M & A Acquisition Corp. v. ICAO

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
November 21, 2019
2019COA173
No. 19CA0679, M & A Acquisition Corp. v. ICAO — Labor and
Industry — Colorado Employment Security Act — Benefit
Awards
As a matter of first impression, the division concludes that the
ICAO Appeals Panel erroneously treats section 8-73-108(5)(e)(IX.5),
C.R.S. 2019 as the exclusive applicable provision for disqualifying
an employee from unemployment compensation eligibility when the
employee’s separation from employment resulted from a positive
drug test administered pursuant to the employer’s drug policy.
COLORADO COURT OF APPEALS 2019COA173
Court of Appeals No. 19CA0679
Industrial Claim Appeals Office of the State of Colorado
DD No. 48631-2018
M & A Acquisition Corp./West Star Aviation, Inc.,
Petitioner,
v.
Industrial Claim Appeals Office of the State of Colorado and Ryan D. Holm,
Respondents.
ORDER SET ASIDE AND CASE
REMANDED WITH DIRECTIONS
Division VII
Opinion by JUDGE TOW
J. Jones and Fox, JJ., concur
Announced November 21, 2019
Bechtel Santo & Severn, Michael C. Santo, Emily E. Tichenor, Grand Junction,
Colorado, for Petitioner
No Appearance for Respondents
¶1 In this unemployment compensation benefits case, M & A
Acquisition Corp. seeks review of a final order of the Industrial
Claim Appeals Office (Panel). The Panel affirmed a hearing officer’s
decision awarding benefits to Ryan D. Holm. M & A discharged
Holm because he tested positive for marijuana.
¶2 M & A contends that the Panel erred by limiting its analysis to
a single disqualifying subsection of the statute, section 8-73-
108(5)(e)(IX.5), C.R.S. 2019, and by expressly declining to consider
other potentially applicable disqualifying subsections. We agree
and therefore set aside the Panel’s order and remand for further
proceedings.
I. Background
¶3 We derive the following information concerning Holm’s job
separation from the hearing officer’s findings.
¶4 Holm worked for M & A as a full-time aircraft mechanic. He
was injured at work in February 2017. Although he returned to
work for a few days in April and May 2017, he was eventually
placed on a medical leave of absence on May 30, 2017.
¶5 While on medical leave, Holm needed to go into M & A’s office
every other week to make payments on a loan against his
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retirement account. In November 2017, while Holm was in the
office making a loan payment, a person in human resources notified
him that his name had been pulled for a random drug test. M & A
had a written policy requiring employees to submit to random drug
tests if their names came up for such testing. Holm was aware of
this policy. Holm tested positive for marijuana, and M & A
thereafter discharged him based on the test result.
¶6 The hearing officer found that Holm was still an M & A
employee and therefore subject to the drug testing policy but was
not working when he was tested. The hearing officer determined
that because Holm had been on a leave of absence since May 30,
2017, and had not performed work for M & A since that date, he
was not at fault for the job separation. Consequently, the hearing
officer awarded Holm benefits on a no-fault basis. See § 8-73-
108(1)(a) (setting forth the guiding legislative principle that
“unemployment insurance is for the benefit of persons unemployed
through no fault of their own”).
¶7 M & A appealed the decision to the Panel, arguing that Holm
was disqualified from receiving benefits under three statutory
provisions: (1) “[v]iolation of a statute or of a company rule which
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resulted or could have resulted in serious damage to the employer’s
property or interests”; (2) “[o]ff-the-job use of not medically
prescribed intoxicating beverages or controlled substances . . . to a
degree resulting in interference with job performance”; and (3)
“failure to meet established job performance or other defined
standards.” § 8-73-108(5)(e)(VII), (VIII), (XX).
¶8 On review, the Panel affirmed the hearing officer’s decision but
applied a different rationale. It concluded that “when an individual
is separated from employment due to a positive drug test
administered pursuant to the employer’s drug policy, the provisions
of [section] 8-73-108(5)(e)(IX.5), C.R.S. are exclusive” and
disqualification “is not warranted under one of the more general
disqualification provisions.” Hence, the Panel declined to consider
whether the three other possible disqualifying subsections urged by
M & A applied.
¶9 Because marijuana was not present in Holm’s system “during
working hours” as required by subsection (IX.5), the Panel
concluded that he was not disqualified from receiving benefits
under that subsection. Based on its conclusion that subsection
(IX.5) was the only potentially applicable disqualifying subsection,
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the Panel reasoned that since its requirements were not met, Holm
was not at fault for the separation and was entitled to an award of
benefits.
II. Discussion
¶ 10 M & A contends that the Panel erred by considering only
subsection (IX.5) and by expressly declining to consider other
possible disqualifying subsections. We agree.
¶ 11 We may set aside a Panel decision if, among other reasons, it
is erroneous as a matter of law. See § 8-74-107(6), C.R.S. 2019;
Whitewater Hill, LLC v. Indus. Claim Appeals Office, 2015 COA 5,
¶ 10. We review de novo an agency’s legal conclusions, including
its interpretation of statutes. Whitewater Hill, ¶ 10.
¶ 12 As pertinent here, subsection (IX.5) provides for
disqualification from the receipt of benefits based on the
presence in an individual’s system, during
working hours, of not medically prescribed
controlled substances . . . as evidenced by a
drug or alcohol test administered pursuant to
a statutory or regulatory requirement or a
previously established, written drug or alcohol
policy of the employer and conducted by a
medical facility or laboratory licensed or
certified to conduct such tests.
§ 8-73-108(5)(e)(IX.5).
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¶ 13 Nothing in the language of this subsection supports the
Panel’s conclusion that it should be applied exclusively in certain
circumstances. Furthermore, the Panel’s conclusion that
subsection (IX.5) applies exclusively directly conflicts with the
following language in section 8-73-108(5)(e): “[I]f a separation from
employment occurs for any of the following reasons, the employer
from whom such separation occurred must not be charged for
benefits which are attributable to such employment and . . . a
payment of such benefits must not be made from [the
unemployment compensation] fund . . . .” (Emphasis added.) The
statute then lists twenty-five separate subsections, each of which
describes a separate possible circumstance or reason supporting
benefit disqualification. See § 8-73-108(5)(e)(I)-(XXIV). Section 8-
73-108(4), which lists the statute’s various qualifying provisions,
contains the same “any of the following reasons” language.
¶ 14 Thus, the statute contemplates that hearing officers and the
Panel will consider all potentially applicable qualifying and
disqualifying provisions. See Mattison v. Indus. Comm’n, 33 Colo.
App. 203, 206-07, 516 P.2d 1143, 1145 (1973) (noting that where
cases “fall within two or more provisions of the Act . . . the
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Commission has wide latitude in determining which section will be
applied” and that if “the facts of a case are covered specifically by
one section of the statute, that provision must be applied”); see also
Dailey, Goodwin & O’Leary, P.C. v. Div. of Emp’t, 40 Colo. App. 256,
259, 572 P.2d 853, 855 (1977) (stating that “the facts in a given
case [must] be examined to ascertain if they bring the matter within
any statutory category”).
¶ 15 To support its conclusion that Holm’s firing based on the
positive drug test only triggers consideration of subsection (IX.5),
the Panel stated as follows: “In our view, the reasoning of the court
of appeals in Board of Water Commissioners v. Industrial Claim
Appeals Office, 881 P.2d 476 (Colo. App. 1994) and the fact that the
General Assembly subsequently enacted [section] 8-73-
108(5)(e)(IX.5) is controlling.” We are not persuaded that either
Board of Water Commissioners or the enactment of subsection (IX.5)
supports the Panel’s conclusion.
¶ 16 First, contrary to the Panel’s assertion, Board of Water
Commissioners was announced on August 11, 1994, more than a
month after subsection (IX.5) became effective on July 1, 1994. See
Ch. 321, sec. 1, § 8-73-108(5)(e)(IX.5), 1994 Colo. Sess. Laws 1998.
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Thus, to the extent the Panel considered subsection (IX.5) to be a
legislative response to Board of Water Commissioners, it was in
error.
¶ 17 Furthermore, nothing in Board of Water Commissioners itself
supports the Panel’s conclusion that subsection (IX.5) should be
applied exclusively. In that case, the claimant was fired because he
tested positive for cocaine in violation of the employer’s substance
abuse policy. Bd. of Water Comm’rs, 881 P.2d at 477. However, the
hearing officer awarded the claimant benefits, concluding that
although he had been fired for violating a company rule, the
employer had not established the requisite “serious damage” or
“endangerment” to support disqualification under section 8-73-
108(5)(e)(VII). Bd. of Water Comm’rs, 881 P.2d at 477-78. The
hearing officer also determined that the claimant was not
responsible or “at fault” for the separation. Id. at 478.
¶ 18 The Panel affirmed. Id. It rejected the employer’s argument
that the claimant should be disqualified under two subsections
specifically relating to controlled substances, section 8-73-
108(5)(e)(VIII) and (IX). Bd. of Water Comm’rs, 881 P.2d at 478.
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¶ 19 On review, a division of this court reversed. Based on the
evidentiary record, the division concluded that the claimant was (1)
at fault for the job separation and (2) disqualified from receiving
benefits under a statutory subsection the Panel and the hearing
officer had not even considered — section 8-73-108(5)(e)(XX) (failure
to meet established job performance or other defined standards).
Bd. of Water Comm’rs, 881 P.2d at 478.
¶ 20 In our view, Board of Water Commissioners does not support
the Panel’s conclusion that it should only consider a single
disqualifying subsection in this type of job separation scenario. To
the contrary, it supports the apparent legislative intent expressed in
section 8-73-108 that hearing officers and the Panel should
consider all potentially applicable subsections of the statute.
¶ 21 Moreover, the employer’s failure to satisfy the specific
requirements for disqualification under subsection (IX.5) does not,
in our view, justify ignoring other more general and potentially
applicable subsections. We note that the Board of Water
Commissioners division chose to consider and apply a more general
subsection — section 8-73-108(5)(e)(XX) — even though the
evidence in that case did not support applying other disqualifying
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subsections, including two that more specifically addressed
controlled substances. Indeed, construing subsection (IX.5) to
apply exclusively would effectively nullify or render meaningless
section 8-73-108(5)(e)’s language that disqualification is required if
“any of the following reasons” contained in the twenty-five
subsections exists. See Yotes, Inc. v. Indus. Claim Appeals Office,
2013 COA 124, ¶ 14 (courts must give consistent, harmonious, and
sensible effect to all parts of a statute and avoid an interpretation or
construction that renders any language meaningless).
¶ 22 It appears the Panel may have invoked the canon of statutory
interpretation dictating that the specific overrides the general. See
§ 2-4-205, C.R.S. 2019. However, where statutory provisions
appear to conflict, they “shall be construed, if possible, so that
effect is given to both.” Id. In other words, the specific-overrides-
general canon “is only applicable when ‘a conflict between two
statutory provisions is irreconcilable.’” Young v. Brighton Sch. Dist.
27J, 2014 CO 32, ¶ 16 (emphasis in Young) (quoting Martin v.
People, 27 P.3d 846, 860 (Colo. 2001)).
¶ 23 Any conflict among the provisions at issue in this case is not
irreconcilable. Subsection (IX.5) disqualifies an individual for the
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sole reason that he or she had a positive drug or alcohol test while
working, essentially dispensing with the need for an employer to
establish any impairment of the employee’s abilities or adverse
effect on the employer’s business. However, subsection (VII) would
apply where an employee violates an employer’s rule prohibiting
drug use, whether on or off the job, but an employer would be
required to demonstrate that the employee’s drug use had, or could
have had, adverse impacts on the company. Similarly, subsection
(VIII) could be applied to off-the-job drug use but requires proof that
the drug use interfered with the employee’s job performance. And
subsection (XX), when applied in a drug use or testing scenario,
requires the employer to establish that an employee’s drug use or
failed drug test caused him or her to fail to meet an established job
performance or other defined standard. Because there is no
irreconcilable conflict, all provisions of the statute are amenable to
harmonious construction, and thus must be given effect.
¶ 24 For these reasons, we agree with M & A’s contention that the
Panel erred by limiting its analysis in this case solely to subsection
(IX.5).
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¶ 25 We note the Panel ultimately concluded that Holm was not at
fault for the discharge, and we acknowledge that such a conclusion
could, by itself, support an award of benefits. See Cole v. Indus.
Claim Appeals Office, 964 P.2d 617, 618 (Colo. App. 1998) (“[E]ven if
the findings of the hearing officer may support the application of
one of the disqualifying sections of the statute, a claimant may still
be entitled to benefits if the totality of the circumstances establishes
that the claimant’s separation occurred through no fault of her
own.”). But it appears that the Panel’s fault analysis was based
solely on its erroneous conclusion that subsection (IX.5) applies
exclusively.
¶ 26 We conclude that the proper remedy is to set aside the Panel’s
order and remand for it to consider whether the findings and the
evidence should support disqualifying Holm under any of the other
statutory subsections asserted by M & A. In doing so, we express
no opinion as to the merits of M & A’s contentions that Holm is
disqualified under any of the three provisions, particularly in light
of the hearing officer’s factual finding that Holm’s use of marijuana
did not interfere with his performance at work. We also note that,
on remand, the Panel is to review the matter on the record before it,
11
and consider only those arguments previously asserted by M & A.
The Panel should also determine whether Holm was at fault for the
separation using the generally recognized legal standards for that
inquiry. See Mesa Cty. Pub. Library Dist. v. Indus. Claim Appeals
Office, 2017 CO 78, ¶ 18; Cole, 964 P.2d at 618-19.
III. Conclusion
¶ 27 The Panel’s order is set aside, and the case is remanded for
further proceedings consistent with the views expressed in this
opinion.
JUDGE J. JONES and JUDGE FOX concur.
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