A.R. v. Review Board of the Indiana Department of Workforce Development and Housing Authority of the City of Kokomo (mem. dec.)

MEMORANDUM DECISION
Aug 07 2015, 8:20 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Richard L. Darst Gregory F. Zoeller
Cohen Garelick & Glazier Attorney General of Indiana
Indianapolis, Indiana
Kristin Garn
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
A.R., August 7, 2015
Appellant-Petitioner, Court of Appeals Case No.
93A02-1411-EX-800
v. Appeal from the Review Board of the
Department of Workforce
Development.
Review Board of the Indiana
The Honorable Steven F. Bier,
Department of Workforce Chairperson.
Development and Housing
Case No. 14-R-0277
Authority of the City of
Kokomo,
Appellee-Respondent.
Riley, Judge.
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STATEMENT OF THE CASE
[1] Appellant, Angela R. Riley (Riley), 1 appeals the decision of the Unemployment
Insurance Review Board (the Review Board) of the Indiana Department of
Workforce Development (DWD), which upheld the decision of the
administrative law judge (ALJ) denying her claim for unemployment
compensation benefits on the basis that she had been terminated from her
employment for just cause.
[2] We affirm.
ISSUES
[3] Riley raises two issues on appeal, which we restate as follows:
(1) Whether there is sufficient evidence to support the Review Board’s
determination that Riley is ineligible for unemployment compensation benefits
because she was discharged for just cause; and
(2) Whether Riley’s due process rights were violated.
FACTS AND PROCEDURAL HISTORY
[4] On November 3, 2008, the Housing Authority of the City of Kokomo
(Employer) hired Riley as a full-time Application Processing Clerk. Riley
1
The parties refer to Riley using her initials. However, our court has previously found that, notwithstanding
the confidentiality mandate of Indiana Code section 22-4-19-6 and Indiana Administrative Rule 9(G), “it is
appropriate for this [c]ourt to use the full names of parties in routine appeals from the Review Board.” Moore
v. Review Bd. of Ind. Dep’t of Workforce Development, 951 N.E.2d 301, 306 (Ind. Ct. App. 2011). See also J.M. v.
Review Bd. of Ind. Dep’t of Workforce Development, 975 N.E.2d 1283, 1285 n.1 (Ind. 2012) (noting that the
court’s practice “going forward will be to keep the[] parties confidential only if they make an affirmative
request”). Therefore, as we did not receive an affirmative request, we will utilize Riley’s name.
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described that her job duties included maintaining the waiting list of applicants
seeking housing. Once a housing unit became available, Riley was responsible
for assigning the unit to the next eligible applicant.
[5] On May 7, 2014, Riley learned from a maintenance worker that individuals
were in the process of moving into an apartment which had not been authorized
for occupancy. Just two months earlier, Riley had received a written warning
for similarly arranging a housing transfer without first having an inspection
conducted. Upon learning of the unauthorized move-in, Riley contacted
Employer’s chief executive officer, Debra Cook (CEO Cook), and requested an
immediate meeting in order to demand “an answer” as to why these tenants
were being permitted to move into an unpainted, dirty unit. (Tr. p. 25). CEO
Cook informed Riley that she was in a meeting and could not see her right
away. CEO Cook advised Riley to discuss the issue with her immediate
supervisor. Instead, Riley contacted the Indianapolis office to report that
tenants had been permitted to move into an apartment that was still “on
administrative hold.” (Tr. p. 25).
[6] Riley “was agitated that the tenants had been allowed to move into the
apartment.” (Appellant’s App. p. 4). Riley’s supervisor, Property Manager
Tina Bellis (Property Manager Bellis), spoke with CEO Cook and learned that
management was aware of the unauthorized tenants and was handling the
issue. Property Manager Bellis relayed this information to Riley, but Riley
“became very loud and irritable” and complained to other employees about her
dissatisfaction with Employer’s procedures. (Tr. p. 21). Because Riley was
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causing a disturbance throughout the office, CEO Cook suspended her meeting
and asked an assistant property manager to send Riley into her office. Instead
of reporting to CEO Cook’s office as instructed, Riley called CEO Cook and
“said she would not come to [her] office” because it “wouldn’t do any good.”
(Tr. p. 12). According to Riley, she had already handled the issue by reporting
the matter to the Indianapolis office, so “there was no reason for [her] to [go]
down to [CEO Cook’s] office.” (Tr. p. 26).
[7] Employer’s Personnel Policy Manual provides that an employee “may be
subject to discharge upon the first offense” for committing “insubordination –
[f]ailing to follow or comply with instructions or work orders in a timely
manner.” (Appellant’s App. p. 15). After Riley refused CEO Cook’s directive
to come to her office, CEO Cook resolved to terminate Riley’s employment.
However, the director of human resources was out of the office and could not
process Riley’s termination until the following morning. In addition, Riley did
not report to work for the two days following the incident, taking one day off
under the Family and Medical Leave Act (FMLA) and one vacation day.
Thus, it was not until Riley returned to work the following Monday, May 12,
2014, that she was notified of the termination.
[8] Riley subsequently filed a claim with the DWD for unemployment
compensation benefits. On July 31, 2014, a DWD deputy rendered an initial
determination that Riley had not been terminated for just cause and was
therefore eligible for unemployment compensation benefits. On August 9,
2014, Employer appealed the deputy’s ruling to an ALJ. On September 23,
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2014, the ALJ conducted a hearing by a telephone conference call, and on
September 26, 2014, the ALJ issued a decision, reversing the DWD deputy and
finding Riley ineligible for unemployment compensation benefits. In particular,
the ALJ concluded that Riley “knowingly violated reasonable and uniformly
enforced rules. [Riley] was insubordinate when [she] refused to go to [CEO
Cook’s] office. The request by [CEO Cook] was a reasonable request. [Riley]
was discharged for just cause as defined by [Indiana Code section] 22-4-15-1.”
(Appellant’s App. p. 5).
[9] On October 10, 2014, Riley appealed the ALJ’s decision to the Review Board.
On October 27, 2014, the Review Board affirmed the ALJ’s decision, adopting
and incorporating by reference the ALJ’s findings of fact and conclusions of
law. The Review Board added a specific finding that CEO Cook possessed the
“authority to require [Riley] to report to her office” and despite the fact that
CEO Cook’s instruction was “reasonable[,]” Riley “refused to do so.”
(Appellant’s App. p. 2).
[10] Riley now appeals. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
I. Standard of Review
[11] “Any decision of the [R]eview [B]oard shall be conclusive and binding as to all
questions of fact.” Ind. Code § 22-4-17-12(a). The Review Board’s decision
may only be challenged on appeal “as being contrary to law, in which case we
examine the sufficiency of the facts found to sustain the decision and the
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sufficiency of the evidence to sustain the findings of facts.” Coleman v. Review
Bd. of Ind. Dep’t of Workforce Development, 905 N.E.2d 1015, 1019 (Ind. Ct. App.
2009). Pursuant to this standard, “we review determinations of specific or basic
underlying facts, conclusions or inferences drawn from those facts, and legal
conclusions.” Id.
[12] Our standard of review is threefold: “(1) findings of basic fact are reviewed for
substantial evidence; (2) findings of mixed questions of law and fact—ultimate
facts—are reviewed for reasonableness; and (3) legal propositions are reviewed
for correctness.” Reed v. Review Bd. of Ind. Dep’t of Workforce Development, 32
N.E.3d 814, 822 (Ind. Ct. App. 2015). We will consider only the evidence most
favorable to the Review Board’s findings, without reweighing evidence or
assessing the credibility of witnesses. J.M., 975 N.E.2d at 1286. We will affirm
the decision of the Review Board unless there is no substantial evidence to
support its findings. Id.
II. Sufficiency of the Evidence
[13] The Indiana Unemployment Compensation Act was enacted, in part, “to
provide for payment of benefits to persons unemployed through no fault of their
own.” I.C. § 22-4-1-1. Accordingly, an unemployed claimant is ineligible for
unemployment benefits if she is discharged for just cause. I.C. § 22-4-15-1(a).
“Discharge for just cause” is defined to include, but is not limited to:
(1) separation initiated by an employer for falsification of an
employment application to obtain employment through subterfuge;
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(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;
(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.
I.C. § 22-4-15-1(d) (emphasis added). When an employer alleges that an
employee has been discharged for just cause, “the employer bears the burden of
establishing a prima facie case of discharge for just cause.” Albright v. Review
Bd. of Ind. Dep’t of Workforce Development, 994 N.E.2d 745, 750 (Ind. Ct. App.
2013). Once the employer has satisfied its burden, the onus “shifts to the
employee to rebut the employer’s evidence.” Id.
[14] In this case, the Review Board found that Riley was discharged for just cause
under subsection (d)(2) based on her violation of Employer’s rule against
insubordination. Riley now claims that there is insufficient evidence to support
this determination. First, she argues that there is a lack of substantial evidence
that she was insubordinate on March 6, 2014, for which she received a written
warning on March 7, 2014, for arranging an improper housing transfer. We,
however, find no merit or relevancy in this argument because the March 7,
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2014 warning was not the basis for Riley’s termination. Rather, at the hearing
before the ALJ, Employer relied on the May 7, 2014 incident—in which Riley
refused CEO Cook’s instruction to report to her office—as its reason for
terminating Riley’s employment and only briefly mentioned that Riley had
been insubordinate on a prior occasion. Furthermore, neither the ALJ nor the
Review Board cited Riley’s previous warning for insubordination as a just cause
for discharge. Instead, both the ALJ and the Review Board exclusively found
that Riley violated Employer’s rule against insubordination by refusing to go to
CEO Cook’s office. Likewise, we will limit our review solely to whether there
is substantial evidence of just cause to terminate Riley based on her
insubordinate behavior on May 7, 2014.
[15] “To knowingly violate an employer’s rule, the employee must (1) know of the
rule and (2) know his conduct violated the rule.” Id. A review of the record
reveals that Riley had received a copy of Employer’s Personnel Policy Manual,
which identifies “insubordination—[f]ailing to follow or comply with
instructions or work orders in a timely manner”—as an offense for which an
employee is subject to discharge in the first instance. (Appellant’s App. p. 15).
On May 7, 2014, CEO Cook, who is undisputedly Riley’s superior, asked an
assistant property manager to send Riley into her office because of the
disturbance Riley was creating throughout the workplace. When the assistant
property manager told Riley that CEO Cook “would like to see her,” Riley
instead called CEO Cook and “said she would not come to [her] office.” (Tr.
pp. 12, 20). During the hearing before the ALJ, Riley admitted that she saw
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“no reason . . . to [go] down to [CEO Cook’s] office” because “the situation
had already been tak[en] care of.” (Tr. p. 26). By directly refusing to comply
with CEO Cook’s instruction, we find sufficient evidence that Riley knowingly
violated Employer’s rule against insubordination. Nevertheless, Riley attempts
to redirect the blame, asserting that it was Employer who violated the policy
against allowing tenants to move into an unprepared apartment and that it was
CEO Cook who initially refused Riley’s request for a meeting. Ultimately,
these allegations have no bearing on the fact that Riley—as the employee—was
subject to Employer’s rule against insubordination, and Riley violated this rule
when she disregarded CEO Cook’s instruction.
[16] In order for an employee’s rule violation to merit “[d]ischarge for just cause[,]”
the employer’s rule must be “reasonable and uniformly enforced.” I.C. § 22-4-
15-1(d)(2). A work rule will be found to be reasonable if it:
(1) is lawful;
(2) is related to the employer’s business operations;
(3) is intended by the employer to broadly apply to classes, categories,
or all employees;
(4) does not create a harsh or unconscionable requirement for
employees.
646 Ind. Admin. Code § 5-8-5. Riley contends that Employer’s rule is
unreasonable because it “is enforced in a discriminatory or retaliatory manner
based on FMLA leave, sex, race, or disability.” (Appellant’s Br. p. 21). We
disagree. Employer’s director of human resources testified that the policy
against insubordination applies to and is enforced equally against all employees.
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CEO Cook testified that the rule exists because “insubordination will impact
the effective and efficient operations of this agency, and it negatively affects
employee moral[e].” (Tr. p. 13). The Personnel Policy Manual further explains
that the rules are intended “to insure continuous and successful [Employer]
operations.” (Appellant’s App. p. 14). We therefore find that Employer’s rule
against insubordination is reasonable.
[17] Riley also argues that Employer’s rule is not a uniformly enforced policy. “A
uniformly enforced rule is one that is carried out in such a way that all persons
under the same conditions and in the same circumstances are treated alike.”
City of Carmel v. Review Bd. of Ind. Dep’t of Workforce Development, 970 N.E.2d
239, 245 (Ind. Ct. App. 2012). More specifically, Riley contends that
“Employer presented no evidence that it terminated anyone for going ‘over the
head’ of the CEO and complaining to the Indianapolis office” or for improper
housing transfers. (Appellant’s Br. 23). Yet, neither of these reasons were
proffered as Employer’s grounds for terminating Riley. As previously stated,
the ALJ and Review Board found that Riley was terminated for
insubordination because she disregarded CEO Cook’s instruction to report to
her office, and the ALJ concluded that “[a]ny employee who committed the
same action as [Riley] would also be discharged.” (Appellant’s App. p. 4).
[18] With respect to uniform enforcement, our supreme court has found:
Uniform enforcement gives notice to employees about what
punishment they can reasonably anticipate if they violate the rule and
it protects employees against arbitrary enforcement. This is important
to ensure that employees who are denied compensation under this
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subsection are only those who lost their jobs for reasons within their
control. Here, the purposes were met if . . . [Riley] knew of the
violation, knew or can be fairly charged with knowledge that it could
result in termination, and there was no arbitrary enforcement.
McClain v. Review Bd. of Ind. Dep’t of Workforce Development, 693 N.E.2d 1314,
1319-20 (Ind. 1998) (internal citation omitted), reh’g denied. Here, Employer’s
written Personnel Policy Manual was introduced into evidence and clearly
states that an employee may be subject to discharge for a first offense of
insubordination. See City of Carmel, 970 N.E.2d at 245 (requiring a rule to be
reduced to writing and introduced into evidence “to enable this court to fairly
and reasonably review the determination that an employee was discharged for
‘just cause’ for the knowing violation of a rule”). Additionally, Employer’s
director of human resources testified that the rule against insubordination
applies equally to all employees—regardless of whether full-time or part-time.
See id. (“In order to evaluate uniformity one must first define the class of
persons against whom uniformity is measured.”). Thus, there is sufficient
evidence to support the determination that Employer’s rule is uniformly
enforced.
[19] Riley further contends that her alleged insubordination was merely “a pretext
for discrimination and retaliation against [her] for her disability and for her
taking substantial FMLA leave that she was entitled to by law.” (Appellant’s
Br. p. 13). 2 During the hearing, CEO Cook repeatedly stated that Riley’s
2
We decline to address the numerous arguments posited by Riley which have no relevance or basis in the
record, such as her bald assertion that CEO Cook failed “to engage in an interactive process to find a
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discharge was based entirely on her insubordination and was in no way related
to her FMLA leave. Thus, Riley’s argument is nothing more than a request
that we reweigh the evidence and judge witness credibility, which we will not
do. It was entirely within the discretion of the ALJ—and, in turn, the Review
Board—to find CEO Cook’s testimony to be more credible than Riley’s.
III. Due Process
[20] Riley next claims that she was “denied her rights to a fair hearing and an
impartial tribunal.” (Appellant’s Br. p. 28). We find her argument is
tantamount to a claim that she was denied due process. It is well established
that “[t]he fundamental requirement of due process is the opportunity to be
heard at a meaningful time and in a meaningful manner.” Wolf Lake Pub, Inc. v.
Review Bd. of Ind. Dep’t of Workforce Development, 930 N.E.2d 1138, 1141 (Ind.
Ct. App. 2010) (alteration in original). Whether a party was denied due process
is a question of law, which our court reviews de novo. Id.
[21] First, Riley asserts that the ALJ improperly excluded and ignored evidence
regarding the “real reasons” behind Riley’s termination—i.e., Riley’s disability,
retaliation for Riley taking FMLA leave, and retaliation for Riley “going ‘over
the head’” of CEO Cook by complaining to the Indianapolis office.
(Appellant’s Br. pp. 28-29). “In general, the Indiana Rules of Trial Procedure
and the Indiana Rules of Evidence shall govern proceedings before an [ALJ] or
reasonable accommodation for [Riley’s] bipolar disorder, especially when it was aggravated by the CEO, and
the retaliation against [Riley] because of her complaints.” (Appellant’s Br. p. 18).
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the [R]eview [B]oard.” 646 IAC § 5-10-5(a). The parties are afforded an
opportunity to “present evidence as the [ALJ] deems necessary for determining
the substantial rights of the parties.” 646 IAC § 5-10-5(a). In this case, the ALJ
considered Employer’s testimony that Riley was fired for insubordination based
on her failure to report to CEO Cook’s office, and the ALJ also heard Riley’s
testimony that she believed she was terminated out of retaliation and
discrimination. Because it is the role of the ALJ, not this court, to weigh the
evidence, it was within the discretion of the ALJ to find Employer’s testimony
more credible and to subsequently limit the testimony to the events directly
relating to Riley’s discharge. See Ind. Evidence Rule 401 (stating that evidence
is relevant, in part, if “the fact is of consequence in determining the action”);
Evid. R. 402 (excluding irrelevant evidence).
[22] Second, Riley alleges that the ALJ “failed to be impartial by repeatedly asking
leading questions in favor of the Employer” and “refused to allow [Riley] to ask
questions on the same subjects.” (Appellant’s Br. p. 29). We find no merit in
this argument. It is the prerogative of the ALJ to “examine all witnesses” in
order to resolve the case. 646 IAC § 5-10-5(a)(1). In determining whether
information concerning Riley’s FMLA leave was relevant, the ALJ directly
asked Employer whether the FMLA leave had any bearing on its decision to
terminate Riley. In turn, the ALJ also questioned Riley as to why she believed
she was terminated and afforded Riley an ample opportunity to explain her
opinion that she was fired in retaliation for contacting the Indianapolis office
and for taking FMLA leave. We again reiterate that it was within the discretion
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of the hearing officer to credit Employer’s testimony that Riley was terminated
solely due to her insubordination. It is well settled that “[d]ue process requires
a neutral, unbiased decision maker in” administrative determinations. Perry-
Worth Concerned Citizens v. Bd. of Comm’rs of Boone Cnty., 723 N.E.2d 457, 460
(Ind. Ct. App. 2000), trans. denied. Here, we find that Riley has failed to
demonstrate that the ALJ acted in a biased or prejudicial manner; thus, there is
no due process violation.
CONCLUSION
[23] Based on the foregoing, we conclude that there is substantial evidence to
establish that Riley was terminated for just cause and is therefore ineligible for
unemployment compensation benefits. We further conclude that Riley’s due
process rights were not violated.
[24] Affirmed.
[25] Bailey, J. and Barnes, J. concur
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