Opinion
No. C7-02-361.
Filed December 3, 2002.
Appeal from the Department of Economic Security, File No. 950001.
Todd C. Lins, (pro se respondent)
Michael B. Balsbaugh, (for relator)
Linda A. Holmes, Minnesota Department of Economic Security, (for respondent-commissioner)
Considered and decided by Shumaker, Presiding Judge, Schumacher, Judge, and Klaphake, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Relator Imani Sports, L.L.C., challenges the decision by the commissioner's representative that respondent Todd C. Lins is qualified for unemployment insurance benefits. Because the record reasonably supports the determination of the commissioner's representative that Lins quit his employment for good reason caused by Imani, we affirm.
FACTS
Relator Imani Sports, L.L.C., employed respondent Todd C. Lins under a contract that gave Imani sole discretion to "adjust downward" Lins's base salary if Lins failed to meet certain gross-profit goals. However, the contract did not provide that Imani could change Lins's pay from a base salary to a straight commission.
When Lins failed to meet his gross-profit goals, Imani told him that he could continue his employment only under a straight-commission pay structure. Because Lins was unwilling to work for a straight commission, he quit his job and applied for unemployment insurance benefits.
The department of economic security determined that Lins was eligible for benefits. Imani appealed and an unemployment law judge reversed the department's determination. Lins then appealed to the commissioner and the commissioner's representative reversed the unemployment law judge's decision, concluding that Lins quit his job for good reason caused by Imani. Imani brought a certiorari appeal from that reversal.
DECISION
An employee who quits his job for good reason caused by the employer is qualified to receive unemployment benefits. Minn. Stat. § 268.095, subd. 1(1) (Supp. 2001). Decisions of the commissioner's representative are accorded substantial deference. Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51. (Minn. 1995). The factual findings of the commissioner's representative are viewed in the light most favorable to the decision and are not disturbed if evidence in the record reasonably tends to sustain them. Lolling v. Midwest Patrol, 545 N.W.2d 372, 377 (Minn. 1996) (citing Ress v. Abbott N.W. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989)). The scope of our review in unemployment insurance cases is limited to determining whether the record reasonably supports the commissioner's representative's decision. Tuff, 526 N.W.2d at 51.
Current law places no burden of proof on either party. Minn. Stat. § 268.105, subd. 1(b) (2000). The unemployment law judge is required to fully develop the record. Minn. R. 3310.2921. The commissioner's representative on further appeal is required to evaluate the record based on evidence submitted at the hearing before the unemployment law judge. Minn. Stat. § 268.105, subd. 2(c) (2000). The commissioner's representative's decision is independent of the unemployment law judge's decision and is made as the findings and judgment of the commissioner's representative require. Id.
There is no dispute that Lins quit his employment. To receive unemployment insurance benefits, Lins must have had good reason caused by Imani to quit. Minn. Stat. § 268.095, subd. 1(1) (Supp. 2001).
The statute states in relevant part that a "good reason" includes "[a] substantial adverse change in the wages, hours, or other terms of employment by the employer * * * ." Minn. Stat. § 268.095, subd. 3(c) (2000).
The commissioner found that the change in salary structure from a base salary to a straight-commission salary constituted a substantial adverse change in the terms and conditions of employment. The commissioner applied a reasonable person standard and concluded that a reasonable person would quit under these circumstances.
Imani argues that the record does not support the commissioner's representative's decision because the statutory exception for good cause does not apply when the employment contract gives the employer absolute discretion to adjust Lin's compensation downward. Imani argues that the "adjusted downward" contract clause allows the change in salary structure from base salary to straight commission. In support of its argument, Imani asserts that a changed job assignment did not constitute a good reason for quitting when the change was consistent with the employment contract. Simonson v. Thin Film Tech. Corp., 392 N.W.2d 363, 365 (Minn.App. 1986).
Simonson is distinguishable from this case because in Simonson reassignment was explicitly contemplated in the language of the contract, but here a straight commission was neither explicitly contemplated nor expressly stated in the contract. Id. at 364. Furthermore, unlike Simonson, the contract language in the instant case is ambiguous.
"A contract is ambiguous if it is reasonably susceptible to more than one construction." Clapp v. Haferman Water Conditioning, Inc., 380 N.W.2d 838, 842 (Minn.App. 1986) (citations omitted). Where the language is ambiguous, extrinsic evidence may be reviewed; then construction becomes a question of fact. Empire State Bank v. Devereaux, 402 N.W.2d 584, 587 (Minn.App. 1987) (citing Donnay v. Boulware, 275 Minn. 37, 44, 144 N.W.2d 711, 716 (1966). The commissioner's representative's factual findings are viewed in a light most favorable to the decision and are not to be disturbed if evidence in the record reasonably tends to sustain them. Lolling, 545 N.W.2d at 377. The commissioner's representative is not bound by the unemployment law judge's interpretation of the record. Minn. Stat. § 268.105, subd. 2(c).
The interpretation of the contract at issue is a question of fact. The commissioner's representative found that the language of the contract did not allow Imani to change the employment terms and conditions from a base salary to a straight-commission method of pay. The record provides factual support for the commissioner's representative's findings that the contract language is ambiguous. The commissioner's representative could reasonably conclude from the record that the phrase "adjusted downward" did not include discretion for Imani to change Lins's pay from base salary to straight commission.
Imani argues that Lins should have given the new pay structure a fair trial. There is no statutory language requiring an employee to give a new compensation structure a fair trial. Minn. Stat. § 268.095, subd. 3 (2002). Thus, the commissioner's representative need not address the issue of whether Lins's had a duty to give the new salary structure a fair trial before quitting.
Because the record reasonably supports the commissioner's representative's determination that a change from salary to straight commission is a substantial adverse change and the average reasonable person would have quit under the circumstances, we affirm.