Russell v. Review Bd. of Indiana Dept. of Employment and Training Services

• Decision Date: 27 February 1992
• Docket Number: No. 93A02-9107-EX-280,93A02-9107-EX-280
• Parties: Janice M. RUSSELL, Appellant-Claimant, v. REVIEW BOARD OF the INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, and Michael K. Bonnell and George H. Baker, as Members of the Review Board, and Witt, Fiala, Flannery & Associates, Appellees-Respondents.
• Court: Indiana Appellate Court

Page 942

586 N.E.2d 942

Janice M. RUSSELL, Appellant-Claimant, v. REVIEW BOARD OF the INDIANA DEPARTMENT OF EMPLOYMENT AND TRAINING SERVICES, and Michael K. Bonnell and George H Baker, as Members of the Review Board, and Witt, Fiala Flannery & Associates, Appellees-Respondents.

No. 93A02-9107-EX-280.

Court of Appeals of Indiana First District.

Feb. 27, 1992.

Donald R. Lundberg, Indianapolis, Gregory L. Volz, Legal Services Organization of Indiana, Inc., Evansville, for appellant-claimant.

Linley E. Pearson, Atty. Gen., Preston W. Black, Deputy Atty. Gen., Indianapolis, for Review Bd. of Indiana Dept. of Employment and Training Services, and Michael K. Bonnell and George H. Baker, as Members of the Review Bd.

Thomas E. Berry, McMahon, Berger, Hanna, Linihan, Cody & McCarthy, St. Louis, Mo., John S. Beeman, Douglas A. Tresslar, Harrison & Moberly, Indianapolis, for Witt, Fiala, Flannery & Associates.

RATLIFF, Chief Judge.

STATEMENT OF THE CASE

Janice M. Russell ("Russell") appeals from a decision of the Review Board of the Indiana Department of Employment and Training Services ("Board"), in which it denied her claim for unemployment compensation benefits following her termination from employment at Witt, Fiala, Flannery & Associates ("Witt"). We affirm.

ISSUES

We restate the issues on appeal as:

1. Did the Board err in making credibility determinations, and were such determinations the sole determinative factor in denying Russell benefits?

2. Was the Board's decision denying Russell unemployment compensation benefits contrary to law?

FACTS ¹

In 1980, Russell began working as a custodian for the University of Evansville In June of 1983, Witt assumed responsibility for the University's custodial services. Russell and other University custodial employees became Witt's employees. At the beginning of each shift, the custodial employees would "clock in" at Witt's office in the physical plant building on the University's campus. Then the employees went to their assigned buildings on the campus to begin their work. Russell and several other employees would customarily stop at the Shell service station ("Station") across the street from the campus on their way to their work site after "clocking in" to purchase snack items to eat on their morning break period. Russell asserts that Witt's management was aware of this practice.

("University"). Russell's schedule for full-time employment was a shift that commenced at 7:00 a.m. and ended at 3:30 p.m.

Witt assigned its University account to Dave Druml ("Druml") in April of 1990. Druml's responsibilities included the supervision of the custodial employees and the promulgation of associated work rules. To manage this operation effectively, Druml believed that the employees should know what was expected of them. After learning that the employees' compliance with several company rules and regulations had been lax, Druml drafted a policy memo containing a number of new work rules. One of these rules ("Rule") prohibits employees from leaving the campus during their assigned shift without permission. This Rule reads in full:

"LEAVING ASSIGNED WORK SITE:

The following policy applies to all employees:

All employees who desire to leave Campus during their lunch period must clock out prior to leaving, and clock in upon return.

With the exception of lunch periods, no employee is authorized to leave Campus during their [sic] assigned shift without first obtaining permission from the Shift Leadperson or Manager. Leaving Campus without proper authorization during work hours shall constitute "Walking off the job", which is grounds for immediate termination of employment.

With the exception of the break and lunch periods, no employee shall be authorized to leave their [sic] assigned working area, unless authorized by the shift leadperson or manager, or if enroute to or from the WFF [Witt] Office located in the Physical Plant Building."

Record at 97.

On Friday morning, May 18, 1990, Druml conducted a meeting with the morning shift custodial employees, including Russell, to explain the new work rules. Druml gave each employee a copy of the new work rules. To make sure that the employees understood the rules, Druml read and explained each rule. He read each new rule "word for word." Record at 31, 38, 46. Then Druml provided the employees with an opportunity to ask questions about the new rules. Approximately two to three minutes were spent discussing the Rule. There is conflicting testimony regarding whether Druml specifically mentioned the Station when discussing the Rule. Russell admits that she basically understood the new rules and thus, asked no questions at the meeting. Record at 54-55.

On Monday morning, May 21, 1990, at about 7:05 a.m., Druml was inspecting a campus building when he observed a car pull into the Station. Druml recognized the car as belonging to one of Witt's custodial employees. Druml saw Russell and two other custodial employees exit the car and enter the Station. The three employees claim that several of Witt's other employees were leaving the Station's parking lot as they arrived at the Station; however, Druml stated that he did not see the other About noon that same day, Druml informed the three employees that he had seen them at the Station and that their actions violated the Rule. There is conflicting testimony regarding the employees' responses to the charge of violating the Rule. Druml stated that at that time, none of the employees offered any statement, defense, excuse, or justification for their actions. The employees contend, however, that they at that time asked Druml about the other two employees they saw at the Station the morning of May 21, 1990, who were ostensibly also violating the Rule. Druml advised them that a final decision regarding the matter would be made after he had consulted with his superiors, but that they were suspended for the time being.

employees. Record at 19-20. Approximately five minutes later, the three employees returned to the car and proceeded to their campus work location. Druml then checked the three employees' time cards. The cards showed that the employees had "clocked in" immediately before going to the Station. None of the three employees had requested permission to leave the campus that morning. Russell admits that she was at the Station buying a doughnut while "clocked in". Record at 47-48.

On May 24, 1990, the three employees were discharged for "leaving campus during working hours without proper authorization." Record at 103, 19. Sometime after the employees were terminated, Druml learned that these employees claimed that two other custodial employees were at the Station on the morning of May 21, 1990, in contravention of the Rule. Druml attempted to verify this claim, but could discover no facts to substantiate the allegations.

Russell applied for unemployment benefits. A deputy for the Indiana Department of Employment and Training Services ("Department") ruled that Russell had been discharged for just cause, precluding her receipt of benefits. Russell appealed this decision to an Administrative Law Judge ("Referee") in the Department, who conducted a hearing and affirmed the deputy's decision. On appeal, the Board heard oral argument from the parties and modified and affirmed the Referee's determination that Russell had been discharged for just cause, denying her unemployment benefits.

This appeal ensued. Other relevant facts will be stated in our discussion of the issues.

DISCUSSION AND DECISION

Issue One

Russell alleges that the Board erred in making credibility determinations, that these determinations were the sole determinative factor in denying her benefits, and that any such error was not harmless. We disagree.

The Board's findings of fact are presumed conclusive and binding, and we may reverse them only if we believe that reasonable persons would be bound to reach different conclusions. Furr v. Review Board of the Indiana Employment Security Division (1985), Ind.App., 482 N.E.2d 790, 794. We may not substitute our opinions and conclusions for the Board's, and must give deference to its expertise. Delco Remy v. Review Board of the Indiana Employment Security Division (1987), Ind.App., 503 N.E.2d 1251, 1254. Therefore, we must not reweigh evidence and must view the record of the administrative proceedings in a light most favorable to the Board's decision. Id. Generally, administrative agencies are allowed to make findings on issues of credibility without taking live testimony. Stanley v. Review Board of the Department of Employment and Training Services (1988), Ind.App., 528 N.E.2d 811, 813. Moreover, a review board is the ultimate factfinder and credibility is a question of fact. Id. at 814.

In Stanley, this court stated that where demeanor credibility is the sole determinative factor and the review board reverses the referee's findings, due process concerns are crucial. Id., at 814. This holding, however, was very narrow; due process rights are irrevocably jeopardized only where demeanor credibility is the sole determinative factor in reversing a referee's finding (emphases added). Id. The court's holding thus applies only to a very narrow class of cases decided by the Board.

We find that Russell's reliance on Stanley in attacking the Board's additional findings is misplaced. The procedural context of the two cases makes Stanley 's holding inapplicable to Russell's situation. First, in Stanley, the Board reversed the referee's findings, while in Russell's case the Board affirmed and only slightly modified the Referee's findings. Indeed, the Stanley court explicitly held that "where the Board upholds the demeanor credibility finding of a referee the same due process concerns are not implicated." Stanley, 528 N.E.2d at 815. Second, the demeanor credibility determinations that were made by the Board were not the sole determinative factor involved in the Board's decision. Rec...