McClain v. Review Bd. of Indiana Dept. of Workforce Development, 93S02-9708-EX-456

Citation693 N.E.2d 1314
Decision Date20 April 1998
Docket NumberNo. 93S02-9708-EX-456,93S02-9708-EX-456
PartiesCharles H. McCLAIN, Sr., Appellant, v. REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT & IUPUI Human Resources Department, Appellees.
CourtSupreme Court of Indiana

Charles H. McClain, Sr., Indianapolis, for Appellant.

Jeffrey A. Modisett, Atty. Gen., Jon Laramore, Deputy Atty. Gen., Indianapolis, for Appellees.

Jamie L. Andree, Katherine Rybak, Israel Nunez-Cruz, Bloomington, for amicus curiae Legal Services Organization of Indiana, Inc.

ON PETITION TO TRANSFER

BOEHM, Justice.

We granted transfer to consider under what circumstances an employer's termination of an employee for a knowing violation of a reasonable employer workplace policy under Indiana Code § 22-4-15-1(d)(2) meets the requirements that the rule be "uniformly enforced" when it is enforced for the first time. We also attempt to clarify the standard of review of the Unemployment Insurance Review Board's findings and conclusions. We affirm the Board's determination that the rule was uniformly enforced and therefore the termination was for just cause.

Factual and Procedural History

Charles H. McClain, Sr. was fired from his job as a custodian at the Indiana University Medical Center in Indianapolis ("IUPUI") for violating IUPUI's policy that employees personally "clock out" their own timecards at the end of a work shift. When McClain began his employment with IUPUI he signed an employee information receipt which provided in part: "I must always use my time card to clock in when beginning work and clock out when ending/leaving work (including lunch break) for each shift I work." On the evening of the violation, McClain's supervisor saw a friend of McClain's, James Jones, sitting in the time clock room at 11:00 p.m. holding four time cards. The supervisor remained in the room until clock out time at 11:30 p.m. when he observed Jones clock out two of the four time cards--Jones's and McClain's--before he stopped Jones. McClain later claimed that he gave his timecard to Jones only a minute or two before 11:30 so he could help another of the four, who he said had car trouble. All four employees involved in the incident were suspended and then fired.

McClain applied to the Indiana Department of Workforce Development for unemployment benefits under Indiana Code §§ 22-4 et. seq. The Department determined McClain was terminated for "just cause" and suspended McClain's benefits. IND.CODE § 22-4-15-1(a) (Supp.1997). McClain appealed to an Administrative Law Judge who, after a hearing, agreed that McClain was discharged for just cause. Specifically, the ALJ found that McClain was engaged in a "knowing violation of a reasonable and uniformly enforced rule of an employer." Under Indiana Code § 22-4-15-1(d)(2) this is a basis for denial of compensation. At the hearing, McClain testified that he knew of the timecard policy and was aware that a violation could result in a loss of his job. He said, however, that he thought he would be warned before he would be terminated. The supervisor testified that it was "standard practice" to fire employees who violate the policy but admitted that he knew of no other incidents of one employee clocking out another. IUPUI's representative at the hearing, the manager of records and unemployment compensation, testified that McClain was discharged for falsification of his timecard and that "the university treats that as a suspension subject to discharge in all departments." IUPUI introduced a copy of the written policy, partially quoted above, as an Exhibit. The ALJ concluded that McClain knew about the policy, and that it was reasonable and uniformly enforced.

The Unemployment Insurance Review Board affirmed the ALJ and McClain appealed to the Court of Appeals, which reversed on the issue of uniform enforcement. McClain v. Review Bd. of the Ind. Dep't of Workforce Dev., 677 N.E.2d 1084, 1087 (Ind.Ct.App.1997). The majority held that in a case of the first instance of enforcement of a rule an employer must "establish a uniform policy by a plain and clear written rule which establishes what does and what does not constitute a violation and the punishment which will accompany a violation." Id. It concluded that IUPUI's rule in this case did not meet this test. Judge Barteau dissented, concluding that the question of uniform enforcement was a question of fact and that the Board's decision was supported by the evidence. Id. at 1088. We granted transfer.

Standard of Review

The Indiana Unemployment Compensation Act provides that "[a]ny decision of the review board shall be conclusive and binding as to all questions of fact." IND.CODE § 22-4-17-12(a) (Supp.1997). However, the statute also includes explicit provision for judicial review in language virtually identical to that found in provisions for review of other administrative agency actions. 1 Indiana Code § 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: (1) "the sufficiency of the facts found to sustain the decision"; and (2) "the sufficiency of the evidence to sustain the findings of facts." Under this standard courts are called upon to review (1) determinations of specific or "basic" underlying facts, (2) conclusions or inferences from those facts, sometimes called "ultimate facts," and (3) conclusions of law. Courts uniformly recognize that propositions of law, such as the construction of the statute, are for the court to determine. Parkison v. James River Corp., 659 N.E.2d 690, 692 (Ind.Ct.App.1996); Pazzaglia v. Review Bd. of the Ind. Dep't of Employment & Training Servs., 608 N.E.2d 1375, 1376 (Ind.Ct.App.1993). There is less clarity in identifying what is a proposition of law. And the review of determinations of basic facts and ultimate facts has also generated a variety of formulations of the proper standard.

Review of the Board's findings of basic fact are subject to a "substantial evidence" standard of review. KBI, Inc. v. Review Bd. of the Ind. Dep't of Workforce Dev., 656 N.E.2d 842, 846 (Ind.Ct.App.1995) ("We will reverse [the Board's] decision only if there is no substantial evidence to support the findings...."). See also City of Evansville & AFL-CIO v. Southern Ind. Gas & Elec. Co., 167 Ind.App. 472, 482-86, 339 N.E.2d 562, 571-73 (1975) (substantial evidence test applied to factual findings of the Utility Regulatory Commission under language almost identical to that of § 12(f)). In this analysis the appellate court neither reweighs the evidence nor assesses the credibility of witnesses and considers only the evidence most favorable to the Board's findings. 2 General Motors Corp. v. Review Bd. of the Ind. Dep't of Workforce Dev., 671 N.E.2d 493, 496 (Ind.Ct.App.1996).

The Board's conclusions as to ultimate facts involve an inference or deduction based on the findings of basic fact. These questions of ultimate fact are sometimes described as "questions of law." Hehr v. Review Bd. of the Ind. Employment Sec. Div., 534 N.E.2d 1122, 1124 (Ind.Ct.App.1989); Cf. City of Evansville, 167 Ind.App. at 486, 339 N.E.2d at 573 ("the reasonableness of the agency's inference is a question appropriate for judicial determination--a 'question of law' "). They are, however, more appropriately characterized as mixed questions of law and fact. As such, they are typically reviewed to ensure that the Board's inference is "reasonable" or "reasonable in light of [the Board's] findings." 3 KBI, Inc., 656 N.E.2d at 846-47; Hehr, 534 N.E.2d at 1124; Blackwell v. Review Bd. of the Ind. Dep't of Employment & Training Servs., 560 N.E.2d 674, 677 (Ind.Ct.App.1990). The term "reasonableness" is conveniently imprecise. Some questions of ultimate fact are within the special competence of the Board. If so, it is appropriate for a court to exercise greater deference to the "reasonableness" of the Board's conclusion. An example of such an ultimate fact would be whether the workplace rule is reasonable, which is not contested in this case. In evaluating this conclusion, if no proposition of law is contravened or ignored by the agency conclusions, the "reasonable" inference standard gives deference to the agency determination. 4 However, not all ultimate facts are within the Board's area of expertise. See, e.g., id. at 677-78 (reviewing whether the Board's findings supported its conclusion that the employee "voluntarily" left her job). As to these, the reviewing court is more likely to exercise its own judgment. In either case the court examines the logic of the inference drawn and imposes any rules of law that may drive the result. That inference still requires reversal if the underlying facts are not supported by substantial evidence or the logic of the inference is faulty, even where the agency acts within its expertise, or if the agency proceeds under an incorrect view of the law.

Providing a more exact standard is neither necessary nor desirable. Like the courts in Indiana, courts in other jurisdictions have found it difficult to formulate a consistent, precise, and meaningful standard of review of agency action. Tests for "clear error," "substantial evidence," "clear error of judgment," or "arbitrary and capricious" action are often bandied about without any obvious benefit. See generally KENNETH CULP DAVIS, 5 ADMINISTRATIVE LAW TREATISE § 29:5 (2d ed. 1984). We agree with Davis that:

the dominant scope of review is in the middle: Courts usually substitute judgment on the kind of questions of law that are within their special competence, but on other questions they limit themselves to deciding reasonableness; they do not clarify the meaning of reasonableness but retain full discretion in each case to stretch it in either direction.

Id. § 29:1, at 332 (emphasis omitted). In sum, basic facts are reviewed for substantial evidence, legal propositions are reviewed for their...

To continue reading

Request your trial
174 cases
  • Terkosky v. Ind. Dep't of Educ.
    • United States
    • Indiana Appellate Court
    • October 24, 2013
    ... ... INDIANA DEPARTMENT OF EDUCATION, Appellee. No ... erred in denying her petition for judicial review. We affirm. 1 FACTS AND PROCEDURAL HISTORY ... Recker v. Review Bd. of Ind. Dep't of Workforce Dev., 958 N.E.2d 1136, 1139 (Ind.2011) (citing McClain v. Review Bd. of Ind. Dep't of Workforce Dev., ... 261], 416 N.E.2d 845; Hawley v. South Bend Dept. of Redevelopment, [270 Ind. 109, 383 N.E.2d 333 ... ...
  • Knox Cnty. Ass'n for Retarded Citizens, Inc. v. Davis
    • United States
    • Indiana Appellate Court
    • April 18, 2018
    ... ... 93A021701EX141 Court of Appeals of Indiana. FILED April 18, 2018 Attorneys for Appellant: ... KCARC presents two issues for our review, which we restate, generally: 1. Whether the ... McClain v. Review Bd. of Ind. Dep't of Workforce Dev ., ... Ward v. Tipton County Sheriff Dept ., 937 F.Supp. 791, 800 (S.D. Ind. 1996) ... ...
  • United States Steel Corp.. v. Northern Ind. Pub. Serv. Co.
    • United States
    • Indiana Appellate Court
    • September 9, 2011
    ... ... STEEL CORPORATION and ArcelorMittal Indiana Harbor, Inc., Appellants, v. NORTHERN INDIANA ... Standard of Review The General Assembly created the Indiana ... Id. at 1018 (citing McClain v. Review Bd. of Ind. Dep't of Workforce Dev., ... ...
  • Clark v. State Bd. of Tax Com'rs
    • United States
    • Indiana Tax Court
    • April 24, 1998
    ... ... 49T10-9607-TA-00083 ... Tax Court of Indiana" ... April 24, 1998 ... Page 1232 ...   \xC2" ... , 1993, Clark filed a Form 130 Petition for Review of Assessment for each apartment building with ... § 4-21.5-5-14 (West 1991); McClain v. Review Bd. of State Dep't of Workforce Dev., ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT