Opinion ID: 2224640
Heading Depth: 1
Heading Rank: 3

Heading: The Good-Faith Issue.

Text: Claimants contend that the district court exceeded its authority in considering and rejecting their good-faith belief argument, because no specific finding on it had been made by the appeal board. The district court said: None of these reasons would constitute statutory misconduct if the petitioners actually had a good-faith belief that they were acting within the bounds of their contracts of employment. The hearing officer determined that the employees did have such a belief. The Appeal Board did not directly address the issue in its opinion. (Emphasis added.) Notwithstanding this observation by the district court, Hormel argues that the board had in fact addressed the claimants' good-faith belief theory, although the board did not call it by that name. Hormel also contends that good-faith belief is a phrase manufactured by the claimants and that it has no basis in the statute or the board's rules. (Iowa Code section 96.5(2) mentions misconduct in connection with the individual's employment but does not mention a good-faith exception; 370 Iowa Administrative Code 4.32(1)(a) refers only to good faith errors in judgment or discretion.) In its ruling, the appeal board discussed the employees' claim that they believed they had the right to strike under their collective bargaining agreement. Although the claim was not characterized by the board as a good-faith defense, it is clear that that is what it was, and the defense was expressly rejected by the board. The district court on judicial review also rejected this defense. In doing so, it said: In view of all the facts and circumstances, the Court cannot say that the Appeal Board erred in finding that the petitioners should be denied benefits. A reasonable person in petitioner's place would not have had a good faith belief that he or she had a contractual right to honor the P-9 picket. (Emphasis added.) This raises a significant question: Is the test for good faith a subjective or objective test? The claimants argue that it is the formerthat each claim for compensation must be weighed against the individual claimant's subjective belief as to whether he or she had the right, under the collective bargaining agreement, to refuse to work. They apparently concede their acts were deliberate acts or omissions under the rule, but they argue that the good-faith defense must nevertheless be considered on an individual, subjective basis. The Supreme Court has considered the issue in analogous cases. In Gateway Coal Co. v. United Mine Workers, 414 U.S. 368, 94 S.Ct. 629, 38 L.Ed.2d 583 (1974), for example, the Court construed a good faith quitting provision in the Labor Management Relations Act. In reversing a determination equating good faith with an employee's honest belief, the Court held that a union invoking the good-faith provision must present `ascertainable, objective evidence supporting its conclusion.' Id. at 387, 94 S.Ct. at 641, 38 L.Ed.2d at 597 (emphasis added). The Court found an objective test consistent with legislative intent and common sense. Id. See also Harlow v. Fitzgerald, 457 U.S. 800, 815-20, 102 S.Ct. 2727, 2736-39, 73 L.Ed.2d 396, 408-412 (1982) (good-faith immunity of governmental officials in civil rights damages actions judged by strictly objective test); Bellwood Gen. Hosp., Inc. v. NLRB, 627 F.2d 98, 102 (7th Cir.1980) (claim of good-faith doubt in employer's refusal to bargain with established union must satisfy objective test although subjective evidence may be used to bolster employer's argument); NLRB v. Tahoe Nugget, Inc., 584 F.2d 293, 299 (9th Cir.1978) (employer's good-faith challenge of union majority is unconcerned with employer's subjective motivation; focus is instead empirical and objective); Peerless of Am., Inc. v. NLRB, 484 F.2d 1108 (7th Cir.1973) (a violation upon employer's good-faith refusal to bargain has nothing to do with employer's subjective motivation for that refusal). In Therrien v. Maine Employment Security Commission, 370 A.2d 1385 (Me. 1977), the Maine Supreme Court held that an objective test should be used to determine an employee's good-faith belief as to his right to refuse his employer's order. In Therrien, unemployment compensation claimants had been fired because they had refused to participate in their employer's trial program to determine whether efficiency could be improved in the factory. The superior court found the claimants were not guilty of misconduct as a matter of law. In reversing the superior court, the Maine Supreme Court held that the good faith of the mill workers in refusing to participate in the employer's trial program was not a proper basis for disposition of their claims. Id. at 1389. It added that [s]incerity of belief is too subjective a concept to serve satisfactorily as the sole basis for determining a discharged employee's status under the statute. Cases can be easily imagined where an employee's behavior is in fact grounded upon some sincere but irrational belief and where the behavior may be properly deemed misconduct within subsection 23. At a minimum, whatever belief an employee asserts as the reason for his conduct should be measured against a standard of reasonableness under all the circumstances. Id. Similarly, in Williams v. Burlington Industries, Inc., 318 N.C. 441, 349 S.E.2d 842 (1986), the North Carolina Supreme Court held that the proper test was an objective one, stating that [a]lthough an employee's intentions are certainly relevant in either event, the correct standard is the objective good cause rather than the subjective good faith cause. Id. at 851. We agree with these authorities. The subjective understanding and intent of the claimants are relevant on the question of misconduct, but they are not the end of the inquiry. The key question is what a reasonable person would have believed under the circumstances. We conclude that the board properly applied this test and that its conclusion was sustained by substantial evidence. We therefore affirm the denial of unemployment compensation benefits. AFFIRMED. All Justices concur except McGIVERIN, C.J. and CARTER, J. take no part.