Advanced Correctional Healthcare, Inc. v. Review Board of the Indiana Department of Workforce Development , 2015 Ind. App. LEXIS 127 ( 2015 )

Mar 03 2015, 9:49 am
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Gregory Guevara Gregory F. Zoeller
Philip R. Zimmerly Attorney General of Indiana
Bose McKinney & Evans LLP
Kyle Hunter
Indianapolis, Indiana
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Advanced Correctional March 3, 2015
Healthcare, Inc., Court of Appeals Case No.
93A02-1408-EX-538
Appellant-Petitioner,
Appeal from the Review Board of the
v. Department of Workforce
Development.
Steven F. Bier, Chairperson.
Review Board of the Indiana George H. Baker, Member.
Department of Workforce Larry A. Dailey, Member.
Cause No. 14-R-1078
Development, et al.,
Appellee-Respondent
Baker, Judge.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 1 of 14
[1] Advanced Correctional Healthcare (ACH)1 appeals the determination of the
Review Board of the Indiana Department of Workforce Development (the
Board) that M.W., a former employee of ACH, is entitled to unemployment
insurance because he was not fired for just cause. Evidence was presented that
eleven people from two different employers and five separate work locations
had complained about inappropriate sexual comments made by M.W. Despite
this evidence, and despite the fact that M.W. did not deny four of the
complained-of conversations, the Board found that M.W. had not violated
ACH’s sexual harassment policy and was not fired for just cause. Finding a
lack of substantial evidence supporting this judgment, we reverse.
Facts
[2] ACH provides healthcare services to county jail facilities throughout Central
Indiana. ACH has a Sexual Harassment Policy that is set forth in both the
Employee Handbook and in a separate corporate policy document. As
summarized by the Administrative Law Judge, the Sexual Harassment Policy
provides as follows:
1
As of January 13, 2015, Administrative Rule 9 has been amended. In the past, parties to unemployment
compensation proceedings were required to make an affirmative request to remain confidential in court
records. See Recker v. Review Bd. of Ind. Dep’t of Workforce Dev., 958 N.E.2d 1136, 1138 n.4 (Ind. 2011). The
newly amended Rule 9 has a default position of confidentiality such that parties need no longer make an
affirmative request in that regard. Ind. Administrative Rule 9(G)(6). The corollary, however, is that the
party or person affected by the release of the protected personal information may waive the right to exclude
the court record from public access. Id. Here, ACH used its own name in its appellate pleadings and did not
file any of its briefs or appendix on green paper. Consequently, we find that it has waived the right to have its
name excluded from the court record. Because M.W. is not taking part personally in this appeal, we decline
to find that he has waived confidentiality and will refer to him by initials.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 2 of 14
that certain conduct is expressly prohibited including lewd, off-color,
and sexually oriented comments or jokes, and foul or obscene
language, and sexually oriented or explicit remarks including written
or oral references to sexual conduct, gossip regarding one’s sex life,
body, sexual activities, deficiencies or prowess, and questions about
one’s sex life or experiences, and repeated requests for dates, and the
policy further provides that offenders are subject to remedial actions
including termination. The purpose of the policy is to prohibit sexual
harassment.
Appellant’s App. p. 9. The Sexual Harassment Policy is a zero tolerance
policy—employees who are found to have violated it are subject to immediate
disciplinary action, including termination of employment. Employee Relations
Manager S.N., who is directly responsible for enforcing the Sexual Harassment
Policy, testified that the policy is necessary to ensure ACH’s compliance with
state and federal law and to protect employees of ACH and employees and
inmates of the jails served by ACH from unwelcome sexual behavior. S.N. also
testified that ACH uniformly enforces the Sexual Harassment Policy.
[3] M.W. began working for ACH as a nurse in June 2012. In October 2013, he
was promoted to Interim Regional Nurse Manager, which was a supervisory
position. As part of his employment, M.W. signed a form indicating that he
had received and was aware of the Sexual Harassment Policy.
[4] On January 28, 2014, ACH received a complaint from Captain Jason
Sloderbeck of the Hamilton County Jail. Captain Sloderbeck had received
reports from five of his employees regarding inappropriate sexual comments
that had been made by M.W. Following this complaint, ACH opened a full-
scale investigation into M.W.’s conduct, interviewing ACH employees and
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 3 of 14
preparing a written record of those interviews. During the investigation, ACH
uncovered at least seven additional instances in which M.W. had made
inappropriate comments to ACH employees. In all, ACH received reports of
unwelcome sexual comments by M.W. from twelve different people who
worked for two different employers and worked at five different jail locations.
On January 31, 2014, ACH terminated M.W.’s employment, having concluded
that he had repeatedly violated the Sexual Harassment Policy.
[5] M.W. filed a claim for unemployment insurance. The initial determination of
the Department of Workforce Development was that he had been fired for just
cause and was not eligible for unemployment insurance. M.W. appealed that
determination. On May 1, 2014, an Administrative Law Judge (ALJ) held a
telephonic hearing at which testimony was taken and evidence was submitted.
S.N. testified for ACH, presenting evidence of M.W.’s violations of the Sexual
Harassment Policy. Specifically, the following evidence was presented:
1. Nurse J.R. reported that M.W. showed up at her home uninvited. He
later sent her “a couple naked pictures.” Appellant’s App. p. 34.
2. Officer K.W. had a conversation with M.W. in which M.W. commented
about the “size and look” of another officer’s breasts. Id. at 35.
3. The officer about whose breasts M.W. had commented reported that on
one occasion, she mentioned that she was craving chicken fajitas for
lunch. M.W. laughed and, when another officer asked why he was
laughing, said he thought she had said she was “craving some cock.” Id.
at 36.
4. The same officer reported that on another occasion, M.W. came up
behind her and whispered, “when did you get such a nice ass?” Id. That
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 4 of 14
officer said that there have been numerous other occasions “that have
made me feel uncomfortable and as a result I have avoided him at all
cost so as not to have to be put in that type of situation again.” Id.
5. Nurse T.W. was giving medicine to an inmate who was talking with her,
when M.W. commented to the inmate that T.W. “was his woman so he
[the inmate] needed to stop talking to” T.W. Id. at 37. She reports that
she has not felt comfortable around M.W. since this incident.
6. O.J. reported that she worked in the kitchen and that when M.W. was
working, he would come and talk with her. M.W. asked her if she was
married, and she said she was. He said that it did not matter. On
another occasion, he asked her to go out for drinks, and she said no. He
then said “No white man could ever handle [O.J.] the way that he
could.” Id. at 38.
7. K.H. said that M.W. told her that “if [her] husband isn’t cuttin’ it for
[her], he could show [her] a few things.” Id. at 40.
8. K.M. and J.M. both reported that he repeatedly questioned them about
their personal lives and marriages in a way that made them
uncomfortable. J.M. stated that M.W. is “completely convinced that I
will one day sleep with him and that I will cheat on my husband with
him.” Id.
9. S.W. reported that M.W. was inappropriate and made personal
comments that he should not have made. She stated that “he comes
across [as] more flirtatious than your boss” and that he made her feel
uncomfortable. Id. at 41.
10. J.H. reported that an inmate told her that M.W. had asked the inmate to
perform oral sex.
11. M.N. stated that she told M.W. that she needed time off of work to get a
mammogram and his response was that she did not need to make a
doctor’s appointment because he could have done the mammogram for
her. M.N. felt very uncomfortable.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 5 of 14
12. S.L. reported that M.W. frequently used very foul, profane,
unprofessional language.
During the telephonic hearing, M.W. denied some of these allegations. He did
not, however, deny allegations (2), (5), (7), or (9).2
[6] On May 21, 2014, the ALJ issued a decision finding that ACH had not
terminated M.W.’s employment with just cause. In pertinent part, the ALJ
found as follows:
. . . In connection with SW the employer alleges the claimant was
flirtatious and made SW uncomfortable. The claimant and SW flirted
with each other and the evidence is not persuasive SW was offended or
uncomfortable, and the claimant’s conduct involving SW did not
constitute sexual harassment. . . .
. . . The employer alleges that the claimant made a comment in
reference to TW that TW was his “woman.” An inmate made a
statement that he would take TW as his woman, and the claimant and
the inmate and TW were joking, and the claimant made a joking
comment that TW was already his woman, and TW laughed and was
not offended, and the claimant’s conduct did not constitute sexual
harassment. . . . The employer references an incident of a male, KW,
and the claimant having conversation regarding K’s breasts, and such
comments were not made in the presence of K and the evidence is not
persuasive that such comments constituted sexual harassment. The
employer references an alleged comment by the claimant to KH to the
effect that the claimant could take care of KH in a sexual manner if her
husband could not and could show her a few things, and the claimant
did not make the alleged comments. The claimant and KH did speak
2
The Board emphasizes the hearsay nature of the complainants’ allegations. We note, however, that M.W.
did not object to the admission of any of the allegations into evidence, and that his own testimony
corroborates several of the allegations. And in any event, the admission of hearsay evidence in an
administrative hearing is proper. See, e.g., McHugh v. Review Bd. of the Ind. Dep’t of Workforce Dev., 842 N.E.2d
436, 441 (Ind. Ct. App. 2006).
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 6 of 14
of her husband not having a job and the claimant indicated that if KH
wanted he could pay her bills and live with her, and the evidence is not
persuasive KH was offended and the evidence is not persuasive that
such comments constituted sexual harassment.
Appellant’s App. p. 8. The ALJ believed M.W.’s denials of the remaining
allegations. Without explanation, the ALJ found that ACH employee S.N.’s
testimony about the Sexual Harassment Policy “is to an extent lacking in
credibility” and “is not persuasive the policy has been uniformly enforced.” Id.
at 9.
[7] ACH appealed the ALJ’s decision to the full Board. The Board affirmed with a
two-to-one vote. The dissenting chairperson of the Board wrote as follows:
At the hearing before the [ALJ], the Claimant denied that he made
some of the statements the Employer alleged that he made but also
testified that he did not recall making some of the statements . . . . The
Employer provided evidence of more than ten different instances of
harassment. I do not find the Claimant’s testimony credible that he
did not harass any of the complainants. I would reverse the [ALJ] to
conclude that the Employer discharged the Claimant for just cause.
Id. at 2-3. ACH now appeals.
Discussion and Decision
[8] In Indiana, an employee is not eligible for unemployment benefits if he was
discharged for good cause. Ind. Code § 22-4-15-1. Just cause for discharge
includes the knowing violation of a reasonable and uniformly enforced rule of
an employer. I.C. § 22-4-15-1(d).
[9] ACH challenges the Board’s decision as being contrary to law. In considering
such a challenge, we must review the sufficiency of the facts found to sustain
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 7 of 14
the decision and the sufficiency of the evidence to sustain the findings of fact.
I.C. § 22-4-17-12(f). We apply a three-part standard of review: “(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).
[10] Initially, we must emphasize that ACH is not required to prove that M.W.
committed actionable sexual harassment such that the victims would be entitled
to damages stemming from a civil lawsuit. See I.C. § 22-4-15-1(d) (providing
that employee is discharged for just cause if he knowingly violated employer’s
policy); Haegert v. Univ. of Evansville, 977 N.E.2d 924, 937-38 (Ind. 2012)
(finding that employee’s claim based on his discharge for harassment was
governed by the terms of his employment contract rather than Title VII of the
Civil Rights Act or the Indiana Civil Rights Act). Instead, ACH must merely
show that M.W. knowingly violated the Sexual Harassment Policy, which is
reasonable and uniformly enforced.
[11] It is undisputed that M.W. knew of the Sexual Harassment Policy, inasmuch as
he signed a document stating that he had received and was aware of it.
Appellant’s App. p. 32. It is also undisputed that the Sexual Harassment Policy
is reasonable. The only things that remain to be determined, therefore, are
whether M.W.’s conduct violated the policy and whether the policy is
uniformly enforced.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 8 of 14
[12] Regarding M.W.’s conduct, he did not deny and/or did not recall four of the
allegations. Those allegations were as follows:
 Officer K.W. had a conversation with M.W. in which M.W. commented
about the “size and look” of another officer’s breasts. Appellant’s App.
p. 35. 3
 Nurse T.W. was giving medicine to an inmate who was talking with her,
when M.W. commented to the inmate that T.W. “was his woman so he
[the inmate] needed to stop talking to” T.W. Id. at 37. She reports that
she has not felt comfortable around M.W. since this incident.
 K.H. said that M.W. told her that “if [her] husband isn’t cuttin’ it for
[her], he could show me a few things.” Id. at 40.
 S.W. reported that M.W. was inappropriate and made personal
comments that he should not have made. She stated that “he comes
across [as] more flirtatious than your boss” and that he made her feel
uncomfortable. Id. at 41.
[13] With respect to the discussion about the officer’s breasts, the Sexual
Harassment Policy explicitly prohibits “[l]ewd, off-color, sexually oriented
comments or jokes” and “[s]exually oriented or explicit remarks, including
written or oral references to sexual conduct, gossip regarding one’s sex life,
body, sexual activities, deficiencies, or prowess.” Id. at 30-31. The ALJ found
that this comment did not violate the policy because the officer whose body
parts were being discussed was not present. That fact is irrelevant. The plain
3
The Board pulls a single statement made by M.W. out of the transcript to argue that he denied that this
conversation took place. When the entirety of his testimony is reviewed, however, it is apparent that he did
not deny the conversation. Instead, he merely stated that he did not recall it. Tr. p. 35-36.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 9 of 14
language of the policy prohibits explicit discussion about another person’s
private body parts, regardless of the presence of that person during the
conversation. Id. Indeed, it is difficult to imagine a behavior more easily
identifiable as sexual harassment than explicit comments about a colleague’s
body parts—whether or not she is present.
[14] With respect to M.W. referring to another nurse as “his woman” when
speaking to an inmate, we refer to the same provisions of the policy discussed in
the previous paragraph. Moreover, we note that the policy prohibits conduct
that has the “effect of unreasonably creating an intimidating, hostile, or
offensive working environment.” Id. at 30. T.W. reported that following this
incident, she has not felt comfortable around M.W., necessarily meaning that
his comments created an intimidating, hostile, or offensive working
environment for T.W. Although the ALJ found that M.W. was merely
“joking” and that T.W. was not offended, the only evidence supporting this
conclusion is M.W.’s own self-serving interpretation of T.W.’s behavior
following the conversation. That does not constitute substantial evidence
underlying this conclusion because the policy explicitly prohibits lewd jokes
without reference to the reaction of the listener. We can only find that an
explicit comment made to an inmate that a co-worker is the “woman” of the
speaker violates the Sexual Harassment Policy.
[15] With respect to M.W.’s comments that if a co-worker’s husband wasn’t “cuttin’
it for [her], he could show [her] a few things,” we note, again, that the Sexual
Harassment Policy explicitly prohibits “oral references to sexual conduct” and
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 10 of 14
gossip regarding “one’s sex life, body, sexual activities, deficiencies, or
prowess.” Appellant’s App. p. 31, 40. During the telephonic hearing, M.W.
said that in making this statement, he “jokingly said I can take care of you if he
don’t, if he don’t wanna do it.” Tr. p. 36. He clarified that he meant, “[l]ike,
you know, paying the bills, living with her, whatever she wanted.” Id. K.H.
stated that his comments made her “stop and be like, what? . . . I mean, how do
you respond to that? I was just like, well, alright, whatever.” Appellant’s App.
p. 40. The ALJ found that the comments did not violate the policy and that
K.H. was not offended. We cannot agree. It is readily apparent that in making
this comment, M.W. intended to refer to K.H.’s sex life and his own prowess.
Indeed, he admitted that he intended to mean “living with her” as one of the
references of his comment. K.H. stated that she was taken aback by the
comment and did not know how to respond, and there is no evidence in the
record to dispute that aside from M.W.’s own self-serving statement that she
was not offended. This behavior clearly violates the Sexual Harassment Policy.
[16] Finally, M.W. admitted that he flirted with S.W., merely stating that it was
mutual. It is undisputed that at the time of the flirtation, he was S.W.’s
supervisor. Moreover, S.W. stated that his comments were inappropriate and
made her feel uncomfortable. The Sexual Harassment Policy prohibits
verbal or physical conduct of a sexual or otherwise offensive nature,
especially where . . . [s]ubmission to such conduct is made either
explicitly or implicitly a term or condition of employment . . . and/or
[s]uch conduct has the purpose or effect of unreasonably creating an
intimidating, hostile, or offensive working environment.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 11 of 14
Id. at 30. Inasmuch as M.W. was S.W.’s supervisor at the time he was making
inappropriate comments, S.W. could reasonably have inferred that her
submission to his comments was a condition of her employment with ACH.
Furthermore, his comments unquestionably created an intimidating, hostile, or
offensive working environment within the meaning of the policy. The ALJ
found that the flirtation was mutual, that S.W. was not offended or
uncomfortable, and the conduct did not violate the Sexual Harassment Policy.
The only evidence supporting this conclusion is M.W.’s own self-serving
interpretation of S.W.’s behavior, which does not constitute substantial
evidence. A supervisor flirting with a subordinate and making inappropriate
and overly personal comments to the subordinate unquestionably violates the
Sexual Harassment Policy.
[17] As noted above, M.W. did not deny that these four interactions occurred.
There is virtually no evidence in the record supporting the ALJ’s conclusion
that these four instances did not constitute violations of ACH’s Sexual
Harassment Policy. We also note our reluctance to accede to the ALJ’s
decision to discredit and disbelieve each and every one of the eleven
complainants. We also note our surprise, in this day and age, that a judicial
officer would find that if the speaker is merely joking, or if the person about
whom the speaker is making lewd comments is not present, that such actions
do not violate a sexual harassment policy. All of that said, the four instances
that M.W. did not deny clearly violate both the spirit and letter of ACH’s
sexual harassment policy.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 12 of 14
[18] As to whether the policy was uniformly applied, the uncontroverted evidence in
the record establishes that it was. Specifically, ACH employee S.N., the human
resources officer personally responsible for enforcing the policy, testified that
the policy is uniformly enforced. Tr. p. 16. She also testified that the
complaints regarding M.W. were the first complaints ACH has received
regarding violations of the Sexual Harassment Policy in the previous five years.
Id. The ALJ concluded, without explanation, that S.N.’s testimony lacked
credibility. Nothing in the record supports that conclusion. The ALJ also
concluded that her testimony was not persuasive that the policy had been
uniformly enforced. Nothing in the record supports that conclusion either.
[19] Given the undisputed evidence in the record, the only reasonable conclusion to
draw is that the Sexual Harassment Policy has, in fact, been uniformly enforced
by ACH. Nothing in the record remotely tends to show that the Sexual
Harassment Policy was applied arbitrarily to M.W. The mere fact that ACH
has received no other complaints of violations of the policy in the previous five
years does not constitute evidence undermining the uniformity of the policy’s
enforcement.
[20] We note, again, that ACH was not required to prove that M.W. committed
actionable sexual harassment, and we have not made any findings in that
regard in this opinion. As aptly noted by ACH, it should not have to wait until
M.W.’s actions became so egregious that they were legally actionable to
terminate his employment. Instead, ACH was merely required to show that
M.W. was terminated for just cause; specifically, that he was terminated for
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 13 of 14
violating the Sexual Harassment Policy. We find that the Board erred by
concluding that M.W. was not fired for just cause.
[21] The judgment of the Board is reversed.
Vaidik, C.J., and Riley, J., concur.
Court of Appeals of Indiana | Opinion 93A02-1408-EX-538 | March 3, 2015 Page 14 of 14