Court Opinion

ID: 9782458
Source: CourtListenerOpinion
Date Created: 2023-08-30 18:40:33.823055+00
Date Added: 2024-06-11T07:35:01.333922
License: Public Domain

OPINION
NAJAM, Judge.
STATEMENT OF THE CASE
S.S. LLC (“S.S.”)1 appeals the decision of the Review Board of the Indiana Department of Workforce Development (“Review Board”) in favor of D.H. on her claim for unemployment benefits. S.S. raises a single issue for our review, namely, whether the Review Board erred when it concluded that D.H. was not terminated for just cause.
We affirm.
FACTS AND PROCEDURAL HISTORY
D.H. applied for unemployment compensation benefits after leaving her employment with S.S. The Indiana Department of Workforce Development issued an initial determination of benefits on July 23, 2010, *599concluding that D.H. was eligible for unemployment benefits. S.S. appealed, and the Administrative Law Judge (“ALJ”) who presided over the appeal concluded that S.S. had discharged D.H. for just cause and that D.H. was not entitled to unemployment benefits. D.H. appealed to the Review Board, which made the following findings and conclusions in reversing the ALJ’s denial of benefits to D.H.:
The Review Board adopts and incorporates the findings of fact of the Administrative Law Judge except to the extent inconsistent with this decision and as modified herein. The Claimant was present and participated in the hearing by telephone. The Employer also participated in the hearing by telephone and was represented by Perry Combs, Administrator.1
[Internal footnote 1: The Review Board cannot overturn an Administrative Law Judge’s decision based solely on a determination of demeanor credibility. Stanley v. Review Bd., 528 N.E.2d 811, 815 (Ind.Ct.App.1988). Because the parties participated in the hearing by telephone, any explicit or implicit credibility determinations made by the Administrative Law Judge were not based on her observations of the witnesses’ demeanor. “[T]o make an accurate credibility assessment based on demeanor one must be in a position to observe the witnesses as they testify.” Id. No demeanor credibility determinations can be made based on the testimony offered in a telephone hearing. Because the Review Board listened to the hearing recording, the Review Board is in the same position as the Administrative Law Judge to make determinations of credibility regarding the witnesses’ testimony. Of the different components of credibility, “only demean- or credibility remains outside the reviewing authority’s abilities to assess.” Wampler v. Review Bd., 498 N.E.2d 998, 999 (Ind.Ct.App.1986). Thus, the Review Board is free to reject the Administrative Law Judge’s findings of credibility and to make its own determinations as to the credibility of the witnesses at the hearing.]
The Employer is a nursing home. The Claimant worked full-time for the Employer as an activity director. The Claimant began working for the Employer on July 28, 1997. The Claimant became separated from employment on May 24, 2010.
On May 24, 2010, the Employer’s Representative and the Assistant Director of Nursing met with the Claimant for the purpose of administering a third written warning. During the meeting, the Claimant’s employment terminated.
During the hearing, the Employer’s Representative testified that the Claimant became very upset and walked out of the meeting without permission. The Employer has a written policy in its employee handbook that states, “walking off the shift without the permission of your Supervisor will be considered a voluntary resignation.” Emp. Ex. E2. The Claimant signed an acknowledgement form indicating that she received a copy of the employee handbook and understood its contents. Emp. Ex. E3. Because the Claimant had not been given permission to leave, the Employer considered her to have voluntarily resigned her employment. The Employer’s Representative also contended that the Employer had no intention of discharging the Claimant during the meeting.
The Claimant, however, testified that she was told she was being discharged for receiving four warnings within a three week time-frame. She further testified that when she received her third written warning during the meet*600ing, the warning stated that she was discharged from employment. See Emp. Ex. 4. The Claimant also testified that the Employer has a policy that states accumulating three written warnings is grounds for discharge, and she had received three written warnings. She left the meeting after the Employer’s Representative informed her that she had been relieved of her duties and asked her to leave.
Because the parties presented conflicting testimony regarding the circumstances of the Claimant’s separation from employment, the Review Board must make a credibility determination. The Review Board finds the Claimant’s testimony more credible. The Review Board also finds that the Claimant correctly testified as to the Employer’s stated reason for her discharge.
The Employer has [a] written policy in its employee handbook that states, “[A] total of three (3) written warnings of any kind, in one (1) year is cause for immediate termination.” See Emp. Ex. E4. Per the third written warning, this policy is contained on page 59 of the employee handbook. Emp. Ex. E4. Also, according to the contents of the third written warning, the Claimant received a verbal warning on March 31, 2010; a first written warning on April 15, 2010; and a second written warning on May 3, 2010. Emp. Ex. E4. On May 24, 2010, the Claimant received her third written warning and was discharged from employment. Emp. Ex. E4.
The Employer’s Representative presented no evidence regarding why the Claimant was disciplined on any occasion. The Employer’s Representative also presented no evidence regarding the enforcement of the Employer’s discipline policy.
The Administrative Law Judge found that Claimant walked out of the meeting without permission in violation of the Employer’s policy. The Administrative Law Judge determined that the Claimant knowingly violated a reasonable and uniformly enforced Employer rule. The Administrative Law Judge concluded that the Employer discharged the Claimant for just cause....
CONCLUSIONS OF LAW: An Administrative Law Judge cannot change the Employer’s stated reason for discharge. Voss v. Review Board, 533 N.E.2d 1020 (Ind.Ct.App.1989). In Foss v. Review Board, ... the employer provided its employee a written discharge document stating that the discharge was for excessive telephone usage. At the Administrative Law Judge hearing, the employer advanced other reasons to discharge the employee. The court held that the Review Board was limited to considering the employer’s stated reason for discharge. Accord: Hehr v. Review Bd., 534 N.E.2d 1122 (Ind.Ct.App.1989); Parkinson [Parkison ] v. James River Corp., 659 N.E.2d 690 (Ind.Ct.App.1996).
In the present case, the Employer presented the Claimant with a third written warning which stated that she was being discharged and informed the Claimant that she was being discharged for accumulating three written warnings in violation of its discipline policy. The warning also listed the Claimant’s previous warnings and the Employer’s policy that subjects employees to immediate discharge for the accumulation of three written warnings in one year. During the hearing, however, the Employer’s Representative changed the Employer[’]s stated reason for discharge and testified that the Claimant’s employment was terminated for walking out of the May 24, 2010[,] meeting without permission. Just as an Administrative Law *601Judge cannot change the Employer’s stated reason for discharge, neither can the Employer.
When an employee is discharged from employment in Indiana, the employee will not be disqualified from unemployment benefits unless the discharge was for just cause within the meaning of Indiana Code § 22-4-15-l(d). “Discharge for just cause” includes a “knowing violation of a reasonable and uniformly enforced rule of an employer, including a rule regarding attendance.” Ind.Code § 22-4-15-l(d)(2). The burden was on the Employer to prove that it had just cause to discharge the Claimant. Barnett v. Review Bd., 419 N.E.2d 249 (Ind.Ct.App.1981). To find that a discharge was for just cause, the Review Board must first find that: (1) there was a rule; (2) the rule was reasonable; (3) the rule was uniformly enforced; (4) the claimant knew of the rule; and (5) the claimant knowingly violated the rule. Barnett, 419 N.E.2d at 251.
Here, the Employer failed to meet its burden of proof. The Employer presented no evidence during the hearing regarding any of the discipline issued to the Claimant. The Employer also presented no evidence that its discipline policy was reasonable, or that it was uniformly enforced. Therefore, it cannot be concluded that the Claimant knowingly violated a reasonable and uniformly enforced rule of the Employer.
Furthermore, even if the Employer had discharged the Claimant for violating its walk-out policy, the Employer failed to prove that the Claimant actually violated the policy. The Employer claims it discharged the Claimant for walking out of the meeting on May 24, 2010[,] without permission. The Employer, however, terminated the Claimant’s employment during that meeting.
By the time the Claimant had walked out, her employment relationship with the Employer had already been severed. Therefore, the Claimant did not violate the Employer’s walk-out policy.
The Employer failed to meet its burden of proof. The Employer discharged the Claimant but not for proven just cause.
ORDER: The decision of [the] Administrative Law Judge is reversed. The Claimant is entitled to unemployment benefits.
Appellant’s App. at 3-5 (some emphases added). This appeal ensued.
DISCUSSION AND DECISION
In Stanrail Corp. v. Review Board of the Department of Workforce Development, 735 N.E.2d 1197, 1201-02 (Ind.Ct.App. 2000), trans. denied, this Court set out the applicable standard of review:
The Indiana Unemployment Compensation Actc ] provides that “[a]ny decision of the review board shall be conclusive and binding as to all questions of fact.” Ind.Code § 22-4-17-12(a). When the Board’s decision is challenged as contrary to law, the reviewing court is limited to a two-part inquiry into the “sufficiency of the facts found to sustain the decision” and the “sufficiency of the evidence to sustain the findings of facts.” Ind.Code § 22 — 4—17—12(f). Under this standard, we are called upon to review: (1) determinations of specific or basic underlying facts; (2) conclusions or inferences from those facts, or determinations of ultimate facts; and (3) conclusions of law. McClain v. Review Bd. of the Ind. Dep’t of Workforce Dev., 693 N.E.2d 1314,1317 (Ind.1998).
Review of the Board’s findings of basic fact is subject to a “substantial evidence” standard of review. Id. In this *602analysis, we neither reweigh the evidence nor assess the credibility of witnesses and consider only the evidence most favorable to the Board’s findings. General Motors Corp. v. Review Bd. of the Ind. Dep’t of Workforce Dev., 671 N.E.2d 498, 496 (Ind.Ct.App.1996). We will reverse the decision only if there is no substantial evidence to support the Board’s findings. KBI, Inc. v. Review Bd. of the Ind. Dep’t of Workforce Dev., 656 N.E.2d 842, 846 (Ind.Ct.App.1995).
The Board’s determinations of ultimate facts involve an inference or deduction based upon the findings of basic fact and [are] typically reviewed to ensure that the Board’s inference is reasonable. McClain, 693 N.E.2d at 1317-18. We examine the logic of the inference drawn and impose any applicable rule of law. Id. at 1318. Some questions of ultimate fact are within the special competence of the Board, and it is therefore appropriate for us to accord greater deference to the reasonableness of the Board’s conclusion. Id. However, as to ultimate facts which are not within the Board’s area of expertise, we are more likely to exercise our own judgment. Id.
In Indiana, an unemployed claimant is ineligible for unemployment benefits if he is discharged for “just cause.” See Russell v. Review Bd. of Ind. Dep’t of Emp’t & Training Servs., 586 N.E.2d 942, 948 (Ind.Ct.App.1992). Here, S.S. contends that it terminated D.H.’s employment for just cause and that the Review Board erred when it concluded otherwise. S.S. bore the burden to prove that D.H.’s discharge was for just cause. See id.
Just cause includes discharge for a knowing violation of a reasonable and uniformly enforced rule of an employer. Ind. Code § 22 — 4—15—1 (d)(2). An employer’s asserted work rule must be reduced to writing and introduced into evidence to enable this Court to fairly and reasonably review the determination that an employee was discharged for just cause for the knowing violation of a- rule. Stanrail Corp., 735 N.E.2d at 1205. To have knowingly violated an employer’s rule, the employee must know of the rule and must know that his conduct violated the rule. Id. at 1203. The Board must make a finding as to whether an employee knew that his conduct violated an employer rule because the text of Indiana Code Section 22-4-15-l(d)(2) requires a “knowing violation” of a rule rather than merely a violation of a known rule. Id.
Here, at the hearing before the ALJ, S.S. did not argue that D.H. was discharged for just cause. Instead, S.S.’s sole contention was that D.H. voluntarily resigned. Thus, as the Review Board concluded, S.S. did not present evidence that D.H. was discharged for knowingly violating a reasonable and uniformly enforced rule. See Coleman v. Review Bd. of Indiana, 905 N.E.2d 1015, 1020 (Ind.Ct. App.2009). Perry Combs, S.S.’s representative at the telephonic hearing, testified in relevant part as follows:
Q: Did [D.H.] quit her employment?
A: This is where we were talking to her in a meeting and she walked out of the facility and she didn’t clock out. According to our handbook, if somebody walks out they voluntarily resign.
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Q: What is Exhibit E2?
A: E2 is a section of our handbook which has been signed that she acknowl-edgement [sic] of employment on E3, and it’s just stating, the circle it says absence and occurrences and this definition does not alter the fact that failure to return from leave of absence or walking off the shift without the permission of *603your supervisor will be considered a voluntary resignation.
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A: Okay. On Exhibit E4, and it says state corrective action and to eliminate the problem, where it says discharge from employment that was written, [D.H.] did not see that when I handed the paper to her. I was talking to her and letting her know this is her final written warning. I never said one word about her being terminated. She’s not telling the truth.
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Q: Mr. Combs, could you just clarify what is the Employer’s progressive discipline process?
A: You get an oral warning, first written warning, second warning, and a third written warning you can be discharged.
JUDGE: Looking at the warning notice, Employer’s Exhibit E4....
A: Right.
JUDGE: ... it has verbal warning, first warning, second warning, third warning. ...
A: Right.
Q: And is that 3/31 the date of the verbal warning?
A: Where do you see 3/31 at?
JUDGE: On the top of the Employee Warning there’s dates.
A: Oh, verbal warning’s the 3/31. Yeah, the first one. Those are different ones, the others.
Q: So there was a verbal warning on 3/31/10. Is that correct?
A: Yes. A written, the first written on 4/5, and the second written on 5/3.
Q: So this warning on May 24th would’ve been the third written?
A: It could’ve, would’ve been. Yes. She did not even read it. She didn’t let me talk. After I said this is your third written warning she, I handed her this paper she thrown [sic] it in the air and walked out of the room.
Q: So [D.H.] was only given a warning. She would not have been discharged for the incident warranting the warning?
A: Well it says if you get discharged if you [sic], you have one more time to get discharged. You can either discharge a person at that point or you can discharge them, you can give them another chance, but she did not have the courtesy to let me even speak to her about the warning that she was getting. She got up and left the office and our policy states that if she leaves the facility without permission it’s considered a voluntary walk off, and that’s how I take it.
Transcript at 6-14 (emphases added).
The Review Board found D.H. more credible than Combs and concluded that S.S. had terminated D.H.’s employment. S.S. bore the burden to prove that the termination of D.H.’s employment was for just cause. But, again, S.S. did not contend during the hearing that D.H. was terminated. And S.S. did not present evidence that (1) there was a rule; (2) the rule was reasonable; (3) the rule was uniformly enforced; (4) the claimant knew of the rule; and (5) the claimant knowingly violated the rule. See Barnett, 419 N.E.2d at 251. S.S.’s sole claim before the ALJ was that D.H. voluntarily resigned. S.S. could have argued in the alternative that she was terminated for just cause, but it did not.
In support of its determination, the Review Board cited Voss v. Review Board Department of Employment & Training Services, 533 N.E.2d 1020, 1021 (Ind.Ct. App.1989), where we held that an ALJ or Review Board making a determination regarding unemployment benefits may only *604consider an employer’s stated grounds for an employee’s discharge. In particular, we said
whether or not other grounds may have existed for [the employee’s] discharge is irrelevant because [the employer] did not exercise its discretion to discharge [the employee] on those grounds and neither the Board nor this court can assume it would have done so. Thus the issue is whether the stated grounds for discharge have a basis in fact and constitute just cause.
Id. Here, again, during the hearing before the ALJ, S.S. did not allege that D.H. was discharged, let alone state any grounds for her discharge. S.S. merely alleged that D.H. voluntarily resigned. The Review Board found otherwise, and we will not reweigh the evidence. We cannot consider S.S.’s new argument on appeal that D.H. was terminated for just cause. See Troxel v. Troxel, 737 N.E.2d 745, 752 (Ind.2000) (reiterating well-settled rule that party may not raise issue for first time on appeal).
Affirmed.
ROBB, C.J., concurs.
CRONE, J., concurs with separate opinion.

. The majority agrees with the recent opinion in LaDon A. Moore v. Review Board of the Indiana Department of Workforce Development, 951 N.E.2d 301 (Ind.Ct.App.2011), on the use of names in workforce development cases, but in the interest of presenting another position on this issue, and to facilitate further discussion and debate, we have agreed to publish this opinion using initials in this case.