Engel Manufacturing Company, Inc. v. Review Board of the Indiana Department of Workforce Development and D.R. (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: January 30, 2017
• Docket: 93A02-1607-EX-1596
• Status: Published

Opinion

MEMORANDUM DECISION FILED Pursuant to Ind. Appellate Rule 65(D), Jan 30 2017, 9:36 am this Memorandum Decision shall not be regarded as precedent or cited before any CLERK Indiana Supreme Court court except for the purpose of establishing Court of Appeals and Tax Court

the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE Peter M. Yarbro Curtis T. Hill, Jr. Fred R Hains Attorney General of Indiana Hains Law Firm, LLP Aaron T. Craft South Bend, Indiana Elizabeth M. Littlejohn Deputy Attorneys General Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA Engel Manufacturing Company, January 30, 2017 Inc., Court of Appeals Case No. Appellant-Respondent, 93A02-1607-EX-1596 Appeal from the Review Board of v. the Indiana Department of Workforce Development Review Board of the Indiana Case No. 16-R-0724 Department of Workforce Development and D.R., Appellee-Claimant.

Mathias, Judge.

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 1 of 13 [1] Engel Manufacturing Company, Inc. (“Engel”) appeals the order of the Review

Board of the Indiana Department of Workforce Development (“the Review

Board”) determining that one of Engel’s employees, D.R., voluntarily left his

employment for good cause in connection with the work and was therefore

eligible for unemployment benefits. Engel presents one issue on appeal, which

we restate as whether the Review Board’s decision was supported by sufficient

evidence.

[2] We affirm.

Facts and Procedural History

[3] The facts as found by the administrative law judge (“ALJ”), and adopted by the

Review Board, show that D.R. began to working as a lathe operator for Engel

in January of 2008. Engel made parts for the aerospace industry, and D.R.’s

duties included preparing parts to ship to Engel’s aerospace customers.

[4] D.R.’s work environment at Engel was stressful, not only because of the

demands of the high-precision parts that Engel produced, but also because of

the demeanor of Engel’s owner and operator, Stephen Engel (“Mr. Engel”),

who, by his own account, frequently used profanity in his conversations.

[5] On one particular occasion, which occurred in November of 2014, D.R. was

working on his machine when Mr. Engel approached him and began to yell at

him for being “narcissistic” and told him that he was “a real, big fat part of the

world, and the rest of the world is very skinny.” Tr. p. 14. This shocked D.R.,

who decided not to return to work the following day. Engel had a strict policy

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 2 of 13 that any employee who did not show up for work by 9:00 a.m. without calling

in was considered to have quit. When Mr. Engel learned that D.R. had not

come to work, he called D.R. to apologize and convinced him to return to

work.

[6] For the next couple of weeks, D.R.’s work environment improved as Mr. Engel

restrained from berating him. However, from this point in November 2014 to

February 2016, D.R. witnessed Mr. Engel verbally abuse and curse at other

Engel employees. On February 1, 2016, D.R. informed Mr. Engel that he could

not work in the same building as Mr. Engel. Mr. Engel took this as D.R.’s

resignation and accepted it. Soon thereafter, however, Mr. Engel told D.R. that

he needed him as an employee because no other employee could complete the

job that D.R. was then working on. D.R. decided to stay on with Engel, but

only for three days per week.

[7] Just a few days later, on February 4, 2016, Mr. Engel became angry with D.R.

because D.R. had not completed a job that he wanted shipped by the end of the

day. Mr. Engel was very angry and “wildly yell[ed]” at D.R. in front of the

other employees. Tr. p. 10. D.R. did not respond verbally, but did work late

that day in order to finish the job as Mr. Engel had requested.

[8] Four days later, Mr. Engel approached D.R. at work and asked him to review a

blueprint and quickly demanded an answer to a question he had about the

blueprint. D.R. was unfamiliar with the blueprint and told Mr. Engel that he

did not know how to immediately answer his question. D.R. took the blueprint

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 3 of 13 to the inspection department, a move which he believed prudent, as an

incorrect answer to Mr. Engel’s question could have cost the company

thousands of dollars. D.R. asked three other employees if they knew the answer

to the question Mr. Engel had asked. None of them did. Mr. Engel then entered

the room, snatched the blueprint out of D.R.’s hands, and stated that he would

have another employee look at the blueprint. Shortly thereafter, Mr. Engel

returned to D.R. to ridicule him for not being able to answer his question about

the blueprint, telling him that “this is easy,” and asking him, “you can’t do

this?” and “what’s the matter with you?” Tr. p. 13. D.R. explained that such

encounters with Mr. Engel were “not isolated incidents.” Id.

[9] Humiliated, D.R. did not return to work the following day, which, as noted

above, Engel took as quitting the job. This time, however, Mr. Engel did not

call D.R. to ask him to return to work. D.R. then applied for unemployment

benefits.

[10] A claims deputy for the Department of Workforce Development determined

that D.R. had voluntarily left his employment for good cause and was therefore

entitled to receive unemployment benefits. Engel appealed this determination,

and an ALJ conducted a telephonic hearing on the matter on April 19, 2016.

On April 26, 2016, the ALJ issued her decision affirming the claims deputy’s

determination that D.R. had voluntarily left his employment for good cause.

Engel appealed this decision to the Review Board, and on June 9, 2016, the

Review Board affirmed the ALJ’s decision and adopted the ALJ’s findings of

fact and conclusions of law. Engel now appeals.

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 4 of 13 The Indiana Unemployment Compensation Act

[11] Indiana Code article 22-4, known as the Indiana Unemployment Compensation

Act (“the Act”), was enacted to “provide for payment of benefits to persons

unemployed through no fault of their own.” P.K.E. v. Review Bd. of Ind. Dep’t of

Workforce Dev., 942 N.E.2d 125, 130 (Ind. Ct. App. 2011), trans. denied.

Pursuant to the Act, an individual who meets the eligibility requirements of

Indiana Code chapter 22-4-14 and is not disqualified by the exceptions in

chapter 22-4-15 is eligible for benefits. Id. “An otherwise eligible individual can

be disqualified from receiving benefits if he voluntarily left his employment

without good cause[.]” Ind. State Univ. v. LaFief, 888 N.E.2d 184, 186 (Ind.

2008) (citing Ind. Code § 22-4-15-1). A claimant’s entitlement to unemployment

benefits is determined based upon the information that is available without

regard to a burden of proof. P&P Home Servs., LLC v. Review Bd. of Ind. Dep’t of

Workforce Dev., 53 N.E.3d 1232, 1234 (Ind. Ct. App. 2016) (citing Ind. Code §

22-4-1-2(c)).

Standard of Review

[12] The Review Board reviews the ALJ’s decision for errors of fact, law, or

procedure based on the record before the ALJ. P.K.E. v. Review Bd. of Ind. Dep’t

of Workforce Dev., 942 N.E.2d 125, 129-30 (Ind. Ct. App. 2011), trans. denied

(citing Ind. Code § 22-4-17-5(e)). The Review Board “may on [its] own motion

affirm, modify, set aside, remand, or reverse the findings, conclusions, or orders

of an administrative law judge[.]” I.C. § 22-4-17-5(e). As the ultimate finder of

fact, the Review Board has wide discretion and freedom to decide any and all

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 5 of 13 issues and may act independently on the evidence before it. P.K.E., 942 N.E.2d

129.

[13] Here, the Review Board affirmed the ALJ’s findings and conclusions in whole.

Decisions made by the Review Board are subject to review for legal error, but

questions of fact determined by the Review Board are, absent limited

exceptions, conclusive and binding. K.S. v. Review Bd. of Ind. Dep’t of Workforce

Dev., 33 N.E.3d 1195, 1197 (Ind. Ct. App. 2015) (citing Ind. Code § 22-4-17-

12(a)).

[14] As explained by our supreme court in Chrysler Group., LLC v. Review Board of the

Indiana Department of Workforce Development:

Under Indiana’s Unemployment Compensation Act, “[a]ny decision of the review Board shall be conclusive and binding as to all questions of fact.” Ind. Code § 22-4-17-12(a) (2007). The Review Board’s conclusions of law may be challenged as to “the sufficiency of the facts found to sustain the decision and the sufficiency of the evidence to sustain the findings of facts.” Ind. Code § 22-4-17-12(f). Consistent with appellate review of other administrative adjudications, we categorize the Review Board’s findings three ways: (1) basic, underlying facts; (2) “ultimate facts” derived as inferences or conclusions from basic, underlying facts; (3) and conclusions of law.

We review the Review Board’s findings of basic facts under a substantial evidence standard, and we neither reweigh the evidence nor assess its credibility. We consider only the evidence most favorable to the Review Board’s findings and, absent limited exceptions, treat those findings as conclusive and binding. Ultimate facts—typically mixed questions of fact and law—are reviewed to ensure the Review Board has drawn a reasonable Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 6 of 13 inference in light of its findings on the basic, underlying facts. Where the matter lies within the particular expertise of the administrative agency, we afford the finding a greater level of deference. Where the matter does not lie within the particular expertise of the agency, however, the reviewing court is more likely to exercise its own judgment. Regardless, the court examines the logic of the inference drawn and imposes any rules of law that may drive the result. The Review Board’s conclusion must be reversed if the underlying facts are not supported by substantial evidence or the logic of the inference is faulty, even where the agency acts within its expertise, or if the agency proceeds under an incorrect view of the law.

We are not bound by the Review Board’s conclusions of law, though [a]n interpretation of a statute by an administrative agency charged with the duty of enforcing the statute is entitled to great weight, unless this interpretation would be inconsistent with the statute itself.

960 N.E.2d 118, 122-23 (Ind. 2012) (some citations and internal quotations

omitted).

Discussion and Decision

[15] In the present case, Engel makes no claim that D.R. has not satisfied the

eligibility requirements of chapter 22-4-14, nor does D.R. deny that he

voluntarily left his employment. Thus, the only question before us is whether

D.R. “voluntarily left the employment without good cause in connection with

the work[.]” I.C. § 22-4-15-1(a). “Whether an employee leaves his employment

without good cause in connection with the work is a question of fact to be

determined by the Review Board.” Y.G. v. Review Bd. of Ind. Dep’t of Workforce

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 7 of 13 Dev., 936 N.E.2d 312, 314 (Ind. Ct. App. 2010) (citing Indianapolis Osteopathic

Hosp. Inc. v. Jones, 669 N.E.2d 431, 433 (Ind. Ct. App.1996)).

[16] Voluntary unemployment is not generally compensable under the Act because a

declared purpose of the Act is to provide benefits for persons unemployed

through no fault of their own. Kentucky Truck Sales, Inc. v. Review Bd. of Ind. Dep’t

of Workforce Dev., 725 N.E.2d 523, 526 (Ind. Ct. App. 2000). Thus the

requirement that an employee who voluntarily leaves employment must do so

for “good cause in connection with the work” if he wishes to receive

unemployment benefits.

[17] This “good cause” requirement means that the employee’s reason for

terminating his employment must be job related and objective in character, and

not consist of purely subjective, personal reasons. Id. “The Act will provide

compensation only when demands placed upon an employee are so

unreasonable or unfair that ‘a reasonably prudent person would be impelled to

leave.’” Id. (quoting Marozsan v. Review Bd. of Ind. Employment Sec. Div., 429

N.E.2d 986, 990 (Ind. Ct. App. 1982)). Thus, in order to determine if good

cause existed, the Review Board must determine first whether the individual’s

reasons for abandoning employment would have compelled a reasonably

prudent person under the same circumstances to quit, and then whether the

individual’s reasons for leaving were objectively related to the employment.

Brown v. Ind. Dep’t of Workforce Dev., 919 N.E.2d 1147, 1151 (Ind. Ct. App.

2009).

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 8 of 13 [18] Where an employee asserts that a reprimand or criticism represents good cause

for leaving employment, we consider all of the circumstances surrounding the

reprimand. Kentucky Truck Sales, 725 N.E.2d at 526. “If there are other factors

involved, such as provocation brought on by unjust reprimands or other

evidentiary factors that would have ‘strong influential effect upon the mind of

the employee contributing to or causing him to voluntarily quit his

employment,’” such contributing factors can, under the proper circumstances,

be considered as good cause. Id. (quoting Marozsan, 429 N.E.2d at 990).

[19] Here, Engel claims that the Review Board unreasonably concluded that D.R.

quit for good cause. Given the highly deferential standard of review we apply to

such matters, we cannot agree. The Review Board adopted the ALJ’s findings,

which well document Mr. Engel’s frequent outbursts toward D.R., which

involved him yelling and cursing1 at D.R. for little reason. Without repeating all

of the facts as set forth above, we note that Mr. Engel called D.R. a narcissist,

and stated that he lived in a “real, big fat part of the world, and the rest of the

world is very skinny.” Tr. p. 14. He later “wildly” yelled at D.R. in front of

other employees. He also ridiculed D.R. in front of other employees when D.R.

was unable to read a blueprint, a task that several other employees were also

unable to do. Also, as D.R. explained, such encounters with Mr. Engel were

1 Engel takes issue with the Review Board noting Mr. Engel’s use of profanity. Engel notes that D.R. testified that he did not remember Mr. Engel cursing at him. However, Mr. Engel himself admitted at the ALJ hearing that he frequently used profanity. From this, the ALJ and the Review Board could reasonably conclude that D.R.’s outbursts included profanity.

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 9 of 13 not isolated incidents, and D.R. observed Mr. Engel berate other employees.

Notably, Mr. Engel did not directly contradict any of D.R.’s testimony before

the ALJ, other than to claim that he had not yelled. Given these facts and

circumstances, we are in no position on appeal to second-guess the Review

Board’s factual determination that D.R.’s reason for quitting — Mr. Engel’s

continued verbal abuse — would have compelled a reasonably prudent person

to quit under the same circumstances.

[20] Engel’s citation to Richey v. Review Board, 480 N.E.2d 968, 970 (Ind. Ct. App.

1985), is unavailing. In Richey, the Review Board made a factual finding that

the employee quit for subjective, personal reasons and therefore did not quit for

good cause. Id. at 971. On appeal, this court merely held that sufficient

evidence supported the Board’s finding. Id. 971-72. Contrariwise, here the

Review Board found that D.R. did have good cause to quit, and, as noted

above, there was sufficient evidence to support this finding.

[21] Furthermore, Richey is factually distinguishable from the present case. In Richey,

merely one incident had occurred months before the employee quit in which the

employee and her supervisor had “an exchange of words.” Id. at 971.

Thereafter, the employee quietly “harbor[ed] sensitivity” over this incident and

subjectively felt “uncomfortable.” Id. at 971-72. Accordingly, the Richey court

held that, “Feeling uncomfortable in an employment situation is a specific

enough finding to equate Richey's reasons for leaving as personal and subjective

in nature; i.e., her reason was not for ‘good cause.’” Id.

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 10 of 13 [22] In contrast, here, D.R. was subjected to repeated verbal abuse by Mr. Engel,

and he did not sit idly and harbor his feelings for months. Instead, he directly

confronted Mr. Engel and even went so far as to quit, only to be asked to return

to work by Mr. Engel himself. When Mr. Engel’s coarse behavior continued,

D.R. quit.

[23] Engel also cites Kentucky Truck Sales, Inc. v. Review Board, 725 N.E.2d 523 (Ind.

Ct. App. 2000), but we find this case too to be readily distinguishable. In

Kentucky Truck Sales, Kiser, the employee, had a history of missing work and

was warned that further attendance problems would subject him to discipline.

Despite this warning, Kiser missed work on one day and reported an hour late

the next day. When Kiser arrived at work an hour late, the foreman had been

instructed not to assign him any work, and the shop manager yelled at him,

accused him of lying, and referred to him as a “son of a bitch.” Id. at 525. Kiser

told the foreman that he “didn’t have to listen to this s---,” and clocked out,

falsely indicating on his time card that he had gone home sick. Id. (alterations in

original). Kiser then did not return to work that week or the next and did not

contact the employer. Kentucky Truck Sales then sent Kiser a letter notifying

him that it had assumed that Kiser had voluntarily quit and to contact the

employer if this were not the case. Kiser made no further contact with his

employer other than to return his uniforms several weeks later. Kiser then

applied for, and was denied, unemployment benefits. The ALJ reversed this

initial decision and determined that Kiser had quit for good cause, and the

Review Board affirmed.

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 11 of 13 [24] On appeal, this court noted that Kiser had not filed an appellee’s brief and

noted that the employer therefore needed only establish prima facie error in the

Review Board’s decision. Id. at 525-26. Applying this lesser standard, we held

that although Kiser’s reprimand may have been “indelicately presented,” in

light of Kiser’s attendance record, it was not an unjustified reprimand that

constituted “such provocation as to impel a reasonably prudent person to leave

his employment.” Id. at 526.

[25] Here, there is no suggestion that D.R. had a history of poor attendance. Indeed,

when he did not show up to work after the November 2014 incident, it was Mr.

Engel who called D.R. and requested that he return to work. Moreover, he was

subjected to repeated verbal berating and humiliation by Mr. Engel in front of

other employees. Accordingly, the holding of Kentucky Truck Sales does not

convince us that we must reverse the factual determination of the Review Board

that D.R. quit for good cause in connection with his work.

[26] The same is true for Engel’s citation to Geckler v. Review Board, 244 Ind. 473, 193

N.E.2d 357 (1963), a case in which the employee quit because of one instance of

being indelicately reprimanded. Again, here, D.R. was subject to repeated

verbal harassment and humiliation. Unlike in Geckler, the Review Board did not

find that D.R. was “nervous, temperamental, hypersensitive and subjective.”

244 Ind. at 477, 193 N.E.2d at 358.

[27] Finally, Engel argues that D.R. had no medical evidence to support his claims

of stress-related physical ailments, citing Y.G. v. Review Board, 936 N.E.2d 312

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 12 of 13 (Ind. Ct. App. 2010). At issue in Y.G. was whether the Review Board had erred

in determining that the employee did not qualify for benefits under Indiana

Code section 22-4-15-1(c)(2), which provides that an employee who voluntarily

quits is not disqualified for benefits if the unemployment is “the result of

medically substantiated physical disability” and the employee “is involuntarily

unemployed after having made reasonable efforts to maintain the employment

relationship . . . .” Here, however, the Review Board did not conclude that

D.R. was entitled to benefits based a medically-substantiated physical disability.

It instead concluded that he was entitled to benefits under subsection 22-4-15-

1(a) because he voluntarily left the employment with “good cause in connection

with the work[.]”

Conclusion

[28] The Review Board’s factual determination that D.R. voluntarily left his

employment with good cause in connection with the work is supported by

sufficient evidence in the record. Accordingly, we affirm the Review Board’s

conclusion that D.R. is entitled to unemployment benefits.

[29] Affirmed.

Baker, J., and Pyle, J., concur.

Court of Appeals of Indiana | Memorandum Decision 93A02-1607-EX-1596 | January 30, 2017 Page 13 of 13