntarily separated her from her former position as the Associate Director of Special Events at Everywoman’s Center at the University of Massachusetts, Amherst due to budget restrictions, has not met her burden of proving that her termination was involuntary. She voluntarily entered into a separation agreement with her employer that allowed her to remain employed for two (2) additional years and she ultimately accrued twenty (20) years and four (4) months of creditable service.
Pursuant to G.L. c. 32 § 16(4), the Petitioner, Sandra Mandel, is appealing from the August 31, 2012 decision of the Respondent, State Board of Retirement (SBR), denying her application for a Section 10(2) termination retirement allowance. (Exhibit 34.) The Petitioner’s timely appeal was received on September 13, 2012. (Exhibit 35.)
I held a hearing on July 9, 2018 in Room 320 at 436 Dwight Street, Springfield, MA. The Petitioner testified in her own behalf. The SBR presented no witnesses. Both parties made oral arguments. The parties submitted pre-hearing memoranda. (Petitioner-Attachment A and Exhibits 1-34; Respondent-Attachment B and Exhibits 40-41.) (Exhibits 35-39 were submitted with the Petitioner’s Response to the First Pre-hearing Order. (Attachment A1). The hearing was digitally recorded.
Based upon the documents submitted at the hearing in the above-entitled appeal, I hereby render the following Findings of Fact:
G.L. 32, § 10(2)(a) 1 permits members of the Massachusetts State Employees Retirement System to qualify for enhanced retirement benefits under circumstances where they fail of reappointment, if their office or position is abolished, or if they are removed from their office or position without moral turpitude or their part. Ergo, in order to qualify for the enhanced retirement benefit, or the termination allowance allowed pursuant to Section 10(2)(a), the member must have been involuntarily discharged, and not through agreement. See Megiel-Rollo v. Contributory Retirement Appeal Board, 81 Mass. App. Ct. 317 (2012).
In early May, 2010, the Petitioner in this case received a notice that her position would be eliminated effective July 31, 2010. Then, on July 28, 2010, she voluntarily entered into a settlement agreement with her employer that allowed her to continue to work for UMass until July 30, 2012. The settlement agreement provided that she could consult with an attorney, consider the agreement for twenty-one (21) days and have the option to revoke for seven (7) days following the execution of the agreement. The agreement also provided that the Petitioner acknowledged that the resolution was “a full and final resolution of all issues involving her employment at the University.” The Petitioner worked until July 30, 2012, two full years following the execution of the agreement.
The Megiel-Rollo case, supra, is factually analogous to the present case. The Petitioner, Megiel-Rollo was a teacher who entered into a settlement agreement with her employer that resolved a discrimination complaint. The agreement provided that she was entitled to a paid leave of absence for the period of nine (9) months while she continued to receive health insurance benefits and accrue sick time. She was allowed twenty-one (21) days to consider the settlement agreement and an additional seven (7) days after the execution of the agreement to revoke. At the end of her employment, Megiel-Rollo received a letter of termination.
The Megiel-Rollo Court noted that a termination letter from the employer did not in and of itself render the termination involuntary. The Court concluded that the provisions of the settlement agreement did not evidence an “involuntary termination.” The Megiel- Rollo Court concluded that the Petitioner in that case was voluntarily terminated by signing the settlement agreement.
Like the Petitioner in Megiel-Rollo, the Petitioner in the present case benefited from the July 2010 settlement agreement, notwithstanding the fact that she received the lay-off notice prior to entering into the settlement agreement. She worked for two more years and ended up with twenty (20) years and four (4) months of creditable service. She is not entitled to a termination retirement allowance.
The application of the Megiel-Rollo case to these facts lends itself to my determination that the Petitioner’s termination was actually voluntary, as she negotiated her own exit terms when she voluntarily entered into the settlement agreement. The SBR’s decision to deny her application is affirmed on this basis.
The SBR has also contended that a member is prohibited from receiving enhanced retirement benefits under 10(2)(a) if the member’s removal or discharge was brought about through collusion. The SBR cites Tarlow v. Contributory Retirement Appeal Board, No. 13-CV-4512-B, 2015 WL 1012559, at *2 Mass. Super. Jan. 30, 2015 for the proposition that a, the settlement agreement between a member and the member’s employer that was crafted to bring the member past the twenty-year mark is sufficient to find collusion. I find the Petitioner’s vehement contentions during her testimony in the present case, wherein she insisted both that there was absolutely no collusion between her and her employer, and, that she had been s totally unaware of the termination allowance provided in Section 10(2)(a) when she entered in to the settlement agreement, to be self-serving. However, it must be noted that there is no overt evidence of collusion by the Petitioner and her employer in this case. It must also be noted, though, that the settlement agreement did provide for her to be employed until after she had accrued twenty (20) years and four (4) months of creditable service. This result merits close scrutiny.
As the Megiel-Rollo Court noted in dicta, in settlement negotiations, or similar situations, that arise between employees and their public employers, there is a danger that the parties will add a term to the settlement providing a termination letter, even when employee had no reasonable expectation of being fired and termination would not have otherwise occurred. For the employee, the benefit of such a letter may result in receiving higher retirement benefits than the employee may have otherwise received, and such a letter could be a valuable bargaining chip with no detriment to the employer’s financial bottom line. The Court noted further that, as the Contributory Retirement Fund in Massachusetts is made up solely of contributions from the members, those members would incur the cost of the higher termination allowance brought about by such a settlement. Megiel-Rollo, supra, pp. 321-324. See also, Hoener v. Public School Employees’ Retirement Board, 546 Pa. 215, 225, 684 A. 2nd 112 (1996). The Hoerner Court held that the Pennsylvania Retirement Board, not the language of an employee’s negotiated termination agreement, had the power to determine benefits due under the State’s retirement code. Thus, settlement agreements, whether deliberately or inadvertently structured to enhance an employee’s retirement benefits are generally frowned upon in retirement cases.
Again, based on the forgoing, the decision of the SBR to deny the Petitioner’s application for a section 10(2)(a) termination retirement allowance is affirmed.
So Ordered.
Division of Administrative Law Appeals,
BY:
Judithann Burke
Administrative Magistrate
DATED: November 9, 2018
