Ward v. Industrial Com'n, 83SC186

• Citation: 699 P.2d 960
• Decision Date: 22 April 1985
• Docket Number: No. 83SC186,83SC186
• Parties: Edsel H. WARD, Petitioner, v. The INDUSTRIAL COMMISSION of the State of Colorado (Ex-Officio Unemployment Compensation Commission of Colorado) and the Colorado State Department of Highways, Respondents.
• Court: Supreme Court of Colorado

Page 960

699 P.2d 960

Edsel H. WARD, Petitioner, v. The INDUSTRIAL COMMISSION of the State of Colorado

(Ex-Officio Unemployment Compensation Commission

of Colorado) and the Colorado State

Department of Highways, Respondents.

No. 83SC186.

Supreme Court of Colorado,

En Banc.

April 22, 1985.

G.E. Shields, Lakewood, for petitioner.

Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Richard H. Forman, Solicitor Gen., Robert C. Lehnert, Asst. Atty. Gen., Denver, for respondents.

ROVIRA, Justice:

We granted certiorari to review an unpublished decision of the court of appeals, Ward v. Industrial Commission, No. 82CA0528 (Colo.App. March 24, 1983), affirming the Industrial Commission of Colorado's reduced award of unemployment benefits to the claimant, Edsel H. Ward. We reverse and remand the cause for further proceedings consistent with this opinion.

I.

Edsel H. Ward was employed as an auditor for three years in the external audit division of the Colorado State Department of Highways (DOH) until February 28, 1978, when he was dismissed. His job was to audit the performance of outside parties awarded DOH contracts. After his dismissal, Ward filed a claim for unemployment benefits which was opposed by the DOH. On April 6, Ward was notified by a deputy in the Department of Labor and Employment that he would be denied benefits for twelve weeks because of allegedly inflammatory statements he made "defaming the office of the State Auditor, State Personnel Department, and the employees of the State Highway Department." The reduction was based upon Ch. 38, sec. 12, § 8-73-108(6)(b)(VIII), 1976 Colo.Sess.Laws 335, 347.

Ward appealed the deputy's decision. A hearing was then held before a referee for seven and one-half days in early June and the middle of July. In his September 1978 decision, the referee found that the DOH terminated the claimant because he was insubordinate, failed to follow lines of authority, and was generally disruptive and argumentative with management. The referee also considered Ward's argument that he was terminated because he followed a course of revealing questionable actions by the DOH, in short, because he was a "whistle blower." Citing a number of confrontations between the claimant and management more fully discussed below, the referee ruled that Ward was not dismissed because he was a "whistle blower" and that the DOH was justified in dismissing him. Ward was denied six weeks of benefits. Like the deputy, the referee relied upon section 8-73-108(6)(b)(VIII).

Ward appealed to the Commission, which in February 1979 adopted the referee's order after further discussion of the confrontations between the claimant and management. A final order issued on March 28, 1979.

The court of appeals, Ward v. Industrial Commission, 44 Colo.App. 301, 612 P.2d 1164 (1980), reversed because section 8-73-108(6)(b)(VIII), relied upon by the referee and the Commission, had been repealed effective October 1, 1977. See Ch. 96, sec. 5, § 8-73-108(6), 1977 Colo.Sess.Laws 482, 485. It then remanded the cause to the Commission.

On remand, in its findings of fact and order dated December 2, 1980, the Commission adopted the findings of fact set forth in the referee's decision of September 1978 and the Commission's order of February 1979 as true and correct. It found that the claimant was responsible for his separation and denied him twelve weeks of benefits pursuant to section 8-73-108(5) (reduced awards) in effect at that time. See § 8-73-108(5), 3 C.R.S. (1973 & 1980 Supp.). Ward petitioned for review. The Commission issued a final order in April 1982 affirming its prior order.

Ward again appealed seeking reversal on primarily two grounds. First, he asserted that the referee and the Commission had denied him procedural due process. See U.S. Const. amend. XIV; Colo.Const.art. II, § 25. Second, he claimed that his constitutional rights to free speech had been denied because the reduction in benefits resulted from confrontations with his employer in which he had allegedly exercised those rights. See U.S. Const. amend. I and XIV; Colo. Const. art. II, § 10. In his reply brief, Ward also contended that the DOH's opposition to his unemployment claim violated the policy of Colorado's "whistle-blower" statute, §§ 24-50.5-101 to -107, 10 C.R.S. (1982), which protects state employees from disciplinary measures or harassment by their supervisors for the disclosure of information on actions of state agencies that are not in the public interest. In Ward v. Industrial Commission, No. 82CA0528 (Colo.App. March 24, 1983), the court of appeals affirmed the Commission's order, finding no denial of procedural due process and rejecting as without merit Ward's claim that the order constitutes an unconstitutional prior restraint on his freedom of speech. The opinion did not address the applicability of the "whistle-blower" statute.

On Ward's petition for certiorari, we granted review on two issues: (1) whether reduction of unemployment compensation to a purported whistle blower is consistent with the statutory purpose of compensating those unemployed through no fault of their own if whistle blowing is statutorily and constitutionally protected conduct, and (2) whether the claimant was denied procedural due process. We address each in turn.

II.

Before proceeding with Ward's free speech claim, we first review those instances of conflict or confrontation between the claimant and the DOH which the Commission relied upon to reduce benefits. In its February 1979 order, which was later adopted in toto on December 2, 1980, the Commission summarized the following six separate instances of confrontation:

1. An Equal Employment Opportunity report had been submitted by the Colorado State Highway Department to the Federal Highway Administration which contained a typographical error. The claimant referred the error to his immediate supervisor, to which the supervisor responded that the error was of no significance and should be disregarded. Not being satisfied with that response, the claimant took it upon himself to refer the error to a higher authority. Such action caused the employer to expend time and effort unnecessarily to finally dispense with the problems caused by the claimant's action.

2. An audit had been made on the Denver Coalition Venture which disclosed some discrepancies that the claimant felt were to be construed as fraud; his concerns were expressed to his supervisors and subsequently a meeting was held regarding the matter. The meeting was attended by the claimant, his supervisors and members of the Attorney General's staff. The claimant recommended that the matter be turned over to the Federal Bureau of Investigation for investigation. The recommendation was overruled by the Attorney General and it was understood that the matter would be turned over to the FHA [Federal Highway Administration] to be investigated by its own investigation section. In spite of the fact that the management had decided the process to be followed for investigation of the suspected discrepancies, the claimant chose to refer the matter to the FBI. This action also ultimately resulted in the department's expending unnecessary time and energy to resolve the problem caused by the claimant.

3. The claimant used his own personal automobile to conduct state business which was contrary to relative departmental rules which he admitted he knew were in existence. This in itself was a direct flaunt to his supervisor. His request for reimbursement for mileage which was obviously not reimbursable under the rules subsequently caused time consuming discussions.

4. The arguments and discussions that ensued over [the] supervisor's exercising his prerogative in determining that the claimant was not entitled to administrative [snow] leave on a stormy day when many state employees failed to report to work, also proved to be costly and time consuming.

5. The claimant's action or inaction in the procuring of a respirator necessary to work safely as deemed by the management is not the expression of cooperation on the claimant's part towards work rules instituted by the management. The Industrial Commission recognizes that it is the responsibility of the employer to furnish its employees a safe place to work and admits the management did not show the enthusiasm that it should have shown by not putting the proper safety equipment in the employee's hands as soon as possible. It also must express its feelings about the claimant's lack of initiative in seeking out the safety person so as to be provided his respirator and the accompanying safety lecture relative to the usage and the possible repercussions for failure to use the equipment.

6. The personnel procedures that the claimant felt were improperly implemented do have procedures for appeal whether they are just or unjust is not at issue here. At issue is the fact that the person who applies for employment must realize that any employment to which he aspires has work rules that must be adhered to as a condition of employment. The discussions, allegations and contentions as to the improprieties in the implementation of personnel rules went beyond the normal course and led to damage to supervision.

The Commission concluded that all of these actions by the claimant expressed disdain for established work rules and sources of authority and were costly to the state's taxpayers. It also found that the claimant's attitude and allegations brought about poor employer-employee relationships that could ultimately destroy the DOH's effectiveness. The Commission thus found that the responsibility for the separation was placed squarely on the claimant and disqualified him from the receipt of benefits for a period of twelve weeks pursuant to section 8-73-108(5). See § 8-73-108(5), 3 C.R.S. (1973 & 1980 Supp.).

A.

Although we recognize that the General Assembly has conferred discretion on the Commission in...