Steve McCrory, D/B/A McCrory & Associates v. Kristen M. Henderson and Texas Workforce Commission

Affirmed and Opinion filed September 19, 2013.
In The
Fourteenth Court of Appeals
NO. 14-12-00752-CV
STEVE MCCRORY, D/B/A MCCRORY & ASSOCIATES, Appellant
V.
KRISTEN M. HENDERSON AND TEXAS WORKFORCE COMMISSION,
Appellee
On Appeal from the 212th District Court
Galveston County, Texas
Trial Court Cause No. 11CV1833
OPINION
The Texas Workforce Commission (“TWC”) awarded Kristen M.
Henderson unemployment compensation benefits and authorized a charge back of
those benefits to Steve McCrory d/b/a McCrory & Associates. McCrory sought
review of the decision in district court. Both parties filed motions for summary
judgment regarding whether the TWC’s decision was supported by substantial
evidence. Following a hearing, the trial court upheld the TWC’s decision, denying
McCrory’s motion and granting TWC’s and Henderson’s motions. From that
decision, McCrory brings this appeal. Because the record contains substantial
evidence to support the TWC’s decision, we affirm.
BACKGROUND
Henderson began temporary employment with McCrory in 2007. In March
2008, she was hired on a full-time basis. In June 2011, Henderson quit. According
to Henderson, she quit because Michael Richardson, the Operations Manager and
her direct supervisor, had sexually harassed her. Based upon her claim that she
had good cause connected to her work for voluntarily leaving her employment,
Henderson filed a claim for unemployment compensation. See Tex. Lab. Code
Ann. § 207.045 (West 2006).1
The TWC hearing examiner initially determined that Henderson was
disqualified for unemployment compensation. She appealed to the Commission’s
Appeal Tribunal division for a hearing on the merits. Following an evidentiary
hearing, the Appeal Tribunal affirmed the earlier disqualification. Henderson then
appealed to the Commissioners, who unanimously reversed the Appeal Tribunal
and awarded her unemployment compensation benefits. In their ruling reversing
the Appeal Tribunal, the Commissioners found that Henderson was being sexually
harassed by Richardson and that Steve McCrory, the owner of the company, was
aware of the harassment. The Commissioners also found that Henderson
complained to McCrory and that he told her the allegations would be investigated.
The Commissioners further found that after a week had passed, there was no
indication that McCrory was taking any remedial action in response to
1
Under this provision, a former employee is not entitled to unemployment benefits if she
left the job “voluntarily without good cause connected with the individual’s work.” Tex. Lab.
Code Ann. § 207.045(a).
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Henderson’s complaint. The Commissioners concluded that Henderson had good
cause connected with her work for voluntarily leaving her employment with
McCrory.
McCrory filed a petition for judicial review in the district court, seeking
reversal of the TWC’s decision. All parties filed traditional motions for summary
judgment. The trial court granted Henderson’s and TWC’s motions for summary
judgment and denied McCrory’s motion for summary judgment, upholding the
decision of the TWC. McCrory now appeals, contending the TWC’s decision was
not supported by substantial evidence.
ANALYSIS
I. Standard of review
In three issues on appeal, which we review together, McCrory contends that
the trial court erred in denying his motion for summary judgment and granting
Henderson’s and the TWC’s motions for summary judgment because the TWC’s
decision awarding Henderson unemployment benefits was not supported by
substantial evidence. We review the TWC’s decision on unemployment benefits
de novo to determine whether there is substantial evidence to support the TWC’s
ruling. See Tex. Lab. Code Ann. § 212.202(a) (West 2006); Elgohary v. Texas
Workforce Comm’n, No. 14-09-00108-CV, 2010 WL 2326126, at *2 (Tex. App.—
Houston [14th Dist.] June 10, 2010, no pet.) (mem. op.). The TWC’s action is
presumed valid, and the party seeking to set aside the decision has the burden of
showing that it was not supported by substantial evidence. Hooda Corp. v. Tex.
Alcoholic Beverage Comm’n, 370 S.W.3d 458, 461 (Tex. App.—Dallas 2012, no
pet.); Elgohary, 2010 WL 2326126, at *2. Whether there is substantial evidence to
support an administrative decision is a question of law. Tex. Dep’t of Pub. Safety v.
Alford, 209 S.W.3d 101, 103 (Tex. 2006). Substantial evidence is more than a
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mere scintilla and need not be a preponderance. Garza v. Texas Alcoholic
Beverage Comm’n, 138 S.W.3d 609, 613 (Tex. App.—Houston [14th Dist.] 2004,
no pet.). “Evidence may actually preponderate against the decision of an agency
and still amount to substantial evidence.” Id. (citing Lewis v. Metro. Sav. & Loan
Ass’n, 550 S.W.2d 11, 13 (Tex. 1977)).
Under this standard of review, “the issue is whether the evidence introduced
before the trial court shows facts in existence at the time of the [TWC’s] decision
that reasonably support the decision.” Collingsworth Gen. Hosp. v. Hunnicutt, 988
S.W.2d 706, 708 (Tex. 1998). On controverted issues of fact, we may not
substitute our judgment for that of the TWC. Tex. Alcoholic Beverage Comm’n v.
Cabanas, 313 S.W.3d 927, 930 (Tex. App.—Dallas 2010, no pet.) The TWC’s
decision may be set aside only if it was made without regard to the law or the facts
and, as a result, was unreasonable, arbitrary, or capricious. See Collingsworth, 988
S.W.2d at 708; Murray v. Tex. Workforce Comm’n, 337 S.W.3d 522, 524 (Tex.
App.—Dallas 2011, no pet.).
We review the trial court’s judgment by comparing the TWC decision with
the evidence presented to the trial court and the governing law. Blanchard v.
Brazos Forest Prod., L.P., 353 S.W.3d 569, 573 (Tex. App.—Ft. Worth 2011, pet.
denied). We determine whether the summary judgment evidence established as a
matter of law that substantial evidence existed to support the TWC’s decision. Id.
We conclude that it does.
II. Evidence supporting the TWC’s decision
Applying this standard of review, we begin by summarizing the evidence
supporting the TWC’s decision. Henderson testified before the TWC that she was
“forced to quit” due to the circumstances and environment at work. She testified
that Richardson had sexually harassed her since at least the middle of 2010. At
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times he would try to pull Henderson onto his lap or to sit in hers. Richardson blew
Henderson kisses, told her she looked “good enough to eat,” repeatedly asked her
out, suggestively rubbed her hair, and referred to her as “beautiful,” “sexy,” and
“gorgeous.”
In one incident, when Henderson asked for a raise, Richardson told her that
she needed to leave her fiancé and let Richardson “have [his] way with [her]”
sexually, and he would take care of her and she would never look back. In another
incident in May 2010, while McCrory was present, Richardson told Henderson that
her “butt looked good in [her] jeans.” Henderson looked at McCrory, who shook
his head but said nothing to Richardson.
In the final incident on June 3, 2011, Henderson testified that Richardson
went to her desk, leaned over, tried to look down her dress and asked her, “Are you
wearing panties?” Henderson told Richardson to get away from her. Henderson
testified that she tried to confront Richardson about his behavior through a text, to
which he responded, “I counted on you and trusted you. No more. Your [sic]
making a mistake!”
Henderson testified that she was never given an employee handbook and
was not aware of a sexual harassment policy or reporting procedure. Henderson
was afraid to come forward, but she finally spoke to McCrory on June 15.
McCrory said he would speak to Richardson and get him to apologize, but that he
did not want to involve anyone else. McCrory also told Henderson that he would
get back in contact with her regarding the results of his investigation. Henderson
did not contact McCrory about the situation again until June 24. On that day,
Henderson called McCrory twice and could not leave a voice message because his
voicemail was full, so she texted him twice. At that point, having received no
apology from Richardson, heard nothing back from McCrory regarding the
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promised investigation, and seen no indication that an investigation was underway,
Henderson concluded that McCrory was not going to do anything about the sexual
harassment and was now avoiding her. She therefore quit later that day by sending
McCrory an email. Henderson believed that if McCrory had been conducting any
type of investigation, she would have seen people going in and out of the
conference room because it was a small office. She also believed that if McCrory
had spoken to Richardson, Richardson would have apologized.
Jaclyn Cron, a former McCrory employee, testified that she quit in 2007
because her husband did not approve of some of the incidents at work. Richardson
often rubbed Cron’s back and shoulders. On one occasion, when Cron left to pick
up her son from daycare, she texted Richardson that she would not make it back to
the office and to call if he needed anything. Richardson texted in response, “Even
in the middle of the night?” Cron’s husband saw all of the texts. Cron responded
“no” and told Richardson not to communicate with her in that way. Cron never
went back to the office. When asked at the TWC hearing if she knew whether
Richardson harassed anyone else, Cron stated that another employee told her that
her husband had also become upset about a comment regarding sexual activity.
Amanda Watson, another former employee, testified before the TWC that
Richardson was “very touchy feely” with Henderson with “lots of shoulder
rubbing, things like that.” In her opinion, Richardson acted inappropriately. “He’d
make innuendos. He’d say you know what you have to do if you want to go home
early . . . .” Watson testified that she was fired after she informed the company
that she was pregnant.
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III. The trial court did not err in granting summary judgment that the
TWC’s decision was supported by substantial evidence.
McCrory asserts there is not substantial evidence to support the TWC’s
findings that (1) harassment occurred; (2) the employer was aware of Richardson’s
prior conduct; (3) the employer failed to take remedial action; or (4) Henderson
had good cause connected to her work for voluntarily leaving her employment.
The question for this Court, however, is whether there is substantial evidence to
support the TWC’s ruling awarding benefits to Henderson. See Collingsworth, 988
S.W.2d at 708. We conclude that there is.
As summarized above, Henderson testified to conduct by Richardson that
constitutes sexual harassment.2 In addition, Watson testified she witnessed
inappropriate conduct and comments that Richardson directed to Henderson.
Henderson also related an incident that occurred in front of McCrory, and it is
undisputed that McCrory took no remedial action in response to that incident.
Henderson testified that after she reported the harassment to McCrory on
June 15, she believed McCrory was avoiding her and not conducting an
investigation. Henderson saw no evidence of an investigation in the small office,
and she never received the apology from Richardson that McCrory had promised.
According to Henderson, she quit because Richardson was sexually harassing her
and McCrory was not responding to her attempts to determine if he was “taking
care of the situation.”
2
Sexual harassment claims generally take one of two forms: (1) quid pro quo harassment,
in which employment benefits are conditioned on sexual favors; and (2) harassment that creates a
hostile or offensive work environment. See Hoffmann-LaRoche, Inc. v. Zeltwanger, 144 S.W.3d
438, 445 n.5 (Tex. 2004).
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On appeal, McCrory points to TWC precedent indicating that an employee
quits without good cause if she does not afford the employer an opportunity to
remedy the situation, and to evidence that he had begun an investigation. But there
is evidence that: (1) McCrory did not take remedial action in response to the first
incident; (2) McCrory told Henderson he was not going to involve anyone else
from the company in his investigation; and (3) Henderson saw no evidence of an
investigation and did not receive the promised apology from Richardson for more
than a week after she reported the sexual harassment to McCrory. Thus, we
conclude there is evidence in the record that Henderson gave McCrory an
opportunity to remedy the situation.
McCrory also points to evidence from Richardson and other employees of a
pattern of deceitful and manipulative conduct by Henderson, evidence that
Henderson herself engaged in sexually suggestive conduct at work, and evidence
that Henderson did not intend to remain at work while McCrory took remedial
action. We do not disagree with McCrory that there was evidence contrary to the
TWC’s findings, but we may not substitute our judgment for that of the TWC on
controverted issues of fact. See Tex. Alcoholic Beverage Comm’n, 313 S.W.3d at
930. The substantial evidence threshold we must apply is not a high one, and the
existence of contrary evidence in the record does not demonstrate that the TWC
decision is unsupported by substantial evidence. See Blanchard, 353 S.W.3d at
574 (holding substantial evidence supported TWC decision even though there was
conflicting evidence in the record).
On this record, therefore, we conclude that substantial evidence supports the
TWC’s determination that Henderson had good cause connected to her work for
voluntarily leaving her employment with McCrory. See Madisonville Consol.
Indep. Sch. Dist. v. Texas Employment Comm’n, 821 S.W.2d 310, 314 (Tex.
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App.—Corpus Christi 1991, writ denied) (holding that substantial evidence
supported the Texas Employment Commission’s determination that employee did
not leave his last work voluntarily without good cause connected with his work,
under statutory predecessor to Labor Code section 207.045(a)). In making this
determination, the TWC relied upon the following definition of good cause
contained in its Appeals Policy and Precedent Manual: “Good cause connected
with the work for leaving, as that term is used in the law of unemployment
insurance, means such cause, related to the work, as would cause a person who is
genuinely interested in retaining work to nevertheless leave the job.” Some courts
have determined whether substantial evidence supported the TWC’s decision
regarding unemployment benefits based upon the TWC’s definition of “good
cause” and exceptions thereto. See, e.g., Lopez v. Texas Workforce Comm’n, No.
01-10-00849-CV, 2012 WL 4465197, at *2, 5 (Tex. App.—Houston [1st Dist.]
Sep. 27, 2012, no pet.) (mem. op.) (concluding summary judgment evidence
demonstrated that substantial evidence supported TWC’s determination that
employee did not have good cause connected to her work for voluntarily leaving
her employment, based upon TWC’s definition of “good cause” and exceptions
thereto). The Labor Code does not define “good cause” as used in section
207.045(a), however, and we need not address whether the TWC’s construction of
this statutory term is correct to adjudicate the issues in this appeal. See Tex.
Employment Comm’n v. Huey, 342 S.W.2d 544, 545–50 (Tex. 1961) (holding,
based on stipulated facts, that employees did not voluntarily leave their
employment without good cause connected to their work under statutory
predecessor to Labor Code section 207.045(a), without addressing meaning of
“good cause” under the statute). Therefore, we do not do so.
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CONCLUSION
Because we conclude that the summary judgment record shows as a matter
of law that substantial evidence supports the TWC’s decision, we overrule
McCrory’s issues and affirm the judgment of the trial court.
/s/ J. Brett Busby
Justice
Panel consists of Justices Frost, Brown, and Busby.
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