J.M. v. Review Board of the Indiana Department of Workforce Development and T.C.

ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Ronald E. Weldy REVIEW BOARD
Indianapolis, Indiana Gregory F. Zoeller
Attorney General of Indiana
Kathy Bradley
Deputy Attorney General
Indianapolis, Indiana
ATTORNEY FOR APPELLEE T.C.
Douglas J. Masson
Lafayette, Indiana
______________________________________________________________________________
In the
Indiana Supreme Court Oct 17 2012, 8:57 am
_________________________________
No. 93S02-1203-EX-138
J. M.,
Appellant (Petitioner below),
V.
REVIEW BOARD OF THE INDIANA
DEPARTMENT OF WORKFORCE
DEVELOPMENT AND T.C.,
Appellees (Respondents below),
_________________________________
Appeal from the Review Board of the Department of Workforce Development No. 10-R-06947
The Honorable Michael Botkin, Administrative Law Judge,
The Honorable Steven F. Bier, Chairperson, The Honorable George H. Baker, Member,
The Honorable Lawrence A. Dailey, Member
_________________________________
On Petition to Transfer from the Indiana Court of Appeals, No. 93A02-1102-EX-146
_________________________________
October 17, 2012
David, Justice.
This case involves an employee who was fired from his job for his failure to follow the
instructions of his supervisor regarding missed work time. The employee wanted to take a
college class during normal work hours and make up those hours later in the day or otherwise at
his discretion. His employer allowed him to take the class, but informed him that he would have
to use his vacation, compensation, or unpaid time rather than take shorter lunches, come in early,
or stay late. J.M. subsequently enrolled in the class, but did not follow his employer’s
instructions and failed to properly account for his time off. Consequently, he was fired and
denied unemployment benefits. An Administrative Law Judge overturned that decision and
granted J.M. unemployment benefits. The Review Board upheld the original denial of
unemployment benefits. We affirm the Board’s determination that the termination was for just
cause.
Facts and Procedural History
J.M. was an employee of the Surveyor’s Office of T.C.1 from July 6, 2009, to September
1, 2010. Around May 13, 2010, J.M. asked to take a class during work hours and make up the
missed time by working during his lunch break or coming in before the normal workday began.
Normal work hours for J.M. were from 8:00 a.m. to 4:30 p.m. with a floating one-hour unpaid
lunch. The class J.M. signed up for was offered from 7:30 a.m. to 9:30 a.m. on Mondays and
Wednesdays. J.M. believed he could be at work by 10:00 a.m. on those days. A few days later,
J.M.’s Supervisor, Z.B., emailed J.M. that office policy would allow time off for educational
classes but that missed time could not be “made up.” Z.B. informed J.M. he would have to use
vacation time instead. Z.B. also stated, “I understand if this isn’t the answer you were hoping or
looking for but that has been [the surveyor’s] policy on this issue historically.” Z.B. explained
the issue had come up before and the county surveyor was opposed to employees making up time
due to the difficulty in supervision and tracking the made up time. Essentially, the employer’s
position was that J.M. could take the time off for his classes, but he would have to use his
1
Although in this case we kept the claimant and employing unit confidential, our practice going forward
will be to keep these parties confidential only if they make an affirmative request as outlined in Recker v.
Review Board, 958 N.E.2d 1136, 1138 n.4 (Ind. 2011). As discussed in Recker, an affirmative request
must be made for confidentiality.
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accrued compensation, personal, or vacation time. The employer would not allow J.M. to work
through a lunch break or outside of the normal hours to make up his missed time.
T.C. maintains an employee handbook. According to rule 33 of the handbook, an
employee can face discipline for “[d]isobeying a reasonable order of supervisor to perform
assigned work or to comply with written or verbal instructions.”
J.M. began class on August 23, 2010. J.M. went to the classes and subsequently violated
his supervisor’s instruction when he admitted that for the four hours missed that week, he
reported 2.25 hours as vacation or compensation time, did not take a lunch on one of the days,
and came in 15 minutes early three days that week. This conduct violated the directive given to
him by his supervisor and, thus, violated the handbook. As a result, on September 1, 2010,
J.M.’s employment was terminated.
At the hearing, J.M. gave conflicting testimony. J.M. initially stated he had forgotten the
directive to use vacation, personal, or compensation time to cover the missed time. However,
J.M. also stated he did not report all the time missed as vacation, compensation, or personal time,
because he believed he would need the time later in the semester.
On September 24, 2010, a claims deputy of the Indiana Department of Workforce
Development determined that J.M. was discharged for just cause and was ineligible for
unemployment benefits. J.M. filed an appeal from the determination. An Administrative Law
Judge (ALJ) reversed the decision, finding that J.M. was eligible for unemployment benefits.
The ALJ concluded that the discipline was too severe for only a small amount of misreported
time. T.C. filed an appeal with the Review Board challenging the ALJ’s decision. The Review
Board reversed the ALJ’s decision and found that J.M. was discharged for just cause and
ineligible for unemployment benefits. Specifically, the Review Board noted that J.M. had
violated the direction from his supervisor as well as the policy found in the employee handbook.
The Court of Appeals reversed the Review Board. We granted transfer.
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Discussion
The Indiana Unemployment Compensation Act (UCA) provides that any decision of the
Review Board shall be conclusive and binding as to all questions of fact. Ind. Code § 22-4-17-
12(a) (2007). When the decision of the Review Board is challenged, an appellate court makes a
two-part inquiry into (1) “the sufficiency of the facts found to sustain the decision” and (2) “the
sufficiency of the evidence to sustain the findings of fact.” Id. § 22-4-17-12(f). This Court
provided an extensive analysis of the standard of review for these cases in McClain v. Review
Board of Indiana Department of Workforce Development, 693 N.E.2d 1314 (Ind. 1998). Simply
stated, an appellate court reviews “(1) determinations of specific or ‘basic’ underlying facts; (2)
conclusions or inferences from those facts, sometimes called ‘ultimate facts,’ and (3) conclusions
of law.” Id. at 1317.
The Review Board’s “findings of basic facts are subject to a ‘substantial evidence’
standard of review.” Id. We neither reweigh evidence nor judge the credibility of witnesses;
rather, we consider only the evidence most favorable to the Review Board’s findings. Id. We
will reverse the decision only if there is no substantial evidence to support the Review Board’s
findings. Id.
An individual is disqualified for unemployment benefits if he is discharged for “just
cause.” Ind. Code § 22-4-15-1(a) (Supp. 2012). “Discharge for just cause” includes but is not
limited to
(1) separation initiated by an employer for falsification of an employment
application to obtain employment through subterfuge;
(2) knowing violation of a reasonable and uniformly enforced rule of an
employer, including a rule regarding attendance;
(3) if an employer does not have a rule regarding attendance, an individual’s
unsatisfactory attendance, if the individual cannot show good cause for
absences or tardiness;
(4) damaging the employer’s property through willful negligence;
(5) refusing to obey instructions;
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(6) reporting to work under the influence of alcohol or drugs or consuming
alcohol or drugs on employer’s premises during working hours;
(7) conduct endangering safety of self or coworkers;
(8) incarceration in jail following conviction of a misdemeanor or felony by a
court of competent jurisdiction; or
(9) any breach of duty in connection with work which is reasonably owed an
employer by an employee.
Ind. Code § 22-4-15-1(d) (emphasis added). The Review Board found that J.M. was discharged
for just cause based on subsection (d)(2).
In overturning the Review Board’s decision, the Court of Appeals relied on the Review
Board’s holding that J.M. violated Indiana Code section 22-4-15-1(d)(2) and held that J.M. did
not in fact violate subsection (d)(2). However, the Court of Appeals did not consider subsection
(d)(5) because it was not named in the conclusions of law by the Review Board. Indiana Code
section 22-4-15-1(d)(5) mirrors rule 33 of the employee handbook, which the Review Board
discussed. As mentioned previously, rule 33 provides for dismissal for “disobeying a reasonable
order of supervisor to perform assigned work or to comply with written or verbal instructions.”
The Court of Appeals found it could not affirm a just cause finding on different grounds
than the one cited by the Review Board. The Court of Appeals relied on the proposition that
“[w]hile the Board’s task is to use any applicable definition in the statute to determine whether
an employee was discharged for just cause, our review is limited to determining whether the
Board made sufficient findings to support the definition it selected to apply.” Ryan v. Review
Bd., 560 N.E.2d 112, 114 (Ind. Ct. App. 1990) (citing Trigg v. Review Bd., 445 N.E.2d 1010,
1013 (Ind. Ct. App. 1983)). If we were confined to considering only the unwritten policy of the
surveyor’s office, the Court of Appeals would have been correct. However, we are not so
confined. We agree with Judge Garrard’s concurrence in Trigg when he stated,
It may appear at first blush that the majority opinion has merely taken the view
that where the review board has premised its decision upon one of the grounds of
discharge for good cause enumerated in IC 22-4-15-1, we may not look to a
different statutory ground even though the review board’s findings clearly
establish its applicability. If that were the case I would feel constrained to dissent.
It is not.
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Trigg, 445 N.E.2d at 1014–15 (Garrard, J., concurring). Furthermore, Ryan is distinguishable
because the employer in Ryan argued to sustain the dismissal on the theory that the employee’s
conduct amounted to a breach of a duty that she owed her employer, a factor enunciated in
Indiana Code section 22-4-15-1(d)(8). Ryan, 560 N.E.2d at 115. In Ryan, the employer did not
appear at the hearing and did not provide the referee any evidence to sustain the employer’s
burden of establishing a just-cause discharge. Id. That is in marked contrast to the present case,
where both J.M. and Z.B. appeared at the hearing and presented their evidence, which included
J.M. not obeying the instructions given to him regarding taking time off of work.
The findings of a Review Board need to be only specific enough to permit us to
intelligently review the Review Board’s decision. Fort Wayne Comm. Schools v. Review Bd.
Of Indiana Employment Sec. Div., 428 N.E.2d 1379, 1382 (Ind. Ct. App. 1981). Agency
findings are specific enough when they are given with “sufficient particularity and specificity”
such that the reviewing court can “adequately and competently review” the agency’s decision.
Capital Improvement Bd. of Managers of Marion County v. Pub. Serv. Comm’n, 176 Ind. App.
240, 260, 375 N.E.2d 616, 631 (1978).
The Review Board correctly framed the issue as “whether the Employer met its burden of
proof that it discharged the Claimant for just cause.”
In the findings of fact, the Review Board noted,
One such behavior that can warrant discipline is found in Rule 33: “Disobeying a
reasonable order of supervisor to perform assigned work or to comply with
written or verbal instructions.” Employer’s Ex. 4, p. 2. The Claimant
acknowledged receiving the handbook and his responsibility to read and comply
with the handbook’s terms. Employer’s Ex. 3. The Project Manager testified that
the Employer uniformly enforces its rules. The Claimant disagreed, but he was
unable to provide any evidence of non-uniform rule enforcement. The Review
Board finds that the surveyor’s office uniformly enforces the Employer’s Work
Rules.
The findings of fact also state that the project manager told J.M. that “although he was approved
to miss work to attend the class, the current surveyor’s policy was to not allow employees to try
to ‘make up’ hours they missed.” However, the conclusions of law solely focus on subsection
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(d)(2) that J.M. knowingly violated a reasonably and uniformly enforced rule of an employer and
do not focus on subsection (d)(5), that J.M. disobeyed his supervisor’s instructions.
We conclude the findings of basic fact are within the scope of our substantial-evidence
standard of review. The substantial-evidence test is met when the findings of the Review Board
are conclusive and binding unless they meet certain exceptions, including but not limited to
(1) The evidence on which the Review Board based its findings was devoid of
probative value;
(2) The quantum of legitimate evidence was so proportionately meager as to lead
to the conviction that the finding does not rest upon a rational basis;
(3) The result of the hearing before the Review Board was substantially
influenced by improper considerations;
(4) There was not substantial evidence supporting the findings of the Review
Board;
(5) The order of the Review Board, its judgment or finding, is fraudulent,
unreasonable or arbitrary.
McClain, 693 N.E.2d at 1317 n.2 (citing General Motors Corp. v. Review Bd. of the Ind. Dep’t
of Workforce Dev., 671 N.E.2d 493, 496 (Ind. Ct. App. 1996)). The basic facts here are not in
dispute. None of the enumerated exceptions are met.
We then turn to what we refer to as ultimate facts, or “mixed questions,” or alternatively
described as “questions of law.” We review to ensure the Board’s inference is “reasonable.” Id.
at 1317–18. The ultimate order of the Review Board, that “[J.M.] is not entitled to
unemployment benefits,” was reasonable. At issue is J.M.’s violation of his boss’s orders. J.M.
was told he could not “make up” time, and instead must use vacation, personal, or compensation
time. It is uncontroverted that J.M. disobeyed this instruction.
J.M. made two inconsistent statements defending his actions at his ALJ review hearing.
He first said he forgot the project manager’s directive to use vacation time to cover time missed.
Second, he stated he did not report all the time missed as vacation because he believed he would
need the time to use later in the semester. It is uncontroverted that J.M. did not obey the
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instructions previously given to him. He did not report his missed work as vacation,
compensation, or personal time.
We may rely on a different statutory ground of a just cause finding than the one relied
upon by the Review Board when, as here, the Review Board’s findings of fact clearly establish
the alternate subsection’s applicability. As such, we affirm the Review Board under Indiana
Code section 22-4-15-1(d)(5), that J.M. refused to obey instructions, and was thus fired for just
cause.
This analysis comports with the deferential standard given to the trial courts of this state:
“on appellate review the trial court’s judgment will be affirmed if sustainable on any theory or
basis found in the record.” Havert v. Caldwell, 452 N.E.2d 154, 157 (Ind. 1983). “Moreover it
is well established that a decision of the trial court will be sustained if a valid ground exists to
support it, whether or not the trial court considered those grounds.” Bruce v. State, 268 Ind. 180,
200, 375 N.E.2d 1042, 1054 (1978). To state it yet another way, we “may affirm a trial court’s
judgment on any theory supported by the evidence.” Dowdell v. State, 720 N.E.2d 1146, 1152
(Ind. 1999).
Conclusion
J.M. refused to obey instructions that were given to him on how to fill out his time sheet
to incorporate his missed time. When the facts of the case support more than one statutory
ground for discharge, we are not confined to narrowly review the Review Board’s decision when
the facts point to the Review Board’s ultimately correct conclusion. Here, the findings of fact by
the Review Board clearly showed J.M. violated his supervisor’s instructions and the employee
handbook, which is also a just-cause discharge under Indiana Code section 22-4-15-1(d)(5).
Accordingly, we affirm the Review Board’s denial of unemployment benefits.
Dickson, C.J., Rucker, and Massa, JJ., concur.
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