Miller v. Ky. Unemployment Ins. Comm'n, 2012–CA–001167–MR.

• Decision Date: 06 March 2014
• Docket Number: No. 2012–CA–001167–MR.,2012–CA–001167–MR.
• Citation: 425 S.W.3d 92
• Parties: Jennie MILLER, Appellant v. KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION and Allgeier Brewing Company, Inc., Appellees.
• Court: Kentucky Court of Appeals

425 S.W.3d 92

Jennie MILLER, Appellant

v.KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION and Allgeier Brewing Company, Inc., Appellees.

No. 2012–CA–001167–MR.

Court of Appeals of Kentucky.

Sept. 27, 2013.

Rehearing Denied March 6, 2014.

Robyn Smith, Karen Faulkner, Louisville, KY, for Appellant.

Jonathan S. Ricketts, Kevin M. Norris, Louisville, KY, for Appellee, Allgeier Brewing Company, Inc.

Patrick B. Shirley, Frankfort, KY, for Appellee, Kentucky Unemployment Insurance Commission.

Before CAPERTON, LAMBERT, and MAZE, Judges.

OPINION

LAMBERT, Judge:

Jennie Miller has appealed from the opinion of the Jefferson Circuit Court affirming the decision of the Kentucky Unemployment Insurance Commission (the Commission) to deny her application for unemployment benefits. Finding no error in the procedures followed or in the ultimate decision, we affirm.

Miller began working for Cumberland Brews in February 2007, and at the time she left her employment on July 24, 2010, she was the front house manager. Her duties included serving, bartending, closing and cleaning responsibilities, and managing the restaurant and staff. She contended that she took a leave of absence due to her pregnancy, and she was unable to work for six to eight weeks after giving birth. Miller had her baby on September 2, 2010, and when she was ready to return to work in October, Miller was informed that there were no positions available and that her job would not be available until spring.

Miller filed an application for unemployment benefits on October 24, 2010. In the employer's statement, Cumberland Brews, through owner Mark Allgeier, noted that the reason for separation was Miller's resignation. He indicated that Miller worked from February 2, 2007, through July 24, 2010. In a letter attached to the employer's statement, Mr. Allgeier stated that he had offered Miller a leave of absence, but that she told him she was going to find a different job with more stable income after having her baby. He indicated that Miller had been granted an eight-week leave of absence in the past to study yoga in South America. In a separate letter, General Manager Molly Robison stated that Miller told her that she did not plan on returning to work at Cumberland Brews after she had her baby. Another letter from Assistant Manager Von Price indicated that Miller told her that she was not planning to return to her position after the birth of her baby, but was planning to get a new job with more reliable income.

In a notice of determination mailed December 10, 2010, the Division of Unemployment Insurance ruled that Miller was not eligible to receive benefits because she voluntarily quit without good cause attributable to her employment, citing Kentucky Revised Statutes (KRS) 341.370(1)(c). Miller appealed the notice of determination,claiming that she did not quit her position at Cumberland Brews, but went on maternity leave with the intention of returning after her child was born. When she was able to return to work, she contacted the general manager, Ms. Robison. While Ms. Robison first told her it should not be a problem for her to return to work, she later contacted Miller to say that Mr. Allgeier said the business was too slow to put her back on the payroll. Miller also disputed the truthfulness of the letters Cumberland Brews submitted with its filing. Miller included her own letter from Ms. Robison retracting her previous letter and indicating that Mr. Allgeier had asked her to sign the earlier letter, although she did not believe Miller officially quit.

The referee held a hearing on January 31, 2011. Cumberland Brews did not appear. The referee entered a decision on February 10, 2011, in which he reversed the determination and found that Cumberland Brews initiated Miller's discharge and that the discharge was not for misconduct. The referee stated that Cumberland Brews failed to present any evidence to establish that Miller had committed any misconduct. Therefore, Miller was qualified to receive unemployment benefits.

On February 22, 2011, Cumberland Brews filed an appeal from the referee's decision. In its appeal, Cumberland Brews stated that it had not received notice of the January 31, 2011, hearing and also disputed the referee's findings. It included an affidavit from Mr. Allgeier related to the lack of notice of the hearing. Mr. Allgeier also indicated he wanted the opportunity to participate in a rehearing. The Commission acknowledged receipt of the appeal, and stated:

THE COMMISSION USUALLY DECIDES APPEALS WITHOUT A NEW HEARING. IT RELIES ON EVIDENCE TAKEN AT THE REFEREE HEARING. THE COMMISSION WILL NOT CONSIDER ANY EVIDENCE NOT INTRODUCED AT THE REFEREE HEARING. IN ITS DISCRETION, THE COMMISSION MAY HOLD AN ADDITIONAL HEARING.

The acknowledgement also permitted the parties to submit written summary statements or briefs.

Cumberland Brews filed a brief and argued that its due process rights were violated when it did not receive notice of the hearing and that it could demonstrate a meritorious defense to Miller's claim. It then indicated what evidence it would have presented at the hearing, had it been able to attend, related to the circumstances of Miller leaving her employment. Miller filed a responsive brief, disputing the issues raised by Cumberland Brews. She argued that Cumberland Brews' appeal was untimely filed, since it should have sought a rehearing by February 17, 2011, but did not file its appeal until February 22, 2011, citing 787 Kentucky Administrative Regulations (KAR) 1:110 Section 4(5). Miller also argued that Cumberland Brews failed to show good cause for failing to appear at the hearing and that it was afforded due process because the notice was issued in compliance with the Commission's policies and procedures. In reply, Cumberland Brews asserted that it had timely and properly filed its notice of appeal.

By order mailed March 16, 2011, the Commission remanded the case back to the Appeals Branch referee for an additional hearing. The order provided, in relevant part:

The employer states that it did not receive notice of the scheduled hearing and, therefore, was not allowed an opportunity to present its case.

787 KAR 1:110, Section 2(2)(c) provides that the Commission, at its discretion, may return any case or issue to a referee for the taking of additional evidence. The referee shall take testimony in the manner prescribed for hearing of appeals before referees and shall thereupon return the record to the Commission for its decision thereon.

The employer did not appear for the referee hearing. We desire the employer's evidence before making a decision in this matter and therefore return the case for an additional hearing. The Appeals Branch will mail a copy of the recording of the prior hearing to the parties with notice of the additional hearing. The parties will be given opportunity to review any exhibits entered at the original hearing when the additional hearing is convened. The claimant and any witnesses appearing at the prior hearing must attend the additional hearing. The employer shall be given the opportunity to cross-examine each witness. The claimant will be given opportunity to present additional witnesses and evidence subject to cross-examination by the employer. The employer will then be given opportunity to offer testimony and present witnesses and evidence subject to cross-examination by claimant. Both parties shall be given opportunity to present arguments or summaries at the close of the hearing.

DECISION

WHEREFORE, the Commission, having reviewed the record and being advised, remands this case to the Appeals Branch for the scheduling of an additional hearing consistent with this order. The case shall be returned to the Commission for its review and decision. [Emphasis in original.]

The additional hearing was held on May 9, 2011, after which the case returned to the Commission for a decision. Based upon the evidence presented at the hearing, the Commission reversed the referee's decision, finding that Miller initiated the separation from her employment without good cause attributable to her employment. The Commission found that Miller did not follow the protocol for requesting maternity leave because “she did not intend to return to the work following child birth[.]” The Commission did not find credible or plausible Miller's assertion that “she could simply begin a leave period without approval and return to work, at her sole discretion, anytime she desired and was physically capable[.]” It went on to state:

There can be little doubt, that claimant had good personal cause for not returning to (i.e., for quitting) her regular job with the captioned employer because continued employment in that job would have been harmful to her health or the health of her unborn child. However, since claimant has not proven by substantial evidence that her diminished physical capabilities were work-related, her good cause for quitting has not been shown to be attributable (i.e., causally connected) to the employment with the captioned employer. Therefore, claimant must be disqualified from receiving benefits. [Emphasis in original.]

On June 17, 2011, Miller filed a verified petition for judicial review and complaint in Jefferson Circuit Court pursuant to KRS 341.450(1) and 452.460(1). Miller named as defendants the Commission; Allgeier Brewing Co., Inc., d/b/a Cumberland Brews; Mark Allgeier; Molly Robison; and Patricia Allgeier as defendants. She requested judicial review of the Commission's order reversing the referee's decision based upon the violation of its regulations and because it was arbitrary; fraud in the proceedings; waiver/estoppel as a bar to the rehearing; and facial and as-applied challenges to the regulations. In her complaint, Miller alleged causes of action for wrongful discharge (discrimination), retaliation, a violation of the Fair Labor Standards Act, a violation of the Family Medical Leave Act, fraud,...