Adams v. Dep't of Workforce Servs., Workforce Appeals Bd.

Decision Date16 August 2012
Docket NumberNo. 20110406–CA.,20110406–CA.
CourtUtah Court of Appeals


Joseph E. Hatch, Murray, for Petitioner.

Amanda B. McPeck, Salt Lake City, for Respondent.



McHUGH, Presiding Judge:

¶ 1 David D. Adams petitions this court to review a decision of the Workforce Appeals Board (the Board) that determined he was ineligible to receive unemployment benefits, assessed an overpayment penalty, and treated his motion to reopen the evidentiary hearing as an appeal to the Board. We decline to disturb the Board's decision.


¶ 2 Adams was employed as the chief technology officer at an early stage technology company until he was laid off in April 2009. He filed claims for unemployment insurance benefits beginning on April 26, 2009, and received weekly benefits until October 16, 2010. When Adams first started receiving benefits, the Department of Workforce Services (the Department) sent him the Claimant Guide: Unemployment Insurance Benefits (the Claimant Guide ), which provided instructions regarding a claimant's responsibility to conduct a job search while receiving unemployment benefits. It states,

Work Search Requirements

Your obligation while receiving unemployment benefits is to become reemployed, and you should develop a realistic plan to achieve this objective. A primary component of your re-employment plan will be to contact employers. Unless a Department representative instructs otherwise, you are required to make a good faith effort to seek full-time work each week that you claim benefits, even if you are employed part time.

Additional job-development activities that will enhance your prospects of finding work include: writing resumes, visiting employers' web sites, networking, contacting private or church employment agencies or visiting a DWS Employment Center. The phrase “good faith effort to seek work” means that you will consistently make the types of personal efforts to find work that are customary for persons in the same or similar occupations. Your efforts must reflect a genuine desire to obtain employment immediately.

You should make at least two contacts each week with employers not previously contacted. If you do not make at least two new contacts during a given week, you may be denied benefits; however, the Department will evaluate your overall work-search efforts during the week before making an eligibility determination.

You are required to keep a detailed record of your work search activities. You may be selected at any time for an audit or eligibility review during which you will be asked to provide this information. Your record of employer contacts should include the following: (1) date of contact, (2) company name and phone number, (3) person contacted, (4) type of work, (5) method of contact and (6) results. Failure to provide this information upon request may result in a denial of benefits and possible overpayments and penalties.

As your period of unemployment continues, you must expand your work search to include work at lower rates of pay.

¶ 3 Adams testified that he read and understood the Claimant Guide and indicated that he was aware of the requirement that he should make at least two new job contacts each week with employers not previously contacted” and that upon request he was required “to provide a complete list of job contacts which include[d] company name, contact, position applied for, phone number or method of contact, and that these contacts must be [verifiable].” Each week that Adams applied for benefits, he was required to answer the following question: “Did you contact employers for work as you were instructed by the Department?” On each occasion, Adams responded, “Yes.” Overall, Adams received unemployment benefits for seventy-one weeks, for a total of $33,467 in benefits.

¶ 4 In October 2010, the Department sent Adams a questionnaire to ensure that his unemployment benefits received for prior weeks had been properly paid. As part of the questionnaire, Adams was asked to attach his weekly job search contacts for the period from April 25, 2010, to October 2, 2010. In response, Adams wrote a letter explaining that “during the past couple of months, [he] only had one ‘official’ job-seeking contact.” The letter continued,

I decided months ago that my best option was not to look for a job, but to make my own, and so I have been working tirelessly meeting with Venture Capitalists and other investors trying to raise money for a new enterprise that will not only employ me, but at least a dozen other Utahns too. In this letter, I will catalog all of the investors that I have met with, and the various conferences I've attended in order to expand my network. One of the reasons I was uncertain about sending this letter, however, is that I understand that as part of your audit, you're going to want to verify my work search contacts, but I feel very uneasy about the Department of Workforce Services contacting these investors. What I would ask is that if you need verification, please contact me, and I'll meet with you in person and we can discuss ways that you can verify that I made these contacts.

Adams then submitted a list of approximately thirty-five investors and several conferences he had attended. The list provided the names of the investors and their companies but did not provide contact information, the positions Adams applied for, the methods of contact, or the dates of contact.

¶ 5 On November 16, 2010, Adams met with a Department investigator assigned to explore concerns raised by Adams's letter. Adams told the investigator that he had made only four actual job applications since January 2010 but provided a list of six more investors he had contacted. Adams explained that his job search consisted primarily of meeting with investors in the hope that they would fund a start-up technology company and then offer him a position as the founder or chief operations officer. In particular, he indicated that since January 2010 his efforts were focused on getting funding for one particular new venture and that he expected to have the project funded in the next twelve months. The investigator's report indicates that when she asked Adams whether he had asked any of the investors for a job, Adams responded that “if he did that it would show [a] lack of confidence in [the new venture].”

¶ 6 On November 19, 2010, Adams received a “Notice of Issue,” stating,


If it is determined that you knowingly withheld information or willfully made a false statement to receive benefits, you will be assessed an overpayment, civil penalty, and be disqualified up to 49 weeks.

The potential overpayment and penalty are shown on the following page.

A response is required from you by 6:00 p.m. November 29, 2010. If you fail to respond, a decision will be made based on the available information.

The following pages indicated that the weeks at issue were from May 2, 2009, to November 13, 2010—the entire period Adams filed for unemployment benefits. Adams never responded to this notice. On December 1, 2010, the Department issued a decision concluding that under Utah Code section 35A–4–403(1)(c), Adams had not been “available for work” because he had “not been seeking work as instructed.” SeeUtah Code Ann. § 35A–4–403(1)(c) (Supp.2012).1 Thus, the Department concluded that Adams was not eligible throughout the period he had received unemployment benefits.

¶ 7 Adams appealed, and the Department scheduled a telephonic hearing for January 10, 2011, before an Administrative Law Judge. The Department sent Adams notice of the hearing, which instructed him to [p]rovide a copy of [his] complete list of job search contacts, beginning with the effective date of the disqualification/allowance under appeal, to the [ALJ] and other parties listed on th[e] notice prior to the hearing.” There was also a provision in the notice indicating that if he wished to introduce any additional documents he “MUST mail, fax, or hand-deliver the documents to the [ALJ] and all other parties at least three days before the hearing.” Adams did not provide a detailed list of employment contacts prior to the hearing.

¶ 8 Adams appeared on his own behalf at the hearing and indicated that he had prepared a more comprehensive list of contacts (the List). Although the ALJ would not allow Adams to introduce the List because it was not provided prior to the hearing as required, the ALJ told Adams, [Y]ou can provide testimony about [the List] today during the hearing, ... you can certainly do that.” During the hearing, Adams testified that while his initial job search was “traditional,” he later started focusing his efforts on networking with investors, venture capitalists, and members of the boards of start-up companies. He explained that he did so because his prior position was with an early stage technology company and meeting with these individuals was how he expected to find a similar job.

¶ 9 After the hearing, the ALJ issued two decisions. First, the ALJ determined that Adams was not available for full-time work during the entire period of unemployment because he did not satisfy the Department's requirements for making two new contacts with employers per week. The ALJ also noted that [Adams] did not provide detailed records of specific contacts to the Department when requested in his initial meeting, nor did he provide specific contacts for the hearing.” In the second decision, the ALJ concluded that Adams should be assessed a fraud penalty. Specifically, the ALJ held that Adams inaccurately reported that he had been searching for work when he had not, that he knew or should have known the Department's requirements for making job inquiries because it was explained in the Claimant...

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