25CA1447 Zen’d Out v ICAO 01-15-2026
COLORADO COURT OF APPEALS
Court of Appeals No. 25CA1447 Industrial Claim Appeals Office of the State of Colorado DD No. 6098-2025
Zen’d Out Massage Spa,
Petitioner,
v.
Industrial Claim Appeals Office of the State of Colorado and Kaelyn Norman,
Respondents.
ORDER AFFIRMED
Division I Opinion by JUDGE MEIRINK J. Jones and Lum, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced January 15, 2026
Massey Kelly & Priebe, PLLC, Jennifer Tiedeken, Rhonda Reed Weiner, Fort Collins, Colorado, for Petitioner
No Appearance for Respondent Industrial Claim Appeals Office
HKM Employment Attorneys LLP, Adam M. Harrison, Cynthia J. Sánchez, Hayden G. DePorter, Denver, Colorado, for Respondent Kaelyn Norman ¶1 Zen’d Out Massage Spa appeals the award of unemployment
compensation benefits to a former employee, Kaelyn Norman. We
affirm.
I. Background
¶2 Zen’d Out employed Norman as a lead esthetician and
massage therapist. In January 2025, Norman’s supervisor, Maria
Sumner, presented the massage therapists with a list of
expectations and asked them to sign it. Norman expressed
concerns with the expectations because she believed that they
required her to work “at least an extra hour a day without being
paid.” After the meeting, Sumner met Norman in the hallway and
asked her if she was going to sign the list of expectations. Norman
said that she did not want to sign it until she had more time to
review the list and could show it to her attorney. Sumner told
Norman that, if she did not want to sign the expectations, “the next
day could be her last day.” Norman said that she was “done” and
left the spa.
¶3 Norman filed for unemployment benefits, asserting that she
had been terminated because she refused to sign the list of
expectations. A deputy for the Division of Unemployment Insurance
1 determined that Norman was disqualified from receiving benefits
under section 8-73-108(5)(e)(I), C.R.S. 2025, finding that Norman
quit her job because she was dissatisfied with the rate of pay.
¶4 Norman requested a hearing before a hearing officer. After
considering the evidence, the hearing officer reversed the deputy’s
decision and determined that Norman was eligible for benefits
under section 8-73-108(4)(c), which provides that a person may
receive a full award of benefits based on unsatisfactory working
conditions. In doing so, the hearing officer concluded that “[t]he
pressure to sign the list of expectations without time to review the
list and talk to her attorney created working conditions that were
unsatisfactory.”
¶5 Zen’d Out appealed to the Industrial Claims Appeals Office
(the Panel), which affirmed the hearing officer’s decision. The Panel
determined that Norman’s decision not to sign the list of
expectations and to quit was objectively reasonable because
Norman “likely was being paid less than state law required.” In
reaching its decision, the Panel relied on the Colorado Division of
Labor Standards and Statistics’ Interpretive Notice & Formal
Opinion (“INFO”) #20B: What’s Owed for “Time Worked” for
2 Different Types of Pay, Hourly and Non-Hourly (last updated Dec. 8,
2023), https://perma.cc/S7CT-SGC4 (INFO #20B).
II. Discussion
¶6 Zen’d Out asserts that the Panel erred by concluding that
Norman was entitled to unemployment benefits under section 8-73-
108(4)(c). We disagree.
A. Legal Principles and Standard of Review
¶7 Workers can receive unemployment benefits only if they
become unemployed through no fault of their own. See Debalco
Enters., Inc. v. Indus. Claim Appeals Off., 32 P.3d 621, 623 (Colo.
App. 2001). Determining whether a claimant is at fault for an
employment separation requires a case-specific consideration of the
totality of the circumstances. Morris v. City & County of Denver,
843 P.2d 76, 79 (Colo. App. 1992).
¶8 Under section 8-73-108(4)(c), a claimant is not at fault for an
employment separation when the claimant was forced to quit
because of unsatisfactory working conditions. See Campbell v.
Indus. Claim Appeals Off., 97 P.3d 204, 212-13 (Colo. App. 2003)
(evidence that the employer had unilaterally increased the
claimant’s working hours supported finding that the claimant’s
3 working conditions were unsatisfactory). The statute provides a list
of factors that a hearing officer must consider when determining
whether a claimant’s working conditions are unsatisfactory. See
§ 8-73-108(4)(c). But the factors listed in the statute “are not all-
inclusive,” and the hearing officer may consider other factors that
are pertinent to the determination. Campbell, 97 P.3d at 209.
¶9 Ultimately, in deciding whether a claimant’s working
conditions were unsatisfactory, the hearing officer must determine
whether a reasonable person in the claimant’s position would have
found the actual working conditions to be so detrimental to the
worker as to warrant resignation. Rodco Sys., Inc. v. Indus. Claim
Appeals Off., 981 P.2d 699, 701-02 (Colo. App. 1999); see also
Yotes, Inc. v. Indus. Claim Appeals Off., 2013 COA 124, ¶ 31 (noting
that the hearing officer “must consider the working conditions that
existed when the separation occurred and the extent to which the
conditions were likely to continue”). Said another way, evidence of
a claimant’s “personal perspectives or beliefs” are insufficient to
establish unsatisfactory working conditions. Rodco, 981 P.2d at
701; see also Rotenberg v. Indus. Comm’n, 590 P.2d 521, 523 (Colo.
App. 1979) (the claimant’s “own subjective statements of
4 discomfort” are insufficient to establish unsatisfactory working
conditions).
¶ 10 We will uphold the Panel’s decision unless (1) the Panel acted
without or in excess of its powers; (2) the decision was procured by
fraud; (3) the findings of fact do not support the decision; or (4) the
decision is erroneous as a matter of law. § 8-74-107(6), C.R.S.
2025; see Mesa Cnty. Pub. Libr. Dist. v. Indus. Claim Appeals Off.,
2017 CO 78, ¶ 17. We review de novo ultimate conclusions of fact
and legal conclusions. Harbert v. Indus. Claim Appeals Off., 2012
COA 23, ¶¶ 8-9. But we will not disturb the hearing officer’s factual
findings if they are supported by substantial evidence or reasonable
inferences drawn from the evidence. Goodwill Indus. v. Indus. Claim
Appeals Off., 862 P.2d 1042, 1046 (Colo. App. 1993).
¶ 11 This appeal requires us to interpret regulations and agency
opinions explaining those regulations. See Brunson v. Colo. Cab
Co., LLC, 2018 COA 17, ¶ 11 (“[I]f the language of a regulation or
administrative rule is ambiguous or unclear, we may consider an
agency’s interpretation of its own regulation or rule.”). The rules
governing our interpretation of administrative regulations are the
same as those governing our interpretation of statutes. Pilmenstein
5 v. Devereux Cleo Wallace, 2021 COA 59, ¶¶ 15-16. Our review is de
novo. See Brunson, ¶ 10.
B. The Panel Did Not Misinterpret INFO #20B
¶ 12 Zen’d Out first asserts that the Panel misinterpreted INFO
#20B to conclude that Norman was being paid less than what state
law required. Because it was paying Norman in accordance with
INFO #20B, Zen’d Out’s argument continues, the Panel erred as a
matter of law by concluding that Norman quit because of
unsatisfactory working conditions. We discern no reversible error.
¶ 13 As a preliminary matter, Norman asserts that we should
decline to address Zen’d Out’s argument because it did not raise
this specific issue during the administrative proceeding. See
Debalco, 32 P.3d at 624 (declining to address issues that were not
raised in the administrative proceeding). But in its brief to the
hearing officer, Zen’d Out asserted that it was paying Norman in
accordance with INFO #20B. We therefore conclude that Zen’d Out
preserved this argument for appeal.
¶ 14 The Colorado Department of Labor and Employment’s Division
of Labor Standards and Statics publishes formal opinions
interpreting the Department’s regulations, which are referred to as
6 INFOs. See 303 Beauty Bar LLC v. Div. of Lab. Standards & Stats.,
2025 COA 20, ¶ 21 n.4 (noting that an INFO is “an officially
approved notice, opinion, or explanation on a topic of labor law” but
“is not binding law”). For example, the Division published INFO
#20B describing what constitutes “time worked,” as defined by
regulation, for different “non-hourly” pay types. See Div. of Lab.
Standards & Stats. Reg. Rule 1.9, 7 Code Colo. Regs 1103-1:1
(defining “time worked” as “time during which an employee is
performing labor or services for the benefit of an employer”). INFO
#20B provides that “[n]on-hourly pay can serve as the pay for all
time worked” but that “extra pay is required” if, for example, the
non-hourly pay is (1) below minimum wage or (2) limited to certain
time worked. INFO #20B at 2. There are two categories of non-
hourly work discussed in INFO #20B that are pertinent to this
appeal: (1) commissions and (2) piece rates.
¶ 15 A commission is defined as “‘compensation paid upon results
achieved,’ including pay that depends on sales or other revenue,
rather than on time.” INFO #20B at 4 (quoting Div. of Emp. &
Training v. Moen, 767 P.2d 1230, 1233 (Colo. App. 1988)). Under
INFO #20B, a “commission can serve as the pay for all time worked
7 that produces the commission-generating sale,” but extra pay is
required for “other time worked that doesn’t generate a sale.” INFO
#20B at 4.
¶ 16 INFO #20B provides Example 11 as a guide. This example
involves a maintenance worker who visits homes for service
appointments. Id. The worker also spends time (1) driving to
appointments; (2) communicating with customers; and (3) attending
weekly staff meetings. Id. Because the time spent on the first two
categories (i.e., driving and communicating) are necessary to
generate the commission, the employer does not owe any extra pay.
But because the third category — weekly meetings — does not
produce a commission, the employer must pay extra. Id.
¶ 17 A piece rate is defined as “pay per item or task finished . . .
regardless of the time worked.” Id. at 5. For a person paid on a
piece rate, the piece rate typically serves as pay for (1) work that
produces the piece and (2) work directly related to the piece
production “if the parties agreed and understood that the piece rate
serves as the pay for that work.” Id. But it does not pay for “more
general time worked . . . regardless of what was agreed and
8 understood” because the piece rate cannot serve as pay for time
that does not produce a piece. Id.
¶ 18 INFO #20B provides two examples — Examples 13 and 15 —
that are relevant here. Example 13 involves a startup business that
sells hour-long mock job interviews and pays its employees “$25 for
each one-hour session.” Id. The employee also spends five to ten
minutes of prep time before each session reviewing the personal
information from the customer. Id. INFO #20B concludes that “the
piece rate can’t serve as the pay for prep time” because “the parties
agreed that the $25.00 piece rate is for only the hour of in-session
time.” Id.
¶ 19 Example 15 involves the same factual scenario as Example 13,
but this time the business’s handbook describes the piece rate as
“all work for the client who purchased the session.” Id. at 7. By
changing the language, the business makes clear that “the prep
time is directly related to producing the session” and therefore “the
employer now owes nothing extra.” Id. at 7.
¶ 20 The hearing officer found that Norman was paid forty dollars
for a one-hour massage and sixty dollars for a ninety-minute
massage and that she worked about twenty-four hours a week. The
9 hearing officer found that Norman had expressed concern about
“not being fully compensated for the time she was working,” which
included a requirement that she “be at the facility 30 minutes
before [her] first client and to perform cleaning and closing duties
after [her] last client.” The hearing officer also found that Norman
was “reluctant” to sign the list of expectations presented to her in
January 2025 because she “was concerned that she would be
working at least an extra hour a day without being paid.”
¶ 21 In its order, the Panel noted Norman’s concerns that she was
not being paid for the time spent at the spa before and after her
first and last appointment. It also noted that the employees were
not being paid for the time “spent at the spa between an earlier and
later appointment.” The Panel then noted that Zen’d Out believed
that, if it was paying the massage therapist at least minimum wage,
it did not need to pay them for anything else. But, relying on INFO
#20B, the Panel determined that “the additional time the employer
requires its employees to spend both before and after massage
appointments must be paid and the rate is not limited to an average
of the minimum hourly wage.” The Panel concluded that “[i]nsofar
as the claimant was being prohibited by the employer from being
10 paid for all periods of time she was required to be present at the
employer’s spa, [she] likely was being paid less than state law
required.”
¶ 22 Throughout the testimony, Sumner described Norman’s pay as
commission-based, but Norman testified that she was paid “per
service” and noted that she would get paid the same amount
“regardless of the amount of money that [Zen’d Out was] charging.”
The hearing officer did not make any specific findings about
whether Norman was being paid a commission, but the Panel
described her pay as a commission, and it referred to the part of
INFO #20B that describes commissions. However, the Panel also
referred to Example 13, which, as noted above, involves piece rate
pay.
¶ 23 It is unclear to us whether the Panel considered Norman’s pay
to be a commission or a piece rate. Likewise, in its briefing, Zen’d
Out refers to the pay as a commission but relies on the examples in
the piece rate section of INFO #20B. In our opinion, the evidence
shows that Norman was paid a piece rate — forty to sixty dollars
per massage — rather than a commission. At any rate, whether we
conclude that Norman was paid a piece rate or a commission, we
11 still conclude that the Panel did not reversibly err in its
interpretation of INFO #20B.
¶ 24 Zen’d Out’s Wage Policy describes two types of “direct wages”:
(1) commissions for massages and (2) other wages for work,
including any wages a therapist is paid if there is no scheduled
massage. As noted, Zen’d Out paid between forty and sixty dollars
per massage; the Wage Policy indicates that a massage therapist
should receive an extra fifteen dollars per hour for “no
appointment.” The Wage Policy also identifies tasks that are
considered “time worked”: (1) the thirty-minute period before a
massage therapist’s first appointment; (2) the time for each
massage; (3) the gap between massages; (4) all other gaps between
appointments; and (5) all time an employee is asked to be on-call.
Finally, the Wage Policy provides that employees are entitled to ten-
minute breaks every two hours.
¶ 25 Notably, although the Wage Policy includes the thirty-minute
period before the first massage in “time worked,” it does not
mention the thirty minutes for closing activities. Therefore, like
Example 13 described above, Zen’d Out would have needed to pay
Norman extra for this time. See INFO #20B at 5. Even if Norman
12 was paid on a commission, the record does not indicate that the
closing time activities generated the commission. In other words,
the tasks described by the witnesses were more general and for
Zen’d Out’s benefit, not to generate a commission. See INFO #20B
at 4 (noting that employers must pay extra for “an activity for the
employer’s benefit that . . . doesn’t go toward producing any
commission”).
¶ 26 The record also indicates that Norman may not have been paid
for other activities. For example, the Wage Policy also acknowledges
that therapists should be paid an hourly wage when a massage is
not scheduled. But Norman testified that, even though she had to
be at the spa for eight hours, she only performed about five
massages and had never been paid for time when she did not have
a massage appointment. Norman also testified that she was not
given any breaks.
¶ 27 We therefore conclude that, although the Panel may have
erred by concluding that Zen’d Out had to pay Norman extra for the
thirty minutes before her first massage, it did not err by
determining that Norman “likely was being paid less than state law
required” because the evidence established that Zen’d Out was not
13 paying Norman for all her time as required by INFO #20B. Because
the evidence supports the Panel’s determination that Zen’d Out was
not paying Norman in accordance with applicable law, we discern
no error in its decision that an objectively reasonable person in the
Norman’s position would have found the actual working conditions
— i.e., requiring work without pay — were so detrimental as to
warrant resignation. See Rodco, 981 P.2d at 701-02.
C. The Panel Did Not Create a Right to Consult an Attorney
¶ 28 Zen’d Out next asserts that the Panel improperly created a
right to consult an attorney. In the alternative, it argues that the
evidence did not establish that Norman was prevented from
consulting an attorney. We disagree with both contentions.
¶ 29 To begin, Norman again asserts that we should decline to
address these issues because Zen’d Out did not raise them in the
administrative proceeding. To be sure, Zen’d Out did not
specifically raise either of these issues before the hearing officer or
the Panel. However, it is unclear to us how Zen’d Out could have
challenged the Panel’s determination that “[p]rohibiting an
employee from making inquiry and having terms of work reviewed
by an attorney represents an unsatisfactory working condition”
14 before this appeal. See Rinker v. Colina-Lee, 2019 COA 45, ¶ 26
(when the trial court rules sua sponte on an issue, the merits of its
ruling are subject to review on appeal, whether timely objections
were made or not). And because Zen’d Out’s alternative argument
is based on the determination above, we will address the merits of
both arguments.
¶ 30 First, we disagree with Zen’d Out that the Panel exceed its
authority by creating a right to consult an attorney. Rather, we
agree with Norman that, when the Panel made its decision, it did so
by considering a relevant factor — whether it would be reasonable
for Norman to ask for more time to review the list of expectations
and consult an attorney before agreeing to the list. See Campbell,
97 P.3d at 209 (noting that the Panel can consider factors not
explicitly listed in section 8-73-108(4)(c) if they are pertinent to its
determination). The Panel’s decision did not create a right to
consult an attorney in every case; it only determined that, given the
circumstances presented in this case, a reasonable person would
have acted as Norman did. See Rodco, 981 P.2d at 701-02.
¶ 31 Second, we conclude that the Panel did not err by concluding
that Norman was prohibited from speaking to an attorney. The
15 record shows that Sumner gave Norman the ultimatum to sign the
list of expectations late on a Friday afternoon and said that the
following day would be her last if she did not immediately sign the
list. Under those circumstances, the record indicates that Norman
did not have an opportunity to consult an attorney before signing.
Nor are we convinced by Zen’d Out’s assertion that the “record
strongly indicates that Ms. Norman had consulted her attorney
before the meeting even started.” Even if she had done so, the
record still indicates that she was not given the opportunity to
consult with an attorney after receiving the list of expectations.
Therefore, substantial evidence supports the hearing officer’s
factual findings, and we cannot disturb them on appeal. See
Goodwill, 862 P.2d at 1046.
D. Zen’d Out Did Not Preserve Any Evidentiary Arguments
¶ 32 Finally, Zen’d Out asserts that the hearing officer erred by
preventing it from introducing evidence about how or how much
Norman was paid. We decline to address the merits of this
argument because Zen’d Out did not preserve it for appeal.
¶ 33 At the hearing, Norman’s attorney objected to questions about
how much Norman made and whether she was paid at least
16 minimum wage, asserting that the questions were not relevant to
the issues in the case. The hearing officer sustained the objections.
In its appeal to the Panel, Zen’d Out did not assert that the hearing
officer had erred by excluding this evidence. Rather, Zen’d Out
asserted only that the hearing officer’s decision was “based on
incorrect facts and a misapplication of law.”
¶ 34 Because Zen’d Out did not assert in its appeal to the Panel
that the hearing officer had erred by excluding evidence, we
conclude that Zen’d Out failed to preserve its appellate argument.
See Debalco, 32 P.3d at 624; see also People in Interest of K.L-P.,
148 P.3d 402, 403 (Colo. 2006) (noting that, if the court of appeals
serves as a second layer of appellate review, a party must raise the
issue in the district court to preserve it for review in the court of
appeals). We therefore decline to address the merits of its
argument.
III. Disposition
¶ 35 The order is affirmed
JUDGE J. JONES and JUDGE LUM concur.