McPherson v. Employment Division

• Decision Date: 20 March 1979
• Docket Number: AB-862
• Citation: 285 Or. 541,591 P.2d 1381
• Parties: Marlynn M. McPHERSON, Petitioner, v. EMPLOYMENT DIVISION, and City of Salem, Respondents. TC 77-; CA 8816; SC 25719.
• Court: Oregon Supreme Court

Page 1381

591 P.2d 1381

285 Or. 541

Marlynn M. McPHERSON, Petitioner, v. EMPLOYMENT DIVISION, and City of Salem, Respondents.

TC 77-AB-862; CA 8816; SC 25719.

Supreme Court of Oregon.

Argued and Submitted July 12, 1978.

Decided March 20, 1979.

[285 Or. 542-A] David W. Hittle, Salem, argued the cause for petitioner. With him on the brief were Mike Dye, Dye & Olson.

Al J. Laue, Asst. Atty. Gen., Salem, argued the cause for respondent Employment Division. With him on the brief were James A. Redden, Atty. Gen., and Walter L. Barrie, Sol. Gen.

Jeanette Launer, Asst. City Atty., Salem, argued the cause for respondent City of Salem. With her on the brief was William J. Juza, City Atty.

Before HOLMAN, P. J., and TONGUE, HOWELL, BRYSON, LENT and LINDE, JJ.

LINDE, Justice.

Petitioner, Marlynn McPherson, seeks review of a decision of the Employment Division denying her unemployment compensation on the ground that she left her employment voluntarily and without good cause. After the "Administrator's Decision," ¹ the claimant requested a hearing. A referee denied her claim upon findings of fact and conclusions of law that will be discussed below. The Employment Appeals Board affirmed the referee's decision. On review in the Court of Appeals, the Division's decision was affirmed by a divided court, 31 Or.App. 1277, 572 P.2d 654 (1977), and we allowed review.

The issue is whether the Division misconstrued the unemployment compensation law in concluding that McPherson did not have "good cause" to leave her employment. That question in turn involves a question of the scope of judicial review of the Division's determinations of "good cause." This court has not previously had occasion to address these questions. For the reasons that follow, we reverse and remand petitioner's claim to the Division.

The statute and the facts. Since its initial enactment in 1935, the unemployment law has been a program designed to provide a source of substitute income from a public fund for any eligible unemployed person unless the person is disqualified for one of the reasons provided in the statute. In one phrasing or another, the disqualifying reasons essentially have been loss of employment due to the employee's own misconduct, giving up one's job voluntarily without good cause, and failure to apply for or to accept suitable employment. At present, ORS 657.176 provides:

(1) An authorized representative designated by the assistant director shall promptly examine each claim to determine whether an individual is subject to disqualification as a result of his separation, termination, leaving, resignation, or disciplinary suspension from work or as a result of the individual's failure to apply for or accept work and shall promptly enter an assistant director's decision if required by subsection (4) of ORS 657.265.

(2) If the authorized representative designated by the assistant director finds:

(a) The individual has been discharged for misconduct connected with his work, or

(b) The individual has been suspended from work for misconduct connected with his work, or

(c) The individual voluntarily left work without good cause, or

(d) The individual failed without good cause to apply for available suitable work when referred by the employment office or the assistant director, or

(e) The individual failed without good cause to accept suitable work when offered to him,

the individual shall be disqualified from the receipt of benefits until he has performed service for which remuneration is received equal to or in excess of his weekly benefit amount in four separate weeks subsequent to the week in which the act causing the disqualification occurred.

As stated above, this case involves subsection (2)(c), whether the claimant "voluntarily left work without good cause." The referee's findings of fact are set forth in 31 Or.App. at 1279-1281, 572 P.2d 654, 656, and need not be repeated here. Briefly, it appears from the findings and the undisputed evidence on which they are based that claimant was employed by the City of Salem under the CETA program in February, 1975, and hired as a regular employee in August, 1975, with the classification "Maintenance I." Throughout her employment two male coworkers with whom she was required to work complained to her and to others that they did not approve of a female worker in the maintenance position, and that she lacked the strength to do the job. They did not give McPherson information or other assistance that she needed to develop her job skills. She filed a union grievance over additional difficulties with one of the men after she declined to date him, which was later settled by an apology. McPherson repeatedly brought the matter to the attention of her supervisor and the employer's affirmative action officer. The supervisor told her to ignore the men's remarks; he also said that he was satisfied with her work and progress and recommended her periodically for pay raises. However, claimant decided that she would not be able to obtain technical work experience on the job beyond attending courses or seminars and reading manuals. She gave notice in February, 1977, and quit the following month.

In summary, it is undisputed that claimant left work voluntarily and that she did so because of the "sexist" behavior of male employees with whom she was assigned to work and who objected to her doing "men's work." The issue before us is not whether we would reach the same decision on the facts that the Employment Division did. The purpose of our review is to determine whether the Division reached its conclusion denying claimant unemployment benefits under a misapprehension of the scope of "good cause." Before examining that question, we must clarify the appropriate scope of review.

Scope of review. At the outset, it should be recalled that the scope of judicial review of an administrative decision does not follow simply from the nature of the decision and of the disputed issue. The rules governing judicial review can be and generally are provided by law. In the case of a decision of the Employment Appeals Board, affirming a decision made on a formal hearing record by a referee, the scope of review is that stated for contested cases under the Administrative Procedure Act, ORS 183.482(8). That subsection presently provides:

(8) The court may affirm, reverse or remand the order. The court shall reverse or remand the order only if it finds:

(a) The order to be unlawful in substance or procedure, but error in procedure shall not be cause for reversal or remand unless the court shall find that substantial rights of the petitioner were prejudiced thereby; or

(d) The order is not supported by substantial evidence in the whole record.

The statute thus requires a party challenging an agency determination to specify, and the court to decide, whether the asserted agency error is one of fact, lacking support in the evidence, or a misapplication of the relevant substantive or procedural law. Of course the challenge may involve several grounds, but it remains necessary to identify which is which.

It is also necessary to identify the responsible agency whose order is being reviewed. In the case of unemployment compensation claims this is not self-evident. As stated above, note 1, the administration of this statute is entrusted to the Assistant Director of Employment. He is directed to "determine all questions of general policy and promulgate rules and regulations and be responsible for the administration of this chapter." ORS 657.610. Determinations with respect to a particular claimant's eligibility are made by the assistant director's "authorized representative," ORS 657.176(1), ORS 657.265. If the determination is contested, it becomes the subject of a hearing before a referee, who is appointed by the assistant director. ORS 657.650(1). A referee's decision, however, is not subject to the review and approval or disapproval of the assistant director but rather to review by the Employment Appeals Board. ² Indeed, the assistant director may be the party seeking review of the referee's decision. In other words, the assistant director is the "agency" for setting the policy of the Division. His authorized representative is the "agency" making the initial decision of a claim, which becomes operative if not contested. Only if the decision of the authorized representative is contested does the referee conduct and decide the "contested case." Thus he serves in a reviewing rather than a policy-determining capacity. OAR 471-40-025.

The identification of errors of fact and errors of law for purposes of the scope of review under ORS 183.482(8), when an agency applies a broad statutory term to a particular situation, is one of the most problematic issues in administrative law. See, e. g., 4 K. C. Davis, Administrative Law Treatise §§ 30.01, 30.02 (1958) and later supplements; Jaffe, Judicial Control of Administrative Action 556-564 (1965); B. Schwartz, Administrative Law 642-662 (1976). Agency decisions interpreting a legal term in applying it to particular facts are sometimes said to pose a "mixed question of law and fact." See Dobson v. Commissioner of Internal Revenue, 320 U.S. 489, 501, 64 S.Ct. 239, 88 L.Ed. 248 (1943); Jaffe, Judicial Control of Administrative Action, 546-547 (1965). The Court of Appeals has so characterized determinations of "good cause" under the unemployment compensation law. Stevenson v. Morgan, 17 Or.App. 428, 431, 522 P.2d 1204 (1974). When such a determination is reviewed, however, ORS 183.482(8) calls for separating the elements of the mixture that are "facts" from those that interpret the law. It has been observed that in practice courts appear to reverse the sequence of premise and conclusion, seeming first to choose what they deem the proper scope of review and then to label the issue as one of "fact" or "law" accordingly. See Davis, Supra, §§ 30.03-30.09, reviewing many decisions; Gellhorn and...