M&J MANAGEMENT, INC. v. Review Bd. of Dept. of Workforce Dev.

• Decision Date: 24 May 1999
• Docket Number: No. 93A02-9810-EX-830.,93A02-9810-EX-830.
• Citation: 711 N.E.2d 58
• Parties: M & J MANAGEMENT, INC., Appellant, v. REVIEW BOARD OF the DEPARTMENT OF WORKFORCE DEVELOPMENT, Sandra K. Schaeffer, Appellees.
• Court: Indiana Appellate Court

711 N.E.2d 58

M & J MANAGEMENT, INC., Appellant, v. REVIEW BOARD OF the DEPARTMENT OF WORKFORCE DEVELOPMENT, Sandra K. Schaeffer, Appellees.

No. 93A02-9810-EX-830.

Court of Appeals of Indiana.

May 24, 1999.

Byron L. Myers, Ryan McCabe Poor, Ice Miller Donadio & Ryan, Indianapolis, Indiana, Attorneys for Appellant.

Jeffrey A. Modisett, Attorney General of Indiana, Jon Laramore, Deputy Attorney General, Indianapolis, Indiana, Attorneys for Appellee.

OPINION

ROBB, Judge

Appellant, M & J Management, Inc. ("M & J"), appeals the decision of the Unemployment Insurance Review Board (the "Board"), finding that M & J employee, Sandra Schaeffer ("Schaeffer"), had voluntarily left her employment with good cause and was entitled to unemployment benefits. We reverse and remand.

Issues

M & J presents several issues for our review, which we have consolidated and restated as follows: whether the Board's determination that Schaeffer voluntarily terminated her employment with good cause was reasonable.

Facts and Procedural History

M & J operates several apartment communities. M & J had a written policy that its employees were to refrain from relationships with tenants and considered a violation of that policy or failure to report or enforce the policy a serious offense. Schaeffer was a District Manager with M & J, and knew about the policy and that a violation of the policy could result in termination. In the spring of 1998, M & J discovered that an employee in one of their communities was dating a resident and that the Property Manager of the community was aware of the relationship, but failed to enforce the policy or report the violation. Both the employee and the Property Manager were discharged. On June 8, 1998, M & J spoke with Schaeffer to inform her of the Property Manager's discharge, and Schaeffer admitted that she, too, knew about the relationship, but did not report it because she disagreed with the rule. Schaeffer then left her employment with M & J.

Schaeffer applied for unemployment benefits. A Deputy of the Indiana Department of Workforce Development determined that the "information provided does not establish that Schaeffer quit.... No penalty is imposed under these circumstances." R. 38. M & J appealed the Deputy's determination of eligibility, and a hearing was held before an administrative law judge. The ALJ made the following findings of fact and conclusions of law:

It is the finding of this hearing officer that the facts of the matter and the conclusions of law are as follows:

— that Schaeffer was employed by M & J for approximately 9 years as a district manager.

— that Schaeffer voluntarily left employment.

— that the circumstance which gave rise to the separation occurred when Schaeffer was approached by the owner concerning an employee who was in violation of an M & J policy.

— that M & J manages a residential complex.

— that the residential complex is open to the general public.

— that M & J had a policy which prohibited any employee from dating any resident at the complex.

— that Schaeffer was aware that an employee was dating a resident.

— that M & J learned of the situation and approached Schaeffer and inquired why she failed to report the violation of the policy.

— that Schaeffer responded that she did not enforce the policy because she "disagreed" of sic the policy because she felt it was a violation of the personal rights of the individuals involved.

— that M & J responded that if she was not able to enforce the policy of M & J and, if she disagreed with the policy of M & J, she should not continue employment.

— that Schaeffer thereafter, voluntarily left employment.

— that the representative of M & J appears before this hearing officer and acknowledges the existence of the rule.

— that the representative of M & J presents to the hearing officer no specific reason for the existence of the rule.

Initially, the hearing officer would note that upon voluntary separation, an employee has the burden of proof of establishing "good cause" for separation before he or she is eligible for benefits. "Good cause" has been defined by the courts to mean; (1) that the reason for leaving employment is such that a reasonable, prudent person, under similar circumstances would quit; (2) that the reason for leaving is "objectively" related to the job. Here, noting the above cited definitions, and the above cited findings, it is the determination of this hearing officer as follows:

— that Schaeffer voluntarily left employment.

— that Schaeffer was required by M & J to enforce an M & J policy.

— that Schaeffer refused to enforce the policy because she felt it was unreasonable.

— that M & J presents no evidence to this hearing officer establishing good cause for the policy.

— that Schaeffer left employment rather than enforce an unreasonable policy — that a reasonable, prudent person, under similar circumstances would of sic left employment.

— that Schaeffer, therefore, established good cause for leaving employment.

— that Schaeffer is, therefore, entitled to benefits under the Act.

DECISION: The initial determination of the deputy's sic hereby affirmed. If otherwise eligible, appropriate benefits are herein granted.

R. 42-43. M & J then appealed to the Board, which affirmed the decision of the ALJ, incorporating the ALJ's findings and conclusions. R. 9. M & J now appeals the determination that Schaeffer voluntarily left her employment for good cause and is entitled to unemployment benefits.

Discussion and Decision

We begin by noting our standard of review of agency decisions. The Indiana Unemployment Compensation Act provides that "any decision of the review board shall be conclusive and binding as to all questions of fact." Ind.Code § 22-4-17-12(a). Indiana Code section 22-4-17-12(f) provides that when the Board's decision is challenged as contrary to law, the reviewing court is limited to a two-part inquiry into the "sufficiency of the facts found to sustain the decision" and the "sufficiency of the evidence to sustain the findings of facts." Under this standard, we are called upon to review (1) determinations of specific or basic underlying facts; (2) conclusions or inferences from those facts, or determinations of ultimate facts; and (3) conclusions of law. McClain v. Review Bd. of the Ind. Dep't of Workforce Dev., 693 N.E.2d 1314, 1317 (Ind.1998).

Review of the Board's findings of basic fact are subject to a "substantial evidence" standard of review. Id. In this analysis, we neither reweigh the evidence nor assess the credibility of witnesses and consider only the evidence most favorable to the Board's findings. General Motors Corp. v. Review Bd. of the Ind. Dep't of Workforce Dev., 671 N.E.2d 493, 496 (Ind.Ct.App.1996). We will reverse the decision only if there is no substantial evidence to support the Board's findings. KBI, Inc. v. Review Bd. of the Ind. Dep't of Workforce Dev., 656 N.E.2d 842, 846 (Ind.Ct.App.1995).

The Board's determinations of ultimate facts involve an inference or deduction based upon the findings of basic fact and are typically reviewed to ensure that the Board's inference is reasonable. McClain, 693 N.E.2d at 1317-18. We examine the logic of the inference drawn and impose any applicable rule of law. Id. at 1318. Some questions of ultimate fact are within the special competence of the Board, and it is therefore appropriate for us to accord greater deference to the reasonableness of the Board's conclusion. Id. However, as to...