John D. Giovanoni Ii v. Review Bd. Of The Ind. Dep't Of Workforce Dev.

• Decision Date: 01 June 2010
• Docket Number: No. 93S02-0907-EX-311.,93S02-0907-EX-311.
• Citation: 927 N.E.2d 906
• Parties: John D. GIOVANONI II, Appellant (Plaintiff below),v.REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and Clarian Health Partners, Inc., Appellees (Defendants below).
• Court: Indiana Supreme Court

927 N.E.2d 906

John D. GIOVANONI II, Appellant (Plaintiff below),v.REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and Clarian Health Partners, Inc., Appellees (Defendants below).

No. 93S02-0907-EX-311.

Supreme Court of Indiana.

June 1, 2010.

Delmar P. Kuchaes II, Bargersville, IN, Attorney for Appellant.

Gregory F. Zoeller, Attorney General of Indiana, Ashley E. Tatman, Heather L. Hagan, Frances Barrow, Deputy Attorneys General, Indianapolis, IN, Attorneys for Appellee.

On Petition to Transfer from the Indiana Court of Appeals, No. 93A02-0806-EX-545

SULLIVAN, Justice.

Indiana's Unemployment Compensation Act provides “benefits to persons unemployed through no fault of their own....” Ind.Code § 22-4-1-1. In this case, an employer's attendance policy subjected an employee to discharge for exceeding the permitted number of absences, whether excused or unexcused. Under the Act as written at the time of the employee's discharge, violation of the attendance policy did not disqualify the employee from unemployment compensation because the employee had been discharged through no fault of his own.

Background

John D. Giovanoni was a pharmacy technician employed from November 15, 2006, through December 26, 2007, by Clarian Health Partners, Inc. (“Clarian”), which operated the inpatient pharmacy at Riley Hospital for Children. Clarian's written attendance policy was a “no-fault” policy where all unscheduled absences were considered equal regardless of the reasons for the absences unless they fit within qualified exceptions identified within the policy. ¹ The policy provided for progressive discipline beginning with the accumulation of five “occurrences” (instances of tardiness or absence) in any rolling 12-month period, and ending with termination after eight occurrences in any such period. An administrative law judge (“ALJ”) for the Review Board of the Department of Workforce Development found that the attendance policy “is essential to [Clarian] as attendance is critical as patients need to be able to receive their medications when necessary.” (Appellant's App. at 5.)

During the term of his employment, Giovanoni began to experience a severe medical condition identified as an arachnoid cyst in his brain that caused seizures and debilitating migraines. Aware of the attendance policy, Giovanoni made a concerted effort to come to work, even when his condition rendered him largely unable to perform his duties. Despite his efforts, Giovanoni accumulated seven occurrences as a result of his medical condition; he received written warnings on the last three of these, and the pharmacy manager met with him following the seventh occurrence.²

On December 16, 2007, Giovanoni had his eighth occurrence, due to hazardous road conditions caused by severe winter weather, and was terminated a few days later. Giovanoni sought unemployment benefits. Although a claims deputy originally granted Giovanoni's request, an ALJ reversed the decision of the deputy on Clarian's appeal. The Review Board summarily affirmed the ALJ's findings of fact and conclusions of law.

A divided panel of the Court of Appeals reversed, holding that Giovanoni was not discharged for just cause and therefore was entitled to unemployment benefits. Giovanoni v. Rev. Bd. of Ind. Dep't of Workforce Dev., 900 N.E.2d 437 (Ind.Ct.App.2009). Judge Brown dissented.

The Review Board sought, and we granted, transfer, thereby vacating the opinion of the Court Appeals. Ind. Appellate Rule 58(A).

Discussion

I

The Indiana Unemployment Compensation Act (the “Act”), Indiana Code art. 22-4, provides benefits to those who are out of work through no fault of their own. To be eligible for benefits, an individual must meet the requirements set forth in Indiana Code ch. 22-4-14. Unemployment insurance benefits, however, are not an unqualified right and may be denied to claimants who are disqualified by any of the various exceptions provided in ch. 22-4-15. Specifically, an individual is disqualified if discharged for “just cause.” I.C. § 22-4-15-1.³ “Just cause” is defined in subsection (d) to include the following: “(2) [an employee's] knowing violation of a reasonable and uniformly enforced rule of an employer; [and] (3) ... unsatisfactory attendance, if the individual cannot show good cause for absences or tardiness [.]” I.C. § 22-4-15-1(d)(2)-(3).

The central issue in this appeal concerns the construction and interpretation of these two exceptions as a basis for disqualification of unemployment insurance benefits where an employee is discharged for violation of a “no-fault” attendance rule. In this case, the ALJ and the Board denied Giovanoni's application for benefits under section 22-4-15-1(d)(2) (“subsection (d)(2)”), reasoning that Clarian's policy was a reasonable rule and Giovanoni's violation of this rule disqualified him from eligibility for unemployment insurance benefits.

To make out a prima facie case of termination for just cause based on a violation of an employer attendance rule so as to disqualify a former employee from receiving unemployment insurance benefits under subsection (d)(2), the employer must show that the employee: (1) knowingly violated, (2) a reasonable, and (3) uniformly enforced rule.⁴ McClain v. Rev. Bd. of Ind. Dep't of Workforce Dev., 693 N.E.2d 1314, 1318 (Ind.1998). An employer's attendance rule is reasonable, as is required for the employer to deny unemployment compensation to a claimant fired for violating the rule, if the rule protects the interests of employees as well as those of the employer. Jeffboat, Inc. v. Rev. Bd. of Ind. Emp. Sec. Div., 464 N.E.2d 377, 380 (Ind.Ct.App.1984).

In contrast, it is well established law that under subsection (d)(3) of the Act, just cause for termination should not be found where an employee's absence or tardiness is beyond the employee's control. “Most every wage earner, at various periods during his productive life, faces family emergencies and matters of urgent personal nature. Such absences may if reasonable and not habitual be excused.” White v. Rev. Bd. of Ind. Emp. Sec. Div., 151 Ind.App. 426, 431, 280 N.E.2d 64, 67 (1972). While a just-cause termination analysis pursuant to subsection (d)(3) assesses the legitimacy of the employee's justifications for excessive absenteeism and tardiness, discharge for excessive absenteeism pursuant to an attendance policy analyzed under subsection (d)(2) does not, on its face, require such individualized analysis, but instead looks only to the reasonableness of the rule.

In light of these conflicting interpretations, the Court of Appeals has been divided on the reasonableness of no-fault attendance policies under subsection (d)(2). In some instances, the Court of Appeals has held that because such policies subject an employee to discharge for excused and unexcused absences, they are per se unreasonable and discharge for unsatisfactory attendance is more appropriately analyzed under subsection (d)(3). Giovanoni, 900 N.E.2d at 443 (“[A]n attendance rule that subjects an employee to discharge for excused as well as unexcused absences is per se unreasonable, but an employee who is discharged for problem attendance will be disqualified from unemployment benefits if the employee cannot show good cause.” (citing Love v. Heritage House Convalescent Ctr., 463 N.E.2d 478 (Ind.Ct.App.1983))); accord Parkison v. James River Corp., 659 N.E.2d 690 (Ind.Ct.App.1996). In other cases, the Court of Appeals has held that a no-fault attendance policy is not per se unreasonable solely because some absences caused by illness could result in termination. Beckingham v. Rev. Bd. of Ind. Dep't of Workforce Dev., 903 N.E.2d 477, 482 (Ind.Ct.App.2009) (“[A]n employer's attendance plan is not per se unreasonable simply because it allows excused absences and/or absences caused by illness to be included toward the benchmark at which an employee has been excessively absent and will be discharged.”) rev'd, 927 N.E.2d 913 (Ind.2010); Beene v. Rev. Bd. of Ind. Dep't of Emp. & Training Servs., 528 N.E.2d 842, 846 (Ind.Ct.App.1988) ( “The fact that [claimant]'s absences and tardiness were allegedly caused from occurrences ‘beyond her control’ is not the litmus test in Indiana.... As long as the [e]mployer puts forth a prima facie case for discharge under [subsection (d)(2) ], insufficiently rebutted by the employee, the employee's discharge and denial of benefits can be upheld.” (citing Jeffboat, 464 N.E.2d at 380)).

II

In the words of the Legislature, the purpose of the Indiana Unemployment Compensation Act is

to provide for payment of benefits to persons unemployed through no fault of their own, to encourage stabilization in employment, and to provide for integrated employment and training services in support of state economic development programs, and to provide maximum job training and employment opportunities for the unemployed, underemployed, the economically disadvantaged, dislocated workers, and others with substantial barriers to employment, is, therefore, essential to public welfare; and the same is declared to be a proper exercise of the police powers of the state.

I.C. § 22-4-1-1 (emphasis added).

In light of the Legislature's pronouncement, “just cause” determinations, as they pertain to an employee's discharge, must be consistent with the legislative purpose underlying the Act-to provide financial assistance to an individual who had worked, was able and willing to work, but through no fault of his or her own, is temporarily without employment. Disqualification is inappropriate if the totality of the circumstances establishes that a claimant is unemployed through no fault of his own. At a minimum, the claimant must have performed some volitional act or have exercised some control over the circumstances resulting in the discharge from employment. See Wakshlag v. Rev. Bd. of Ind. Emp. Sec. Div., 413 N.E.2d 1078, 1082 (Ind.Ct.App.1980) (holding that under a previous version of the...