Opinion
No. 93A02-1101-EX-75
09-07-2011
K.T., Appellant, v. REVIEW BOARD OF THE INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT and F.C.I., Appellees.
ATTORNEY FOR APPELLANT : PAUL T. BERKOWITZ Paul T. Berkowitz & Associates. Ltd. Chicago, Illinois ATTORNEYS FOR APPELLEES: GREGORY F. ZOELLER Attorney General of Indiana STEPHANIE ROTHENBERG Deputy Attorney General Indianapolis, Indiana
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:
PAUL T. BERKOWITZ
Paul T. Berkowitz & Associates. Ltd.
Chicago, Illinois
ATTORNEYS FOR APPELLEES:
GREGORY F. ZOELLER
Attorney General of Indiana
STEPHANIE ROTHENBERG
Deputy Attorney General
Indianapolis, Indiana
APPEAL FROM THE REVIEW BOARD OF THE
INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT
Review Board
Cause No. 10-R-06450
MEMORANDUM DECISION - NOT FOR PUBLICATION
ROBB , Chief Judge
Case Summary and Issues
K.T. appeals the decision by the Review Board of the Indiana Department of Workforce Development ("Review Board") affirming the conclusion by the Administrative Law Judge ("ALJ") that K.T. left his employment without good cause, and was thereby ineligible for unemployment benefits. K.T. raises three issues, which we consolidate and restate as two: 1) whether the Review Board's decision is contrary to law, namely, the National Labor Relations Act; and 2) whether K.T. voluntarily left his employment without good cause. We conclude that the Review Board erred as a matter of law, but this error was harmless. We further conclude, however, that K.T. had good cause to leave his employment and therefore was not ineligible to receive unemployment benefits. Accordingly, we reverse and remand.
For the reasons stated in LaDon A. Moore v. Review Bd. of the Ind. Dep't of Workforce Dev., No. 93A02-1005-EX-529, at 8 (Ind. Ct. App., Aug. 12, 2011), I would include the parties' full names. However, my colleagues find that Indiana Code section 22-4-19-6(b) and Administrative Rule 9(G)(4)(d) mandate confidentiality and thus require the use of initials. They are not persuaded that Administrative Rule 9(G)(1)(b)(xviii) permits the use of names.
Facts and Procedural History
From June 22, 2010 to June 25, 2010, K.T. worked full time as a carpenter apprentice for Employer, where he qualified as a union employee. On June 25, 2010, Employer's health care provider informed K.T. that he was not receiving benefits. On June 26, K.T. expressed concern to his direct supervisor, who told K.T. that he would not be receiving benefits but did not provide an explanation. K.T. then asked his supervisor to fire him, but his supervisor declined. K.T. told his supervisor that he would not return to work because his benefits were not being paid, and then sought unemployment benefits.
Unfortunately, K.T.'s direct supervisor did not testify at the ALJ hearing, and therefore could not clarify what occurred.
On September 22, 2010, a deputy of the Indiana Department of Workforce Development concluded that K.T. left his employment without good cause in connection with the work and therefore he was ineligible for benefits. K.T. appealed, and participated with a representative from Employer in a telephonic hearing before the ALJ. The ALJ entered findings of fact and conclusions of law, which include the following:
Both K.T. and the Review Board adopt verbatim the factual findings of the ALJ as the Statement of Facts in their appellate briefs.
FINDINGS OF FACT: . . .
***
. . . The claimant stated that the employer was not paying its employees' benefits. Per the union contract with the employer, the employer is required to provide benefits for its employees. . . .Appellant's Appendix at 40-41.
A collective bargaining agreement was drawn between the union and the employer stating that all union employees would receive benefits. The collective bargaining agreement has not been signed by the employer.
Benefits are not paid to the union until the month after the benefits are issued. The claimant would not have received his paid benefits until July. The employer is not aware that [K.T.'s supervisor] had a conversation where he stated the claimant would not be receiving benefits. . . .
The claimant's witness testified that the new [sic] bargaining agreement expired on May 31, 2009 and the new bargaining agreement went into effect June 1, 2009 and runs until May 31, 2012. The employer has not signed that agreement, due to an issue with the industry fund. The employer never told the claimant he would be receiving benefits. [K.T.'s union business agent]
testified that the employer has not provided its union employees benefits in over a year.
CONCLUSIONS OF LAW: . . .
***
The [ALJ] has found that the parties did not have an implicit agreement that the claimant would receive benefits. The collective bargaining agreement was not signed by the employer, and the employer never told the claimant he would receive benefits. The [ALJ] concludes that there was no change in an agreement so unfair or unjust as to impel a reasonably prudent person to leave employment. Therefore, the [ALJ] concludes that the claimant did not voluntarily leave employment for good cause in connection with work as defined by I.C. §22-4-15-1(a).
K.T. appealed the ALJ's decision to the Review Board, which adopted and incorporated by reference the findings and conclusions of the ALJ and affirmed the ALJ's decision without accepting additional evidence. K.T. now appeals. Additional facts will be supplied as appropriate.
Discussion and Decision
I. Standard of Review
Upon review of an unemployment compensation proceeding, we determine whether the Review Board's decision is reasonable in light of its findings. Szymanski v. Review Bd. of the Indiana Dep't of Workforce Dev., 656 N.E.2d 290, 292 (Ind. Ct. App. 1995). We are bound by the Review Board's resolution of all factual issues, and accordingly we do not reweigh evidence or assess the credibility of witnesses. Id. We consider only the evidence and reasonable inferences which are most favorable to the Review Board's decision, and will not set aside the decision if there is substantial evidence of probative value in support thereof. Id. By implication, this standard of review dictates that where, as here, the Review Board adopts and incorporates by reference the findings and conclusions of the ALJ and affirms the ALJ's decision without accepting additional evidence, we are bound by the ALJ's resolution of all factual issues. See Franklin Cnty. Cmty. Sch. Corp. v. Brashear, 660 N.E.2d 1081 (Ind. Ct. App. 1996). However, we are not bound by the Review Board's interpretation of law, and determine de novo whether the Review Board correctly interpreted and applied the law. Szymanski, 656 N.E.2d at 292.
II. The National Labor Relations Act
K.T. contends the ALJ's conclusion that Employer was not required to pay his benefits was contrary to law because "an employer's failure to honor the terms and conditions of an expired collective-bargaining agreement pending negotiations on a new agreement [or until an impasse is reached] constitutes bad faith bargaining in breach of sections 8(a)(1), 8(a)(5) and 8(d) of the National Labor Relations Act." Appellant's Brief at 6 (quoting Laborers Health & Welfare Trust Fund for N. Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539, 544 n.6 (1988)) (alterations original to Appellant's Br.). Based on Laborers, K.T. argues Employer was required to pay K.T.'s benefits even while Employer worked out issues with the new collective-bargaining agreement and before Employer signed that agreement.
Employer does not explicitly disagree that it was required to pay K.T.'s benefits, and asserted at the ALJ hearing that it would have paid his benefits in the month after they are earned according to its usual policy. Nevertheless, we agree with K.T. that Employer was required to pay K.T.'s benefits, and that the Review Board erred in affirming the ALJ's legal conclusion to the contrary.
Employer's representative seemed somewhat confused at the ALJ hearing. She testified:
Benefits are not paid . . . until the month after they've worked. They're paid monthly and they're paid after, like the June pay, June benefits wouldn't be paid until July and so forth. Whether or not the benefits were paid is not question [sic], I thought we were on trial for the wages.
But it is eminently clear that this case is not simply about whether Employer was required to pay K.T.'s union employee benefits. After all, K.T. does not seek merely a reprimand of Employer or even his union employee benefits; K.T. seeks unemployment benefits. Accordingly, this case turns on the issue of whether K.T. left his employment without good cause in connection with the work, which was the specific conclusion by the ALJ and Review Board that ultimately disqualified K.T. from receiving unemployment benefits.
It is significant then, that neither the ALJ nor the Review Board entered a finding that the employer would not have paid to K.T. his June benefits in July, in its normal course. K.T.'s union business agent testified in the telephonic hearing that the Employer "has not paid their benefits for close to a year and it is part of our collective bargaining agreement . . . ." Transcript at 15. This statement appears to refer to Employer's union employees. However, this agent also testified that Employer "has been paying everything except industry funds, which [it] took issue with," while a new collective-bargaining agreement was being finalized. Id. at 20; accord id. ("[Employer] has been continuing with the agreement just like all the other contracts have [sic] with the exception of the one item."). Construing the evidence in a light most favorable to the Review Board's decision, see Szymanski, 656 N.E.2d at 292, we conclude Employer would have paid K.T. his benefits.
For these reasons, we deem the legal error by the ALJ and Review Board to be harmless error. See Indiana State Hwy. Comm'n v. Indiana Civil Rights Comm'n, 424 N.E.2d 1024, 1034 (Ind. Ct. App. 1981) (applying the doctrine of harmless error in appellate review of an administrative decision). In other words, the ALJ and Review Board's legal error is harmless because neither found that Employer actually failed to honor the terms of the expired collective-bargaining agreement, a failure which Laborers held to be unlawful. See Laborers, 484 U.S. at 544 n.6.
III. Leaving Employment Without Good Cause
Moving to the crux of the case, K.T. argues that he is not disqualified from receiving unemployment benefits because he left his employment with good cause. Cf. Ind. Code § 22-4-15-1(a) (stating that an individual who voluntarily leaves employment without good cause in connection with the work is ineligible for unemployment benefits). Specifically, he contends his "good cause" was his belief in Employer's unilateral decision to not pay his benefits as required by the National Labor Relations Act.
We are inclined to agree that when an employer is legally required to pay union employee benefits to an employee and fails to do so, such employee has good cause to leave his or her employment and would not be disqualified from receiving unemployment benefits. But as noted above, the evidence does not make clear this occurred here. The evidence presented at the ALJ hearing and reasonable inferences in favor of the Review Board's decision indicate that K.T. would have received his June benefits in July, as is customary for Employer.
But K.T. might have had good cause to leave if he believed that Employer would not pay his benefits. The question is whether K.T. should have done more to confirm he would not receive his benefits before his subjective belief would constitute good cause to leave. We reconcile this question with case law regarding good cause by rephrasing the question as follows: without K.T. having done more to confirm that he would not receive his union employee benefits, would the relatively unconfirmed appearance of a lack of benefits be "so unfair or unjust as to compel a reasonably prudent person to quit work," thereby constituting good cause? Quillen v. Review Bd. of the Indiana Emp't Sec. Div., 468 N.E.2d 238, 242 (Ind. Ct. App. 1984).
Several circumstances lead us to conclude that K.T. was not required to take any further action to confirm he would not receive his benefits, and he had good cause to leave his employment. First, K.T.'s direct supervisor, who told K.T. that he would not receive benefits, bore the title of Superintendant and was the one who hired K.T. K.T. might not have known that his supervisor possessed only limited knowledge regarding human resources, but it is not K.T.'s duty to discern that his supervisor might not be knowledgeable about the important and seemingly simple matter of whether K.T.'s benefits would be paid. So far as K.T. knew, as a new employee, his direct supervisor was knowledgeable to answer K.T.'s simple questions.
Second, and relatedly, K.T.'s supervisor did not equivocate when telling K.T. his benefits would not be paid. K.T.'s supervisor told K.T. definitively that Employer would not pay K.T.'s benefits. Even when K.T. became upset and asked his supervisor to lay him off -clearly due to lack of benefits - K.T.'s supervisor did not attempt to explain, did not indicate any uncertainty, and did not ask K.T. to wait or check with others before making the significant decision to leave employment.
Third, K.T. did not merely rely on his own reading of his paycheck or the verbal notice from the health care provider - he asked a supervisor who should have known the answer. K.T. checked with one who should have known, and his question was met with an unequivocal response that his benefits would not be paid. Good cause to leave employment does not require that employees take certain steps to confirm their understanding. But even if it did, K.T.'s inquiry of his supervisor is sufficient considering the circumstances described.
The definitive manner in which K.T.'s supervisor told K.T. that his benefits would not be paid conveys a level of certainty that K.T. would not have felt the need to confirm his understanding by asking others. For these reasons, K.T. was placed in a position that - even without doing more to confirm he would not receive his benefits - was "so unfair or unjust as to compel a reasonably prudent person to quit work." Quillen, 468 N.E.2d at 242. Therefore, K.T. did have good cause to leave his employment, and the ALJ and Review Board erred in concluding that K.T. was ineligible for unemployment benefits. Further, this conclusion is completely consistent with the ALJ and Review Board's resolution of factual issues, as neither entered findings regarding the reasonableness of K.T.'s belief that Employer would not pay his benefits.
Conclusion
The ALJ committed a legal error, but this error was harmless. The circumstances of this case are such that K.T. left his employment with good cause, and the ALJ and Review Board therefore erred in concluding K.T. was ineligible for unemployment benefits.
Reversed and remanded. BARNES, J., and BRADFORD, J., concur.
Transcript at 17 (emphasis added).