Opinion
No. A04-2483.
Filed October 25, 2005.
Appeal from the Department of Employment and Economic Development, File No. 12102 04.
Michael J. Ford, Krista L. Durrwachter, Quinlivan Hughes, P.A., (for relator).
Frank J. Kundrat, Kundrat Law Office, P.A., (for respondent Stanley Steemer).
Linda A. Holmes, Department of Employment and Economic Development, (for respondent department).
Considered and decided by Stoneburner, Presiding Judge; Peterson, Judge; and Halbrooks, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
By writ of certiorari, relator challenges the determination that he quit his employment without a good reason attributable to his employer, thereby disqualifying him from receiving unemployment benefits. Because the record reasonably supports the findings and the decision that relator quit without good reason attributable to his employer, we affirm.
FACTS
From April 2003 to June 2004, relator Richard Soder was employed as an office manager by respondent Stanley Steemer (Stanley). In that capacity, Soder booked cleaning jobs, balanced the company's checkbook, ran the payroll program, and engaged in the hiring and discharge of employees. In addition to those office duties, Soder occasionally engaged in van work, which is the service aspect of the company. Soder testified that he enjoyed working in the vans and that he "excelled at it." But as a result of a nonwork-related accident in January 2004, Soder broke his arm and stopped working in the vans. Stanley testified that, in May 2004, Soder expressed a desire to return to a crew-chief position in the vans because he had conflicts with one of the owners, who was also in the office. Soder's compensation for both the office and van work was a combination of an hourly rate and a commission scale. There were two commission scales: one for office work and one for van work.
In May 2004, Stanley advised Soder that as of July 6, 2004, he would be primarily working as crew chief and part-time, if at all, in the office. The July 6 date was selected by both parties because Soder was scheduled for arm surgery on June 28. He was, therefore, on medical leave beginning June 24. At the same time Stanley also altered its commission scales.
Soder's surgery turned out to be more extensive than anticipated. As a result, his physician imposed work restrictions for 3-6 months that precluded him from working as crew chief. On July 5, 2004, Soder informed Stanley that he was quitting.
Soder applied for unemployment benefits, and Stanley filed a Report to Raise an Issue, stating that Soder quit his employment at Stanley and should be disqualified from receiving benefits. An adjudicator in the Department of Employment and Economic Development determined that Soder was disqualified from receiving benefits because he quit the position due to lack of hours, decrease in pay, and because he did not receive a promised promotion. Soder appealed that decision to an unemployment-law judge, who reversed the adjudicator's determination, finding that Stanley demoted Soder, constituting a good reason to quit caused by the employer. Stanley appealed that determination to the senior-unemployment-review judge (SURJ).
The SURJ found that any change in Soder's pay under the new commission scales was too speculative to determine; that Stanley accommodated Soder's request to work in the vans; and, although not challenged on appeal, that Soder did not quit due to a serious medical injury. Thus, the SURJ concluded that Soder did not quit with good reason caused by his employer. This appeal follows.
DECISION
On certiorari appeal, we review the decision of the SURJ. Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995). The standard of review in economic-security cases is narrow. Markel v. City of Circle Pines, 479 N.W.2d 382, 383 (Minn. 1992).
The decision-maker conducting the review proceeding is now the senior-unemployment-review judge rather than the commissioner's representative. 2004 Minn. Laws ch. 183, § 71, at 305.
I. Factual Findings
Soder challenges a number of the factual findings made by the SURJ. On appeal, this court views the factual findings "in the light most favorable to the decision, and if there is evidence reasonably tending to sustain them, they will not be disturbed." White v. Metro. Med. Ctr., 332 N.W.2d 25, 26 (Minn. 1983). This court also defers to the SURJ's determinations regarding witness credibility and conflicting evidence. Jenson v. Dep't of Econ. Sec., 617 N.W.2d 627, 631 (Minn.App. 2000), review denied (Minn. Dec. 20, 2000).
Soder first challenges the SURJ's finding that he requested to work in the vans. The SURJ determined, after weighing conflicting testimony — Stanley asserting that Soder made this request and Soder denying it — that Soder was unhappy working in the office because he did not get along with the owner and that he wished to work in the vans instead. Furthermore, the SURJ determined that Soder desired to work in the vans because Soder believed that he would make more money working in the vans than in the office. Because there is evidence in the record reasonably tending to sustain the SURJ's finding that Soder requested to work in the vans, we will not disturb it.
Soder next challenges the SURJ's finding that any potential decrease in wages was too speculative to determine. Soder contends that he would have realized a 50% decrease in wages due to the new commission scale. As office manager, Soder received $8 an hour compensation, plus commission based on the number of jobs he booked and the price value of those jobs. If Soder booked over 30 jobs, the commission scale provided that he received 1% commission, which increased by .25% every five jobs. In addition, if Soder booked a job that had a price value of $180, he received a 1.5% commission, which also increased by .25% every five dollars. As a crew chief, Soder received $8 an hour compensation, plus 14% commission on all scheduled jobs, and 15% commission on all unscheduled jobs — jobs that he sold while performing the scheduled jobs.
Under the new commission scale for the office-manager position, Stanley eliminated the commission for number of jobs booked. Stanley also lowered the threshold on the commission scale for the price of jobs from $180 to $160, but decreased the rate at which the percent of commission accumulated to .25% for every ten dollars instead of every five dollars. The commission scale for the van work was to remain the same.
The most radical change Stanley made to its commission scales was the elimination of commission based on the number of jobs booked, and it is this change that Soder claims created the potential for a substantial decrease in his wages. The SURJ determined that under Soder's new position, working primarily as a crew chief and only occasionally working in the office — thereby removing most of Soder's opportunities to book jobs and either benefit from the old commission scale or be negatively impacted by the new commission scale — any potential decrease in wages due to the new commission scale was too speculative to determine. Because there is evidence in the record to reasonably sustain the SURJ's finding, we will not disturb it.
II. Decision to Quit Employment
Good Reason Caused by Employer
Whether an employee has a good reason to quit caused by the employer is a question of law, which this court reviews de novo. Peppi v. Phyllis Wheatley Cmty. Ctr., 614 N.W.2d 750, 752 (Minn.App. 2000). The issue of good cause to quit is a question of law that "is not binding on this court if it does not have reasonable support in the findings." Dachel v. Ortho Met, Inc., 528 N.W.2d 268, 269 (Minn.App. 1995) (quotation omitted). In general, an applicant who quits employment without a good reason caused by the employer is disqualified from receiving unemployment benefits. Minn. Stat. § 268.095, subd. 1(1) (Supp. 2003). In Minnesota, a good reason caused by the employer is one "(1) that is directly related to the employment and for which the employer is responsible; and (2) that is significant and would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment." Id., subd. 3(a) (Supp. 2003). In other words, "whether there was good cause attributable to the employer for the termination is whether the reason for quitting is compelling, real and not imaginary, substantial and not trifling, reasonable and not whimsical and capricious." Shanahan v. Dist. Mem'l Hosp., 495 N.W.2d 894, 897 (Minn.App. 1993). An employee seeking unemployment compensation has the burden of proving good cause to quit. Haskins v. Choice Auto Rental, Inc., 558 N.W.2d 507, 510 (Minn.App. 1997).
The revisor's office inadvertently substituted the phrase "ineligible for" for the phrase "disqualified from" in Minn. Stat. § 268.095, subds. 1, 4, 7, 8(a) (Supp. 2003). See Minn. Stat. § 268.095, subds. 1, 4, 7, 8(a) (2002) (using term "disqualified from"); 2003 Minn. Laws 1st Spec. Sess. ch. 3, art. 2, § 11 (making other changes to Minn. Stat. § 268.095, subd. 1, but retaining term "disqualified from"); 2003 Minn. Laws 1st Spec. Sess. ch. 3, art. 2, § 20(j), (k) (directing revisor to change the term "disqualified from" to "ineligible for" only in Minn. Stat. § 268.095, subd. 12, and then to renumber to Minn. Stat. § 268.085, subd. 13b).
An employee may quit for good cause when an employer substantially changes the conditions of employment. See, e.g., Rootes v. Wal-Mart Assocs., Inc., 669 N.W.2d 416, 418-19 (Minn.App. 2003) (stating that a "substantial adverse change in the wages, hours, or other terms of employment by the employer shall be considered a good reason caused by the employer for quitting unless the change occurred because of the applicant's employment misconduct" (quotation omitted)). But good reason to quit is not established when an employee has irreconcilable differences with his employer or when an employee is simply frustrated or dissatisfied with the working conditions. Ryks v. Nieuwsma Livestock Equip., 410 N.W.2d 380, 382 (Minn.App. 1987). Personality conflicts with supervisors also do not constitute good cause. Bongiovanni v. Vanlor Invs., 370 N.W.2d 697, 699 (Minn.App. 1985).
It is undisputed that Soder voluntarily quit. Thus, the ultimate issue is whether Soder resigned for good cause attributable to Stanley. Soder asserts that Stanley demoted him by moving him from office manager to crew chief, a position that he claims he is overqualified for. To demote means to "lower . . . in rank, position, or pay." Black's Law Dictionary 444 (7th ed. 1999).
There is no evidence in the record that Soder's new position as crew chief would have resulted in a substantial adverse change in pay, certainly not the 50% reduction in income asserted by Soder. Minnesota courts have held that "substantial adverse change" includes a reduction of wages between 15-30%, but not a wage reduction of 10%. See Danielson Mobile, Inc. v. Johnson, 394 N.W.2d 251, 253 (Minn. 1986) (holding that a reduction of 19% was a good cause); Sunstar Foods, Inc. v. Uhlendorf, 310 N.W.2d 80, 85 (Minn. 1981) (holding that a reduction between 21-26% was a good cause); Scott v. Photo Ctr., Inc., 306 Minn. 535, 536, 235 N.W.2d 616, 617 (1975) (holding that a reduction of 25% was a good cause); Dachel, 528 N.W.2d at 270 (holding that a reduction of 10% was not a good cause); McBride v. LeVasseur, 341 N.W.2d 299, 300 (Minn.App. 1983) (holding that a reduction of 30% was a good cause).
Soder did not remain at Stanley to work under the new commission scales, however, so any potential decrease in wages is, as the SURJ found, merely speculative. A speculative decrease in wages is not a sufficient basis for finding a demotion. Johnson v. Walch Walch, Inc., 696 N.W.2d 799, 802 (Minn.App. 2005) (holding that a claim of dramatic loss of income was speculative and therefore not a good cause attributable to the employer), review denied (Minn. July 19, 2005). In Johnson, the relator was a hairstylist who refused to move to a different salon after her salon closed. Id. at 800. She asserted that by moving to a new salon she would have lost a significant number of clients, and, as a result, because she worked on commission, the move would have caused a substantial reduction in pay. Id. The commissioner's representative disagreed and found that any potential reduction was too speculative to determine. Id. at 802. This court stated, "[T]he evidence of income loss is unclear." Id. at 801. Thus, because there was evidence supporting the commissioner's representative's decision, this court affirmed. Id. at 802. Soder's assertion of a reduction in his wages is equally unclear and speculative, and therefore, does not provide a basis for finding a substantial adverse change.
In addition, there is no evidence in the record that Soder's new position was a demotion in rank or position. He contends that acting as a crew chief constitutes "manual labor," and thus, requires less skill than an office manager. But because Soder requested to work in the vans, the change can be considered neither a demotion nor a good cause to quit attributable to Stanley.
Therefore, because any potential decrease in pay due to the changed position is too speculative to determine and because Soder requested the change in positions, Soder did not quit his employment with good cause attributable to Stanley.