A1 Pioneer Moving v. Labor Commission ( 2021 )

2021 UT App 115THE UTAH COURT OF APPEALS
A1 PIONEER MOVING AND WCF MUTUAL INSURANCE COMPANY,
Petitioners,
v.
LABOR COMMISSION AND VILIAMI PULU,
Respondents.
Opinion
No. 20200534-CA
Filed November 4, 2021
Original Proceeding in this Court
Joshua M. Woodbury, Attorney for Petitioners
Tracy L. Olson and Chad P. Curtis, Attorneys for
Respondent Viliami Pulu
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion,
in which JUDGES GREGORY K. ORME and DAVID N. MORTENSEN
concurred.
CHRISTIANSEN FORSTER, Judge:
¶1 A1 Pioneer Moving (A1) terminated Viliami Pulu’s
temporary total disability (TTD) benefits after he was fired for
his involvement in a workplace altercation. The Utah Labor
Commission (Commission) determined that Pulu was entitled to
benefits. A1 and its insurer, WCF Mutual Insurance Company,
seek review of the Commission’s decision, and we decline to
disturb it.
BACKGROUND
¶2 In July 2017, Pulu suffered an injury to his left shoulder
while employed by A1. A1 subsequently provided Pulu with
full-time, light-duty work.
A1 Pioneer Moving v. Labor Commission
¶3 On November 9, 2017, Pulu was involved in an altercation
with a coworker (Coworker). He had asked Coworker to retrieve
a key, but Coworker refused. Pulu responded by telling
Coworker, “I’ll kick your ass,” to which Coworker responded,
“[C]ome kick my ass.” Pulu grabbed Coworker “by the neck in a
one-hand chokehold and with the other hand threatened to
punch him by raising his fist.” Two other employees broke up
the altercation.
¶4 A1 had in place “a written workplace health and safety
rule that prohibit[ed] all threats of (or actual) violence,” the
violation of which would “result in disciplinary action up to and
including termination of employment.” A1 terminated Pulu on
November 12, 2017.
¶5 After Pulu’s termination, A1 did not provide TTD benefits
to Pulu from November 12, 2017, to December 12, 2017.
However, A1 did provide TTD benefits from December 13, 2017,
(the date of the surgery on Pulu’s shoulder) to December 21,
2017. From December 22, 2017, forward, A1 provided Pulu no
TTD benefits. A1 never applied for a hearing with the
Commission seeking a reduction or termination of Pulu’s TTD
benefits.
¶6 Pulu filed an Application for Hearing in March 2019,
claiming entitlement to TTD benefits from November 12, 2017, to
December 12, 2017, and from December 22, 2017, to August 9,
2018. In its disclosures, A1 identified its defense to the
discontinuation of benefits: “[Pulu] is not entitled to further
disability compensation pursuant to Utah Code § 34A-2-
410.5(2)(a)[1] on the basis that [Pulu’s] employment . . .
1. This section of the code states,
In accordance with this section, the commission
may reduce or terminate an employee’s disability
(continued…)
20200534-CA 2 2021 UT App 115A1 Pioneer Moving v. Labor Commission
[termination] was reasonable, for cause, and as a result of violent
and threatening conduct which was also a violation of
reasonable workplace policies.”
¶7 After the hearing, the administrative law judge (ALJ)
issued findings of fact and conclusions of law. The ALJ
determined that Pulu was entitled to TTD benefits for the two
disputed periods but, reasoning that Pulu’s “conduct and
termination [was] analogous to an employee who engages in
willful misconduct,” ordered that his compensation be reduced
by 15%. See Utah Code Ann. § 34A-2-302(3)(a) (LexisNexis Supp.
2021) (stating that workers’ compensation benefits “shall be
reduced 15% when injury is caused by the willful failure of the
employee” to follow safety rules). The ALJ explained that the
reduction was justified because Pulu’s misconduct “was
[relatively] minor with no injuries to either employee, and other
similar physical altercations and threats had gone undisciplined
by A1 Pioneer.”
(…continued)
compensation for a disability claim for good cause
shown by the employer including if:
(a) the employer terminates the employee from the
reemployment and the termination is:
(i) reasonable;
(ii) for cause; and
(iii) as a result, in whole or in part, of:
(A) criminal conduct;
(B) violent conduct; or
(C) a violation of a reasonable, written
workplace health, safety, licensure, or
nondiscrimination rule that is applied in a
manner that is reasonable and
nondiscriminatory . . . .
Utah Code Ann. § 34A-2-410.5(2) (LexisNexis Supp. 2021).
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¶8 Both Pulu and A1 sought review of the ALJ’s decision.
While Utah Code section 34A-2-410(2)2 provides that TTD
benefits must be paid when an employer is unable to make
available authorized light-duty employment, A1 argued that
“[c]onversely, where suitable light duty work is made available,
refusal to do that work by the employee provides a defense to
compensation benefits.” Accordingly, A1 asserted that Pulu was
not entitled to any benefits because he “constructively refused
available light duty work by engaging in threats of violence and
actual violence against a coworker.” See Stampin’ Up, Inc. v. Labor
Comm'n, 2011 UT App 147, ¶¶ 8–10, 256 P.3d 250(acknowledging that an “employee’s deliberate, volitional
conduct with the intent to sever an employment relationship”
can be construed as a constructive refusal of available light-duty
work).
¶9 In his motion for review of the decision, Pulu argued that
the ALJ erred in reducing his compensation by 15% because A1
failed to comply with Utah Code section 34A-2-410.5’s
procedural requirements and limitations period. See Utah Code
Ann. § 34A-2-410.5(4)(a) (LexisNexis Supp. 2021) (stating that an
employer seeking reduction or termination of disability
compensation after an employee’s good-cause termination or
incarceration “may file an application for a hearing” with the
Commission’s Division of Adjudication).
¶10 The Commission rejected A1’s constructive-refusal
argument because “A1’s position necessarily assign[ed] motives
to . . . Pulu for which there [was] no evidence” and there was
2. “If a light duty medical release is obtained before the
employee reaches a fixed state of recovery and no light duty
employment is available to the employee from the employer,
temporary disability benefits shall continue to be paid.” Utah
Code Ann. § 34A-2-410(2) (LexisNexis 2019).
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“nothing in the record to indicate that . . . Pulu engaged in the
fight with [Coworker] in order to purposely sever his
employment relationship with A1.” Regarding the 15%
reduction, the Commission stated,
Because . . . Pulu’s entitlement to temporary
disability benefits had been established, the proper
way for A1 to seek reduction or termination of
those benefits was to file an application for hearing
as provided for in § 410.5(4). Instead, A1 denied
paying temporary total disability compensation to
. . . Pulu and then sought to justify it after the fact
based on his termination for cause. The foregoing
statute and rule[3] do not provide for such an
approach.
Accordingly, the Commission modified the ALJ’s decision by
determining that Pulu was entitled to benefits for the two time
periods without any reduction. A1 seeks review of the
Commission’s order.
ISSUES AND STANDARDS OF REVIEW
¶11 A1 seeks judicial review and presents two issues for our
consideration. A1 first asks whether the Commission erred in
interpreting Utah Code section 34A-2-410.5 as requiring A1 to
follow the procedures set forth in that statute prior to
3. “An employer shall not terminate or reduce an employee’s
temporary disability compensation pursuant to section 34A-2-
410.5 prior to issuance of a final order by the Commission
ordering the reduction or termination.” Utah Admin. Code
R602-4-2.
20200534-CA 5 2021 UT App 115A1 Pioneer Moving v. Labor Commission
terminating Pulu’s TTD benefits.4 “We review statutory
interpretations by agencies for correctness, giving no deference
to the agency’s interpretation.” Cook v. Department of Com., 2015
UT App 64, ¶ 12, 347 P.3d 5 (quotation simplified).
¶12 A1 next asks us to consider whether the Commission
erred when it concluded that Pulu did not constructively refuse
light-duty work as a result of his participation in the physical
altercation.5 This issue presents a question of fact, and “when the
Labor Commission’s factual determinations are properly before
us on review, we review them under the substantial evidence
4. A1 formulates this as two issues: (1) “Did the Labor
Commission err when it rejected the argument that [Pulu]
forfeited entitlement to TTD compensation for violating [A1’s]
workplace rule against threatening or engaging in violent
behavior in the workplace?” and (2) “Did the Labor Commission
err by concluding that [A1 was] required to file an application
for hearing under Utah Code § 34A-2-410.5(4)?” A1’s
formulation represents two facets of the same issue, so we have
chosen to analyze this as a single issue. See Carter v. State, 2012
UT 69, ¶ 16 n.7, 289 P.3d 542 (“It is a maxim of appellate review
that the nature and extent of an opinion rendered by an
appellate court is largely discretionary with that court.”
(quotation simplified)).
5. A1 formulates this as three issues: (1) “Did the Labor
Commission err in finding that [Pulu’s] actions did not
constitute a constructive intent to sever his employment
relationship?” (2) “Did the Labor Commission err in finding that
[Pulu’s] actions did not constitute a constructive refusal of light-
duty work?” and (3) “Did the Labor Commission err in applying
the standard” found in Stampin’ Up, Inc. v. Labor Commission,
2011 UT App 147, 256 P.3d 250? For the same reason expressed
above, see supra note 4, we have consolidated these issues.
20200534-CA 6 2021 UT App 115A1 Pioneer Moving v. Labor Commission
standard of review, examining the whole record to determine
whether a reasonable mind might accept as adequate the
evidence supporting the decision.” Quast v. Utah Labor Comm’n,
2017 UT 40, ¶ 15, 424 P.3d 15 (quotation simplified).6 “A decision
is supported by substantial evidence if there is a quantum and
quality of relevant evidence that is adequate to convince a
reasonable mind to support a conclusion.” Provo City v. Utah
Labor Comm’n, 2015 UT 32, ¶ 8, 345 P.3d 1242 (quotation
simplified).
6. Pulu argues that A1 did not preserve this second issue because
the constructive-refusal argument was not raised as an
affirmative defense before the ALJ but only during the hearing
before the Commission. We are not persuaded that this issue is
unpreserved. “In an administrative proceeding, the preservation
doctrine requires the challenged issue to initially be brought to
the fact finder’s attention so that there is at least the possibility
that it could be considered.” Columbia HCA v. Labor Comm’n,
2011 UT App 210, ¶ 6, 258 P.3d 640 (quotation simplified).
Because “both the ALJ and the Commission have fact-finding
authority,” A1 was required “to have raised the issues currently
on appeal to either the ALJ or the reviewing Commission for the
issues to be properly preserved.” See id. This issue was raised
before the Commission, so we conclude that this issue was
properly preserved in this context because the Commission was
able to adjudicate the issue. See id. (“[The employer] satisfied the
preservation requirement by raising the issue at the
administrative level so either the administrative law judge or the
Commission could have adjudicated the issue.” (quotation
simplified)); see also Pease v. Industrial Comm’n, 694 P.2d 613, 616
(Utah 1984) (“Had [the employer] raised the issue, either the
administrative law judge or the Commission could have
adjudicated the issue . . . .”).
20200534-CA 7 2021 UT App 115A1 Pioneer Moving v. Labor Commission
ANALYSIS
I. Utah Code Section 34A-2-410.5’s Procedural Requirements
¶13 Subsection (2) of Utah Code section 34A-2-410.5 grants
the Commission the authority to “reduce or terminate an
employee’s disability compensation for a disability claim” if an
“employer terminates the employee from the reemployment[7]
and the termination is . . . reasonable,” “for cause,” and the
result of “violent conduct” or a “violation of a reasonable,
written workplace . . . safety . . . rule.” Utah Code Ann. § 34A-2-
410.5(2) (LexisNexis Supp. 2021).
¶14 Subsection (4) of the same statute instructs an employer or
insurer seeking such a reduction or termination of benefits to
apply for a hearing with the Commission’s Division of
Adjudication. See id. § 34A-2-410.5(4)(a) (“An employer or the
employer’s insurance carrier may file an application for a
hearing with the Division of Adjudication to request that an
employee’s disability compensation for a disability claim be
reduced or terminated under this section.”). The limitations
period for filing this application for a hearing is one year from
the date of termination. Id. § 34A-2-410.5(4)(b). If after a hearing
the Commission determines that the conditions of subsection (2)
are met, the Commission “may reduce or terminate the disability
compensation.” See id. § 34A-2-410.5(5)(a).
¶15 Subsection (7) of the statute allows the Commission to
“make rules . . . related to the procedures for a request for a
hearing” to reduce or terminate disability benefits. See id. § 34A-
7. “‘Reemployment’ means employment that: (i) is after an
accident or occupational disease that is the basis for a disability
claim; and (ii) . . . offers to an employee an opportunity for
earnings . . . .” Utah Code Ann. § 34A-2-410.5(1)(e).
20200534-CA 8 2021 UT App 115A1 Pioneer Moving v. Labor Commission
2-410.5(7). Acting on this authorization, the Commission has put
in place the following administrative rule: “An employer shall
not terminate or reduce an employee’s temporary disability
compensation pursuant to section 34A-2-410.5 prior to issuance
of a final order by the Commission ordering the reduction or
termination.” Utah Admin. Code R602-4-2.
¶16 A1 argues that contrary to the plain language of
subsection (4) and the accompanying administrative rule R602-4-
2, employers are not required to file an application for a hearing
to seek reduction or termination of benefits under the conditions
described in subsection (2). A1 asserts,
Utah Code authorizes the Labor Commission to
reduce or terminate benefits under § 34A-2-410.5
regardless of whether an employer or the
employer’s insurance carrier files an application for
hearing. If such an application is filed, a reduction
or termination would be governed by § 34A-2-
410.5(5). If no application is filed, and good cause is
shown, a reduction or termination of benefits
would fall under § 34A-2-410.5(2).
Thus, A1’s assertion is that filing an application is essentially
discretionary and not mandatory—an employer seeking to
reduce or terminate benefits could pursue a unilateral path
under subsection (2) or the application path under subsection
(4). This reading is unpersuasive for several reasons. First, on a
practical level, no employer would submit an application to the
Division of Adjudication under A1’s reading, opting instead for
a unilateral route absent the Commission’s involvement. A1
makes no attempt to explain why the legislature would put in
place a procedure that is merely optional for employers seeking
relief from paying benefits to a terminated employee. As Pulu
points out in his brief, A1’s interpretation would make the
statute’s procedures and limitations period applicable only “to
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those employers/insurers that were foolish enough to seek the
Commission’s permission and provide the employee with due
process.”
¶17 Second, A1’s reading renders the majority of the statute
superfluous. While subsection (2) states that the Commission may
reduce or terminate disability benefits if an employee is
terminated for cause involving violent conduct or a violation of
written workplace safety rules, there is no mechanism in the
statue for involving the Commission without notification by the
employer. The obvious question under A1’s interpretation of the
statute involves how the Commission would become involved in
any sort of reduction of benefits absent some type of application
by the employer. The answer is that the Commission does not
take any action to reduce or terminate benefits without an
employer’s application. And the procedures for submitting an
application are covered in the following subsections of the
statute. See Utah Code Ann. § 34A-2-410.5(4)(a) (“An employer
or the employer’s insurance carrier may file an application for a
hearing with the Division of Adjudication to request that an
employee’s disability compensation for a disability claim be
reduced or terminated under this section.”); id. § 34A-2-
410.5(5)(a) (“The commission may reduce or terminate the
disability compensation of an employee for a disability claim if
after a hearing requested under Subsection (4), the commission
determines that the conditions of Subsection (2) are met.”); id.
§ 34A-2-410.5(7) (“[T]he commission may make rules: (a)
describing factors to be considered under Subsection (2); and (b)
related to the procedures for a request for a hearing under this
section.”). Thus, subsection (2) does not stand alone as a path for
the unilateral reduction or termination of the benefits an
employer is obligated to pay an employee. Rather, the particular
subsection is an umbrella provision that sets the conditions
(namely, termination for violent behavior, incarceration, and
drug/alcohol impairment) under which benefits may be
20200534-CA 10 2021 UT App 115A1 Pioneer Moving v. Labor Commission
terminated through the process described in subsections (4)
through (7).
¶18 Moreover, the use of the word “may” in subsection (4)
should not be construed to imply that filing an application with
the Commission is optional for an employer seeking reduction or
termination of benefits under the conditions described in
subsection (2). Rather, the subsection’s use of “may” indicates
that an employer retains the discretion to determine whether to
file an application to seek reduction or termination of an
employee’s benefits. But if an employer does wish to avail itself
of the process by which the Commission might reduce or
terminate benefits, based on the relevant provisions, it must file
an appropriate application and follow the process outlined in the
statute. Thus, while an employer is under no obligation to seek
reduction or termination of benefits under the conditions
described in subsection (2), if that employer wishes to seek
reduction or termination, filing the application and following the
procedure are required for the Commission to entertain the
request. See Utah Admin. Code R602-4-2 (“An employer shall
not terminate or reduce an employee’s temporary disability
compensation pursuant to section 34A-2-410.5 prior to issuance
of a final order by the Commission ordering the reduction or
termination.”). In other words, the only way to reduce or
terminate benefits under subsection (2) is by way of an order
from the Commission, and the only way that such an order gets
issued is by an employer first filing an appropriate application
with the Commission.
¶19 Regarding the applicability of section 34A-2-410.5, A1 also
argues that “[t]his case does not deal with the termination or
reduction of compensation benefits which were being paid to”
Pulu because “Pulu was not receiving any indemnity
compensation benefits at the time of his termination that could
be reduced or terminated.” But this argument is at odds with the
record. For the month immediately after Pulu was terminated on
20200534-CA 11 2021 UT App 115A1 Pioneer Moving v. Labor Commission
November 12, Pulu received no pay whatsoever. But he started
receiving TTD benefits during the week after his surgery on
December 13. So while it is true that Pulu was not receiving TTD
benefits at the time he was fired—indeed he could not have been
receiving them because he had been employed and assigned
light-duty work by A1—he was receiving TTD benefits when A1
unilaterally terminated those benefits on December 21.
Moreover, as the Commission pointed out, Pulu’s right to TTD
benefits vested at the time of his injury. See King v. Industrial
Comm’n, 850 P.2d 1281, 1293 (Utah Ct. App. 1993) (“[T]he Utah
Workers’ Compensation Act is based on contract principles and
an employee’s right to benefits arises when [the employee]
suffers a work-related injury.”), abrogated on other grounds by
Murray v. Utah Labor Comm’n, 2013 UT 38, 308 P.3d 461.
¶20 The Commission did not err in concluding that A1 was
required to file an application pursuant to Utah Code section
34A-2-410.5(4) before it could reduce or terminate the benefits
that Pulu was entitled to after his termination.
II. Constructive Refusal of Light-Duty Work
¶21 A1 next argues that “Pulu’s actions leading to his
termination were not only intentional and deliberate, but also
demonstrated intent to sever his employment relationship.”
Thus, A1 asserts that Pulu constructively refused the light-duty
work that A1 had made available to him and, accordingly, A1
was under no obligation to provide statutorily mandated
temporary disability benefits. See Utah Code Ann. § 34A-2-410
(LexisNexis 2019) (“If a light duty medical release is obtained
before the employee reaches a fixed state of recovery and no
light duty employment is available to the employee from the
employer, temporary disability benefits shall continue to be
paid.”).
20200534-CA 12 2021 UT App 115A1 Pioneer Moving v. Labor Commission
¶22 Key to the resolution of this issue is the application of this
court’s decision in Stampin’ Up, Inc. v. Labor Commission, 2011 UT
App 147, 256 P.3d 250. Pulu argues that Stampin’ Up is directly
on point and resolves the issue of whether he constructively
refused light-duty work when he engaged in the altercation. To
the contrary, A1 asserts that Pulu’s actions are “highly
distinguishable” from those at issue in Stampin’ Up, making
Stampin’ Up largely inapplicable here. We agree with Pulu.
¶23 In Stampin’ Up, an employee injured his shoulder,
received TTD benefits for about a week, and was placed on light-
duty work following release from his treating doctor. Id. ¶ 2. He
continued to perform the light-duty work until he was
terminated a few months later for sending pornographic images
to other employees via cell phone and on company email
accounts. Id. After the employee’s termination, the employer’s
insurance did not resume paying TTD benefits, asserting that the
employee, through “bad acts resulting in the termination,” had
“constructively rejected” the light-duty work the employer had
made available. Id. (quotation simplified). After a hearing on
whether the employee was entitled to benefits after his
termination, the ALJ rejected the employer’s argument,
concluding that the employee “did not intentionally engage in
misconduct with the purpose of severing the employment
relationship; therefore, he was entitled to temporary disability
benefits.” Id. ¶ 5. The Commission subsequently affirmed the
ALJ’s decision. Id. ¶ 6.
¶24 On review, this court allowed the decision to stand,
reasoning that the “Commission’s interpretation of [Utah Code
section 34A-2-410(2)] reasonably draws a line between deliberate
conduct by which an employee intends to sever his or her
employment relationship and conduct that, while perhaps
deliberate, lacks that purpose.” Id. ¶ 11. This court explained that
just because an employee is terminated for good cause, it does
not necessarily follow that the employee constructively rejected
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available light-duty work. See id. ¶ 10. Rather, this court agreed
with the Commission that constructive refusal of light-duty
work requires a showing “that the terminated employee acted
deliberately and with the intent to sever [the employment]
relationship with [the] employer.” Id. ¶ 9.
¶25 A1 argues that Pulu’s bad conduct differed from that in
Stampin’ Up in two crucial ways. First, A1 asserts that “the
severity of the conduct here is much more pronounced than the
conduct at issue in Stampin’ Up” because it involved “potential
life-threatening injuries” and “physical harm to a co-worker.”
Second, A1 points out that Pulu’s conduct was in “direct
violation” of A1’s written policies. A1 argues that these two
factors demonstrate that “Pulu’s conduct was carried out with
the intent to sever the employment relationship.” A1 goes on:
“Some acts are so brutal and outside the scope of acceptable
workplace conduct that they must be deemed indicative of an
intent to sever the employment relationship.”
¶26 We disagree with A1 that Pulu’s conduct demonstrated
an intent to sever his employment. As the Commission pointed
out in its order modifying the ALJ’s decision, “There is nothing
in the record to indicate . . . Pulu engaged in the fight with
[Coworker] in order to purposely sever his employment
relationship with A1.” Indeed, the record indicates that Pulu had
no intention of severing his employment relationship. While the
policy on workplace violence had been in place since 2006, the
Commission determined that no employee had ever been
terminated for engaging in workplace violence prior to Pulu; in
fact, Coworker himself had been involved in a previous physical
altercation in the workplace with a different coworker and had
not been fired. Moreover, the record from the hearing indicates
that the written policy may have never been distributed to A1’s
employees. Thus, if no employee had been terminated for
engaging in workplace violence and Pulu appears not to have
received the written policy about the consequences of workplace
20200534-CA 14 2021 UT App 115A1 Pioneer Moving v. Labor Commission
violence, it seems unlikely that he intended to sever his
employment relationship by engaging in an altercation with
Coworker. Given these circumstances, even if Pulu knew that he
could get fired for fighting with a coworker, it is doubtful that he
thought he would get fired for his actions—and it is even more
implausible that he engaged in the violent conduct with the
intent to get fired.
¶27 And contrary to A1’s characterization, the altercation does
not appear to have been severe. Indeed, the ALJ described the
violent conduct as “[relatively] minor with no injuries to either
employee.” And Pulu and Coworker both testified that
comments such as “I’ll kick your ass” were common in the
workplace and were more akin to playful banter than actual
threats of violence. Thus, the context of the working relationship
between Pulu and Coworker does not suggest that their
interaction on the day of the altercation indicated that Pulu acted
with the intent to sever his employment relationship.
¶28 A1’s contention that Pulu constructively refused to accept
light-duty work does not add up. This case is more similar to
Stampin’ Up than different. Because Pulu did not “act[]
deliberately and with the intent to sever” his employment
relationship, A1’s assertion that Pulu constructively refused
light-duty work fails. See Stampin’ Up, 2011 UT App 147, ¶ 9.
CONCLUSION
¶29 The Commission did not err when it determined that A1
was required to apply for a termination of Pulu’s benefits
instead of terminating them unilaterally. And we uphold the
Commission’s determination that Pulu’s violent behavior did
not constitute a constructive refusal of available light-duty work.
Accordingly, we decline to disturb the Commission’s decision.
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