Engel Manufacturing Company, Inc. v. Review Board of the Indiana Department of Workforce Development and D.R. (mem. dec.) ( 2017 )

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D),
Jan 30 2017, 9:36 am
this Memorandum Decision shall not be
regarded as precedent or cited before any CLERK
Indiana Supreme Court
court except for the purpose of establishing Court of Appeals
and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Peter M. Yarbro Curtis T. Hill, Jr.
Fred R Hains Attorney General of Indiana
Hains Law Firm, LLP Aaron T. Craft
South Bend, Indiana Elizabeth M. Littlejohn
Deputy Attorneys General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Engel Manufacturing Company, January 30, 2017
Inc., Court of Appeals Case No.
Appellant-Respondent, 93A02-1607-EX-1596
Appeal from the Review Board of
v. the Indiana Department of
Workforce Development
Review Board of the Indiana Case No. 16-R-0724
Department of Workforce
Development and D.R.,
Appellee-Claimant.
Mathias, Judge.
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[1] Engel Manufacturing Company, Inc. (“Engel”) appeals the order of the Review
Board of the Indiana Department of Workforce Development (“the Review
Board”) determining that one of Engel’s employees, D.R., voluntarily left his
employment for good cause in connection with the work and was therefore
eligible for unemployment benefits. Engel presents one issue on appeal, which
we restate as whether the Review Board’s decision was supported by sufficient
evidence.
[2] We affirm.
Facts and Procedural History
[3] The facts as found by the administrative law judge (“ALJ”), and adopted by the
Review Board, show that D.R. began to working as a lathe operator for Engel
in January of 2008. Engel made parts for the aerospace industry, and D.R.’s
duties included preparing parts to ship to Engel’s aerospace customers.
[4] D.R.’s work environment at Engel was stressful, not only because of the
demands of the high-precision parts that Engel produced, but also because of
the demeanor of Engel’s owner and operator, Stephen Engel (“Mr. Engel”),
who, by his own account, frequently used profanity in his conversations.
[5] On one particular occasion, which occurred in November of 2014, D.R. was
working on his machine when Mr. Engel approached him and began to yell at
him for being “narcissistic” and told him that he was “a real, big fat part of the
world, and the rest of the world is very skinny.” Tr. p. 14. This shocked D.R.,
who decided not to return to work the following day. Engel had a strict policy
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that any employee who did not show up for work by 9:00 a.m. without calling
in was considered to have quit. When Mr. Engel learned that D.R. had not
come to work, he called D.R. to apologize and convinced him to return to
work.
[6] For the next couple of weeks, D.R.’s work environment improved as Mr. Engel
restrained from berating him. However, from this point in November 2014 to
February 2016, D.R. witnessed Mr. Engel verbally abuse and curse at other
Engel employees. On February 1, 2016, D.R. informed Mr. Engel that he could
not work in the same building as Mr. Engel. Mr. Engel took this as D.R.’s
resignation and accepted it. Soon thereafter, however, Mr. Engel told D.R. that
he needed him as an employee because no other employee could complete the
job that D.R. was then working on. D.R. decided to stay on with Engel, but
only for three days per week.
[7] Just a few days later, on February 4, 2016, Mr. Engel became angry with D.R.
because D.R. had not completed a job that he wanted shipped by the end of the
day. Mr. Engel was very angry and “wildly yell[ed]” at D.R. in front of the
other employees. Tr. p. 10. D.R. did not respond verbally, but did work late
that day in order to finish the job as Mr. Engel had requested.
[8] Four days later, Mr. Engel approached D.R. at work and asked him to review a
blueprint and quickly demanded an answer to a question he had about the
blueprint. D.R. was unfamiliar with the blueprint and told Mr. Engel that he
did not know how to immediately answer his question. D.R. took the blueprint
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to the inspection department, a move which he believed prudent, as an
incorrect answer to Mr. Engel’s question could have cost the company
thousands of dollars. D.R. asked three other employees if they knew the answer
to the question Mr. Engel had asked. None of them did. Mr. Engel then entered
the room, snatched the blueprint out of D.R.’s hands, and stated that he would
have another employee look at the blueprint. Shortly thereafter, Mr. Engel
returned to D.R. to ridicule him for not being able to answer his question about
the blueprint, telling him that “this is easy,” and asking him, “you can’t do
this?” and “what’s the matter with you?” Tr. p. 13. D.R. explained that such
encounters with Mr. Engel were “not isolated incidents.” Id.
[9] Humiliated, D.R. did not return to work the following day, which, as noted
above, Engel took as quitting the job. This time, however, Mr. Engel did not
call D.R. to ask him to return to work. D.R. then applied for unemployment
benefits.
[10] A claims deputy for the Department of Workforce Development determined
that D.R. had voluntarily left his employment for good cause and was therefore
entitled to receive unemployment benefits. Engel appealed this determination,
and an ALJ conducted a telephonic hearing on the matter on April 19, 2016.
On April 26, 2016, the ALJ issued her decision affirming the claims deputy’s
determination that D.R. had voluntarily left his employment for good cause.
Engel appealed this decision to the Review Board, and on June 9, 2016, the
Review Board affirmed the ALJ’s decision and adopted the ALJ’s findings of
fact and conclusions of law. Engel now appeals.
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The Indiana Unemployment Compensation Act
[11] Indiana Code article 22-4, known as the Indiana Unemployment Compensation
Act (“the Act”), was enacted to “provide for payment of benefits to persons
unemployed through no fault of their own.” P.K.E. v. Review Bd. of Ind. Dep’t of
Workforce Dev., 942 N.E.2d 125, 130 (Ind. Ct. App. 2011), trans. denied.
Pursuant to the Act, an individual who meets the eligibility requirements of
Indiana Code chapter 22-4-14 and is not disqualified by the exceptions in
chapter 22-4-15 is eligible for benefits. Id. “An otherwise eligible individual can
be disqualified from receiving benefits if he voluntarily left his employment
without good cause[.]” Ind. State Univ. v. LaFief, 888 N.E.2d 184, 186 (Ind.
2008) (citing Ind. Code § 22-4-15-1). A claimant’s entitlement to unemployment
benefits is determined based upon the information that is available without
regard to a burden of proof. P&P Home Servs., LLC v. Review Bd. of Ind. Dep’t of
Workforce Dev., 53 N.E.3d 1232, 1234 (Ind. Ct. App. 2016) (citing Ind. Code §
22-4-1-2(c)).
Standard of Review
[12] The Review Board reviews the ALJ’s decision for errors of fact, law, or
procedure based on the record before the ALJ. P.K.E. v. Review Bd. of Ind. Dep’t
of Workforce Dev., 942 N.E.2d 125, 129-30 (Ind. Ct. App. 2011), trans. denied
(citing Ind. Code § 22-4-17-5(e)). The Review Board “may on [its] own motion
affirm, modify, set aside, remand, or reverse the findings, conclusions, or orders
of an administrative law judge[.]” I.C. § 22-4-17-5(e). As the ultimate finder of
fact, the Review Board has wide discretion and freedom to decide any and all
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issues and may act independently on the evidence before it. P.K.E., 942 N.E.2d
129.
[13] Here, the Review Board affirmed the ALJ’s findings and conclusions in whole.
Decisions made by the Review Board are subject to review for legal error, but
questions of fact determined by the Review Board are, absent limited
exceptions, conclusive and binding. K.S. v. Review Bd. of Ind. Dep’t of Workforce
Dev., 33 N.E.3d 1195, 1197 (Ind. Ct. App. 2015) (citing Ind. Code § 22-4-17-
12(a)).
[14] As explained by our supreme court in Chrysler Group., LLC v. Review Board of the
Indiana Department of Workforce Development:
Under Indiana’s Unemployment Compensation Act, “[a]ny
decision of the review Board shall be conclusive and binding as
to all questions of fact.” Ind. Code § 22-4-17-12(a) (2007). The
Review Board’s conclusions of law may be challenged as to “the
sufficiency of the facts found to sustain the decision and the
sufficiency of the evidence to sustain the findings of facts.” Ind.
Code § 22-4-17-12(f). Consistent with appellate review of other
administrative adjudications, we categorize the Review Board’s
findings three ways: (1) basic, underlying facts; (2) “ultimate
facts” derived as inferences or conclusions from basic, underlying
facts; (3) and conclusions of law.
We review the Review Board’s findings of basic facts under a
substantial evidence standard, and we neither reweigh the
evidence nor assess its credibility. We consider only the evidence
most favorable to the Review Board’s findings and, absent
limited exceptions, treat those findings as conclusive and binding.
Ultimate facts—typically mixed questions of fact and law—are
reviewed to ensure the Review Board has drawn a reasonable
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inference in light of its findings on the basic, underlying facts.
Where the matter lies within the particular expertise of the
administrative agency, we afford the finding a greater level of
deference. Where the matter does not lie within the particular
expertise of the agency, however, the reviewing court is more
likely to exercise its own judgment. Regardless, the court
examines the logic of the inference drawn and imposes any rules
of law that may drive the result. The Review Board’s conclusion
must be reversed if the underlying facts are not supported by
substantial evidence or the logic of the inference is faulty, even
where the agency acts within its expertise, or if the agency
proceeds under an incorrect view of the law.
We are not bound by the Review Board’s conclusions of law,
though [a]n interpretation of a statute by an administrative
agency charged with the duty of enforcing the statute is entitled
to great weight, unless this interpretation would be inconsistent
with the statute itself.
960 N.E.2d 118, 122-23 (Ind. 2012) (some citations and internal quotations
omitted).
Discussion and Decision
[15] In the present case, Engel makes no claim that D.R. has not satisfied the
eligibility requirements of chapter 22-4-14, nor does D.R. deny that he
voluntarily left his employment. Thus, the only question before us is whether
D.R. “voluntarily left the employment without good cause in connection with
the work[.]” I.C. § 22-4-15-1(a). “Whether an employee leaves his employment
without good cause in connection with the work is a question of fact to be
determined by the Review Board.” Y.G. v. Review Bd. of Ind. Dep’t of Workforce
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Dev., 936 N.E.2d 312, 314 (Ind. Ct. App. 2010) (citing Indianapolis Osteopathic
Hosp. Inc. v. Jones, 669 N.E.2d 431, 433 (Ind. Ct. App.1996)).
[16] Voluntary unemployment is not generally compensable under the Act because a
declared purpose of the Act is to provide benefits for persons unemployed
through no fault of their own. Kentucky Truck Sales, Inc. v. Review Bd. of Ind. Dep’t
of Workforce Dev., 725 N.E.2d 523, 526 (Ind. Ct. App. 2000). Thus the
requirement that an employee who voluntarily leaves employment must do so
for “good cause in connection with the work” if he wishes to receive
unemployment benefits.
[17] This “good cause” requirement means that the employee’s reason for
terminating his employment must be job related and objective in character, and
not consist of purely subjective, personal reasons. Id. “The Act will provide
compensation only when demands placed upon an employee are so
unreasonable or unfair that ‘a reasonably prudent person would be impelled to
leave.’” Id. (quoting Marozsan v. Review Bd. of Ind. Employment Sec. Div., 429
N.E.2d 986, 990 (Ind. Ct. App. 1982)). Thus, in order to determine if good
cause existed, the Review Board must determine first whether the individual’s
reasons for abandoning employment would have compelled a reasonably
prudent person under the same circumstances to quit, and then whether the
individual’s reasons for leaving were objectively related to the employment.
Brown v. Ind. Dep’t of Workforce Dev., 919 N.E.2d 1147, 1151 (Ind. Ct. App.
2009).
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[18] Where an employee asserts that a reprimand or criticism represents good cause
for leaving employment, we consider all of the circumstances surrounding the
reprimand. Kentucky Truck Sales, 725 N.E.2d at 526. “If there are other factors
involved, such as provocation brought on by unjust reprimands or other
evidentiary factors that would have ‘strong influential effect upon the mind of
the employee contributing to or causing him to voluntarily quit his
employment,’” such contributing factors can, under the proper circumstances,
be considered as good cause. Id. (quoting Marozsan, 429 N.E.2d at 990).
[19] Here, Engel claims that the Review Board unreasonably concluded that D.R.
quit for good cause. Given the highly deferential standard of review we apply to
such matters, we cannot agree. The Review Board adopted the ALJ’s findings,
which well document Mr. Engel’s frequent outbursts toward D.R., which
involved him yelling and cursing1 at D.R. for little reason. Without repeating all
of the facts as set forth above, we note that Mr. Engel called D.R. a narcissist,
and stated that he lived in a “real, big fat part of the world, and the rest of the
world is very skinny.” Tr. p. 14. He later “wildly” yelled at D.R. in front of
other employees. He also ridiculed D.R. in front of other employees when D.R.
was unable to read a blueprint, a task that several other employees were also
unable to do. Also, as D.R. explained, such encounters with Mr. Engel were
1
Engel takes issue with the Review Board noting Mr. Engel’s use of profanity. Engel notes that D.R.
testified that he did not remember Mr. Engel cursing at him. However, Mr. Engel himself admitted at the
ALJ hearing that he frequently used profanity. From this, the ALJ and the Review Board could reasonably
conclude that D.R.’s outbursts included profanity.
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not isolated incidents, and D.R. observed Mr. Engel berate other employees.
Notably, Mr. Engel did not directly contradict any of D.R.’s testimony before
the ALJ, other than to claim that he had not yelled. Given these facts and
circumstances, we are in no position on appeal to second-guess the Review
Board’s factual determination that D.R.’s reason for quitting — Mr. Engel’s
continued verbal abuse — would have compelled a reasonably prudent person
to quit under the same circumstances.
[20] Engel’s citation to Richey v. Review Board, 480 N.E.2d 968, 970 (Ind. Ct. App.
1985), is unavailing. In Richey, the Review Board made a factual finding that
the employee quit for subjective, personal reasons and therefore did not quit for
good cause. Id. at 971. On appeal, this court merely held that sufficient
evidence supported the Board’s finding. Id. 971-72. Contrariwise, here the
Review Board found that D.R. did have good cause to quit, and, as noted
above, there was sufficient evidence to support this finding.
[21] Furthermore, Richey is factually distinguishable from the present case. In Richey,
merely one incident had occurred months before the employee quit in which the
employee and her supervisor had “an exchange of words.” Id. at 971.
Thereafter, the employee quietly “harbor[ed] sensitivity” over this incident and
subjectively felt “uncomfortable.” Id. at 971-72. Accordingly, the Richey court
held that, “Feeling uncomfortable in an employment situation is a specific
enough finding to equate Richey's reasons for leaving as personal and subjective
in nature; i.e., her reason was not for ‘good cause.’” Id.
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[22] In contrast, here, D.R. was subjected to repeated verbal abuse by Mr. Engel,
and he did not sit idly and harbor his feelings for months. Instead, he directly
confronted Mr. Engel and even went so far as to quit, only to be asked to return
to work by Mr. Engel himself. When Mr. Engel’s coarse behavior continued,
D.R. quit.
[23] Engel also cites Kentucky Truck Sales, Inc. v. Review Board, 725 N.E.2d 523 (Ind.
Ct. App. 2000), but we find this case too to be readily distinguishable. In
Kentucky Truck Sales, Kiser, the employee, had a history of missing work and
was warned that further attendance problems would subject him to discipline.
Despite this warning, Kiser missed work on one day and reported an hour late
the next day. When Kiser arrived at work an hour late, the foreman had been
instructed not to assign him any work, and the shop manager yelled at him,
accused him of lying, and referred to him as a “son of a bitch.” Id. at 525. Kiser
told the foreman that he “didn’t have to listen to this s---,” and clocked out,
falsely indicating on his time card that he had gone home sick. Id. (alterations in
original). Kiser then did not return to work that week or the next and did not
contact the employer. Kentucky Truck Sales then sent Kiser a letter notifying
him that it had assumed that Kiser had voluntarily quit and to contact the
employer if this were not the case. Kiser made no further contact with his
employer other than to return his uniforms several weeks later. Kiser then
applied for, and was denied, unemployment benefits. The ALJ reversed this
initial decision and determined that Kiser had quit for good cause, and the
Review Board affirmed.
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[24] On appeal, this court noted that Kiser had not filed an appellee’s brief and
noted that the employer therefore needed only establish prima facie error in the
Review Board’s decision. Id. at 525-26. Applying this lesser standard, we held
that although Kiser’s reprimand may have been “indelicately presented,” in
light of Kiser’s attendance record, it was not an unjustified reprimand that
constituted “such provocation as to impel a reasonably prudent person to leave
his employment.” Id. at 526.
[25] Here, there is no suggestion that D.R. had a history of poor attendance. Indeed,
when he did not show up to work after the November 2014 incident, it was Mr.
Engel who called D.R. and requested that he return to work. Moreover, he was
subjected to repeated verbal berating and humiliation by Mr. Engel in front of
other employees. Accordingly, the holding of Kentucky Truck Sales does not
convince us that we must reverse the factual determination of the Review Board
that D.R. quit for good cause in connection with his work.
[26] The same is true for Engel’s citation to Geckler v. Review Board, 244 Ind. 473, 193
N.E.2d 357 (1963), a case in which the employee quit because of one instance of
being indelicately reprimanded. Again, here, D.R. was subject to repeated
verbal harassment and humiliation. Unlike in Geckler, the Review Board did not
find that D.R. was “nervous, temperamental, hypersensitive and subjective.”
244 Ind. at 477, 193 N.E.2d at 358.
[27] Finally, Engel argues that D.R. had no medical evidence to support his claims
of stress-related physical ailments, citing Y.G. v. Review Board, 936 N.E.2d 312
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(Ind. Ct. App. 2010). At issue in Y.G. was whether the Review Board had erred
in determining that the employee did not qualify for benefits under Indiana
Code section 22-4-15-1(c)(2), which provides that an employee who voluntarily
quits is not disqualified for benefits if the unemployment is “the result of
medically substantiated physical disability” and the employee “is involuntarily
unemployed after having made reasonable efforts to maintain the employment
relationship . . . .” Here, however, the Review Board did not conclude that
D.R. was entitled to benefits based a medically-substantiated physical disability.
It instead concluded that he was entitled to benefits under subsection 22-4-15-
1(a) because he voluntarily left the employment with “good cause in connection
with the work[.]”
Conclusion
[28] The Review Board’s factual determination that D.R. voluntarily left his
employment with good cause in connection with the work is supported by
sufficient evidence in the record. Accordingly, we affirm the Review Board’s
conclusion that D.R. is entitled to unemployment benefits.
[29] Affirmed.
Baker, J., and Pyle, J., concur.
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