Court Opinion

ID: 4661739
Source: CourtListenerOpinion
Date Created: 2021-02-19 23:03:33.394979+00
Date Added: 2024-06-11T08:02:15.828496
License: Public Domain

2021 IL App (3d) 190115

                                Opinion filed February 19, 2021
      ____________________________________________________________________________

                                                  IN THE

                                   APPELLATE COURT OF ILLINOIS

                                             THIRD DISTRICT

                                                    2021

      KEN’S BEVERAGE, INC.,                  )     Appeal from the Circuit Court
                                             )     of the Twelfth Judicial Circuit,
            Plaintiff-Appellant,             )     Will County, Illinois.
                                             )
            v.                               )
                                             )
      MICHELLE P. WOOD, ILLINOIS             )
      DEPARTMENT OF EMPLOYMENT               )     Appeal No. 3-19-0115
      SECURITY BOARD OF REVIEW, and          )     Circuit No. 18-MR-2455
      JEFF MAYS, in His Official Capacity as )
      DIRECTOR OF THE ILLINOIS               )
      DEPARTMENT OF EMPLOYMENT               )
      SECURITY,                              )     The Honorable
                                             )     John C. Anderson,
            Defendants-Appellees.            )     Judge, presiding.
                                             )
      ____________________________________________________________________________

            PRESIDING JUSTICE McDADE delivered the judgment of the court, with opinion.
            Justice Wright concurred in the judgment and opinion.
            Justice Holdridge specially concurred, with opinion.
      ____________________________________________________________________________

                                                OPINION

¶1          Plaintiff Ken’s Beverage, Inc. discharged Michelle P. Wood from her position as a

     dispatch supervisor, citing her behavior toward the manager and her subordinates during the final

     months of her employment as the reason for the discharge. Wood applied for unemployment

     benefits from the Illinois Department of Employment Security; Ken’s Beverage resisted. Referee
     David Ott held that Wood’s discharge was for misconduct and that she was, therefore, not

     entitled to receive unemployment compensation benefits. The review board reversed Referee

     Ott’s decision on the basis that Ken’s Beverage had failed to meet its burden of showing that

     Wood had been discharged for misconduct. The circuit court affirmed the review board’s

     decision. Ken’s Beverage now appeals.

¶2                                          I. BACKGROUND

¶3          Michelle Wood was employed at Ken’s Beverage from July 30, 2007, to March 1, 2018.

     Her final position at Ken’s Beverage was as a Dispatch Supervisor. Ken’s Beverage alleged that

     she had received at least 12 documented warnings within the seven years from June 2010 to July

     2017, of which the following 6 were for unprofessional behavior. On June 10, 2010, Wood was

     given an oral warning for insubordination after she “blew up at a supervisor.” She received a

     written warning for disruptive work behavior on February 15, 2011. The warning reported that

     Wood was bad-mouthing an employee while the employee was within hearing distances and

     counseled her to change her behavior. On April 1, 2011, she was placed on a three-day

     suspension for insubordination. Ken’s Beverage alleged that Wood disrespected the owner while

     he was discussing her processing of invoices for payment. Wood was counseled to listen to

     instructions. On April 21, 2013, Wood received an oral warning for verbally insulting a

     coworker. Then, on April 25, 2013, she received a written warning for causing disruptive work

     behavior by cursing and swearing at another coworker.

¶4          On July 5, 2017, Wood received a “final” written warning alleging unprofessional

     conduct for making an inappropriate comment about an employee’s sexual orientation. The

     conduct, which occurred in the presence of a manager, was deemed a violation of Ken’s

     Beverage’s sexual harassment policy. The written warning included a reprimand and stated that

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     “any further incidents of misconduct [or] harassment will result in [Wood’s] immediate

     termination.”

¶5          On March 1, 2018, Ken’s Beverage terminated Wood for engaging in hostile and

     disruptive work behavior. Wood received an “employee counseling form,” describing her

     conduct after the issuance of the final warning. It stated that Wood “demonstrated a continued

     pattern of abusive, petty and passive aggressive behavior [against] her supervisors” and three

     dispatchers under her supervision. It also stated that she “blatantly ignored requests from the

     Operations Manager.” It concluded Wood’s repeated behavior created a hostile work

     environment.

¶6          Wood subsequently filed a claim for unemployment security benefits, which Ken’s

     Beverage resisted. On April 19, 2018, Referee Ott held a telephonic hearing to resolve her claim.

     Human Resources Director Pamela Rebhorn and Operation’s Manager Carlos Mullins testified

     on behalf of Ken’s Beverage. Rebhorn explained that, because of Wood’s behavior, Ken’s

     Beverage had to move personnel who felt uncomfortable because of her behavior. She stated that

     she received several complaints in the final months leading to Wood’s termination.

¶7          Mullins testified that he was Wood’s direct supervisor. A dispatcher, whom Wood

     supervised and who complained of daily disrespect and mistreatment from Wood, had to be

     transferred to another call center. He also stated that he found another dispatcher crying in her

     car because of a hostile interaction with Wood. Mullins recalled these incidents as occurring in

     February 2018, shortly before Wood was discharged. Finally, Mullins testified that, when he was

     discussing her behavior with her, Wood said “that’s bulls***.”

¶8          Referee Ott found that Wood had been counseled repeatedly regarding her behavior. He

     also found that Wood’s comment (“that’s bulls***”) to Mullins was a willful and deliberate

                                                      3
       disregard of the standards at Ken’s Beverage. He concluded that the comment was not an

       isolated incident, as shown by the repeated prior occasions when she was counseled that her

       behavior had to stop. Referee Ott ruled that the “evidence showed that the employer fired

       [Wood] for misconduct within the meaning of the Section 602A.” Wood appealed Referee Ott’s

       ruling to the Department of Employment Security Board of Review.

¶9            The board reversed the ruling, concluding that the evidence was insufficient. It explained

       that Ken’s Beverage’s “case would have been greatly strengthened if any of the dispatchers

       [Wood] supervised, who allegedly complained about her behavior towards them, testified at the

       hearing and gave examples of [her] abusive qualities and liberal use of profanity while on the job

       ***.” The board also stated that “Mullins could have written [Wood] up any number of times for

       her alleged insolence and insubordinate behavior ***.” It noted that the comments made against

       the previous employee’s sexual orientation were “ant-gay [sic].” But, the board found that,

       although Referee Ott could have properly considered the sexual allegation claim in the final

       notice, “it was a singular, isolated incident and not *** illustrative of [the] ‘continued pattern’ of

       abusive [behavior]” and “poor work performance for which she was ultimately discharged.” The

       board concluded that Ken’s Beverage failed “to provide eye-witness testimony about actual

       incidents, along with the dates of those incidents, and the contemporaneous documentary

       evidence.”

¶ 10          Ken’s Beverage filed a complaint for administrative review in the Will County circuit

       court on September 5, 2018. The court held a hearing on February 8, 2019. It considered the

       memoranda of law submitted by the parties; no testimony was heard. On February 15, 2019, the

       court affirmed the board of review, finding that the decision was neither contrary to the manifest

       weight of the evidence nor clearly erroneous. Ken’s Beverage appealed.

                                                         4
¶ 11                                             II. ANALYSIS

¶ 12           On appeal, Ken’s Beverage argues that the board of review’s finding that Wood was not

       terminated for misconduct was clearly erroneous. The company contends that the board

       incorrectly focused on the final triggering event, rather than considering Wood’s entire history of

       misconduct, as evidenced by the numerous previous warnings she had received. Ken’s Beverage

       also contends that the board incorrectly applied a new legal standard by requiring the employer

       to present additional eye-witness testimony to support the allegations of misbehavior following

       the final warning. We agree with Ken’s Beverage, and we reverse the board’s decision and

       reinstate Referee Ott’s initial ruling.

¶ 13           When an appeal of an administrative agency’s final decision comes to this court, we

       review the decision of the agency—here, the board of review—rather than that of the circuit

       court. Petrovic v. Department of Employment Security, 2016 IL 118562, ¶ 22. The court will not

       disturb the agency’s factual findings unless they are against the manifest weight of the evidence.

       Woods v. Illinois Department of Employment Security, 2012 IL App (1st) 101639, ¶ 16. If,

       however, the agency applies a legal standard to a given set of facts, whether its decision was

       proper is reviewed under the clearly erroneous standard. Cinkus v. Village of Stickney Municipal

       Officers Electoral Board, 228 Ill. 2d 200, 211 (2008). A decision is clearly erroneous if the

       record leaves the reviewing court with the firm and definite conviction that a mistake has been

       made. Alternative Staffing, Inc. v. Illinois Department of Employment Security, 2012 IL App

       (1st) 113332, ¶ 29.

¶ 14           An employee who is discharged for misconduct is ineligible for unemployment insurance

       benefits. 820 ILCS 405/602(A) (West 2018). To establish misconduct under section 602(A), the

       employer must show that:

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                      “(1) there was a deliberate and willful violation of a rule or policy of the

                      employing unit, (2) the rule or policy was reasonable, and (3) the violation either

                      harmed the employer or was repeated by the employee despite a previous warning

                      or other explicit instruction from the employing unit.” Woods, 2012 IL App (1st)

                      101639, ¶ 19 (citing 820 ILCS 405/602(A) (West 2008)).

       “Harm includes damage or injury to other employees’ well-being or morale ***.” Alternative

       Staffing, Inc., 2012 IL App (1st) 113332, ¶ 31. Misconduct can be premised on either a single

       incident of a violation of an employer’s rules that triggered the employee’s discharge or the

       employee’s cumulative violations of the employer’s rules taken as a whole. Id. ¶ 30. Willful

       misconduct occurs where an employee is aware of a company rule and consciously disregards it.

       Id. ¶ 31.

¶ 15           The record on appeal establishes each of the necessary elements for a section 602A

       employment misconduct. The parties do not dispute that Ken’s Beverage had a policy against

       sexual harassment or that the policy was reasonable. The sole issue presented is whether Wood

       willfully violated the policy, despite repeated warnings from June 2010 to July 2017 for

       insubordination and disruptive work behavior. Eventually, Ken’s Beverage issued her a final

       notice that her behavior would no longer be tolerated. The “final” notice came as a warning

       triggered by a comment about a fellow employee’s sexual orientation, which was made in the

       presence of a manager. The notice informed Wood that “any further incidents of misconduct [or]

       harassment will result in [her] immediate termination.”

¶ 16           Despite these warnings and the final notice she received, Wood persisted in her abusive,

       offensive behavior and insubordination. Two dispatchers, supervised by Wood, complained to

       Mullins of behavior following Wood’s receipt of the final notice. One dispatcher reported daily

                                                        6
       disrespect and mistreatment from Wood, and another dispatcher was found crying in her car

       because of an interaction with Wood. Rebhorn explained that, because of Wood’s behavior,

       Ken’s Beverage found it necessary to transfer dispatchers who were uncomfortable because of

       her behavior. Moreover, when Mullins attempted to discuss her behavior with her, Wood

       dismissed the claims as “bulls***.” Referee Ott concluded that Wood’s behavior and her

       comment to Mullins were consistent with previous behavior for which she had been repeatedly

       warned over the course of her employment.

¶ 17          However, the Board of Review disagreed, concluding that the sexual harassment claims

       were different from the abusive behavior for which she was discharged. The board seemingly

       considered the comments regarding an employee’s sexual orientation to be of a higher magnitude

       than the ordinary type of abusive language for which Wood was ultimately discharged. The

       board therefore held that Ken’s Beverage failed to give Wood further requisite notice before

       terminating her. We do not find the board’s distinction regarding the nature of Wood’s various

       choice of abusive language consistent with the statute. Whether verbal insult targeted at an

       employee constitutes disruptive or abusive behavior does not turn on whether the insult was anti-

       gay, was predicated on the employee’s sex or gender, or contained ordinary use of profane

       language. The issue is whether Wood’s comments or choice of words caused harm to other

       employees by affecting their “well-being” or their “morale.” Alternative Staffing, Inc., 2012 IL

       App (1st) 113332, ¶ 31 (“Harm includes damage or injury to other employees’ well-being or

       morale ***.”). Abusive language is harmful regardless of the subject of its content. Id.

¶ 18          On July 5, 2017, Wood received a final notice for abusive behavior against a dispatcher

       under her supervision. The employee counseling form noted that the warning was triggered

       under Ken’s Beverage’s sexual harassment policy. However, the warning alerted her to the risk

                                                        7
       of termination for disruptive or abusive behavior against other employees. In Alternative

       Staffing, the appellate court found error where the board focused on the final triggering incidents,

       while ignoring the prior incidents. Alternative Staffing, Inc., 2012 IL App (1st) 113332, ¶ 34. The

       court held that the failure to consider the prior incidents was clearly erroneous. Id. It noted that

       misconduct, disqualifying an employee from employment security, can be found in the

       cumulative effects of documented warnings of misbehavior. The court stated that the employer

       submitted sufficient evidence documenting the 11 prior incidents and thus met its burden of

       proof. Id. ¶ 35. Under the standard in Alternative Staffing, evidence of Wood’s prior documented

       warnings is sufficient to satisfy Ken’s Beverage’s burden of proof. Id. ¶ 31.

¶ 19          Referee Ott considered Rebhorn’s and Mullins’s testimony regarding their conversations

       with dispatchers complaining of Woods abusive behavior. The board, however, ruled that Ken’s

       Beverage did not meet its burden because it failed to call the two dispatchers whose complaints

       triggered Wood’s termination. In so doing, the board clearly erred by requiring a higher

       evidentiary threshold than that ordinarily required in such cases. The “Director [of the

       Department of Employment Security] may adopt regulations governing the conduct of hearings

       held pursuant to any provisions of [the] Act.” 820 ILCS 405/2300 (West 2018). Under section

       2300, the director’s regulations are binding, regardless of whether they conform with “the

       common law or statutory rules of evidence or other technical rules or procedure” or not. Id. The

       “admission of evidence contrary to the common law rules of evidence [cannot] invalidate any

       decision made by the Director.” Id. Applying his discretion, the director held that “[t]echnical

       rules of evidence do not apply to hearings before Referees.” 56 Ill. Adm. Code 2720.250(a),

       amended at 43 Ill. Reg. 6385 (eff. May 14, 2019). A referee may consider “[u]nobjected to

       hearsay statements” and give them “their natural probative value.” Id.

                                                         8
¶ 20           We find nothing in the record suggesting that Wood timely objected to the possible

       hearsay statements contained in Rebhorn’s or Mullins’s testimony. Once such statements were

       presented, Referee Ott could “not, on his *** own initiative, refuse to admit [the] evidence or

       testimony.” 56 Ill. Adm. Code 2720.250(b), amended at 43 Ill. Reg. 6385 (eff. May 14, 2019).

       He could only weigh the credibility of each side—which he presumably did. Id. The review

       board, however, rejected his assessment because the evidence was not from eyewitnesses’ first-

       hand accounts. We find this evidentiary ruling clearly erroneous under the standard set in section

       2300 and section 2720.250 and, therefore, reverse the decision of the Illinois Department of

       Employment Security’s Board of Review.

¶ 21                                            III. CONCLUSION

¶ 22           The judgment of the Illinois Department of Employment Security’s Board of Review is

       reversed.

¶ 23           Reversed.

¶ 24           JUSTICE HOLDRIDGE, specially concurring:

¶ 25           I join the majority’s judgment and most of its analysis. I agree that the board of review

       erred by concentrating only on the final, triggering incidents that prompted the employer’s final

       warning and termination of Wood and by failing to consider documented evidence of Wood’s

       misconduct prior to the final warning. I also agree that the board erred by excluding hearsay

       statements that Rebhorn and Mullins made during their testimony and by requiring first-hand

       witness testimony as to all instances of Wood’s alleged misconduct. I write separately to clarify

       one point in the majority’s analysis as to the latter issue.

¶ 26           The majority suggests that there is “nothing in the record suggesting that Wood timely

       objected to the possible hearsay statements contained in Rebhorn’s or Mullins’s testimony.” Supra

                                                          9
       ¶ 20. I disagree. During Mullins’s testimony, Wood’s counsel told the referee that he had “a

       continuing objection to the hearsay evidence.” The referee interrupted him and stated, “Yeah.

       Here’s the way it works. I’m allowed to hear hearsay but I’m not allowed to rely on it in preparing

       my decision. *** But you’ve got your continuing objection.” Thus, contrary to the majority’s

       conclusion, the hearsay statements at issue were not “[u]nobjected to hearsay” which the referee

       was required to admit and to “give *** their natural probative value.” (Internal quotation marks

       omitted.) Supra ¶ 19.

¶ 27          Nevertheless, the issue of the admissibility of Mullins’s and Rebhorn’s hearsay statements

       is moot in this case because the referee did not rely on those statements in reaching his decision.

       (The referee expressly noted that fact both in response to Wood’s counsel’s objection at the hearing

       and in his final decision.) Accordingly, the referee correctly applied section 2720.250 of the Illinois

       Administrative Code, which applies in proceedings for unemployment benefits filed with the

       Illinois Department of Employment Security. That section provides, in relevant part, that the

       referee “may, but need not, rule on any objection to the introduction of evidence or testimony” but

       must note any objections and make them part of the record. 56 Ill. Adm. Code 2720.250(a).

       Because neither the referee nor the board of review relied upon the hearsay statements in reaching

       their respective decisions, we need not address this issue further on appeal.

¶ 28          In any event, we do not need to rely upon any of the hearsay statements at issue to reverse

       the board of review’s decision. There was sufficient non-hearsay evidence of Wood’s misconduct

       after the employer’s July 5, 2017, final warning to justify reversal. As the majority correctly notes,

       the final warning informed Wood that any further misconduct by Wood would result in her

       termination. Mullins testified that he repeatedly e-mailed Wood warnings about her failure to

       follow his directives, but Wood ignored his directions on several occasions. At least one of these

                                                         10
instances occurred after the final warning. Mullins testified that, when he met with Wood in

February 2018 to discuss Wood’s misconduct, Wood dismissed the claims against her as

“bullshit.” That statement constituted misconduct by Wood in defiance of the final warning. In

addition, Rebhorn testified that she was present during a meeting in the Fall of 2017 when Wood’s

supervisors warned Wood about her misconduct and Wood “started yelling.” These instances,

coupled with documentary evidence of Wood’s prior misconduct, justified Wood’s dismissal for

misconduct. The board of review’s contrary conclusion is clearly erroneous.

                                               11
                                 No. 3-19-0115

Cite as:                 Ken’s Beverage, Inc. v. Wood, 2020 IL App (3d) 190115

Decision Under Review:   Appeal from the Circuit Court of Will County, No. 18-MR-
                         2455; the Hon. John C. Anderson, Judge, presiding.

Attorneys                Gregory W. Guevara, of Indianapolis, for appellant.
for
Appellant:

Attorneys                Kwame Raoul, Attorney General, of Chicago (Jane Elinor Notz
for                      and Caleb Rush, of Chicago), for appellee.
Appellee:

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