Title: Wyoming Dept. of Employment, Div. of Unemployment Ins. v. Rissler & McMurry Co.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Wyoming Dept. of Employment, Div. of Unemployment Ins. v. Rissler & McMurry Co.1992 WY 119837 P.2d 686Case Number: 92-57Decided: 09/16/1992Supreme Court of Wyoming
WYOMING DEPARTMENT OF 
EMPLOYMENT, DIVISION of UNEMPLOYMENT INSURANCE; and Scott R. Wenzel, 

Appellants 
(Respondents/Claimant),

v.

RISSLER & McMURRY 
COMPANY, 

Appellee 
(Petitioner/Employer).

Appeal from District 
Court, NatronaCounty, Dan Spangler, 
J.

William G. 
Hibbler, Sr. Asst. Atty. Gen., Casper, for appellant Wyoming Dept. of Employment, Div. of 
Unemployment Ins.

Donald J. 
Rissler of Brown, Raymond & Rissler, P.C., Casper, for 
appellee.

MACY, Chief 
Justice.

[¶1]      Appellant Wyoming 
Department of Employment, Division of Unemployment Insurance (the Division) 
contends that the district court erred in reversing the decision by the 
Unemployment Insurance Commission (the Commission) which determined that a 
discharged employee, Appellant Scott R. Wenzel, was eligible to receive 
unemployment insurance benefits and that he was not discharged for "misconduct" 
connected with his employment.

[¶2]      We reverse and 
remand.

[¶3]      The Division 
presents this issue:

     Whether the Appellant, 
Wyoming Department of Employment, Division of Unemployment Insurance, properly 
held that Scott R. Wenzel is eligible for unemployment insurance benefits 
because it found that he was not discharged for misconduct connected with his 
work?

Appellee Rissler 
& McMurry Company rephrases the issues as follows:

ISSUE 
I

     Whether the decision 
of the Employment Security Commission of Wyoming reversing the decision of the 
hearing examiner and reinstating the benefits of Appellant Wenzel was supported 
by substantial evidence and whether that decision was arbitrary and 
capricious.

ISSUE 
II

     Whether the actions of 
the Commission are in excess of their statutory jurisdiction, authority or 
limitations.

[¶4]      The facts of this 
case are hard to sort out and very much in dispute. Wenzel was employed by 
Rissler & McMurry for various periods of time in 1990 and 1991. He left his 
job at Rissler & McMurry without notice in October 1990. Wenzel claims that 
he left the job because he could not afford to keep a motel room near the work 
site while maintaining his home in Casper. He was rehired in January 1991 to work 
on a construction project in Casper. Rissler & McMurry instituted a 
drug-alcohol testing policy between the time when Wenzel left his job in 1990 
and the time when he was rehired in 1991. As a condition for his reemployment, 
Wenzel was tested on January 21, 1991, and the test results were negative in all 
respects. About two weeks after Wenzel was rehired, he was injured in a 
Casper bar when 
a television set fell on him. Because of those injuries, he missed work from 
January 31, 1991, until February 12, 1991. Wenzel continued to work for Rissler 
& McMurry until April 15, 1991.

[¶5]      On that day, 
Wenzel called Rissler & McMurry's main office to complain about his pay 
check. He thought he had been paid the wrong wages. Rissler & McMurry 
supervisory personnel considered Wenzel's behavior as being "extremely 
irrational" and "erratic." A Rissler & McMurry supervisor called Wenzel 
later that day and told him to go to the WyomingMedicalCenter to be tested under the drug/alcohol 
testing policy or he would be fired. Rissler & McMurry claimed that Wenzel 
refused to take the test, and, indeed, no test was ever performed. Wenzel 
asserted that he did not refuse to take the test but that he said he wanted to 
talk with a lawyer first. Wenzel was fired for refusing to take the 
test.

[¶6]      Wenzel applied to 
the Division for unemployment benefits. The Division determined that Wenzel was 
eligible to receive those benefits. Rissler & McMurry appealed that decision 
through the Division's internal appeal procedures. An appeals examiner conducted 
a hearing and determined that Wenzel was not eligible for benefits because his 
refusal to take the test was misconduct. Wenzel sought a review from the 
Commission, which determined that Wenzel had not committed misconduct and 
reinstated the initial determination. Rissler & McMurry sought a district 
court review in accordance with W.R.A.P. 12, and the district court, finding 
that Wenzel committed misconduct, reversed the Commission's 
decision.

[¶7]      The standard of 
review to be applied in this matter was well explained in detail in Employment 
Security Commission of Wyoming v. Western Gas Processors, Ltd., 786 P.2d 866, 
870-71 (Wyo. 1990) (some citations and footnotes omitted):

     The standard of review 
of an agency determination is well-established. Unemployment benefit cases 
involving contended misconduct normally present mixed questions of law and fact. 
A reviewing court is "confined to the matters explicitly referenced in W.S. 
16-3-114(c) and W.R.A.P. 12.09." Cook v. Zoning Bd. of Adjustment for the City 
of Laramie, 776 P.2d 181, 184 (Wyo. 
1989).

     "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." 

Southwest WyomingRehabilitationCenter v. Emp. Sec. Com'n. of 
Wyoming, 781 P.2d 918, 920 (Wyo. 1989). Our deference 
for findings of fact is reserved for the fact-finder which, in this case, is 
ESC.

     When reviewing a claim 
that an agency determination is arbitrary, capricious, and an abuse of 
discretion because the findings of fact[] are not supported by substantial 
evidence, we determine if there is "such relevant evidence as reasonable minds 
would accept as adequate to support a conclusion." SouthwestWyomingRehabilitationCenter, 781 P.2d  at 921. Our review of an 
agency's findings of fact and conclusions of law is simple. First, if we can 
find from the evidence preserved in the record a rational view for the findings 
of fact made by the agency, we then say the findings are supported by 
substantial evidence. Using judicial reliance upon and deference to agency 
expertise in its weighing of the evidence, a reviewing court will not disturb 
the agency determination unless it is "clearly contrary to the overwhelming 
weight of the evidence on record." SouthwestWyomingRehabilitationCenter, 781 P.2d  at 921. Second, we ask if 
the conclusions of law made by the agency are in accordance with 
law.

     When we review agency 
conclusions of law, we are alert to three possibilities. The agency may 
correctly apply [its] findings of fact to the correct rule of law. In such case, 
the agency's conclusions are affirmed. But the agency could apply [its] findings 
of fact to the wrong rule of law or [it] could incorrectly apply [its] findings 
of fact to a correct rule of law. In either case, we correct an agency 
conclusion to ensure accordance with law. Our standard of review for any 
conclusion of law is straightforward. If the conclusion of law is in accordance 
with law, it is affirmed; if it is not, it is to be 
corrected.

Wyo. Stat. § 
27-3-311(c) (1991) provides:

     (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, fraud in connection with a claim for benefits or receipt of 
disqualifying income.

Our inquiry in 
this instance, under the applicable standard of review, is whether the 
Commission could determine that Wenzel's refusal to take a drug/alcohol test did 
not constitute "misconduct" as contemplated by § 27-3-311(c). Western Gas 
Processors, Ltd., 786 P.2d  at 871.

[¶8]      Rissler & 
McMurry had a policy in place which provided for testing upon "reasonable 
cause":

     When appropriate, 
Rissler & McMurry Co. may test any employee when there is reasonable cause 
to suspect that employee is impaired or under the influence of alcohol, drugs or 
controlled substances while on duty at the work place. When an employee displays 
behavior which is observable by a supervisor (ideally, two members of the 
management team) the employee will be escorted to a collection site for a 
possible medical evaluation and urine drug or alcohol screen. The employee then 
will be escorted home or provided with transportation home and will be suspended 
from work, without pay, until results are known. If the test results are 
negative, the discipline, if any, will be weigh[]ed against the circumstances 
and the employee[']s actions. If the test results are positive, the employee 
will be discharged, effective the date of the suspension.

     Employees who have 
been requested to undergo a urine drug screen and/or an alcohol test under 
reasonable cause circumstances are expected to promptly comply with the request 
and to exercise honesty, good faith and cooperation in the performance of the 
required procedures. Failure to do so may subject the employee to discipline, up 
to and including discharge, not withstanding any discipline which may otherwise 
be imposed on the basis of the test results.

[¶9]      As we discussed 
in Western Gas Processors, Ltd., a first level of inquiry in such a case is 
whether the rule was reasonable. 786 P.2d at 872-73; 76 AM.JUR.2D Unemployment 
Compensation § 81 (2d ed. 1991). See also DAVID G. EVANS, DRUG TESTING LAW, 
TECHNOLOGY AND PRACTICE, esp. §§ 1:05, 2:07, 2:20 & 4:37 (1990). When an 
employer contends that violation of its rule constitutes misconduct, the 
employer bears the burden of establishing the existence of the rule and its 
violation. If the employer establishes these elements, the burden shifts to the 
employee to demonstrate either that the violation was justified or that the rule 
was unreasonable. 76 AM.JUR.2D Unemployment Compensation, supra. In this 
instance, there is no question that the policy existed and that the employee was 
aware of its existence. We do not need to decide whether the drug/alcohol 
testing policy was reasonable because Rissler & McMurry did not follow the 
policy. Among those reasonable expectations which we accord to employees is the 
following: Refusal to take a drug/alcohol test which was not brought about in 
accordance with the employer's established policy is not "misconduct" which will 
disqualify that employee from receiving unemployment compensation benefits. See 
Western Gas Processors, Ltd., 786 P.2d 866. We note in passing that Rissler 
& McMurry's policy appeared to place the employee "between a rock and a hard 
place." The employee would be fired for refusing to take the test, the employee 
would be fired if the test result were positive, the employee could be fired if 
the behavior which constituted the "reasonable cause" were bad enough to 
constitute cause for firing even though the drug test result was negative, and, 
if the employee were "uncooperative" in the testing process, he could be fired 
even though the test result was negative.

[¶10]   Rissler & McMurry's policy 
provided that, at the time the "suspicious" behavior was observed, the employee 
would be escorted to a testing center so that a test could be performed. In this 
instance, a Rissler & McMurry supervisor telephoned Wenzel and told him to 
report immediately to the WyomingMedicalCenter to take a test. The supervisor did 
not follow the procedure designated in the Rissler & McMurry 
policy.

[¶11]   We hold, under our standard of 
review, that the Commission's findings were consistent with the law and 
supported by substantial evidence.

[¶12]   As noted earlier in our opinion, 
the facts were very much contested. Rissler & McMurry presented evidence 
demonstrating that Wenzel was frequently tardy and missed inordinate amounts of 
work. Wenzel maintained that he was never tardy and that he never missed work 
unless he was medically excused. Rissler & McMurry had no "records" which 
were contrary to Wenzel's claim. After Wenzel was fired, Rissler & McMurry 
obtained letters from various supervisory personnel which stated that Wenzel was 
frequently tardy, but no contemporaneous records existed, and nobody could 
testify about any particular date or dates. See 76 AM.JUR.2D Unemployment 
Compensation, supra at § 93.

[¶13]   Unemployment compensation is not a 
gratuity which may be withheld frivolously. It is a part of an employee's 
compensation or wages. Unemployment Compensation Commission of Wyoming v. 
Renner, 59 Wyo. 437, 143 P.2d 181 (1943); 76 AM.JUR.2D 
Unemployment Compensation, supra at § 2. Unemployment compensation statutes are 
to be liberally construed in favor of the claimants. 76 AM.JUR.2D Unemployment 
Compensation, supra at § 14.

     The statutory term 
"misconduct" should not be so literally construed as to effect a forfeiture of 
benefits by an employee except in clear instances; rather, the term should be 
construed in a manner least favorable to working a forfeiture so as to minimize 
the penal character of the provision by excluding cases not clearly intended to 
be within the exception.

Id., § 77 at 840. See also 
Annotation, Private Employee's Loss of Employment Because of Refusal to Submit 
to Drug Test as Affecting Right to Unemployment Compensation, 86 A.L.R.4th 309 
(1991).

[¶14]   In this case, Rissler & 
McMurry's evidence was so conclusory, sketchy, disputed, uncertain, and 
insubstantial that we would be doing a grave disservice to the jurisprudence of 
unemployment compensation if we were to affirm the district court's 
decision.

[¶15]   Rissler & McMurry contends that 
this Court should reinstate the appeals examiner's decision and that the 
Commission exceeded its authority or jurisdiction by changing the appeals 
examiner's decision. The Division followed the process specified in the agency's 
rules and regulations, being the exact same procedure which was followed in 
Western Gas Processors, Ltd. The Commission's final decision is the decision to 
be reviewed by the district court under W.R.A.P. 12, not those decisions which 
were made at intermediate stages in the process.

[¶16]   The district court's order 
reversing the Commission's decision is reversed, and the case is remanded to the 
district court with directions that an order be entered affirming the 
Commission's determinations that Wenzel committed no misconduct and that he was 
entitled to receive benefits.

[¶17]   Reversed and remanded.