Best Lock Corp. v. Review Bd. of Indiana Dept. of Employment and Training Services, 93A02-9009-EX-540

• Decision Date: 04 June 1991
• Docket Number: No. 93A02-9009-EX-540,93A02-9009-EX-540
• Citation: 572 N.E.2d 520
• Parties: BEST LOCK CORPORATION, Appellant (Employer Below), v. REVIEW BOARD OF the INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, Michael K. Bonnell, Joe A. Harris and George H. Baker, as members of and consulting the Review Board of the Indiana Department of Employment and Training Services and, Daniel C. Winn, Appellee (Claimant Below).
• Court: Indiana Appellate Court

Page 520

572 N.E.2d 520

BEST LOCK CORPORATION, Appellant (Employer Below), v. REVIEW BOARD OF the INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, Michael K. Bonnell, Joe A. Harris and George H. Baker, as members of and consulting the Review Board of the Indiana Department of Employment and Training Services and Daniel C. Winn, Appellee (Claimant Below).

No. 93A02-9009-EX-540.

Court of Appeals of Indiana Fourth District.

June 4, 1991.

Jack H. Rogers, Clare M. Sproule, Barnes & Thornburg, Indianapolis, for appellant.

Linley E. Pearson, Atty. Gen., Preston W. Black, Deputy Atty. Gen., Indianapolis, for appellee.

MILLER, Judge.

Appellant Best Lock Corporation has a company rule which prohibits the use of tobacco, alcohol and drugs both while at work and away from work (the TAD rule). Five-year employee Daniel Winn admitted drinking at a bar and was fired for violating Best Lock's rule. He claimed unemployment compensation on the basis there was no just cause for his firing. The Review Board of the Indiana Department of Employment and Training Services (Review Board) agreed, and Best Lock appeals, claiming that: 1) contrary to a finding by the Review Board, it presented evidence that its TAD rule was reasonable; and 2) the Review Board abused its discretion by denying Best Lock's request for leave to submit additional evidence to the Board.

We affirm, finding that Best Lock failed to present evidence that there was any connection between the TAD rule and Best Lock's business interest, and that the Review Board did not abuse its discretion by denying Best Lock's request to submit additional evidence to the Board.

FACTS

Best Lock's TAD rule provides as follows:

"The use of tobacco, the use of alcohol as a beverage, or the use of drugs by an employee shall not be condoned. 'Drugs' is herein defined as: Marijuana and other type of drugs, except those legally sold without a prescription and drugs taken under a medical doctor's prescription. Any employee violating this policy, at work or away from the plant, will be summarily terminated."

The rule is contained in the Employee Handbook which is given to all employees when they begin working.

Daniel Winn started working for Best Lock in September, 1984. He stated on his job application that he did not drink alcohol and that he agreed to abide by the TAD rule. He also signed a receipt indicating that he had received and read the employee handbook in which the rule was contained. On December 5, 1989, Winn testified on behalf of his brother-in-law (a former Best Lock employee who had also been discharged for violating the TAD rule) in an unfair labor practices hearing before the National Labor Relation Board. During his testimony, he stated he had been drinking on several occasions four years earlier in the period between December, 1985, and February, 1986. Winn was discharged on December 26, 1989.

The claims deputy determined that Winn was not disqualified from receiving unemployment benefits because he was not discharged for just cause. Best Lock appealed the decision to the appeals referee, who affirmed the Deputy's decision. Best Lock then appealed to the Review Board. In affirming the referee's decision, the Board adopted the referee's findings of fact as follows (relevant part):

"Based on the evidence presented at the hearing, the referee makes the following findings of fact. The claimant started employment with this employer on or about September 10, 1984. He was assigned to do setup work. His last day of employment was on or about December 26, 1989. The claimant was discharged because his employer learned that on occasion during 1985 and 1986, the claimant drank alcohol, although the claimant realized that this employer's rules provide for discharge of any employee management discovers drank alcohol while in its employ.

"No evidence was presented at the hearing that the claimant drank alcohol on company premises or during working hours, or reported to work under the influence of alcohol. Furthermore, there is no evidence that the claimant ever violated any alcoholic beverage statutes or regulations.

"When the claimant was hired, he did state on the job application that he did not drink alcohol, and he realized that one of the terms of his hire was that he not do that. However, no evidence was presented at the hearing that such rule is reasonable or necessary for proper conduct or production at work. The claimant did not refuse to obey any instructions or rules that were work related.

"CONCLUSIONS OF LAW: From the foregoing findings, it is concluded that the claimant was discharged, but not for just cause in connection with the work. There is not sufficient evidence of probative value that the claimant was guilty of any of the offenses defined as just cause for discharge by Chapter 15-1 of the Indiana Employment & Training Services Act. Furthermore, there is not sufficient evidence of probative value that the claimant was guilty of any other willful and wanton act or omission which deprived this employer of services reasonably owed it."

(R. 10-11, emphasis supplied).

DISCUSSION AND DECISION

We first note our standard of review. When reviewing a decision by the Review Board, we must determine whether the decision of the Board is reasonable in light of its findings. Blackwell v. Review Board of Ind. Dep't of Employment and Training Serv. (1990), Ind.App., 560 N.E.2d 674. We may only examine the evidence and reasonable inferences drawn therefrom which would support the Board's decision. Id. We must accept the facts as found by the Review Board unless its findings fall within one of the exceptions for which this court may reverse. One of those exceptions is if the Review Board ignored competent evidence. ¹ Id. Further, this court may reverse the Review Board's decision if reasonable persons would be bound to reach a conclusion different than that reached by the Board based on the evidence before the Board. Ryan v. Review Board of Ind. Dep't of Employment and Training Serv. (1990), Ind.App., 560 N.E.2d 112, 114.

I. Sufficiency of the Evidence

Best Lock first argues that the Board erred as a matter of law in concluding Winn was discharged for just cause because reasonable persons would be bound to reach a conclusion different than that made by the Board based on the evidence before it.

"Just cause" is defined in Ind.Code Sec. 22-4-15-1(d) as follows (relevant part):

" 'Discharge for just cause' as used in this section is defined to include but not be limited to:

(2) Knowing violation of a reasonable and uniformly enforced rule of an employer." (emphasis added).

The burden was on Best Lock to establish a prima facie showing of just cause for termination. Hehr v. Review Board of Ind. Employment Security Div. (1989), Ind.App., 534 N.E.2d 1122, 1124. Here, that means that the burden was on Best Lock to show that Winn knowingly violated the TAD rule, that the rule was reasonable and that the rule was uniformly enforced. If that had been done, the burden would have been shifted to Winn to introduce evidence to rebut Best Lock's case. Id.

Best Lock argues that it met its burden of establishing a prima facie case by presenting evidence on all of these issues. The Review Board does not contest the issue of whether Best Lock established Winn knowingly violated the rule or that the rule is uniformly enforced. (The referee's findings and conclusions addressed the fact that Winn violated the rule but were silent as to whether the rule was uniformly enforced). Rather, the Board argues that Best Lock failed to show the TAD rule was reasonable. Thus, the reasonableness question remains for our examination. Before answering this question, however, it is necessary to examine what evidence would have been necessary to make a prima facie showing that such a rule was reasonable. ²

In Jeffboat, Inc., v. Review Board of the Ind. Employment Security Div. (1984), Ind.App., 464 N.E.2d 377, we held that the employer's Absentee Control Program was reasonable because it protected the "interest of the employer by providing protection from an employee who abuses the Program ...". Thus, we have held that a rule which regulates an employee's on-duty activities and which protects the interest of the employer is reasonable. In Jeffboat, however, the rule governed on-duty activities whereas the rule at issue here governed employees' off-duty as well as on-duty activities.

It has been said that when a rule purports to govern employees' off-duty activities, the conduct regulated must bear some relationship with the employer's business interest in order for the rule to be considered reasonable:

"A rule laid down by the employer governing off-duty conduct of his employees must have a reasonable relationship to the employer's interests in order that violation thereof will constitute misconduct barring eligibility for unemployment compensation benefits. The question of the reasonableness of such a rule is to be tested by the rule's relationship to the business interests of the employer at the time of the making of the rule, rather than at the time of the employee's violation thereof. A rule of this type may be regarded as reasonable where a violation is reasonably likely to harm the employer's business interest, even though the actual violation does not result in actual harm to the business interests of the employer."

76 Am.Jur.2d Unemployment Compensation Sec. 57 (1975) (emphasis supplied). See also 81 C.J.S. Social Security Sec. 224 (1977).

There are no Indiana cases discussing this particular question. However, there are cases from other jurisdictions which merit discussion. In Gregory v. Anderson (1961), 14 Wis.2d 130, 109 N.W.2d 675, Gregory was in the business of selling and servicing vending machines and he employed truck drivers to service the machines, including those located in taverns. Because his business involved servicing of taverns, Gregory had difficulty...