Elizabeth H. Greenwell v. Employment Appeal Board and Professional Transportation, Inc.

IN THE COURT OF APPEALS OF IOWA
No. 15-0154
Filed March 23, 2016
ELIZABETH H. GREENWELL,
Plaintiff-Appellant,
vs.
EMPLOYMENT APPEAL BOARD and
PROFESSIONAL TRANSPORTATION, INC.,
Defendants-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Eliza Ovrom, Judge.
Elizabeth Greenwell appeals the district court’s ruling on judicial review
upholding the denial of unemployment benefits upon a finding of misconduct.
REVERSED AND REMANDED WITH DIRECTIONS.
Robert C. Oberbillig of the Drake Law School Legal Clinic, and Sterling
Wilkins, Kaitlyn J. Ausborn, and Robert L. Myott, Student Legal Interns, Des
Moines, for appellant.
Richard R. Autry of the Employment Appeal Board, Department of
Inspections and Appeals, Des Moines, for appellees.
Heard by Danilson, C.J., and Vogel and Potterfield, JJ.
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DANILSON, Chief Judge.
Elizabeth Greenwell was discharged from her position at Professional
Transportation Inc. (PTI) after backing a company van into a Union Pacific train
car. Greenwell was then denied unemployment benefits for “misconduct.”
Greenwell appeals the district court’s ruling on judicial review upholding the
denial of benefits.
Two issues were raised by Greenwell. First, Greenwell contends that in
denying benefits the agency wrongly considered two other incidents. Second,
she maintains the agency wrongfully applied and interpreted the term
“misconduct.” PTI contends Greenwell’s repeated negligence rose to the level of
misconduct.
Misconduct must be substantial to justify a denial of unemployment
benefits. The agency made no finding that the acts constituted an “intentional
and substantial” disregard of the employer’s interests. We therefore reverse the
district court and remand with directions.
I. Background Facts and Proceedings.
Elizabeth Greenwell worked as a full-time hotel van driver for PTI from
August 2012 until she was discharged on January 10, 2014. Greenwell’s duties
involved transporting railroad personnel. Her discharge was based on an
incident on January 8, 2014, in which the van she was driving slid into a train car.
Greenwell then sought unemployment benefits. PTI disputed Greenwell
was eligible for benefits as she had been “discharged for misconduct in
connection with work.” PTI remarked the January 8, 2014 incident was the “2nd
preventable accident in less than 2 months. She was deemed as a safety risk.”
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On February 4, 2014, Greenwell received notice from Iowa Workforce
Development that she was not eligible for unemployment benefits because she
was “discharged from work on 01/10/14, for violation of a known company rule.”
She appealed that decision.
On March 7, 2014, a telephone hearing was held before an administrative
law judge (ALJ). The ALJ stated that issues listed on the hearing notice included
whether Greenwell “was laid off, discharged for misconduct in connection with
the employment that would disqualify her for benefits or whether she voluntarily
quit without good cause attributable to the employer.”1 The ALJ also observed it
was the employer’s burden to prove the claimant was not eligible for benefits.
PTI submitted no exhibits. Denise Blaylock, the PTI local branch
manager, was Greenwell’s immediate supervisor. Blaylock testified Greenwell
began working for PTI on August 23, 2012. She drove the “hotel van” Sunday
through Thursday nights from midnight to 8:00 a.m. transporting railroad
employees to and from the railroad yard to hotels. When the ALJ asked how
Greenwell’s employment came to an end (whether the “company discharged her,
laid her off, she quit or something else”), Blaylock eventually stated, “[T]he safety
department terminate[d] her which would be over my head so that would be PTI,
yes. PTI Safety Department terminated her.”
Blaylock testified that on January 8, 2014,
The final event that triggered that decision was she was
operating one of the PTI vans which is the larger white van. It
seats like five or more people and she was trying to turn around
down near a rail track and (inaudible) you know, you got to be
careful. Our procedures tell us look before you back so she had a
1
The only claim made by PTI was that Greenwell was discharged for misconduct.
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backing incident which is the one they really frown on because a lot
of them go on so you really got to get out and look but Elizabeth—
this is what she told me. I wasn’t there. Stated that when she
got—she’s (inaudible) some snow and she was trying to back out
and the van evidently wasn’t going so she, I think she, rocked it
back and forth and she said that she gave it a final—she stepped
on the gas really hard, give it a final back out. When she did the
van, the train kind of set up the hill just a little bit, maybe one or two
feet, just kind of up, you know, from the back of the van’s bumper
and she stepped on—when she floored it the van jumped up and
backed into the train and knocked out the assemble on the—I think
it’s the right, yeah, the right rear on the righthand side in the rear
and it just kind of, you know, damaged the van some and PTI back
(inaudible) is zero tolerance for hitting a train.
When the ALJ asked if other events factored into the decision to discharge
Greenwell, Blaylock stated there was an incident on November 23, 2013, in
which Greenwell exited a van with its engine running and while she was outside
the vehicle the driverless van ran into a parked vehicle, which then slid on ice
and “pushed it into a second car.” As a result of this November incident,
Greenwell was given a three-day suspension and was required to “go through
the safety training again.” Blaylock also testified there had been an August 2013
incident where Greenwell had backed into a pole or a post when at a
convenience store. This incident had been submitted to the safety department
as well, and Greenwell had been told “be careful.” Blaylock testified, “It just gets
stricter as you go on but that particular incident I don’t think she ever have any
time off for that particular one there.”
On cross-examination, Blaylock acknowledged Greenwell was not
informed after the November 2013 incident that she faced termination if she had
a similar accident.
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The ALJ asked Blaylock if there was anything else she would like to add,
to which Blaylock stated:
Uh, excuse me. As far as basically Hull Avenue and some
of the other places that he was stating, uh, basically the hotel
(inaudible) they go over there really often and (inaudible) so far as
the date in question of the incident, um, I think we’re seeing it kind
of made the manager a little upset the one that, my previous
manager and then safety. We all had to go on that conference call
was that, uh, when you have an accident you’re supposed to call
and get a relief van and not transport the crew, which is in our
safety training videos that she watched also. She proceeded to put
the crew in the van anyway with their luggage and take a bungee
cord and tie the doors together. And when she did that that added,
you know, fuel to the fire because there, there was a second
violation. So I think that kind of, you know, messed it up a little bit
when she didn’t follow procedure to wait until another relief van
come (inaudible) better, you know, so the crew wouldn’t have to be
transported that way because those, those people will sue us if
something happens, if the bungee cord popped or something. That
was just the second thing that kind of added to the accident. And
that’s all I have to say on the incident.
Greenwell then testified. She stated she was informed on January 10 that
the reason for her discharge was “that this last accident that happened on the 8th
of January at approximate [sic] 3:50 in the morning.” Greenwell’s version of the
incident differed from that given by Blaylock. Greenwell explained:
I dropped the conductor that I had picked up from the train and he
looked around and thought that I could back up a little bit and try to
tum around. He was—got out of the van. He basically went to his
train and I tried to back up and because it was totally dark and cold
with tons of ice and snow on it. I was sliding and because we don’t
have major back up lights I assumed that if I tried to turn around I’d
have a better view of what my conditions were so basically I tried to
turn around, got stuck and slid on some ice as I was trying to
manipulate my way and hit the railroad car.
....
[Then] . . . basically I continued to, um, drive forward. There
was no, at the time there was no camera to take pictures. There
was no accident report. There was no nothing. Here it is four
o’clock in the morning and basically from that standpoint, um, I
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drove to the UP main yard where it was safe and called—tried to
call my boss.
Greenwell testified she did not normally work in that area of the Hull Avenue
yard. She also testified there was no one in the van beside herself at the time.
Greenwell was asked about the November 23 incident. She opined, “I
must have hit the gearshift that was on the panel as I threw the—my briefcase”
into the running van before she went to the office to get paperwork. Greenwell
acknowledged she was required to take a drug test immediately and then retake
safety training. She also acknowledged the August 2013 incident when she
backed into a pipe. She testified about the “get out and look” policy, which
required that before backing up in a van, one is to get out and look for obstacles.
Greenwell stated it was her understanding that “we are allowed to have crew
members if they’re outside of the van to be able to spot us where we go.” The
crew she was transporting was outside the van, but they were distracted and did
not warn her of the pole—no damage was done to the van.
The ALJ issued a decision on March 19, 2014, finding:
The final incident that triggered the discharge occurred on
January 8, 2014. On that day, Ms. Greenwell was operating the
employer’s passenger van when it collided with a stationary train in
a train yard. Ms. Greenwell had transported railroad personnel to
the train yard. Ms. Greenwell drove the passenger van into an
unmarked, unfamiliar area and got stuck. In the course of trying to
free the van, the back corner of the passenger van came in contact
with the stationary train, causing damage to the van. Ms.
Greenwell reported the incident to a supervisor. The employer has
a zero tolerance policy for motor vehicle accidents involving contact
with a train.
The final incident that triggered the discharge followed two
earlier incidents in which Ms. Greenwell carelessly and/or
negligently operated the employer’s van. On November 23, 2013,
Mr. Greenwell entered a passenger van that was already running
and, as she entered, moved the gear shift as she tossed her brief
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case inside the cab. Before Ms. Greenwell exited the van shortly
thereafter, she did not ensure that the van was in park. The
running van was not in park. After Ms. Greenwell exited the van,
the van rolled a substantial distance and collided with a personal
vehicle. The force of the collision pushed that vehicle into another
vehicle nearby. The collision caused damage to the employer’s
van and to at least one of the personal vehicles. In August 2013,
Ms. Greenwell backed the employer’s passenger van into a
stationary post in a convenience store parking lot.
The ALJ affirmed the earlier denial of unemployment benefits, concluding:
The evidence in the record establishes carelessness and/or
negligence in connection with each of the three motor vehicle
collisions that factored in the discharge. The three incidents, taken
together, establish a pattern and are sufficient to indicate a
disregard of the employer’s interests. Ms. Greenwell minimizes her
responsibility for the collisions, though each resulted from her
actions and decisions she made. Based on the evidence in the
record and application of the appropriate law, the administrative law
judge concludes that Ms. Greenwell was discharged for
misconduct.
Greenwell appealed to the Employment Appeal Board, a two-member
panel of which upheld the ALJ’s decision, adopting it as its own.
Greenwell filed a petition for judicial review in the district court, claiming
several errors including that the decision was based on an erroneous
interpretation of statutory provisions, was not supported by substantial evidence,
and was in violation of an agency rule because it was not based on a current act
of misconduct.
The district court ruled it could not find the Board’s interpretation of the
term misconduct irrational, illogical, or wholly unjustifiable. The court wrote:
“Unlike in Lee, the agency made a finding that the employee’s actions were
negligent. There is evidence in the record that she had a series of three
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collisions within a six-month period. All could have been avoided if she had been
more careful.”
The court found substantial evidence in the record to support the finding
that the employee acted deliberately. The court noted the ALJ did find a pattern
of negligence “sufficient to indicate a disregard of the employer’s interests,”
which the district court found was supported by substantial evidence.
Finally, the court rejected the claim that the discharge was not based on a
current act of misconduct.
Greenwell filed a motion to enlarge or amend, asserting the court’s ruling
rested upon several erroneous statements of fact, and also arguing “two
incidents do not construe [sic] misconduct.” The court denied the motion, stating:
There is a factual basis for the court’s ruling concerning the
January 8, 2014 motor vehicle collision. This was petitioner’s third
violation of company policy concerning motor vehicle accidents.
She had received warnings and safety training prior to the most
recent incident.
Greenwell now appeals.
II. Scope and Standard of Review.
Iowa Code chapter 17A (2013), the Administrative Procedure Act, governs
our review of claims concerning unemployment benefits. Harrison v. Emp’t
Appeal Bd., 659 N.W.2d 581, 586 (Iowa 2003). We review to correct any errors
of law that may have occurred at the agency level. Id. Section 17A.19(10)
provides that a party may successfully challenge an agency decision when the
party’s substantial rights have been prejudiced because the agency action is
unsupported by substantial evidence or is affected by other error of law.
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III. Discussion.
An employee who is terminated for misconduct is disqualified from
receiving unemployment benefits. Iowa Code § 96.5(2)(a); Iowa Admin.Code r.
871–24.32(1)(b) (“Any individual who has been discharged or suspended for
misconduct connected with work is disqualified for benefits until the individual
has worked in (except in back pay awards) and been paid wages for insured
work equal to ten times the individual’s weekly benefit amount, provided the
individual is otherwise eligible.”). Misconduct for this purpose is defined as
a deliberate act or omission by a worker which constitutes a
material breach of the duties and obligations arising out of such
worker’s contract of employment. Misconduct as the term is used
in the disqualification provision as being limited to conduct evincing
such willful or wanton disregard of an employer’s interest as is
found in deliberate violation or disregard of standards of behavior
which the employer has the right to expect of employees, or in
carelessness or negligence of such degree of recurrence as to
manifest equal culpability, wrongful intent or evil design, or to show
an intentional and substantial disregard of the employer’s interests
or of the employee’s duties and obligations to the employer. On the
other hand mere inefficiency, unsatisfactory conduct, failure in good
performance as the result of inability or incapacity, inadvertencies
or ordinary negligence in isolated instances, or good faith errors in
judgment or discretion are not to be deemed misconduct within the
meaning of the statute.
Iowa Admin. Code r. 871–24.32(1)(a). This definition has been held to
“accurately reflect[] the intent of the legislature.” Reigelsberger v. Emp’t Appeal
Bd., 500 N.W.2d 64, 66 (Iowa 1993); accord Lee v. Emp’t Appeal Bd., 616
N.W.2d 661, 665 (Iowa 2000).
Misconduct “must be substantial” to justify the denial of unemployment
benefits. Lee, 616 N.W.2d at 665 (citation omitted). “Misconduct serious enough
to warrant the discharge of an employee is not necessarily serious enough to
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warrant a denial of benefits.” Id. (citation omitted). In addition, administrative
code rule 871-24.32(8) provides, “While past acts and warnings can be used to
determine the magnitude of a current act of misconduct, a discharge for
misconduct cannot be based on such past act or acts. The termination of
employment must be based on a current act.”
The employer bears the burden of proving a claimant is disqualified for
benefits because of misconduct. Iowa Code § 96.6(2) (“The employer has the
burden of proving that the claimant is disqualified for benefits pursuant to section
96.5 . . . .”); Lee, 616 N.W.2d at 665.
Greenwell asserts she is entitled to relief because the agency’s decision is
an incorrect application of law to undisputed facts. In other words, she contends
the agency’s decision is “[b]ased upon an irrational, illogical, or wholly
unjustifiable application of law to fact that has clearly been vested by a provision
of law in the discretion of the agency.” Iowa Code § 17A.19(10)(m). We will
therefore analyze whether the district court correctly applied the law by applying
section 17A.19(10)(m) to the agency action to determine whether our
conclusions are the same as the district court’s. Weishaar v. Snap–On Tools
Corp., 506 N.W.2d 786, 789 (Iowa Ct. App. 1993); Langley v. Emp’t Appeal Bd.,
490 N.W.2d 300, 302 (Iowa Ct. App. 1992).
The Board determined that “three incidents, taken together, establish a
pattern and are sufficient to indicate a disregard of the employer’s interests.” The
district court upheld that interpretation and found substantial evidence supporting
a finding of disregard. However, the definition of misconduct requires more than
a “disregard” it requires a “carelessness or negligence of such degree of
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recurrence as to manifest equal culpability, wrongful intent or evil design, or to
show an intentional and substantial disregard of the employer’s interests.” Iowa
Admin. Code r. 871–24.32(1)(a) (emphasis added). The agency adopted the
ALJ’s findings and conclusions, which provided, “The three incidents, taken
together, establish a pattern and are sufficient to indicate a disregard of the
employer’s interests.” The agency made no finding that the acts constituted an
“intentional and substantial” disregard of the employer’s interests or met any of
the other alternative standards. Mere negligence is not sufficient. Lee, 616
N.W.2d at 666. Reoccuring acts of negligence by an employee would probably
be described by most employers as in disregard of their interests. The
misconduct legal standard requires more than reoccurring acts of negligence in
disregard of the employer’s interests.
In light of the agency’s failure to apply the proper legal standard, we
reverse the district court with directions to remand to the Employment Appeal
Board to make findings of fact and conclusions using the proper legal standard.
See O’Brien v. Emp’t Appeal Bd., 494 N.W.2d 660, 662 (Iowa 1993).
REVERSED AND REMANDED WITH DIRECTIONS.