S.S. Llc v. Review Bd. of The Ind. Dep't of Workforce Dev.

• Decision Date: 25 August 2011
• Docket Number: No. 93A02–1101–EX–56.,93A02–1101–EX–56.
• Citation: 953 N.E.2d 597
• Parties: S.S. LLC, Appellant,v.REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and D.H., Appellees.
• Court: Indiana Appellate Court

953 N.E.2d 597

S.S. LLC, Appellant,

v.REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and D.H., Appellees.

No. 93A02–1101–EX–56.

Court of Appeals of Indiana.

Aug. 25, 2011.

Carol M. Wyatt, Baker & Daniels LLP, Indianapolis, IN, Attorney for Appellant.Gregory F. Zoeller, Attorney General of Indiana, Stephanie Rothenberg, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellees.

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

S.S. LLC (“S.S.”) ¹ appeals the decision of the Review Board of the Indiana Department of Workforce Development (“Review Board”) in favor of D.H. on her claim for unemployment benefits. S.S. raises a single issue for our review, namely, whether the Review Board erred when it concluded that D.H. was not terminated for just cause.

We affirm.

FACTS AND PROCEDURAL HISTORY

D.H. applied for unemployment compensation benefits after leaving her employment with S.S. The Indiana Department of Workforce Development issued an initial determination of benefits on July 23, 2010, concluding that D.H. was eligible for unemployment benefits. S.S. appealed, and the Administrative Law Judge (“ALJ”) who presided over the appeal concluded that S.S. had discharged D.H. for just cause and that D.H. was not entitled to unemployment benefits. D.H. appealed to the Review Board, which made the following findings and conclusions in reversing the ALJ's denial of benefits to D.H.:

The Review Board adopts and incorporates the findings of fact of the Administrative Law Judge except to the extent inconsistent with this decision and as modified herein. The Claimant was present and participated in the hearing by telephone. The Employer also participated in the hearing by telephone and was represented by Perry Combs, Administrator.¹

[Internal footnote 1: The Review Board cannot overturn an Administrative Law Judge's decision based solely on a determination of demeanor credibility. Stanley v. Review Bd., 528 N.E.2d 811, 815 (Ind.Ct.App.1988). Because the parties participated in the hearing by telephone, any explicit or implicit credibility determinations made by the Administrative Law Judge were not based on her observations of the witnesses' demeanor. “[T]

o make an accurate credibility assessment based on demeanor one must be in a position to observe the witnesses as they testify.” Id. No demeanor credibility determinations can be made based on the testimony offered in a telephone hearing. Because the Review Board listened to the hearing recording, the Review Board is in the same position as the Administrative Law Judge to make determinations of credibility regarding the witnesses' testimony. Of the different components of credibility, “only demeanor credibility remains outside the reviewing authority's abilities to assess.” Wampler v. Review Bd., 498 N.E.2d 998, 999 (Ind.Ct.App.1986). Thus, the Review Board is free to reject the Administrative Law Judge's findings of credibility and to make its own determinations as to the credibility of the witnesses at the hearing.]

The Employer is a nursing home. The Claimant worked full-time for the Employer as an activity director. The Claimant began working for the Employer on July 28, 1997. The Claimant became separated from employment on May 24, 2010.

On May 24, 2010, the Employer's Representative and the Assistant Director of Nursing met with the Claimant for the purpose of administering a third written warning. During the meeting, the Claimant's employment terminated.

During the hearing, the Employer's Representative testified that the Claimant became very upset and walked out of the meeting without permission. The Employer has a written policy in its employee handbook that states, “walking off the shift without the permission of your Supervisor will be considered a voluntary resignation.” Emp. Ex. E2. The Claimant signed an acknowledgement form indicating that she received a copy of the employee handbook and understood its contents. Emp. Ex. E3. Because the Claimant had not been given permission to leave, the Employer considered her to have voluntarily resigned her employment. The Employer's Representative also contended that the Employer had no intention of discharging the Claimant during the meeting.

The Claimant, however, testified that she was told she was being discharged for receiving four warnings within a three week time-frame. She further testified that when she received her third written warning during the meeting, the warning stated that she was discharged from employment. See Emp. Ex. 4. The Claimant also testified that the Employer has a policy that states accumulating three written warnings is grounds for discharge, and she had received three written warnings. She left the meeting after the Employer's Representative informed her that she had been relieved of her duties and asked her to leave.

Because the parties presented conflicting testimony regarding the circumstances of the Claimant's separation from employment, the Review Board must make a credibility determination. The Review Board finds the Claimant's testimony more credible. The Review Board also finds that the Claimant correctly testified as to the Employer's stated reason for her discharge.

The Employer has [a] written policy in its employee handbook that states, “[A] total of three (3) written warnings of any kind, in one (1) year is cause for immediate termination.” See Emp. Ex. E4. Per the third written warning, this policy is contained on page 59 of the employee handbook. Emp. Ex. E4. Also, according to the contents of the third written warning, the Claimant received a verbal warning on March 31, 2010; a first written warning on April 15, 2010; and a second written warning on May 3, 2010. Emp. Ex. E4. On May 24, 2010, the Claimant received her third written warning and was discharged from employment. Emp. Ex. E4.

The Employer's Representative presented no evidence regarding why the Claimant was disciplined on any occasion. The Employer's Representative also presented no evidence regarding the enforcement of the Employer's discipline policy.

The Administrative Law Judge found that Claimant walked out of the meeting without permission in violation of the Employer's policy. The Administrative Law Judge determined that the Claimant knowingly violated a reasonable and uniformly enforced Employer rule. The Administrative Law Judge concluded that the Employer discharged the Claimant for just cause....

CONCLUSIONS OF LAW: An Administrative Law Judge cannot change the Employer's stated reason for discharge. Voss v. Review Board, 533 N.E.2d 1020 (Ind.Ct.App.1989). In Voss v. Review Board, ... the employer provided its employee a written discharge document stating that the discharge was for excessive telephone usage. At the Administrative Law Judge hearing, the employer advanced other reasons to discharge the employee. The court held that the Review Board was limited to considering the employer's stated reason for discharge. Accord: Hehr v. Review Bd., 534 N.E.2d 1122 (Ind.Ct.App.1989); Parkinson [ Parkison ] v. James River Corp., 659 N.E.2d 690 (Ind.Ct.App.1996).

In the present case, the Employer presented the Claimant with a third written warning which stated that she was being discharged and informed the Claimant that she was being discharged for accumulating three written warnings in violation of its discipline policy. The warning also listed the Claimant's previous warnings and the Employer's policy that subjects employees to immediate discharge for the accumulation of three written warnings in one year. During the hearing, however, the Employer's Representative changed the Employer[']s stated reason for discharge and testified that the Claimant's employment was terminated for walking out of the May 24, 2010[,] meeting without permission. Just as an Administrative Law Judge cannot change the Employer's stated reason for discharge, neither can the Employer.

When an employee is discharged from employment in Indiana, the employee will not be disqualified from unemployment benefits unless the discharge was for just cause within the meaning of Indiana Code § 22–4–15–1(d). “Discharge for just cause” includes a “knowing violation of a reasonable and uniformly enforced rule of an employer, including a rule regarding attendance.” Ind.Code § 22–4–15–1(d)(2). The burden was on the Employer to prove that it had just cause to discharge the Claimant. Barnett v. Review Bd., 419 N.E.2d 249 (Ind.Ct.App.1981). To find that a discharge was for just cause, the Review Board must first find that: (1) there was a rule; (2) the rule was reasonable; (3) the rule was uniformly enforced; (4) the claimant knew of the rule; and (5) the claimant knowingly violated the rule. Barnett, 419 N.E.2d at 251.

Here, the Employer failed to meet its burden of proof. The Employer presented no evidence during the hearing regarding any of the discipline issued to the Claimant. The Employer also presented no evidence that its discipline policy was reasonable or that it was uniformly enforced. Therefore, it cannot be concluded that the Claimant knowingly violated a reasonable and uniformly enforced rule of the Employer.

Furthermore, even if the Employer had discharged the Claimant for violating its walk-out policy, the Employer failed to prove that the Claimant actually violated the policy. The Employer claims it discharged the Claimant for walking out of the meeting on May 24, 2010[,] without permission. The Employer, however, terminated the Claimant's employment during that meeting. By the time the Claimant had walked out, her employment relationship with the Employer had already been severed. Therefore, the Claimant did not violate the Employer's walk-out policy.

The Employer failed to meet its burden of proof. The Employer discharged the Claimant but not for proven just cause.

ORDER: The decision of [the] Administrative Law Judge is reversed. The Claimant is entitled to unemployment benefits.

...