Tolson v. Department of the Interior ( 2021 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 20-AA-189
KATHERINE M. TOLSON, PETITIONER
V.
DEPARTMENT OF THE INTERIOR, RESPONDENT.
On Petition for Review of an Order of the
District of Columbia Office of Administrative Hearings
(2019-DOES-2010)
(Argued February 17, 2021 Decided May 27, 2021)
Paul J. Sampson for petitioner.
Derek S. Hammond, Assistant United States Attorney, for respondent.
Michael R. Sherwin, Acting United States Attorney, and R. Craig Lawrence and
Jane M. Lyons, Assistant United States Attorneys were on the brief for respondent.
Before GLICKMAN, EASTERLY, and DEAHL, Associate Judges.
EASTERLY, Associate Judge: “The purpose of the District’s unemployment
compensation statute [D.C. Code § 51-101 to 127] is to protect employees against
economic dependency caused by temporary unemployment and to reduce the need
for other welfare programs.” Nwokwu v. Allied Barton Sec. Serv., 171 A.3d 576,
2
582 (D.C. 2017). To that end, unemployment benefits are presumptively available
to all qualifying employees who lose their job. An employer may rebut the
presumption that an employee is entitled to benefits by showing that, based on all
the circumstances surrounding the employee’s departure, the employee assumed the
risk of unemployment and left their job of their own free will. But the fact that the
burden of proof and persuasion is placed on the employer to show the employee left
voluntarily does not alter the proper focus of the voluntariness inquiry, namely, the
state of mind of the employee.
This court has previously recognized, consistent with the unemployment
regulations, that an employee does not leave their job voluntarily if they reasonably
believe they are about to be fired. Here, the employer communicated to the
employee that a “final” decision had been made that she was “unsuitable” for her
job, and the employee believed she was about to be fired. But because of other
procedural requirements, termination was not in fact imminent. The Office of
Administrative Hearings Administrative Law Judge determined that the objective
reality—the fact that termination procedures had not yet commenced—was
dispositive and concluded that the employee resigned from her position of her own
volition. But the employee’s reasonable understanding of her circumstances
3
controls. Because the record evidence indicates that the employee reasonably
believed she was about to be fired, we reverse and remand.
I. Facts and Procedural History
Katherine Tolson began working as an administrative support assistant in
human resources at the U.S. Department of the Interior in 2011. In 2017, the
Department initiated a security “reinvestigation” of Ms. Tolson, with which Ms.
Tolson cooperated. She was informed of the conclusion of the reinvestigation in a
three-page document dated October 1, 2019, with the subject “Notification of
Determination and Referral.” The document detailed both “Adjudicative Findings”
and the “Adjudicative Conclusion.” In the latter section, the document informed
Ms. Tolson that she had been found “unsuitable for Federal service.” The first
sentence of the penultimate paragraph of the document stated that “[a] copy of this
final determination is being provided to your organization[’]s Employee & Labor
Relations Branch who will work with your supervisor to initiate an appropriate
administrative action which includes your removal from Federal service.”
(emphasis added). The second sentence of this paragraph “advised that this
unfavorable suitability determination is final and is not subject to further appeal.”
4
A second “Notification of Determination and Referral” was generated ten
days later. This October 11, 2019, document was a duplicate of the October 1, 2019,
document—it had the same number of pages and paragraphs, with the same page
breaks, and the same content—with two exceptions. At the beginning of the
notification, the security designation for Ms. Tolson’s position as Non-
Sensitive/Moderate Risk was corrected to Non-Sensitive/Low Risk. And at the end
of the notification, the first sentence of the penultimate paragraph was abridged so
that it stated only that the Department’s “Employee & Labor Relations Branch . . .
will work with your supervisor to initiate an appropriate administrative action” and
made no reference to “removal from Federal service.” Nothing in the notification
called attention to either of these alterations.
On October 22, 2019, Ms. Tolson submitted a two-sentence letter to the
Department of the Interior stating that she was resigning and identifying her last day
of work. Thereafter, she applied for unemployment benefits with the Department
of Employment Services. A DOES claims examiner acknowledged Ms. Tolson’s
explanation that “she quit work because her employer was going to terminate her,”
but concluded that her departure was voluntary based on the Department’s
representation that she had “quit her job due to . . . personal reasons and she did not
receive any Notice of Proposed Removal.” The claims examiner then concluded
5
that because Ms. Tolson had not proved that she left “for good cause connected with
the work,” 1 she was not entitled to unemployment benefits.
Ms. Tolson appealed this determination to OAH. Human resources specialist
Elizabeth Poore appeared for the Department of the Interior at the hearing before the
OAH ALJ. The essence of Ms. Poore’s testimony was that at the time Ms. Tolson
resigned, she had not yet been formally terminated by the Department. Although
she had received a letter informing her she was unsuitable for federal service, she
resigned before the Department initiated the discharge process. Ms. Poore
acknowledged that the unsuitability notification, dated October 1, 2019, had
included a reference to “removal from federal service” as a consequence of the
unsuitability determination.
Testifying on her own behalf, Ms. Tolson explained that she had been working
since she was sixteen, and that she had twenty-five years of service in the federal
government, nine of them at the Department of the Interior. She stated that she had
1
Even an employee who leaves their job voluntarily may be eligible for
benefits if they prove they left for “good cause connected with the work,” which is
defined in the regulations to include racial or sexual discrimination or harassment,
the failure to be paid, or unsafe work conditions. See 7 D.C.M.R. §§ 311.1, 311.4,
311.7 (2021).
6
resigned from the Department “[b]ecause I was being removed.” She elaborated that
she believed she was being terminated “[b]ecause of my security clearance”—
apparently a reference to her unsuitability determination2—and she noted that “[a]t
the bottom of the letter it said I couldn’t appeal.” She had spoken to Human
Resources after she received the unsuitability notification, and someone (she could
not remember who, even though she worked in HR) told her to “go ahead and resign”
and keep a “clean record.” 3 She also testified that she believed “they w[ere] going
to have an action process for me,” meaning “[a] removal action.” She explained that
she “didn’t want that on my record. So I went ahead and resigned.”
After Ms. Tolson testified, her counsel recalled Ms. Poore for further
questioning. Ms. Poore then mentioned for the first time that Ms. Tolson had been
issued two unsuitability notifications, the first on October 1, 2019, referencing her
“removal from Federal service,” and the second on October 11, 2019, with the
2
Although the unsuitability notification indicated that a review of Ms.
Tolson’s “security file” prompted the reinvestigation, Ms. Poore clarified that Ms.
Tolson did not have a security clearance.
3
Ms. Poore confirmed that she knew Ms. Tolson “called quite a few people
at the time . . . she got [the unsuitability determination] letter,” but she did not know
who specifically Ms. Tolson spoke to or who would have given such advice.
7
“removal” language deleted.4 Ms. Poore explained the second unsuitability
notification was generated because the first one “made it sound like removal was a
foregone conclusion,” when in fact Ms. Tolson had a separate right to notice of her
proposed termination and the opportunity to challenge that action. In response to
counsel’s questions, Ms. Poore conceded that Ms. Tolson was not advised in the
unsuitability notification of her separate rights to notice and an opportunity to be
heard with respect to an adverse action such as termination. Ms. Poore also
conceded that there was no other position Ms. Tolson could have filled at the
Department with an unsuitability determination, and based on her twenty-five years
working in human resources, she opined that it was “highly unlikely” someone
deemed unsuitable could keep their job.
Ms. Tolson was not recalled to the stand after Ms. Poore testified for the
second time, and the hearing concluded. The ALJ subsequently issued a written
order. In her findings of fact, the ALJ explained that, independent of the suitability
assessment, the “Employer’s discharge process require[d the] Employer to initiate
an administrative action to separate an employee”; the employee had a right to notice
4
The Department of the Interior did not include the October 11 letter in its
proposed exhibits and it was not entered into the administrative record. The letter
was included, however, in Ms. Tolson’s appendix on appeal without objection from
the Department.
8
and an opportunity to be heard before a final decision was made; and the employee
also had a right to appeal to the U.S. Merit Systems Protection Board. The ALJ
further found that “[a]t the time [Ms. Tolson] resigned, [the Department of Interior]
had not initiated an administrative action to remove [her], nor had [the Department]
issued [her] a notice of proposed removal, which is necessary to discharge an
employee from federal service.” The ALJ then concluded the Department had
carried its burden to show that Ms. Tolson “resigned voluntarily, and not in the face
of imminent termination.” The ALJ explained that the Department “had not initiated
an action to remove [her] based upon the suitability determination,” and she did not
credit Ms. Tolson’s testimony that “employees in human resources told her that a
discharge action would be taken.” The ALJ also stated she was “not persuaded by
[Ms. Tolson’s] assertion that her separation was a for[e]gone conclusion because she
had been found unsuitable for continued federal employment,” noting “Ms. Poore
could not state definit[ively] that [Ms. Tolson] would be separated as a result of the
suitability determination.” Because the fact that she “might be separated . . . at some
point in the future . . . is not sufficient cause to resign,” the ALJ concluded, Ms.
Tolson “jumped the gun.”
The ALJ also addressed whether Ms. Tolson had demonstrated that she
resigned for good cause connected with the work such that she would still qualify
9
for unemployment benefits. Although she found that Ms. Tolson “testified credibly
. . . that she resigned because she believed[] that she was going to be fired and that
it would be better for her to resign so that she would have a clean record,” the ALJ
concluded that this “personal reason[]”did not constitute good cause.
II. Legal Framework
“[A]ny individual who [has] left [their] most recent work voluntarily without
good cause connected with the work, as determined under duly prescribed
regulations, shall not be eligible for benefits . . . .” D.C. Code § 51-110(a)(1) (2014
Repl. & 2020 Supp.). Because the unemployment benefits statute is meant to be
interpreted “liberally” so as to “minimiz[e] the economic burden of unemployment,”
Thomas v. District of Columbia Dep’t of Labor, 409 A.2d 164, 170–71 (D.C. 1979),
it is presumed that an individual’s departure from their job is involuntary, unless the
individual admits it was not. 7 D.C.M.R. § 311.3. The employer bears the burden
of production and persuasion to rebut that presumption by “present[ing] evidence
sufficient to support a finding . . . that the leaving was voluntary.” Id.; see also
Green v. District of Columbia Dep’t of Emp. Servs., 499 A.2d 870, 875–76 (D.C.
1985). Voluntariness must be assessed “from the circumstances of a particular
case,” and it must be determined “that the leaving was voluntary in fact, within the
ordinary meaning of the word.” 7 D.C.M.R. § 311.2; see also Wash. Chapter of Am.
10
Inst. of Architects v. District of Columbia Dep’t of Emp. Servs., 594 A.2d 83, 86
(D.C. 1991) (explaining voluntariness must be assessed “by reference to all the
circumstances surrounding the [employee’s] decision to leave”).
Obviously when an employee is fired, their departure from their job is
involuntary. But an involuntary departure may also occur if “the employee’s action
was compelled by the employer rather than based on the employee’s volition,” i.e.,
if the employee was “encourage[d]” or “coerce[d]” to resign. Hockaday v. District
of Columbia Dep’t of Emp. Servs., 443 A.2d 8, 10 (D.C. 1982). If an employee is
told by the employer they must quit or they will be fired, the presumption of
involuntariness will not be rebutted. See Thomas, 409 A.2d at 170 (recognizing that
the “‘quit or be fired’ situation” “operates to the advantage of the employer” and
concluding that “it is not proper to take such a quit, tendered in lieu of termination,
out of its context and regard it as dispositive on the issue of voluntariness for
unemployment benefits determination purposes”); accord Green, 499 A.2d at 876(“This court deems involuntary a resignation in the face of imminent discharge.”).
If, on the other hand, “the employer has offered solid evidence that what was
communicated was merely a warning” to the employee that their performance was
unsatisfactory and that they needed to “shape up or ship out,” the employer may
rebut the presumption of involuntariness, because “a reasonable worker in that
11
position should remain on the job (as the employer anticipates [they] would) and try
to improve [their] performance.” Thomas, 409 A.2d at 173 (internal quotation marks
omitted).
When an employee quits out of a concern they will be fired, the imminence
of potential discharge is a central concern in assessing voluntariness. See Green,
499 A.2d at 876 (“[T]he prospect of termination must be real.” (ellipsis and internal
quotation marks omitted)); Thomas, 409 A.2d at 172–73 (there must be “actual
imminence of a feared discharge”). Thus, the departure of an employee who “giv[es]
up a right to a termination hearing” may be deemed voluntary if “there is clear
evidence that the employer was not really serious, or that the employer’s reason for
seeking the employee’s discharge lacked legitimacy and the employee reasonably
could have stayed on and utilized the hearing tool.” Thomas, 409 A.2d at 173.
In short, voluntariness must be based on an individual’s reasonable perception
of their situation based on facts known to them.
12
III. Analysis
Ms. Tolson challenges the ALJ’s determination that the Department of the
Interior carried its burden to rebut the presumption that her departure was
involuntary. Reviewing this issue de novo, Berkley v. D.C. Transit, Inc., 950 A.2d
749, 760 (D.C. 2008) (the determination that an employee left their job voluntarily
is an “ultimate fact” or a conclusion of law subject to de novo review (internal
quotation marks omitted)), we agree that the ALJ erred.
The Department of the Interior presented evidence that Ms. Tolson had not in
fact been fired, that she had only received notification (twice) that she was unsuitable
for federal employment, and that the Department never initiated the process to
terminate her because she quit first. These are the undisputed objective facts. But
as explained above, in assessing whether the Department rebutted the presumption
that Ms. Tolson left her job involuntarily, we must examine the situation, and
specifically the Department’s communications, from Ms. Tolson’s perspective.
Three weeks before she submitted her letter of resignation, the Department of
the Interior sent Ms. Tolson its first notification informing her that a security
reinvestigation which had been initiated two years earlier was over, factual findings
13
had been made, and a final and unappealable conclusion had been reached that she
was “unsuitable for Federal service.” It further stated that her supervisor would be
informed and “appropriate administrative action which include[d] [her] removal
from Federal service” would be initiated. This first notification does not help the
Department carry its burden to prove that Ms. Tolson left her job voluntarily. This
was not “clear evidence” that Ms. Tolson should not have feared imminent
unemployment. Thomas, 409 A.2d at 173. Rather, it supports a conclusion that Ms.
Tolson thought she was about to be fired (as she testified she did) and reasonably so.
See Wash. Chapter of Am. Inst. of Architects, 594 A.2d at 87 (presumption of
involuntariness unrebutted where “[claimant] was not told improvement would
result in a work relationship satisfactory to her employer” and “[t]here [wa]s no
evidence that the employer offered [claimant] any palatable option other than
resignation”). Indeed, Ms. Poore, the Department’s sole witness, acknowledged that
the wording of the first notification “made it sound like removal was a foregone
conclusion.”
Ms. Poore testified that the second version of the unsuitability notification was
issued ten days later precisely for that reason. But critically, the Department of the
Interior never elicited any testimony from Ms. Tolson about her understanding of
the second notification. Evidence that the Department had sent a second notification
14
was not even introduced until after Ms. Tolson testified. A review of that document
does not reveal an obvious message that termination was not imminent or inevitable.
Preliminarily, the second notification gave no indication that its content was any
different from the first. There was no header, no textual explanation, no bolding or
highlighting to indicate any change had been made; and because it is the same length,
with the same number of paragraphs, with the same topic sentences, it could easily
be mistaken for a duplicate. Even taking note of the alteration, the notification still
contained ominous language that a final, unappealable decision had been made that
Ms. Tolson was unsuitable and that her supervisor would be enlisted “to initiate an
appropriate administrative action.” The second notification does no more work than
the first to show that imminent termination was not a “real” possibility, Green, 499
A.2d at 876 (internal quotation marks omitted), and that Ms. Tolson’s departure was
in fact voluntary. 5
5
The Department argues that the issuance of the second notification
demonstrated that the agency “was not acting with urgency” to initiate the process
to terminate Ms. Tolson. But, as discussed below, there is no evidence that Ms.
Tolson was aware that there was another process, and receipt of a second notification
ten days after the first does not help the Department carry its burden to show that it
was not acting in a coercive manner and that Ms. Tolson’s resignation, only eleven
days after receipt of the second notification, was voluntary.
15
To support its determination that the Department of the Interior carried its
burden, the OAH ALJ looked to the “Employer’s discharge process,” noting that the
Department would have been required to initiate a distinct administrative action to
terminate Ms. Tolson; Ms. Tolson would have had a right to notice and an
opportunity to be heard in that administrative action; and she would have also had a
right to appeal to the U.S. Merit Systems Protection Board. But here again, the
record is deficient, because there is no evidence that Ms. Tolson was aware of the
procedural protections due to her in relation to her termination. The testimony about
this process came exclusively from Ms. Poore.6 Ms. Poore conceded neither of the
notifications of unsuitability informed Ms. Tolson that she had a future right to
notice and an opportunity to be heard with respect to any adverse action related to
her “final” and “unappealable” unsuitability determination. And there was no
evidence that Ms. Tolson was informed of her rights in another manner. Thus, the
6
In its brief to this court, the Department of the Interior asserts that “the
available appeal to a separate federal agency . . . would have drastically extended
the proceedings because the [Merit Systems Protection Board] had a significant
backlog in cases at the time Ms. Tolson resigned”; but there is no evidence in the
record that either Ms. Tolson or Ms. Poore was aware of this circumstance. The
Department also notes that “MSPB has reversed unsuitability determinations.” But
again there is no evidence that Ms. Tolson was aware of that possibility; to the
contrary, she had twice been informed by the Department that her unsuitability
determination was “final.” And Ms. Poore testified that, based on her twenty-five
years of experience, it was highly unlikely that Ms. Tolson could keep her job.
16
ALJ’s determination that Ms. Tolson “jumped the gun” was unfounded where all
Ms. Tolson was told was that the race was over.
Notably, the ALJ credited Ms. Tolson’s testimony that “she resigned because
she believed[] that she was going to be fired and that it would be better for her to
resign so that she would have a clean record.”7 Based on the record evidence, Ms.
Tolson’s belief was reasonable and the ALJ’s finding on this point should have
compelled a determination that the Department of the Interior had failed to carry its
burden of proof to rebut the presumption that Ms. Tolson’s resignation was
involuntary. It is immaterial that the ALJ did not credit Ms. Tolson’s testimony that
she was told by an unidentified individual that she should “go ahead and resign”
instead of being fired. Ms. Tolson did not have the burden of proof or persuasion to
disprove the voluntariness of her departure. 8
7
The court made this credibility determination in the context of assessing
whether Ms. Tolson voluntarily left her job for good cause related to the work, an
analytic step we conclude the ALJ should not have reached in light of the
Department of the Interior’s failure to rebut the presumption of involuntariness.
8
Likewise, it was not Ms. Tolson’s burden to present evidence that her duties
changed after she received the unsuitability notification, as the Department argues.
17
For these reasons, we reverse the ALJ’s order concluding that the Department
of the Interior carried its burden to prove that Ms. Tolson resigned from her job
voluntarily and remand for further proceedings consistent with this opinion.
So ordered.