Title: SOUTHWEST WYOMING REHABILITATION CENTER, A Non-Profit Wyoming Corporation v. EMPLOYMENT SECURITY COMMISSION OF WYOMING

State: wyoming

Issuer: Wyoming Supreme Court

Document:

SOUTHWEST WYOMING REHABILITATION CENTER, A Non-Profit Wyoming Corporation v. EMPLOYMENT SECURITY COMMISSION OF WYOMING1989 WY 194781 P.2d 918Case Number: 89-85Decided: 10/27/1989Supreme Court of Wyoming

SOUTHWEST WYOMINGREHABILITATIONCENTER, A NON-PROFIT WYOMING 
CORPORATION, APPELLANT (PETITIONER),

v.

EMPLOYMENT SECURITY 
COMMISSION OF WYOMING, APPELLEE 
(RESPONDENT).

Appeal from the District 
Court, SweetwaterCounty, Jere Ryckman, 
J.

John W. James of 
James and James, Rock 
Springs, for 
appellant.

William G. 
Hibbler, Sp. Asst. Atty. Gen., Casper, for appellee. 

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY 
and GOLDEN, JJ.

URBIGKIT, 
Justice.

[¶1.]     Appellant, SouthwestWyomingRehabilitationCenter, seeks reversal of a decision by 
the Employment Security Commission of Wyoming (ESC) allowing unemployment 
benefits to four of appellant's former employees. Those employees voluntarily 
quit pursuant to their settlement agreement arising from a federal civil rights 
lawsuit against appellant. The ESC determined their resignations, having been 
submitted for good cause associated with the employment, did not disqualify them 
from receiving benefits. Upon appellant's petition for review, the district 
court affirmed the ESC decision. Appellant now asks us to answer the following 
question in the negative:

Whether the decision of 
the Employment Security Commission, upholding an award of unemployment insurance 
benefits to the claimants, was supported by substantial evidence or in 
accordance with law?

[¶2.]     We 
affirm.

[¶3.]     Jan Rae Frady, Virginia 
Lee McCann, Valerie J. Prazma and Denis D. Carlson initiated a lawsuit against 
appellant in the United States District Court to "redress injuries done to them 
by the Defendants resulting in deprivation of rights, privileges and immunities 
guaranteed them by the Constitution and laws of the United States of America 
pursuant to 42 U.S.C. § 1983, 1985, and 1986 and the First, Fifth and Fourteenth 
Amendments to the United States Constitution." Appellant had allegedly harassed 
those employees in retaliation for their support of a former co-employee 
following discharge and his subsequent proceedings before the ESC, wherein he 
successfully sought unemployment benefits. The parties settled the lawsuit by 
agreement for each litigant to accept $10,000 and then voluntarily resign from 
appellant's employment. Following their respective resignations, each of the 
employees applied for unemployment compensation.

[¶4.]     Appellant objected to 
those benefit claims, asserting the employees should be disqualified because 
they had voluntarily resigned without any express or constructive inducement or 
coercion by appellant. Appellant also stated:

The Employee filed a 
lawsuit in the Federal District 
Courtover the 
same issues contained in her petition for unemployment compensation. That 
lawsuit was settled and part of the consideration for sums of money received by 
the Employee at the conclusion of the lawsuit was the voluntary resignation of 
the Employee from employment with the Employer. Therefore, the Employee would be 
unjustly enriched by receiving unemployment benefits at this time since the sums 
of money received in the lawsuit represented compensation in full to the 
Employee.

(Emphasis 
added.) As an alternative to these arguments, appellant implied benefits should 
be denied based on the employees' poor work performance.1

[¶5.]     The ESC initially 
concluded, in four separate decisions, that appellant failed to establish any 
misconduct by the employees. It also determined the resignations, having been 
prompted by a settlement agreement, would not disqualify the employees' claims. 
Appellant pursued administrative review, bringing the four cases before an 
Appeals Examiner for consideration. By the parties' agreement, no testimony was 
presented. The Appeals Examiner's decision of September 2, 1988 consequently 
rested solely on the written administrative record and certain documents 
admitted into evidence by stipulation. The Appeals Examiner affirmed the award 
of benefits to the employees, reasoning:

In this matter, the 
employer was the moving force in the separation in that the release and full 
settlement was contingent upon the individual's resignation from employment. 
Resignation resulted from the action of the employer. The claimant did 
voluntarily terminate employment, however, she did so for cause associated with 
the work and she is, therefore, not subject to 
disqualification.

After further 
ESC administrative appeal, resulting in the agency's affirmation of the Appeals 
Examiner's decision, appellant petitioned for judicial review. The reviewing 
court issued a decision letter in the consolidated cases on February 21, 1989, 
noting:

The essential facts of 
these cases are not in dispute and, therefore, will not be restated here. The 
question to be reviewed is whether the Hearing Examiner and the Employment 
Security Commission properly applied the law to the issue of whether the four 
former employees of Petitioner were entitled to unemployment benefits following 
their voluntary resignations.

* * * * * 
*

There is no question that 
claimants resigned voluntarily so the question is whether, or not, they had "good cause attributable directly to his 
(their) employment." It should be obvious that after having filed a lawsuit 
against Petitioner for conditions of employment and having failed in attempts to 
get their superiors terminated, the claimants were not wanted employees. * * * 
The claimants, therefore, did have "good 
cause."

(Emphasis in 
original.) The reviewing court concluded the administrative decision was "not 
arbitrary, capricious, nor contrary to law, and [was] * * * supported by 
substantial evidence" and, accordingly, by order of March 9, 1989, affirmed that 
decision.

[¶6.]     On appeal from a 
district court's consideration of an agency action, this court is not bound by 
the conclusions of the reviewing court. Rather, using the same evidentiary 
materials and the same review standards as the district court, we conduct an 
independent inquiry into the matter, just as if it had proceeded directly to us 
from the agency. Employment Sec. Com'n of Wyoming v. Bryant, 704 P.2d 1311, 1314 (Wyo. 1985); Matter of North Laramie Land Co., 605 P.2d 367, 373 (Wyo. 
1980). That is, we apply the standard set out in W.S. 16-3-114(c). See Bryant, 
704 P.2d  at 1314 and Board of Trustees of School Dist. No. 4, Big Horn County v. 
Colwell, 611 P.2d 427, 428-29 (Wyo. 1980). W.S. 16-3-114(c) 
states:

To the extent necessary 
to make a decision and when presented, the reviewing court shall decide all 
relevant questions of law, interpret constitutional and statutory provisions, 
and determine the meaning or applicability of the terms of an agency action. In 
making the following determinations, the court shall review the whole record or 
those parts of it cited by a party and due account shall be taken of the rule of 
prejudicial error. The reviewing court shall:

(i) Compel agency action 
unlawfully withheld or unreasonably delayed; and

(ii) Hold unlawful and 
set aside agency action, findings and conclusions found to 
be:

(A) Arbitrary, 
capricious, an abuse of discretion or otherwise not in accordance with 
law;

(B) Contrary to 
constitutional right, power, privilege or immunity;

(C) In excess of 
statutory jurisdiction, authority or limitations or lacking statutory 
right;

(D) Without observance of 
procedure required by law; or

(E) Unsupported by 
substantial evidence in a case reviewed on the record of an agency hearing 
provided by statute.

In the present 
case, appellant contends the decision of the ESC was contrary to law and 
unsupported by substantial evidence. We do not agree.

[¶7.]     The district court 
correctly noted that this case raises a single question: whether the voluntary 
resignation of appellant's employees was with "good cause." In turn, that 
question involves both an inquiry into the meaning of the statutory phrase and 
an inquiry into the evidentiary support for the designated meaning. The meaning 
of "good cause" in any particular factual context is a question of statutory 
construction, a question of law. Sage Club, Inc. v. Employment Sec. Com'n of 
Wyoming, 601 P.2d 1306, 1310 (Wyo. 1979). We have held 
that "good cause" is such a cause that would justify an employee in voluntarily 
leaving his job to join the ranks of the unemployed. Consequently, a resignation 
must be due to such objective circumstances as would reasonably motivate an 
average able-bodied and qualified worker, exercising common sense and prudence, 
to abandon the certain remunerations of his wage for the lesser rewards of 
compensated unemployment. Beddow v. Employment Sec. Com'n of Wyoming, 718 P.2d 12, 14 (Wyo. 1986); Bryant, 704 P.2d at 1315-17; Scott v. Fagan, 
684 P.2d 805, 809 (Wyo. 1984); Sage Club, Inc., 601 P.2d  at 1310. 
This test has been satisfied in the present case.

[¶8.]     The record indicates a 
steady deterioration of the relationship between appellant and these four 
employees. After an earlier defeat in ESC proceedings by another former 
employee, appellant took certain actions against these claimants which they 
interpreted as retaliation for their support of their former co-employee. Bad 
blood fouled the employment atmosphere so completely on both sides that the four 
workers abandoned more usual avenues of redress and filed suit. Settlement of 
that lawsuit cost appellant $40,000, in return for which the employees agreed to 
resign. Regardless of which side suggested those resignations as part of the 
settlement, these circumstances could reasonably motivate the average prudent 
worker to leave his job and seek unemployment benefits while looking elsewhere 
for employment. Thus, the ESC correctly concluded that such circumstances fell 
within the definition of the statutory term "good cause" and its decision was, 
in that regard, in accordance with law. Scott, 684 P.2d 805.

[¶9.]     The question remains, 
however, whether the existence of those circumstances related by the four 
employees, and therefore the actuality of their "good cause," was supported by 
substantial evidence. Substantial evidence is such relevant evidence as 
reasonable minds would accept as adequate to support a conclusion. Beddow, 718 P.2d  at 14; Bryant, 704 P.2d  at 1315; Sage Club, Inc., 601 P.2d  at 1310. In 
determining whether that quantum of evidence is present, we must review all the 
evidence on the record, both that which supports and that which conflicts with 
the agency's decision, and decide whether the agency could reasonably conclude 
as it did. Roberts v. Employment Sec. Com'n of Wyoming, 745 P.2d 1355, 1357 (Wyo. 1987); Spivey v. Lucky MC Uranium Corp., 636 P.2d 518, 522 (Wyo. 
1981); Colwell, 611 P.2d  at 429. The standard requires more than a mere 
scintilla of evidence, more than a mere suspicion that a certain fact exists. 
However, once that measure of evidence has been found to exist, the possibility 
of drawing two inconsistent conclusions from a body of evidence does not prevent 
a finding that the conclusion drawn by the administrative agency was supported 
by substantial evidence. Burlington Northern R. 
Co. v. Public Service Com'n of Wyoming, 698 P.2d 1135, 1139 (Wyo. 1985); Board of Trustees, 
Laramie County School Dist. No. 1 v. Spiegel, 549 P.2d 1161, 1178 (Wyo. 1976). In fact, we 
have indicated we defer to the experience and expertise of the agency in its 
weighing of the evidence and will disturb its decisions only where it is clearly 
contrary to the overwhelming weight of the evidence on record. Cody Gas Co. v. 
Public Service Com'n of Wyoming, 748 P.2d 1144, 
1146 (Wyo. 
1988); Beddow, 718 P.2d  at 14. See also Scott, 684 P.2d  at 
809.

[¶10.]  The record in the present case reveals 
something more than minimal evidence of the strife at appellant's place of 
business. We need not favor the explanations of one side over the other to reach 
that conclusion, but merely let the fact of those discordant explanations and 
the clear uncontested evidence of the lawsuit and its outcome speak for 
themselves. Appellant does not suggest the evidence of conflict is 
insignificant. Nor does appellant offer proof, or even contend, that such 
conflict did not exist. The entire thrust of appellant's appellate argument is 
that, notwithstanding such conflict, the claimants failed to prove 
involuntariness of their resignations by substantial evidence. Resignation 
voluntariness is, however, irrelevant. The four employees acknowledged all along 
they had voluntarily quit. What was in issue is existence of good cause to do 
so. While the evidence of work place discord is somewhat less than conclusive as 
to both the source and the severity of the problem, that the problem existed is 
uncontested. Furthermore, although appellant disagreed with his employees as to 
the source of the work place difficulties, there is nothing within this record 
to indicate the discord was any less severe than the employees claimed. The 
conclusions of the ESC, that these employees had good cause to resign, is 
supported by substantial evidence.

[¶11.]  The decision of the administrative agency 
and review concurrence of the district court is affirmed.

FOOTNOTES

1 The grounds advanced by 
appellant for disqualifying its employees from benefits may be found in W.S. 
27-3-311, which states in pertinent part:

(a) An individual shall 
be disqualified from benefit entitlement * * *, if the commission finds that 
he:

(i) Left his most recent 
work voluntarily without good cause attributable directly to his employment, 
except for bona fide medical reasons;

* * * * * 
*

(c) An individual shall 
be disqualified from benefit entitlement and shall forfeit all accrued benefits 
if he was discharged from his most recent work for misconduct connected with his 
work, * * *.

MACY, Justice, 
dissenting.

[¶12.]  I dissent. The record of appeal merely 
contains allegations and conclusory statements that the employees were being 
harassed. This does not meet the substantial evidence test. An employee should 
not be able to file a lawsuit, settle, and then contend that there was good 
cause to quit because the lawsuit caused discord. While a reasonable worker may 
have resigned under the circumstances following the settlement negotiations, 
this Court should not consider the dissension caused by the lawsuit when 
utilizing the "good cause" test, because that application opens the door for 
abuse of the unemployment insurance system. Exclusive application of the test to 
events leading up to the lawsuit would prevent that abuse.