Opinion
Court of Appeals Case No. 20A-EX-1839
03-31-2021
William C. FOLEY, Appellant, v. REVIEW BOARD OF the INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and Twin City Dodge, Inc., Appellees.
Attorney for Appellant: H. Kennard Bennett, Bennett & McClammer, Indianapolis, Indiana Attorneys for Appellee: Theodore E. Rokita, Attorney General of Indiana, Frances Barrow, Deputy Attorney General, Indianapolis, Indiana
Attorney for Appellant: H. Kennard Bennett, Bennett & McClammer, Indianapolis, Indiana
Attorneys for Appellee: Theodore E. Rokita, Attorney General of Indiana, Frances Barrow, Deputy Attorney General, Indianapolis, Indiana
Brown, Judge. [1] William C. Foley appeals a decision of the Review Board of the Indiana Department of Workforce Development (the "Board") with respect to his claim for unemployment benefits. The issue is whether the Board erred in concluding that he voluntarily left his employment without good cause. We affirm.
Facts and Procedural History
[2] Foley worked as a salesperson or sales consultant for Twin City Dodge, Inc. ("Employer"), a car dealership, until April 27, 2020. The Indiana Department of Workforce Development ("DWD") issued a notice to Employer dated May 11, 2020, stating that Foley had filed a claim for unemployment benefits. Employer sent a protest by fax on May 14, 2020, indicating the reason for separation was that Foley had quit. A claims investigator with DWD issued a determination on May 19, 2020, stating Employer failed to provide separation information and Foley was entitled to benefits. Employer appealed, stating it had timely provided separation information and attached a copy of its fax confirmation.
[3] On July 14, 2020, a telephonic hearing was held before an administrative law judge ("ALJ"). A copy of Employer's fax confirmation was admitted into evidence without objection. Foley testified that he worked full-time as a salesperson for Employer beginning in April 2019. He testified that he was laid off on March 23, 2020, "due to business ... going to a crawl, or a standstill due to COVID-19." Transcript Volume II at 13. He indicated that, prior to his layoff, he was on a draw-based pay plan, and that he returned to work on April 16, 2020. He testified that he had a phone conversation with the general manager on April 14, 2020, during which "they guaranteed me a certain percentage of what I averaged last year" and "it was my understanding that I was supposed to receive seventy-five [ ] percent of what I averaged last year, and I was going to receive that as a guaranteed payment amount for two months." Id. at 12. He stated the manager had explained that Employer was on the paycheck protection program, that he "would be paid seventy-five percent; a guaranteed amount" and, in addition to that, he would be entitled to commissions. Id. at 17. He indicated he had requested that the agreement be in writing on three separate occasions, he was told he would receive it in writing but that never occurred, and that his return from layoff was contingent upon the new pay plan. He testified that he received a paycheck on April 24, 2020, which reflected a draw consistent with his previous pay plan rather than the guaranteed amount. He indicated that, when he received his pay stub, it was his impression that he had been brought back to work under false pretenses. He testified that he quit his employment effective April 27, 2020.
[4] Stacy Shafer, who worked in human resources for Employer, testified that Foley's last day of employment was April 27, 2020, he was a full-time sales consultant, and his duties consisted of showing cars to customers and making sales. She testified that he had been laid off from March 20, 2020, until April 16, 2020, because business was down due to the COVID-19 crisis. When asked if she was aware of a promise made by the general manager that Foley would be paid seventy-five percent of what he had averaged in 2019 upon his return, she answered "No. I did not receive a new pay plan for him." Id. at 20. When asked "[a]re you the person that would've received a new pay plan," she replied "[y]es, from his manager.... It would've been submitted to me to submit the payroll." Id. at 21. She indicated the general manager had the authority to institute a new pay plan for Foley.
[5] Shafer further testified that Employer had probably twelve sales consultants and that, back at the end of April timeframe, it was "down to about five" sales consultants. Id. When asked "is each Sales Consultant paid under their own, unique, pay scheme," she replied "[n]o; there is [ ] one standard Sales Consultant pay plan," and when asked "is that based upon the draw," she replied affirmatively. Id. When asked "have you been aware of ... a Sales Consultant that's deviated from that pay plan," she stated "when we first hire them on, they are given a guarantee, depending on the dealership, four or five hundred a week their first – anywhere from sixty to ninety days, while they learn the process. And, then they go on the draw," and when asked "[s]o, once an Employee has gotten out of their probationary period, to your knowledge, Sales Consultants are paid on the draw? There's not been any deviation, that you're aware of," she answered "[c]orrect." Id. at 21-22. She further testified that two other sales consultants were also brought back in mid-April following the March layoff and that both were "brought back on a strict commission draw basis." Id. at 23. She indicated that Employer had participated in the paycheck protection program. She stated that she was unaware of any pay structure which involved a guarantee of seventy-five percent of the prior year's earnings and that any such plan would have been turned in to her. She testified the paycheck protection money received was used in all departments, and that Foley's April 24, 2020 paystub showed an amount paid as a "sales draw," which is essentially an advance on commissions, and showed no amount paid as "base." Id. at 27. She testified Foley also received a final check on May 1, 2020, which reflected commissions and a bonus. In closing, she indicated Foley's final check was not reduced in the amount of the draw from the previous check.
[6] On July 17, 2020, the ALJ issued a decision reversing the claims investigator's determination and finding Employer had timely filed separation information and Foley had voluntarily left his employment without good cause in connection with the work. The ALJ's decision provided in part:
In the present case, there is insufficient evidence that there was an agreement between the parties to change [Foley's] pay plan and that [his] return from a layoff was contingent upon the change in pay plan. Two other sales consultants when they returned from layoff in mid-April 2020 were paid based upon a draw as was [Foley]. If there had been a change in pay plan, then Ms. Shafer would have received the new pay plan, which she did not. There was no written agreement that [Foley] would be paid on any basis other than a draw. There is insufficient evidence that the working conditions were so unreasonable or unfair so that a reasonably prudent person would be impelled to leave the employment at the time [Foley] chose to do so. The [ALJ] concludes [Foley] voluntarily left employment without good cause in connection with the work ....
Exhibits Volume III at 34. Foley appealed the ALJ's decision. On September 4, 2020, the Board entered a decision which affirmed the ALJ's decision and adopted and incorporated by reference the ALJ's findings of fact and conclusions of law.
Discussion
[7] Foley claims that he left his employment with Employer for good cause in connection with the work. He argues that he was asked to return to work with a guaranteed compensation structure equal to seventy-five percent of his 2019 earnings and that Employer failed to honor that agreement.
Foley also argues that DWD did not participate in the hearing and that he was unable to examine whether Employer's protest was timely. The admitted exhibits show that DWD issued a notice to Employer dated May 11, 2020, stating that Foley had filed a claim for unemployment benefits and Employer sent a protest by fax on May 14, 2020. See Ind. Code § 22-4-17-2 (requiring DWD to provide notice to employers of their benefit liability and employers to respond within ten days). We do not disturb the ALJ and Board's finding that Employer timely filed separation information.
[8] The standard of review on appeal of a decision of the Board 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. Recker v. Review Bd. of Ind. Dep't of Workforce Dev. , 958 N.E.2d 1136, 1139 (Ind. 2011). Ultimate facts are facts that involve an inference or deduction based on the findings of basic fact. Id. Where such facts are within the special competence of the Board, the Court will give greater deference to the Board's conclusions, broadening the scope of what can be considered reasonable. Id.
[9] The purpose of the Unemployment Compensation Act is to provide benefits to those who are involuntarily out of work, through no fault of their own, for reasons beyond their control. Brown v. Ind. Dep't of Workforce Dev. , 919 N.E.2d 1147, 1150-1151 (Ind. Ct. App. 2009). When a person voluntarily leaves employment "without good cause in connection with the work," the person is generally disqualified from receiving unemployment compensation benefits. Y.G. v. Rev. Bd. of Ind. Dep't of Workforce Dev. , 936 N.E.2d 312, 314 (Ind. Ct. App. 2010) (citing Ind. Code § 22-4-15-1(a) ). Whether a person leaves employment without good cause in connection with the work is a question of fact to be determined by the Board. Id.
[10] The claimant has the burden to prove that the claimant left employment voluntarily with good cause. Brown , 919 N.E.2d at 1151. The claimant must establish (a) the claimant's reasons for abandoning the claimant's employment would impel a reasonably prudent person to terminate under the same or similar circumstances and (b) these reasons or causes are objectively related to the employment. Id.
[11] This Court has stated that, if an employer unilaterally changes agreed upon employment terms, the employee may accept the changes and continue employment under the new terms or reject the changes and quit work, that an employee terminating employment under these circumstances does so with good cause, and that, nevertheless, "the circumstances must also be so unfair or unjust as to compel a reasonably prudent person to quit work." Quillen v. Rev. Bd. of Ind. Emp. Sec. Div. , 468 N.E.2d 238, 241-242 (Ind. Ct. App. 1984) (citation omitted). In Quillen , the Court noted employer's worsening business conditions and agreed with the Board that the employer's changes to the employee's work hours and rate were not so unfair or unjust as to compel a reasonably prudent person to quit work under similar circumstances. Id. at 242.
[12] Here, the ALJ and Board found there was insufficient evidence of an agreement to change Foley's pay plan and pointed to the testimony that two other sales consultants returned from a layoff in mid-April 2020 and were paid based upon a draw like Foley, that Shafer did not receive a new pay plan for Foley, and there was no written agreement. Based upon the evidence as set forth above and in the record, we cannot say that Employer unilaterally changed Foley's employment terms and therefore, Foley has failed to meet his burden to prove his circumstances were so unfair or unjust as to compel a reasonably prudent person to quit. We do not disturb the Board's conclusion that Foley voluntarily left his employment without good cause in connection with the work.
[13] For the foregoing reasons, we affirm the decision of the Board.
[14] Affirmed.
Bradford, C.J., and Vaidik, J., concur.