Kyesha Mickles v. Maxi Beauty Supply, Inc., and Division of Employment Security , 566 S.W.3d 274 ( 2019 )

In the Missouri Court of Appeals
Eastern District
DIVISION THREE
KYESHA MICKLES, ) No. ED106696
)
Appellant, ) Appeal from the Labor and Industrial
) Relations Commission
VS, ) 2021743
)
MAXI BEAUTY SUPPLY, INC. and )
DIVISION OF EMPLOYMENT J
SECURITY, )
)
Respondents. J Filed: January 29, 2019
OPINION
Kyesha Mickles appeals the decision of the Labor and Industrial Relations Commission (the
Commission) disqualifying her from unemployment benefits because she voluntarily quit her job at
Maxi Beauty Supply, Inc. (Employer) without good cause. Mickles argues that the Commission erred
because she had good cause to quit. Because we find that Mickles had good cause to quit, we hold
that the Commission erred when it determined that Mickies quit without good cause, which is a
question of law we review de novo. Darr v. Roberts Mktg. Grp., LLC, 428 S.W.3d 717, 719
(Mo.App.E.D. 2014). Consequently, we reverse and remand with directions to award Mickles
unemployment benefits.
Factual and Procedural Background
Mickles, a licensed cosmetologist with a bachelor’s degree in business management, began
working at one of Employer’s beauty stores in January of 2015 as a salesperson. By early 2017, she
had become store manager at Employer’s Hazelwood, Missouri location, and her rate of pay was
$11.25 an hour. She also earned commissions for eyelash services she performed at the store.
However, in March 2017, Employer discontinued the eyelash service, and Mickles lost that source of
income.
At that time, Mickles was pregnant with less than two months before the birth of her first
child, so she asked Employer whether there were work opportunities within the company to make up
for the lost income. In fact, she told Employer she may not be able to continue working for the
company after her maternity leave without an increase in her income due to her family’s increased
economic needs,
Employer initially declined to address Mickles’s request. However, a few months later,
Employer offered to make Mickles the company’s general manager and human resources director, a
position for which she would be paid $12.50 an hour and would be responsible for hiring, firing,
scheduling, managing social media, creating job descriptions and a filing system, and settling disputes
between employees. Mickles would have the keys to three of Employer’s five stores, and would be
“on call” to Employer at all times. She would also be permitted to bring her child to work with her,
which saved her childcare expenses.
Mickles accepted the new position when she returned from maternity leave in early summer
2017. Over the course of the next few months, she worked 20 to 35 hours a week in the position,
averaging about 24 hours per week. There is no indication that Employer was dissatisfied with her
work performance. However, on September 17, 2017, Employer sent Mickles a text message stating
that Employer no longer needed Mickles’s general manager-human resources position, and that
Employer wanted Mickles to return to being a regular employee working weekends at $10 an hour.
Immediately after receiving the text message, Mickles contacted Employer’s vice president,
Eric Yoon, who spoke on Employer’s behalf, to seek clarification regarding her job status. Mickles
also met with Yoon in person the day after she received the text message. Mickles asked for an
explanation why her position was no longer needed. She also stated that she would like to stay on
with the company but could not accept a regular-employee position or the reduced pay rate or hours
offered. No other offer was made by Employer, however, beyond the offer made in the text message.
When Mickles requested to be returned to one of Employer’s store manager positions,
Employer refused. Yoon stated that store managers were required to work 60 hours a week and that
Mickles was not able to do so. At the hearing in this case, Mickles questioned the veracity of
Employer’s purported manager-hours requirement, and Yoon admitted that Employer has a store
manager position at one of its locations that requires only “30 plus” hours of work per week. There
is nothing in this record demonstrating that this particular store manager position or any other manager
position was ever offered to Mickles.
Ultimately, Mickles declined to accept Employer’s text-messaged offer. She filed for
unemployment benefits, and a deputy for the Missouri Division of Employment Security determined
that she was qualified to receive benefits, because she quit with good cause attributable to her work.
The deputy noted that Employer’s demotion “no longer allowed [Mickles] to use her managerial
skills,” and that “the reduction in pay was substantial.” Employer appeaied.
The Appeals Tribunal conducted a telephone conference hearing at which Mickles and Eric
Yoon testified. The Appeals Tribunal agreed with the deputy’s decision that Mickles was not
disqualified for benefits, finding that Mickles met her burden of proving good cause to quit because
her “change in salary was significant enough to compel a reasonable person to cease working” for
Employer.
Employer then appealed to the Commission, which reversed the decision of the Appeals
Tribunal and found that Mickles voluntarily quit her job without good cause. The Commission
concluded that Mickles failed to show good cause because she did not “explore the changed
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conditions of the revised employment arrangement with the employer,” and because, in the
Commission’s view, a reasonable person would have maintained the employment relationship for as
long as it took to seek other employment.
This appeal follows.
Standard of Review
Our standard for reviewing decisions of the Commission in unemployment compensation
cases is found in Article V, § 18 of the Missouri Constitution and § 288.210'. According to art. V, §
18, we must determine whether the Commission’s decision is “authorized by law” and “whether it is
supported by competent and substantial evidence upon the whole record.” Darr, 428 8.W.3d at 719
(citing Pulitzer Publishing Co. v. Labor. & Indus. Relations Comm’n, 596 8.W.2d 413, 417 (Mo.banc
1980)), Likewise, § 288.210 provides that this Court may modify, reverse, remand for rehearing, or
set aside the Commission’s decision upon finding (1) that the Commission acted without or in excess
of its powers; (2) that the decision was procured by fraud; (3) that the facts found by the Commission
do not support the decision; or (4) that there was not sufficient competent evidence in the record to
support the decision.
Essentially, the Missouri Constitution and the Missouri Employment Security Law task this
Court with reviewing the Commission’s unemployment-compensation decisions for legal error. In
conducting such review, we manifestly are not bound by any of the Commission’s legal conclusions
| All statutory references are to RSMo 2016.
or applications of the law to the facts. Turner v. Proffer Transp., inc., 310 S.W.3d 769, 774
(Mo.App.E.D. 2010) (citing Ayers v. Sylvia Thompson Residence Ctr., 211 S.W.3d 195, 198
(Mo.App. W.D. 2007)). We review questions of law de nove. Difatta-Wheaton vy. Dolphin Capital
Corp., 271 8.W.3d 594, 596 (Mo.banc 2008), With regard to questions of fact, however, § 288.210
prohibits us from hearing new evidence and requires us, in the absence of fraud, to accept the
Commission’s factual findings so long as they are supported by competent and substantial evidence
in the record. Darr, 428 S.W.3d at 719.
Discussion
The general purpose of the Missouri Employment Security Law is to provide unemployment
compensation to persons unemployed through no fault of their own. Difatta-Wheaton, 271 S.W.3d
at 596 (citing § 288.020.1). We therefore construe that statute liberally to provide for the payment of
compensation to individuals in respect to their unemployment. § 288.020.2. And we read
disqualifying provisions strictly. St. John’s Mercy Health Sys. v. Div. of Emp't Sec., 273 S.W.3d 510,
514 (Mo.banc 2009).
The disqualifying provision at issue here, § 288.050.1(1), provides in pertinent part:
Notwithstanding the other provisions of this law, a claimant shail be disqualified for waiting
week credit or benefits until after the claimant has earned wages for work insured pursuant to
the unemployment compensation laws of any state equal to ten times the claimant's weekly
benefit amount if the deputy finds: (1) That the claimant has left work voluntarily without
good cause attributable to such work or to the claimant’s employer.
The subsection defines “good cause” as “only that cause which would compel a reasonable employee
to cease working or which would require separation from work due to illness or disability.” §
288.050.1(4).
The question of good cause in this context is a legal issue that we review de novo. See Darr,
428 $.W.3d at 724 (“Whether good cause is established upon the particular facts of each case isa
question of law, which we review independently without any deference to the Commission’s
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determination.”), Consistent with the definition provided under § 288.050.1(1), good cause has long
been understood to mean circumstances that would cause a reasonable person in a similar situation to
leave the employment rather than continue working. /d. The conditions motivating the employee to
voluntarily leave must be real, not imaginary, substantial, not trifling, and reasonable, not whimsical,
and good faith is an essential element. Jd. at 724-25. To establish good faith, the employee must
prove that she made an effort to resolve the troublesome situation before ending the employment
relationship. fd, at 725.
Here, we find Mickles ended her employment relationship with good cause and the
Commission’s finding to the contrary is not supported by competent and substantial evidence. First,
her general manager-human resources position was eliminated with no advance notice to her, and she
was informed abruptly by text message,? Then, when she requested to stay on with the company in
one of Employer’s store manager positions-—because she had extensive experience as a manager for
Employer, is a licensed cosmetologist, and holds a bachelor’s degree in business management—
Employer offered her only to return to her starting-level, regular employee position, with significantly
less hourly pay (from $12.50 to $10 an hour), and only weekend hours. Mickles made multiple
attempts to resolve the issues regarding her job status and future with the company—she discussed
her employment situation with Employer’s vice president, Erie Yoon, on the telephone and in person.
Nevertheless, no modification from the text-messaged offer was forthcoming from Employer
and Mickles’s only options were to accept a significant demotion and pa reduction for reasons
y p g p
2 There is no dispute that Employer summarily eliminated Mickles’s general manager-human
resources position without notifying her in advance. This case is therefore unlike Kimble v. Div. of
Emp’t Sec., 388 S.W.3d 634 (Mo.App. W.D, 2013), Respondents’ favored citation, because in Kimble
the employee was informed ahead of time of the upcoming elimination of his position and was
perinitted to continue working in that position for one week while he considered an offer from his
employer to stay on in a different position. Jd. at 636-37. Moreover, the employer in Kinzb/e, unlike
here, offered the employee a new position that “had the potential of placing [the employee] in a
comparable position financially.” Jd. at 643.
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unrelated to her work performance, or to quit. Mickles described the situation as a “slap in the face” —
an indication that Employer “really didn’t care about [her] or [her] family.” In these circumstances,
we conclude that Mickles amply demonstrated a good faith effort to resolve the troublesome situation
with which she was faced.
This Court has held that it is reasonable for an employee to quit when forced to accept a
demotion coupled with a substantial decrease in pay. See Armco Steel Corp, v. Labor & Indus.
Relations Comm'n, Div. of Emp’t Sec., 553 S.W.2d 506, 508 (Mo.App. 1977) (holding that “{a]
substantial reduction in wages is regarded as ‘good cause’ so as to entitle a claimant to unemployment
compensation benefits”). And it is a question of law whether Employer, by eliminating Mickles’s
general manager-human resources position and allowing her to stay on with the company only if she
returned to her starting position as a regular employee, forced Mickles to accept a substantial
difference in pay and working conditions or else go unemployed. See Bordon v. Div. of Emp’t Sec.,
199 S.W.3d 206, 210 (Mo.App. W.D. 2006) (“Whether there is a substantial difference [in wages or
work conditions effected by the employer] is a question of law.”’).
We find that the record here establishes that Employer’s offer represented a substantial
demotion, reduction in pay, and much less favorable working conditions and schedule. Mickles
would have to relinquish her position of authority within the company and return to a regular
employee position. As a result of the reduced hours of pay, Mickles would lose more than $100, on
average, per week. For an employee whose usual weekly pay was between $300 and $350, $100 a
week represents a substantial reduction in compensation? Moreover, Employer knew that its text-
3 Employer contends that the pay reduction in this case did not give Mickles good cause to leave her
employment because the loss was not significant enough when measured as a percentage of her
previous pay rate. We recognize that Missouri courts in cases such as Armco, 553 S.W.2d at 507-08,
have in determining whether a reduction in pay was substantial or a “mere decrease” addressed the
employee’s reduction in pay as a percentage loss. We observe, however, that this percentage analysis
on its own cannot in every case be considered determinative because an equal-percentage loss in pay
will always fall more harshly on the less well-compensated of two individuals, perhaps severely so.
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messaged offer meant that it was also revoking the employment benefit Mickles had theretofore
enjoyed of bringing her child to work and thus saving childcare expenses.
We are therefore unmoved by the Commission’s finding that Mickles lacked good cause based
on its reasoning that she did not “explore the changed conditions of the revised employment
arrangement with the employer” because that is not true and is not supported by this record.
Moreover, the Commission’s judgment that a reasonable person would have maintained the
employment relationship for as long as it took to seek other employment, even sustaining a demotion
back to their non-managerial, low-level, starting position with the company, is unsupported by this
record or by Missouri law. The Commission relied on Mo. Div. of Emp’t Sec. vy, Labor & Indus.
Relations Comm’n, 625 S.W 2d 882 (Mo.App.E.D. 1981), but that case is readily distinguishable on
its facts because there the employee only had his hours reduced. /d. at 884-85. Here, Employer
reduced Mickles’s hours, her rate of pay, and her job status.
And on the question of good faith mentioned by the court in Darr, supra, the contrast between
Employer’s conduct and Mickles’s conduct is stark. Employer chose a text message to notify
Mickles—-an experienced management-level employee with no documented performance issues-—-
that she had been demoted and her pay cut. Mickles, on the other hand, responded to the text message
by demonstrating her desire to understand Employer’s position and a willingness to seck a
compromise. Following these efforts, Mickles understood that her general manager-human resources
position was eliminated and Employer’s sole offer was for her to return to being a regular employee
working weekends at $10 an hour, Therefore, the Commission erred as a matter of law when it found
that Mickles’s future status was unclear and that it was incumbent on her to seek clarification. The
Moreover, we find that here, considering both the reductions in rate of pay and hours offered by
Employer, it appears that Mickles would have sustained a percentage loss of about 25 percent per
week, bringing her within the range found to support a finding of good cause in Armco. See id.
(finding the 44 percent loss in the case was enough, and characterizing as “substantial” reductions
losses of 25 percent in cases from other states).
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offer was clear. Nothing in the record whatsoever supports the notion that Employer was willing to
better the offer. And Mickles repeatedly sought to clarify Employer’s position.
Conclusion
For the reasons stated above, we reverse the Commission’s decision and remand with
directions to award Mickles unemployment benefits.
Sherri B. Sullivan, P.J., and
Lawrence E. Mooney, J., concur.
4 At the hearing, in the briefs before this Court, and at oral argument, Employer has suggested
somewhat cynically that Mickles may have been able to obtain some betterment of the text-messaged
offer, This is pure speculation and not credible. Employer never hinted to Mickles that Employer
was willing to consider any atrangement other than the text-messaged offer. And Employer had
multiple opportunities to do so since Mickles repeatedly stated during her conversations with Yoon
that she wanted to stay on.
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