Sherri A. Cornejo v. Review Board of the Indiana Department of Workforce Development and Houchens Food Group, Inc. ( 2013 )

Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
MICHAEL D. HEAD GREGORY F. ZOELLER
Geiger, Conrad, & Head, LLP Attorney General of Indiana
Indianapolis, Indiana
ELIZABETH ROGERS
Deputy Attorney General
Indianapolis, Indiana
Mar 14 2013, 9:19 am
IN THE
COURT OF APPEALS OF INDIANA
SHERRI A. CORNEJO, )
)
Appellant, )
)
vs. )
) No. 93A02-1210-EX-786
REVIEW BOARD OF THE )
INDIANA DEPARTMENT OF )
WORKFORCE DEVELOPMENT and )
HOUCHENS FOOD GROUP, INC., )
)
Appellee. )
APPEAL FROM THE REVIEW BOARD of the
INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT
Case No. 12-R-02903
March 14, 2013
MEMORANDUM DECISION – NOT FOR PUBLICATION
MATHIAS, Judge
Sherri Cornejo 1 (“Cornejo”) appeals the Review Board of the Department of
Workforce Development’s (“the Board”) decision that she was ineligible for
unemployment insurance benefits because she was terminated from her employment with
Houchens Food Group, Inc. for just cause. Cornejo argues that the Board’s determination
that Cornejo was terminated for just cause was unreasonable.
We affirm.
Facts and Procedural History
The facts most favorable to the Board’s determination are as follows. Cornejo was
employed as a clerk at a retail grocery store owned by Houchens Food Group, Inc.
(“Houchens”). Tr. p. 10. Cornejo’s job responsibilities included checking in delivered
merchandise brought to the store by vendors and entering the invoices from the vendor
into the computer. The store was facing problems with loss of inventory, which is
commonly referred to in the industry as “shrink loss[;]” therefore, in late January or early
February 2012, new store manager Shane Hamilton (“Hamilton”) informed employees
that they needed to physically check the merchandise on the delivery truck to help reduce
the shrink loss.
On February 7, 2012 and again on February 20-21, 2012, multiple vendors
brought merchandise into the store, and Cornejo signed the vendors’ tickets but did not
physically check the merchandise to confirm the correct amount had been delivered. As
a result, on March 6, 2012, Houchens terminated Cornejo’s employment.
1
As our supreme court noted in J.M. v. Review Bd. of Indiana Dept. of Workforce Dev., we will keep
the parties confidential only if they make “an affirmative request . . . for confidentiality.” 975 N.E.2d
1283, 1285 n.1 (Ind. 2012).
2
On June 20, 2012, a Department of Workforce Development claims deputy
determined that Cornejo was not discharged for just cause, because the employer failed to
establish that Cornejo’s actions were a deliberate disregard of the employer’s best interest
and failed to establish that Cornejo was aware her job was in jeopardy. Therefore, the
claims deputy determined that Cornejo was eligible for unemployment insurance
benefits. Houchens appealed the judgment on July 3, 2012 and a hearing was held before
an Administrative Law Judge (“ALJ”) on July 31, 2012 on the matter.
Shortly thereafter, on August 1, 2012, the ALJ issued a decision reversing the
claims deputy’s decision that Cornejo was eligible for unemployment benefits. The
Board affirmed the ALJ’s decision and adopted the ALJ’s findings of fact and
conclusions of law on September 4, 2012. Appellant’s App. p. 2. The ALJ’s decision,
which was adopted by the Board, provided:
Findings of Fact: The employer is a retail grocery business. The claimant
worked as a DSD clerk. The claimant began employment on June 2, 2008,
when the claimant’s previous employer sold the business to the current
employer. The claimant separated from employment on March 6, 2012.
The employer has a policy that defines unacceptable conduct as the failure
to comply with company procedures. One procedure requires employees to
make sure that merchandise brought into the store matches the store’s
documentation. The employer had a large amount of shrink loss because of
employees not verifying merchandise brought into the store. Shane
Hamilton, Store Manager, went to the store in late January and early
February to determine what caused the shrink loss. Several factors led to
the shrink loss, including the failure of employees to check merchandise
brought into the store by vendors. Shane Hamilton reviewed videotape of
the claimant. The videotape showed that the claimant failed to verify that
the merchandise brought into the store by the vendors matched the
merchandise listed on the invoice slips. The claimant signed the invoice
slips without individually checking the merchandise. The claimant
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received a prior written warning on May 24, 2010 for failing to check
merchandise brought into the store by vendors.
Other employees also failed to check merchandise brought into the store on
the trucks. The employer did not discharge these employees. The previous
managers told the employees that they did not need to check the
merchandise on the trucks. Shane Hamilton informed the employees that
they needed to check the merchandise on the trucks. The employees
complied with his instructions.
The Administrative Law Judge finds that the claimant knew that she needed
to check all of the merchandise brought into the store, unlike the other
employees, and that she failed to do so.
Conclusions of Law: The employer’s policy is not a rule because it is not
capable of uniform enforcement. The policy is a guideline. The employer
discharged the claimant for failing to comply with the guideline regarding
employees verifying merchandise brought into the store.
In matters involving discharge, an employer bears the burden of
establishing a prima facie showing of just cause for termination. Owen
County v. Indiana Dep’t of Workforce Dev., 861 N.E.2d 1282, 1291 (Ind.
Ct. App. 2007). Under Ind. Code § 22-4-15-1(d)(9), the definition of
discharge for just cause includes “any breach of duty in connection with
work which is reasonably owed an employer by an employee.” It is well
established that an employee owes certain reasonably understood duties to
his or her employer. McHugh v. Review Bd. of Ind. Dep’t of Workforce
Dev., 842 N.E.2d 436, 441 (Ind. Ct. App. 2006). The nature of an
understood duty owed to the employer must be such that a reasonable
employee of that employer would understand that the conduct in question
was a violation of a duty owed to the employer and that he or she would be
subject to discharge for engaging in such activity or behavior. Id. See also
646 IAC 5-8-6(a).
The claimant was a DSD clerk. The claimant was responsible for verifying
that the merchandise brought into the store matched the merchandise listed
on the invoice slip. A reasonable employee would understand that failure
to perform this task would constitute a violation of the duty owed to the
employer and that she would be subject to discharge for failing to perform
the task.
Even though other employees also failed to perform this task, these
employees can be distinguished from the claimant. Previous supervisors
4
specifically told the other employees that they did not need to check the
trucks. Alternatively, the employer previously disciplined the claimant for
failing to perform this task.
The claimant’s failure to check the merchandise brought into the store is
indicative of an intentional or substantial disregard for the employer’s
interests. “A breach of duty reasonably owed to an employer includes
conduct, which establishes that the claimant demonstrated an intentional or
substantial disregard for the employer’s interest.” 646 IAC 5-8-6(b)(4)
Therefore, the Administrative Law Judge concludes that the claimant
breached a duty owed to the employer. The employer discharged the
claimant for just cause as defined by Ind. Code § 22-4-15-1.
Appellant’s App. pp. 7-8. Cornejo now appeals.
Discussion and Decision
Cornejo appeals the Board’s denial of her unemployment benefits, which is
governed by the Indiana Unemployment Compensation Act (“the Act”). Our standard of
review on appeals of the Board’s decision is threefold: “(1) findings of basic fact are
reviewed for substantial evidence; (2) findings of mixed questions of law and fact—
ultimate facts—are reviewed for reasonableness; and (3) legal propositions are reviewed
for correctness.” Recker v. Review Bd. of Ind. Dep’t of Workforce Dev., 958 N.E.2d
1136, 1139 (Ind. 2011) (citing McClain v. Review Bd. of Ind. Dep’t of Workforce Dev.,
693 N.E.2d 1314, 1318 (Ind.1998)). “Ultimate facts are facts that ‘involve an inference
or deduction based on the findings of basic fact.’” Id. (quoting McClain, 693 N.E.2d at
1317). We do not “reweigh the evidence nor assess witness credibility, and we consider
only the evidence most favorable to the Review Board’s findings.” Quakenbush v.
Review Bd. of Ind. Dep’t of Workforce Dev., 891 N.E.2d 1051, 1053 (Ind. Ct. App.
5
2008). We will reverse the Board’s decision “only if there is no substantial evidence to
support the Board’s findings.” Id.Under the Act, an individual is disqualified for unemployment benefits if he or she
is discharged for “just cause.” Ind. Code § 22-4-15-1(a). Indiana Code section 22-4-15-
1(d) “delineates nine non-exclusive scenarios” that may be considered “‘[d]ischarge for
just cause[.]’” Seabrook Dieckmann & Naville, Inc. v. Review Bd. of Indiana Dept. of
Workforce Dev., 973 N.E.2d 647, 650 (Ind. Ct. App. 2012). An employer bears the
initial burden of establishing that an employee was terminated for just cause. Doughty v.
Review Bd. of Dep't of Workforce Dev., 784 N.E.2d 524, 526 (Ind.Ct.App.2003). Once
the employer meets this burden, the burden shifts to the employee to introduce competent
evidence to rebut the employer’s case. Id.Here, the Board concluded that Cornejo was discharged for just cause under
Indiana Code section 22-4-15-1(d)(9),2 which provides that discharge for just cause may
include “any breach of duty in connection with work which is reasonably owed an
employer by an employee.” The “breach of duty” ground for a “just cause discharge does
not explicitly condition a claimant’s ineligibility on a requirement that the breach of duty
must have been knowing, willful, or intentional.” Seabrook Dieckmann & Naville, Inc.,
973 N.E.2d at 650 (citing Recker, 958 N.E.2d at 1140). This ground “for just [cause]
discharge is an amorphous one, without clearly ascertainable limits or definition, and
2
We are not confined to the statutory ground for discharge set forth by the Board; however, since we
ultimately conclude that this ground supports the Board’s conclusion, we need not address whether other
grounds for discharge are applicable. J.M. v. Review Bd. of Indiana Dept. of Workforce Dev., 975
N.E.2d 1283, 1289 (Ind. 2012).
6
with few rules governing its utilization.” Id. at 650-51 (internal quotation marks and
citations omitted).
We have held that an employee owes certain reasonably understood duties to his
or her employer. McHugh v. Review Bd. of Ind. Dep’t of Workforce Dev., 842 N.E.2d
436, 441 (Ind. Ct. App. 2006). “The nature of an understood duty owed to the employer
must be such that a reasonable employee of that employer would understand that the
conduct in question was a violation of a duty owed to the employer and that she would be
subject to discharge for engaging in such activity or behavior.” Id.I. Basic Facts
Cornejo argues there was insufficient evidence to support the Board’s finding that
Houchens “has a policy that defines unacceptable conduct as the failure to comply with
company procedures” and that one such procedure “requires employees to make sure that
merchandise brought into the store matches the store’s documentation.” Appellant’s
App. p. 7. However, Human Resource Assistant George McFarland (“McFarland”)
testified that the policy was in the employee handbook and that one of Houchen’s
procedures is “to make sure that all merchandise is accounted for when it is brought into
the store.”3 Tr. p. 7. Moreover, Cornejo herself testified that she understood that she was
3
Cornejo asserts that the policy should have been provided in writing in order for it to be considered by
the Board. Stanrail Corp. v. Review Bd. of Dept. of Workforce Dev., 735 N.E.2d 1197, 1205 (Ind. Ct.
App. 2000) (“An employer’s asserted work rule must be reduced to writing and introduced into evidence
to enable this court to fairly and reasonably review the determination that an employee was discharged for
“just cause” for the knowing violation of a rule.”). However, in Stanrail we considered a “knowing
violation of a reasonable and uniformly enforced rule of an employer.” Id. (citing I.C. § 22-4-15-1(d)(2)).
Whereas, here, the Board noted that Houchen’s policy “is not a rule” but rather the “policy is a
guideline[,]” and Cornejo was discharged for a work-related breach of duty, addressed by Indiana Code
section 22-4-15-1(d)(9). Appellant’s App. p. 8. Thus, because Houchens did not allege that Cornejo
violated a reasonable and uniformly enforced rule, there was no written rule for Houchens to introduce.
7
to physically check merchandise brought into the store. Tr. p. 10. Thus, evidence
supports the Board’s finding that Houchens had a procedure or guideline that required
employees to physically check merchandise was supported by sufficient evidence.
Cornejo also argues that the Board erred by adopting the ALJ’s finding that she
was previously warned about the conduct for which she was later terminated.
Specifically, Cornejo argues that the warning was in regard to her failure to record
invoices, not the failure to physically check in delivered merchandise. However,
McFarland testified that Cornejo previously received a written warning in May 24, 2010
for failure to check “merchandise that was brought into the store[,]” which was the same
infraction for which she was discharged. Tr. p. 5. McFarland further testified that the
May 24, 2010 written warning was the result of the accounting department discovering
that $7,000 of invoices had been billed to the company but the merchandise had never
been checked. Id. Moreover, despite Cornejo’s assertions that she should not have
received the written warning because the “invoices were solely my manager’s
responsibility[,]” she signed the written warning indicating that the conduct at issue had
occurred. Tr. p. 11, 13. Cornejo’s argument is little more than an invitation to reweigh
the evidence or judge the credibility of the witnesses, which we will not do on appeal.
Quakenbush, 891 N.E.2d at 1053.
II. Ultimate Facts
Because we have found that the Board’s findings of fact were supported by
substantial evidence, we must now examine whether the Board’s findings of fact
reasonably support its conclusions. The ALJ concluded that Cornejo “was responsible
8
for verifying that the merchandise brought into the store matched the merchandise listed
on the invoice slip” and that “[a] reasonable employee would understand that failure to
perform this task would constitute a violation of the duty owed to the employer and that
she would be subject to discharge for failing to perform the task.” Tr. p. 10.
Cornejo first challenges the Board’s conclusion that a reasonable employee would
understand that failing to physically check the merchandise was a violation of a duty
owed to Houchens. The Indiana Administrative Code defines a breach of duty
reasonably owed to an employer, in relevant part, as “conduct which establishes that the
claimant: . . . (3) chose a course of action that the claimant knew, or should have known,
would negatively impact the employer's financial interests; (4) demonstrated an
intentional or substantial disregard for the employer's interests . . . .” 646 Ind. Admin.
Code 5–8–6(b).
Cornejo’s testimony, as follows, which was given during the hearing on July 31,
2012, clearly displayed that Cornejo knew and understood that she was supposed to
physically check the merchandise, but she did not always do so.
[ALJ]: Did you understand that you were to physically check merchandise
brought into the store by vendors?
[Cornejo]: Yes, ma’am.
[ALJ]: Did you check the merchandise that was brought in by the vendors?
[Cornejo]: Not all of it . . .
Tr. p. 10. Moreover, Hamilton reviewed video of the store and observed that on February
7, 2012, three different vendors brought merchandise into the store, and Cornejo signed
9
off on the merchandise but never physically checked the merchandise. On February 20-
21, 2012, additional vendors brought merchandise into the store, but Cornejo again failed
to physically check all the merchandise. Tr. p. 19. Cornejo also did not deny that she
failed to check the merchandise on these occasions. Tr. p. 14. Thus, based on the record
and the Board’s findings, it was reasonable for the Board to conclude that Cornejo had
the duty to physically check the merchandise and that Cornejo chose a course of action
that she knew would negatively impact the employer’s financial interest and that also
demonstrated an intentional or substantial disregard for Houchens’ interest.
Next, Cornejo challenges whether a reasonable employee would expect to be
terminated for engaging in said conduct. Cornejo argues that because other Houchens’
employees were not terminated for failing to check the merchandise, Cornejo could not
expect to be terminated. However, the Board clearly distinguished Cornejo’s actions
from the other employees by noting that the other employees did not initially know they
needed to check the merchandise but once they knew, they complied; whereas, Cornejo
knew to check the merchandise and failed to do so. Appellant’s App. p. 8.
On appeal “we consider only the evidence most favorable to the Board’s
findings.” Quakenbush, 891 N.E.2d at 1053. Here, the record reflects that Hamilton
informed employees at the end of January 2012 that they needed to count merchandise.4
Hamilton testified that Cornejo was the only employee he observed “not doing her job.”
Tr. p. 18. Moreover, because Cornejo had received a prior warning for failing to check
4
Cornejo argues that she was never informed of Houchen’s procedure in this regard; however, evidence
in the record points to the contrary, including Cornejo’s own testimony that she understood she was to
physically check merchandise brought into the stores by vendors. Tr. p. 7, 10, and 17. This is an
invitation to reweigh the evidence, which we will not do on appeal. Quakenbush, 891 N.E.2d at 1053.
10
the merchandise, see supra Section I, the Board’s determination that a reasonable
employee would expect to be terminated for engaging in the conduct was reasonable.5
Conclusion
We hold that the Board’s findings of fact were supported by substantial evidence
and that from these findings the Board could have reasonably determined that Cornejo
was discharged for just cause for breaching a duty owed to Houchens.
Affirmed.
KIRSCH, J., and CRONE, J., concur.
5
Cornejo also asserts that there was a “substantial delay” in terminating Cornejo’s employment and that
the substantial delay indicated that the misconduct did not rise to the level constituting just cause for
termination. However, Cornejo has waived this argument on appeal because she cites no authority for
this proposition. Ind. App. Rule 46(A)(8)(a); In re Estate of Carnes, 866 N.E.2d 260, 265 (Ind. Ct. App.
2007). Waiver notwithstanding, we note that Indiana Code chapter 22-4-15 does not provide a time
limitation for termination.
11