Commonwealth of Kentucky, Kentucky Unemployment Insurance Commission v. Elizabeth Miles ( 2020 )

IMPORTANT NOTICE
NOT TO BE PUBLISHED OPINION
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PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C),
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RENDE
NC
2018-SC-000455-DG
COMMONWEALTH OF KENTUCKY, APPELLANT
KENTUCKY UNEMPLOYMENT INSURANCE
COMMISSION
ON REVIEW FROM COURT OF APPEALS
V. CASE NO. 2017-CA-001289-MR
LETCHER CIRCUIT COURT NO. 13-CI-00298
ELIZABETH MILES AND APPELLEES
DJ LETCHER MANOR
MEMORANDUM OPINION OF THE COURT
REVERSING
Appellant, Kentucky Unemployment Insurance Commission (“KUIC”),
appeals the Court of Appeals’ affirmance of the Letcher Circuit Court’s reversal
of a denial of unemployment benefits to the Appellee, Elizabeth Miles. As a
circuit court is an appellate body for unemployment insurance cases, we hold
that the Letcher Circuit Court improperly made findings of fact in its order
reversing the decision of KUIC. Unlike the trial court, however, KUIC is entitled
by statute to issue new findings of fact when reviewing the decision of a
hearing officer. KUIC properly issued new findings of fact and, based on those
findings, denied benefits to Miles. An appellate court may only overturn that
decision if no substantial evidence exists in the record supporting the decision
of KUIC. Neither the Letcher Circuit Court nor the Court of Appeals reviewed
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this case under the proper standard. After thorough review of the applicable
facts and case law, we find that substantial evidence did exist to support the
denial of benefits. Thus, we reverse the Court of Appeals and reinstate KUIC’s
original denial of benefits.
I. Factual and Procedural History.
Upon reversal of the referee’s decision, KUIC issued the following
independent findings of fact:
FINDINGS OF FACT
The captioned employer is a nursing home located in Whitesburg,
Letcher County, Kentucky. Claimant began working for the
employer on June 27, 2007; she was assigned full time as a
certified nurse's aide and paid $10.75 per hour. Her assigned
shift ended at 2:30 p.m.; however, she often stayed past shift end.
She was frequently allowed to arrive late and/or leave early in
order to attend to the needs of her children.
Published rules of the employer, known to Claimant, provide that
workers are expected to maintain an acceptable standard of
conduct; displaying unsatisfactory conduct subjects a worker to
disciplinary action. Behaviors specifically prohibited are:
intimidation or harassment of another employee, whether by
threat, abusive language, physical action or other means; and
insubordination. The open-door provisions provide for prompt
review of any employee question or complaint; employees are to
follow the appropriate chain of command in discussing their
concern, unless it involves someone in their chain of command.
During her tenure with the employer, Claimant received and
acknowledged twenty-seven disciplinary actions (written
warnings) for various workplace infractions (unrelated to her
eventual separation from the employment). There is no indication
that she grieved any warning or discipline previously
administered.
Claimant spoke to Ms. Cook and was referred to Carla Bishnoi
(administrator). Ms. Bishnoi ascertained that Claimant was not a
listed interviewee and gave her permission to leave the facility. As
Claimant was preparing to leave, Ms. Adams informed Ms. Bishnoi
of Claimant’s earlier behavior.
On February 14, 2013, an investigator from the Office of
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Inspector General ([“]OIG[”]) was at the facility to interview
specific first shift employees on a list provided that morning.
Interviews were not completed by 2:20 p.m.; therefore, Diana
Sexton (director of nursing) issued an instruction for all first shift
employees to remain at the facility until it was determined if they
would be interviewed. Kathy Adams (supervisor) relayed the
instruction. Claimant immediately advised that she was not going
to stay as she had to pick up her children from school. She
became loud and argumentative, questioning whether the
employer could legally hold her at the facility past shift end. At
the time of her outburst, she was in the doorway of a resident’s
room, and within earshot of residents, family members, and co­
workers. Ms. Adams advised Claimant that she would need to
speak to Rose Cook (nurse aide coordinator).
Ms. Bishnoi observed Claimant preparing to exit out the back
door and approached to discuss the reported behavior. Ms.
Bishnoi advised Claimant that her behavior was inappropriate,
unacceptable and should not be repeated, and turned to go
back to her office. Claimant followed and became
argumentative, advising that if a supervisor was disrespectful
to her, she had the right to be disrespectful in return. Ms.
Bishnoi advised Claimant to leave and pick up her children.
Claimant persisted, putting her hand in Ms. Bishnoi’s face and
backing her down the hallway toward her office. Ms. Bishnoi
felt threatened and intimidated by Claimant’s behavior,
reiterating that Claimant should leave and the matter would
be discussed later. Ms. Adams observed the final minutes of
this interaction. Claimant left the facility at approximately
2:35 p.m.
On February 18, 2013, Claimant obtained contact information
for Provider Management & Development Corporation (“PMD”)
which she thought to be the corporate office for the employer.
She called PMD in an attempt to file a complaint against Ms.
Bishnoi. PMD could not process a complaint, as it is merely a
consulting group and not an owner or regulator of the facility.
PMD advised Ms. Bishnoi of the call.
Shortly after her attempt to file a complaint with PMD,
Claimant was instructed three times to report to Ms. Bishnoi’s
office to discuss the incident of February 14, 2013; the
instruction was relayed to Claimant by Ms. Adams. The first
two instructions were refused outright; the third instruction
contained an additional caveat: report or leave the facility
without a job. Claimant reported, bringing Lee Pack (licensed
practical nurse) as a witness. As Ms. Pack was responsible
for patient care, she was not allowed to remain for the meeting
but directed to return to her duties.
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Ms. Bishnoi advised that the meeting was to conclude the
discussion of the behavior displayed on February 14, 2013.
Claimant advised that Ms. Bishnoi’s version of events was
erroneous and she was a “liar”; she reiterated that if a
supervisor was disrespectful to her, she would be
disrespectful in return. Ms. Bishnoi advised that Claimant did
not have that prerogative, and a disciplinary action (written
warning) would be presented for Claimant’s signature the next
day after the appropriate discipline was decided upon. As it
was 3:30 p.m., Ms. Bishnoi advised Claimant to leave and pick
up her children, unaware that Claimant had made
arrangements that day for her mother to pick the children up
from school.
After Claimant left, Ms. Bishnoi decided that a suspension
would be issued as appropriate discipline and prepared a
disciplinary action (written warning) to that effect. The
warning was written on the same form as had been used for all
previous warnings received and executed by Claimant;
provides that signature indicates only that the warning has
been read and received by the worker; and contains space for
the worker to provide comments and/or indicate their
disagreement with the employer’s statement.
On February 19, 2013, Claimant advised her supervisor that
she had thought it over and would not sign any disciplinary
action presented by Ms. Bishnoi. Her announced decision was
relayed to Ms. Bishnoi. Claimant was called to Ms. Bishnoi’s
office and discharged for refusing to obey instructions and
displaying inappropriate behavior in the workplace.
Miles appealed KUIC’s decision disqualifying her from receiving benefits
to the Letcher Circuit Court. The circuit court made new findings of fact and
reversed KUIC’s denial of benefits. KUIC appealed this decision to the Court of
Appeals which affirmed the circuit court’s decision. We granted KUIC’s petition
for discretionary review.
II. Standard of Review.
Our review of a KUIC decision is “two-fold. We first determine whether
[KUIC’s] findings of fact are supported by substantial evidence, and then
whether it correctly applied the law to the facts.” Kentucky Unemployment Ins.
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Comm’n v. Hamilton, 364 S.W.3d 450, 452-53 (Ky. 2011) (citing Thompson v.
Kentucky Unemployment Ins. Comm’n, 85 S.W.3d 621, 624 (Ky. App. 2002)).
“Substantial evidence has been defined as evidence which has sufficient
probative value to induce conviction in the minds of reasonable people.”
Kentucky Unemployment Ins. Comm’n v. Cecil, 381 S.W.3d 238, 245 (Ky. 2012)
(citation omitted). If substantial evidence exists, KUIC’s factual findings “will
be upheld even though there exists evidence to the contrary in the record.”
Kentucky Unemployment Ins. Comm’n v. Landmark Cmty. Newspapers of
Kentucky, Inc., 91 S.W.3d 575, 578 (Ky. 2002) (citation omitted).
HI. Analysis.
The issue underlying this entire case is whether proper procedure was
followed by KUIC and each reviewing court. KUIC “is not bound by the
referee’s decision [and] it reviews the matter de novo[.]” W. Kentucky Coca-Cola
Bottling Co., Inc. v. Runyon, 410 S.W.3d 113, 116 (Ky. 2013). Once a referee
has made a decision, KUIC “may on its own motion affirm, modify, or set aside
any decision of a referee on the basis of the evidence previously submitted in
such case, or direct the taking of additional evidencef.]” KRS1 341.430(1).
KUIC must issue a written decision, “which shall affirm the decision of the
referee or present a separate finding of facts, decision, and reasons.” 787 KAR2
1:110(2)(4)(a)(l). “[WJhile the Commission generally does not hear evidence
directly from witnesses, it has the authority to enter independent findings of
fact.” Kentucky Unemployment Ins. Comm’n v. Blakeman, 419 S.W.3d 752,
1 Kentucky Revised Statutes.
2 Kentucky Administrative Regulations.
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753-54 (Ky. App. 2013) (quoting Burch v. Taylor Drug Store, Inc., 965 S.W.2d
830, 834 (Ky. App. 1998), abrogated on other grounds by Cecil, 381 S.W.3d
238). “Necessarily, such authority allows [KUIC] to judge the weight of the
evidence and the credibility of the witnesses and to disagree with the
conclusion reached by the referee.” Id. at 754 (quoting Burch, 965 S.W.2d at
834).
While KUIC has authority to issue independent findings of fact, circuit
courts do not. A circuit court sits as an appellate body, disconnected from the
agency and thus, is tasked with only reviewing the evidence in the record to
determine whether KUIC’s findings of fact were supported by substantial
evidence. In this case, the Letcher Circuit Court improperly reviewed the
evidence and issued its own findings of fact.3 Accordingly, we disregard the
finding of facts and decision of the Letcher Circuit Court and directly review
KUIC’s written decision for substantial evidence supporting its decision.
KRS 341.370 provides:
(1) A worker shall be disqualified from receiving benefits for the
duration of any period of unemployment with respect to which:
(b) He has been discharged for misconduct or dishonesty
connected with his most recent work, or from any work
which occurred after the first day of the worker’s base period
and which last preceded his most recent work, but legitimate
activity in connection with labor organizations or failure to
join a company union shall not be construed as
misconduct[.]
3 Moreover, the Court of Appeals erred when it opined that KUIC “adopted
Referee Nelson’s findings of fact without amendment.” KUIC’s findings of facts totaled
almost two single-spaced pages, whereas Referee Nelson’s totaled three sentences.
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KUIC found that Miles was disqualified from receiving benefits based on five
separate instances of misconduct.
“Discharge for misconduct” as used in this section shall include
but not be limited to, separation initiated by an employer for
falsification of an employment application to obtain employment
through subterfuge; knowing violation of a reasonable and
uniformly enforced rule of an employer; unsatisfactory
attendance if the worker cannot show good cause for absences or
tardiness; damaging the employer’s properly through gross
negligence; refusing to obey reasonable instructions; reporting to
work under the influence of alcohol or drugs or consuming alcohol
or drugs on employer’s premises during working hours; conduct
endangering safety of self or co-workers; and incarceration in jail
following conviction of a misdemeanor or felony by a court of
competent jurisdiction, which results in missing at least five (5)
days work.
KRS 341.370(6) (emphasis added).
KUIC found that:
Substantial evidence supports the finding that Claimant became
argumentative, aggressive, and abusive when verbally reprimanded
as she was exiting the facility on February 14, 2013. She placed
her hand in Ms. Bishnoi’s face and backed her down the hallway.
Claimant displayed behavior both in violation of the standard
which the employer had the right to expect; and of a known,
reasonable, uniformly enforced rule of the employer which
specifically prohibits “intimidation or harassment of another
employee, whether by threat, abusive language, physical action or
other means.”
KUIC denied benefits to Miles for committing misconduct for a “knowing
violation of a reasonable and uniformly enforced rule of an employer[.]” KRS
341.370(6). Although some instances of misconduct require an additional
finding of bad faith or willful or wanton conduct, “when the employee is
discharged for conduct specifically identified in KRS 341.370(6) [,]* no
additional finding is required to deny benefits.
Miles’s actions towards Ms. Bishnoi were a clear violation of Letcher
Manor’s uniformly enforced rule against “[ijntimidation or harassment of
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another employee, whether by threat, abusive language, physical action, or
other means[.]” Ms. Bishnoi testified that Miles was “very argumentative, very
assertive, very aggressive and she backed me up the hallway.” Ms. Bishnoi
also testified that Miles “was the one who came back in my face, threw her
hand up in my face and she literally backed me up the hallway.” Miles’s
actions felt “threatening” to Ms. Bishnoi. The trial court and Court of Appeals
both mistakenly state that no other witness saw this interaction, but Letcher
Manor’s other witness, Ms. Adams, testified that she saw the aforementioned
interaction and that Miles “had her hand up toward Ms. Bishnoi’s face. Yes,
she did.” When asked if she considered Miles’s hand motion as threatening,
Ms. Adams stated, “I do.”
While the referee sided with Miles’s version of events which directly
contradicts the testimony of Ms. Bishnoi and Ms. Adams, KUIC has the
prerogative to issue its own findings of fact determining whether the employer
or employee is more credible. Blakeman, 419 S.W.3d at 754 (citation omitted).4
However, unlike KUIC, courts have no authority to weigh the testimony of both
parties and make credibility determinations. Instead, when substantial
evidence exists, KUIC’s factual findings “will be upheld even though there
exists evidence to the contrary in the record.” Landmark, 91 S.W.3d at 578
(citation omitted). Ms. Bishnoi’s and Ms. Adams’s testimony unequivocally
constitutes substantial evidence and thus, we must uphold the decision of
4 Miles testified that she had never been disciplined by Letcher Manor. Letcher
Manor followed up with proof that it had taken disciplinary action against Miles on 27
prior occasions. Although not necessary to our analysis, KUIC had every reason to
believe the employer over Miles due to the above dishonest testimony during the
referee hearing.
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't
KUIC that Miles committed statutoxy misconduct under KRS 341.370(6). As
even one instance of statutory misconduct is enough to uphold a denial of
benefits, and this Court does not issue advisory opinions, we elect not to review
Miles’s four other alleged instances of misconduct.
IV. Conclusion.
For the aforementioned reasons, we reverse the decision of the Court of
Appeals and reinstate the KUIC’s denial of unemployment benefits.
Wright, J., not sitting. Minton, C.J.; Hughes, Keller, Lambert, Nickell,
and VanMeter, JJ., concur.
COUNSEL FOR APPELLANT:
Maria T. Russell
Linda Marion Keeton
EDUCATION AND WORKFORCE DEVELOPMENT CABINET
OFFICE OF LEGISLATIVE AND LEGAL SERVICES
COUNSEL FOR APPELLEE:
Charnel Marie Burton
APPALACHIAN RESEARCH AND DEFENSE FUND
APPALRED LEGAL AID
Evan Barret Smith
APPALRED LEGAL AID
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