Campbell v. Emp't Dep't, 11AB3431

• Decision Date: 15 May 2013
• Docket Number: A150346.,11AB3431
• Citation: 303 P.3d 957,256 Or.App. 682
• Parties: Kathy D. CAMPBELL, Petitioner, v. EMPLOYMENT DEPARTMENT and Willamette Education Service District, Respondents.
• Court: Oregon Court of Appeals

256 Or.App. 682

303 P.3d 957

Kathy D. CAMPBELL, Petitioner,

v.EMPLOYMENT DEPARTMENT and Willamette Education Service District, Respondents.

11AB3431; A150346.

Court of Appeals of Oregon.

Submitted Feb. 7, 2013.

Decided May 15, 2013.

Larry L. Linder and Law Office of Larry L. Linder, LLC, filed the brief for petitioner.

Denise G. Fjordbeck waived appearance for respondent Employment Department.

No appearance for respondent Willamette Education Service District.

Before ORTEGA, Presiding Judge, and SERCOMBE, Judge, and HADLOCK, Judge.

HADLOCK, J.

Claimant seeks review of a final order on reconsideration of the Employment Appeals Board (EAB) that denied her unemployment insurance benefits on the ground that she had voluntarily resigned from her job without good cause. SeeORS 657.176(2)(c) (individuals are disqualified from receiving benefits if they “[v]oluntarily left work without good cause”). The EAB's order on reconsideration reached the same conclusion as had its original order, which also denied claimant's request for benefits. As discussed in more detail below, we reversed and remanded that initial order for reconsideration because we determined that it was not supported by substantial reason. Campbell v. Employment Dept., 245 Or.App. 573, 581, 263 P.3d 1122 (2011)( Campbell I ). Claimant contends that the EAB's order on reconsideration also is flawed; she argues both that the order is not supported by substantial evidence and reason and that the order is inconsistent with our holding in Campbell I.¹ We disagree and, for the reasons set forth below, we affirm.

We review the EAB's order “for substantial evidence and errors of law, and to determine whether [its] analysis comports with substantial reason.” SAIF v. Ramos, 252 Or.App. 361, 363, 287 P.3d 1220 (2012). Substantial evidence supports a factual finding “when the record, viewed as a whole, would permit a reasonable person to make that finding.” ORS 183.482(8)(c). An order comports with substantial reason when it “articulate [s] a rational connection between the facts of the case and the legal conclusion.” Endres v. DMV, 255 Or.App. 226, 229, 297 P.3d 505 (2013).

In its order on reconsideration, the EAB adopted those factual findings that it had made in its initial order, as summarized in Campbell I, and it also made additional findings. Our decision in this case turns on the EAB's findings about events immediately surrounding claimant's December 1, 2009, decision to leave her job. However, Campbell I provides helpful background information regarding events that preceded claimant's resignation, and we quote from that opinion here:

“Claimant was the director of fiscal services for the Willamette Educational Service District (WESD) from July 1, 2007, until she resigned effective December 1, 2009. Claimant reported directly to WESD's superintendent; she was responsible for advising the superintendent on all fiscal matters, preparing budget documents, and overseeing the budget process. Her position also required her to authorize expenditures, and, as the EAB found, she ‘was responsible for their “good judgment” and “lawfulness,” as provided in the Oregon Accounting Manual (OAM) 10.40.00 PO.’ During her employment, claimant held a ‘certificate of school business management.’

“In October 2008, claimant began voicing concerns about financial improprieties and mismanagement at WESD. One of her concerns centered around the issuance of contracts that claimant contended were in violation of Internal Revenue Service rules and Oregon statutes. She was also concerned that school district funds were being improperly commingled with other funds and not properly reported to the board or in the annual audit. Claimant was disturbed that the superintendent had ordered an increase in the rate that school districts would be charged for WESD's services, even though the superintendent had been told that the increase was not needed because the amounts collected in the prior year had not yet been spent. The superintendent stated that a less than three percent increase would ‘look funny’ and cause the districts to ask questions.”

245 Or.App. at 575–76, 263 P.3d 1122 (footnote omitted).

Claimant continued to raise concerns over the next several months, not only with her supervisor, but also with WESD's auditors, board chair, and legal counsel. Id. at 576, 263 P.3d 1122. Claimant was away from work on medical leave from early June through late September 2009. During that period, she was dropped from two management e-mail lists and some of her work duties were removed. Id. at 577, 263 P.3d 1122. After claimant returned to work, she and the deputy superintendent met with WESD's human resources director in late November 2009. In Campbell I, we described the events culminating in claimant's ultimate resignation:

“During the meeting, claimant brought up several concerns about the misuse of funds. She also told the deputy that they were violating independent contractor rules and that ‘they should not be issuing a bad contract today if they know they are violating the rules.’ The deputy indicated that ‘they did not have to fix the contracting situation yet, the Secretary of State's office would give him 4–6 weeks.’ ² Claimant said that it was ‘very difficult for her to do her job’ and that she felt that ‘she was being retaliated against and intimidated.’

“Claimant resigned on December 1, 2009, as EAB described it, ‘because she believed her concerns were being ignored and that she would be “forced to continue doing * * * improper things” that put her school business manager certification at risk.’ ”

Id. at 577–78, 263 P.3d 1122 (footnote omitted).

Claimant subsequently sought unemployment insurance benefits, which the Employment Department denied. She then asked for and received a hearing before an administrative law judge (ALJ), who agreed with the department and issued a decision stating that claimant had resigned without “good cause” to do so and therefore was ineligible for unemployment benefits. In March 2010, claimant sought review by the EAB, which affirmed the ALJ's decision.

The EAB's original order—like the one currently on review—was based on the interplay between ORS 657.176(2)(c) and OAR 471–030–0038(4). Under ORS 657.176(2)(c), an individual who leaves work “without good cause” is disqualified from receiving unemployment insurance benefits. The administrative rule, OAR 471–030–0038(4), clarifies that “good cause” to resign exists where “a reasonable and prudent person of normal sensitivity, exercising ordinary common sense, would leave work” and the reason for resigning is “of such gravity that the individual has no reasonable alternative but to leave work.” (Emphasis added.) The claimant “has the burden of proving good cause by a preponderance of the evidence.” Kercher v. Employment Dept., 250 Or.App. 409, 411, 280 P.3d 1040 (2012). In this case, therefore, the EAB's evaluation of claimant's request for unemployment benefits turned on whether she proved that she had no reasonable alternative to leaving WESD on December 1, 2009.

In its 2010 order, the EAB observed that claimant's working conditions “were not ideal[,]” and it quoted from the Secretary of State's audit report, which described financial problems at WESD. Nonetheless, the EAB decided that claimant had left work without good cause because, although claimant had held a subordinate position and had been expected to accept direction from her superiors, “no one from WESD told claimant she would be discharged or asked to resign” if she did not follow instructions. The crux of the EAB's reasoning was that even “assuming, arguendo, [that WESD's] improper financial practices * * * continued” in late 2009, claimant “had the option to continue working and, if asked to do anything improper, refuse.” (Emphasis added.)

On review, we held that the EAB's decision did not follow from its factual findings because those findings did not support a conclusion that, if asked to continue facilitating financial improprieties, claimant reasonably could have refused. Campbell I, 245 Or.App. at 581, 263 P.3d 1122. That is, we rejected the EAB's reasoning that, even if claimant were asked to commit improprieties, her purported ability to refuse to follow her superiors' instructions constituted a reasonable alternative to leaving work.

On remand for reconsideration, the EAB affirmed the ALJ's order for a second time, again deciding that claimant had voluntarily left work without good cause and was, therefore, ineligible for unemployment benefits. However, the EAB's second analysis did not hinge—as had the analysis in its first order—on whether claimant had the option of refusing to facilitate any fiscal mismanagement. Instead, the order on reconsideration focused on a factual question that we did not address in Campbell I: whether claimant actually would have been expected to commit “improper” acts after December 1, 2009 (the day she resigned).

On that point, the EAB made findings that undercut claimant's assertion that she had no reasonable alternative to leaving work. Most directly, the EAB found that, “ if anyone at WESD was ‘doing * * * improper things' by December 1, 2009, it was not claimant.” (Emphasis added.) That finding was echoed in the EAB's determination that claimant had not proved that she would have been required to perform any improper tasks after December 1. The EAB acknowledged claimant's testimony that “ ‘the illegal piece’ that was ‘probably still going on,’ ‘was the hiring of people on contracts' ” that were being prepared and approved “in a manner inconsistent with ‘IRS rules and policies.’ ” However, the board noted, claimant did not refute testimony given by the WESD's new human resources director, who stated that, as of November 1, 2009, the contracting practices that previously might have alarmed the IRS were “not continuing.” Moreover, the board explained that, although there was evidence that cl...