Opinion
NO. 2010-CA-001623-MR
07-13-2012
MICHAEL S. JEAN APPELLANT v. KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION AND GIBBS DIE CASTING CORPORATION APPELLEES
BRIEFS FOR APPELLANT: M. Michele Cecil Owensboro, Kentucky BRIEF FOR APPELLEE, KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION: Amy F. Howard Frankfort, Kentucky BRIEF FOR APPELLEE, GIBBS DIE CASTING CORPORATION: Crystal Spivey Wildeman Evansville, Indiana
NOT TO BE PUBLISHED
APPEAL FROM HENDERSON CIRCUIT COURT
HONORABLE KAREN L. WILSON, JUDGE
ACTION NO. 09-CI-00906
OPINION
AFFIRMING
BEFORE: DIXON, KELLER AND NICKELL, JUDGES. NICKELL, JUDGE: Michael S. Jean appeals from an order of the Henderson Circuit Court entered on July 26, 2010, affirming the Kentucky Unemployment Insurance Commission's (Commission) denial of unemployment benefits following his discharge from Gibbs Die Casting Corporation for violation of the company's drug policy. On appeal, he challenges the denial of benefits because the "misconduct" for which he was discharged occurred neither on company property nor on company time, and there was no proof he missed any work due to his incarceration after being sentenced to a term of ten years. After reviewing the briefs, the law and the record, we AFFIRM.
FACTS
Jean began working as a non-union mold maker for Gibbs in 1994. There were no complaints about his work performance; no requests that he submit to drug or alcohol testing; and no allegation that he was ever under the influence while at work. Unbeknownst to Gibbs, on March 11, 2008, Jean was arrested and charged with several drug-related offenses. On June 25, 2008, he entered a drug rehabilitation program.
Charges included manufacturing methamphetamine, possession of marijuana, possession of drug paraphernalia and unlawful possession of a methamphetamine precursor. The conduct resulting in the charges occurred in March of 2008.
On January 1, 2009, Gibbs revised its substance abuse policy. Jean was aware of the revision. The new five-page policy contained the following paragraph:
Gibbs's original substance abuse policy is not part of the record.
Any team member arrested or indicted for use, possession, or selling of prohibited drugs that cannot come to work due to incarceration may at the Company's option be suspended without pay pending resolution of the criminal matter. Any team member convicted of use, possession, or selling of prohibited drugs will be terminated. Such team members will not be offered the opportunity to attend the above referenced treatment program. For any team member not convicted, theTwo weeks later, on January 15, 2009, Jean pled guilty to the drug charges. The last day he reported for work at Gibbs was February 13, 2009. He was sentenced to serve ten years on the criminal charges on February 18, 2009. Importantly, the record does not reveal the date on which Jean began serving his sentence, only that it was "in February" and that he was released on March 24, 2009. Gibbs learned of Jean's sentencing from the newspaper on February 19, 2009, and on February 24, 2009, discharged him "for violation of the substance abuse policy and company work rules." The letter sent to Jean outlining his job separation and benefits stated he was being discharged for "Violation of Substance Abuse Policy - Conviction for Drug Manufacturing[.]"
Company reserves the right to determine whether the team member should be allowed to return to work.
Established by Jean's testimony during a telephonic hearing conducted by the referee on May 13, 2009.
Jean filed for unemployment benefits on March 29, 2009. Gibbs opposed the application arguing his entry of a guilty plea violated the company's drug policy and constituted misconduct under KRS 341.370(6). The matter was reviewed by a referee who affirmed the denial of benefits for work-related misconduct because while the illegal drug activity occurred on neither company property nor on company time, it could "affect [Gibbs's] reputation/business."
Kentucky Revised Statutes.
Jean appealed the referee's decision to the Commission. The Commission affirmed the referee's decision, but corrected the date on which Gibbs learned of Jean's charges and sentencing and replaced the referee's reasons with the following:
KRS 341.370(1)(b) and 341.530(3) combine to provide for the imposition of a duration disqualification from receiving benefits, and granting of reserve account relief to the employer, when a claimant has been discharged from the most recent employment for reasons of misconduct connected with the work.(Emphasis and italics in original).
KRS 341.370(6) states, " 'Discharge for misconduct' as used in this section shall include but not be limited to, separation initiated by an employer for falsification of an employment application to obtain employment through subterfuge; knowing violation of a reasonable and uniformly enforced rule of an employer; unsatisfactory attendance if the worker cannot show good cause for absences or tardiness; damaging the employer's property through gross negligence; refusing to obey reasonable instructions; reporting to work under the influence of alcohol or drugs or consuming alcohol or drugs on employer's premises during working hours; conduct endangering safety of self or co-workers; and incarceration in jail following conviction of a misdemeanor or felony by a court of competent jurisdiction, which results in missing at least five (5) days work." (Emphasis added.)
In the case herein, the claimant was discharged for violating the employer's zero (0) tolerance substance abuse policy, which was known to the claimant. The employer's policy prohibits the illegal use, sale, transfer, distribution, possession, being under the influence of, or unlawful manufacturing of narcotics, drugs, or other controlled substances while performing company business or on company property.
The claimant's actions occurred outside of the workplace, and outside of working hours on the claimant's personal time. As the employer's policy specifically states the violation must occur on company
property or on company time, the claimant cannot be disqualified on this basis.
However, evidence of probative value indicates that on January 15, 2009, the claimant pled guilty to charges of manufacturing methamphetamine, possession of marijuana, possession of drug paraphernalia, and unlawful possession of a methamphetamine precursor. He was sentenced to ten (10) years in prison as a result of this conviction.
The employer became aware of the claimant's guilty plea and ten (10) year sentence on February 19, 2009. At that time, it was reasonable to expect that the claimant would be absent from work, due to incarceration after conviction, in excess of five (5) days.
One (1) example of misconduct, as defined in KRS 341.370(6), supra, is ["] incarceration in jail following conviction of a misdemeanor or felony by a court of competent jurisdiction, which results in missing at least five (5) days work."
The claimant's actions mirror the example of misconduct as defined above and he is disqualified from benefits for missing at least five (5) days of work post-conviction.
Jean appealed the Commission's decision by filing a verified complaint in the Henderson Circuit Court alleging: the Commission had erroneously affirmed the referee's decision which he characterized as "arbitrary, capricious and contained errors of law"; the Commission had abused its discretion by failing "to gather sufficient information for proper findings of fact" and by not basing its decision on "substantial evidence"; and, the Commission misapplied the law to the facts. The Commission answered the complaint, arguing its decision was supported by substantial evidence and asserting the affirmative defense of waiver and failure to exhaust administrative remedies. Gibbs filed an answer echoing the Commission's answer. We quote the part of the circuit court's nine-page opinion affirming the Commission's decision to deny benefits:
First, [Jean] argues that the Commission erred in finding that Jean committed misconduct through incarceration because the record does not demonstrate that he actually missed five days of work due to "incarceration . . . following conviction of a misdemeanor or felony." [Jean] argues that the statutory language requires that the employee be convicted and then serve actual jail time for that conviction, and that the Commission's ruling that it was enough to "expect" Jean would serve jail time was in error.
Factually, the record supports [Jean's] argument. Although the transcript shows that Jean was released from jail on March 24, 2009, it does not show when he began his incarceration other than "in February." The record does not show whether Jean went to jail on February 18 (when he was sentenced) or turned himself in some days later. Therefore, it is not clear from the record if any day that Jean missed work before his termination on February 24, 2009, was because of his conviction.
The defendants argue that it is unreasonable for an employer to wait until the jail time is actually served if it is clear that a convicted employee will serve time and miss five days of work as a result. However, whether or not the Commission was correct in finding anticipated jail time was misconduct under the statute, review of the record shows that the Referee properly ruled that Jean's discharge for violating Gibbs's substance abuse policy was misconduct.
Citing CR 52.02 and 52.04, Jean moved the circuit court to alter, amend or vacate its order. Jean sought additional findings clarifying whether the court deemed his guilty plea to be the basis for its finding of willful and wanton intent; what interest of Gibbs's was affected and how by Jean's conduct since the criminal charges against him did not occur on company time or company property; the reasonableness of Gibbs's policy; and the proof on which the court concluded Gibbs's policy was uniformly enforced. In responding to the motion, the Commission argued that when reviewing its decision to deny benefits the circuit court's role is limited to determining "whether the [Commission]'s findings of fact were supported by substantial evidence and whether the agency correctly applied the law to the facts." Thompson v. Kentucky Unemployment Ins. Comm'n, 85 S.W.3d 621, 624 (Ky. App. 2002). As such, the Commission argued the circuit court was without authority to make the additional findings sought by Jean. See Kentucky Unemployment Ins. Comm'n v. Murphy, 539 S.W.2d 293, 294 (Ky. 1976). No ruling on the motion to alter, amend or vacate appears in the record. This appeal followed.
Kentucky Rules of Civil Procedure.
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ANALYSIS
"The judicial standard of review of an unemployment benefit decision is whether the KUIC's findings of fact were supported by substantial evidence and whether the agency correctly applied the law to the facts." Thompson v. Kentucky Unemployment Ins. Comm'n, 85 S.W.3d 621,624 (Ky. App. 2002) (citations omitted). Skees v. Kentucky Unemployment Ins. Com'n, 347 S.W.3d 467, 470 (Ky. App. 2011). The question on appeal is whether Jean could be denied unemployment benefits for being convicted of criminal activity that did not occur on company property nor on company time when there was no proof he missed any work due to incarceration. Jean raises several issues pointing toward reversal, the most compelling of which is the absence of substantial evidence that he missed five days of work due to his drug conviction.
Under KRS 341.370(1), a worker who has been discharged for misconduct is disqualified from receiving unemployment benefits. While not defined in the statute, several examples of what constitutes "discharge for misconduct" are listed in KRS 341.370(6). Those acts include, but are not limited to:
separation initiated by an employer for falsification of an employment application to obtain employment through subterfuge; knowing violation of a reasonable and uniformly enforced rule of an employer; unsatisfactory attendance if the worker cannot show good cause for absences or tardiness; damaging the employer's property through gross negligence; refusing to obey reasonable instructions; reporting to work under the influence of alcohol or drugs or consuming alcohol or drugs on employer's premises during working hours; conduct endangering safety of self or co-workers; and incarceration in jail following conviction of a misdemeanor or felony by a court of competent jurisdiction, which results in missing at least five (5) days work.(Emphasis added). The bolded language was the reason given for Jean's discharge by the Commission and the circuit court would have us read that phrase to include anticipatory incarceration. While one might assume that a person sentenced to serve ten years would miss five days of work, we must have evidence that Jean missed five days of work due to his incarceration prior to being discharged to uphold this rationale and even the circuit court has acknowledged no such proof was forthcoming.
Statutes express the General Assembly's intent. Gateway Const. Co. v. Wallbaum, 356 S.W.2d 247, 248 (Ky. 1962). To determine the Legislature's intent, we must examine the precise language used in KRS 341.370(6) without reading into it words that are not there, Bohannon v. City of Louisville, 193 Ky. 276, 235 S.W. 750, 752 (1921), or guessing what the General Assembly might have intended to say but did not. Lewis v. Creasey Corporation, 198 Ky. 409, 248 S.W. 1046, 1048 (1923). To deny benefits on this particular ground, the language enacted by the Legislature requires proof of an employee having missed five days of work due to incarceration following conviction for a felony or misdemeanor by a court of competent jurisdiction. As explained in the circuit court's opinion, such proof was lacking. Thus, the Commission's denial of unemployment benefits on this ground was improper.
However, the referee had affirmed the denial of unemployment insurance benefits because Jean's "off duty actions raised [Gibbs's] concern about the affect of (sic) their reputation/business." Sheri Pfingston, a Senior HR Generalist for Gibbs, testified as follows at the brief telephonic hearing conducted by the referee:
[Gibbs's substance abuse policy] does not state anything regarding off company premises. It does basically state that there is no tolerance. And in our company work rules it indicates that any conduct that is detrimental to the best interest of the company would be deemed as a position for termination. And we felt that with this particular case, with it being a felony drug conviction current and facing prison time that, that information and that type of activity is detrimental to the company.We agree with the referee's analysis and deem Pfingston's testimony sufficient to establish misconduct justifying a denial of benefits. Therefore, we affirm this appeal because the trial court and the Commission reached the right result—albeit for the wrong reason. Kentucky Farm Bureau Mut. Ins. Co. v. Shelter Mut. Ins. Co., 326 S.W.3d 803, 812 n. 3 (Ky. 2010); Hale v. Combs, 30 S.W.3d 146, 150 (Ky. 2000).
We comment briefly upon additional arguments raised by Jean. Jean voluntarily pled guilty to manufacturing methamphetamine and other drug crimes. His conviction was published in the newspaper. Public knowledge that Gibbs employed a convicted drug maker would certainly impact the reputation of a commercial enterprise as well as send a negative message to co-workers. See Smith v. Spence & Spence, Attorneys, 80 N.C.App. 636, 641-42, 343 S.E.2d 256, 259-60 (N.C.App. 1986) (employee's personal financial problems affected law firm's business). Thus, we believe there was a sufficient nexus between Jean's off-campus drug activity and his job with Gibbs to justify a finding of misconduct under KRS 341.370(6) and the denial of benefits.
Next, we deem Gibbs's decision to discharge any employee convicted of using, possessing or selling illegal drugs to be reasonable. In addition to adversely impacting Gibbs's business reputation, conviction often leads to incarceration which results in time away from work which would deplete its available workforce. See Kentucky Unemployment Ins. Comm'n v. Stirrat, 688 S.W.2d 750 (Ky. App. 1984). From the record, we know that Jean was incarcerated at least 25 days (February 2009 - March 24, 2009) as a result of his guilty plea and sentence of ten years.
Third, while we are troubled that Jean's arrest for illegal drug activity occurred before the revised company drug policy became effective, his guilty plea was voluntarily entered after the revision became effective. Since Jean admitted he was aware of the revised policy, he must have known entering a guilty plea and being convicted would result in termination and would reflect poorly on Gibbs's reputation in the community. Jean's illegal drug activities demonstrate a "willful and wanton disregard of [Gibbs's] interests." Burch v. Taylor Drug Store, Inc., 965 S.W.2d 830, 835 (Ky. App. 1998).
Fourth, the absence of specific findings of fact by the circuit court, despite Jean's request for them, did not violate his due process rights. When reviewing the Commission's decision, a circuit court serves as a court of review, not a finder of fact and may disturb the Commission's findings only when "the evidence is so persuasive that one would have no choice but to find for the claimant. Such was not the case in this proceeding." Murphy, 539 S.W.2d at 294.
Finally, Jean asserts the circuit court mishandled the matter under KRS Chapter 13B and should have remanded the case to the Commission for a new order rather than affirming the Commission's decision. Jean did not suggest that action to the circuit court. Therefore, it is not properly before us for review. Keeton v. Lexington Truck Sales, Inc., 275 S.W.3d 723, 726 (Ky. App. 2008).
As explained above, the order of the Henderson Circuit Court is AFFIRMED.
KELLER, JUDGE, CONCURS.
DIXON, JUDGE, CONCURS IN RESULT ONLY. BRIEFS FOR APPELLANT: M. Michele Cecil
Owensboro, Kentucky
BRIEF FOR APPELLEE,
KENTUCKY UNEMPLOYMENT
INSURANCE COMMISSION:
Amy F. Howard
Frankfort, Kentucky
BRIEF FOR APPELLEE, GIBBS DIE
CASTING CORPORATION:
Crystal Spivey Wildeman
Evansville, Indiana