Court Opinion

ID: 4586140
Source: CourtListenerOpinion
Date Created: 2020-11-13 16:03:32.790831+00
Date Added: 2024-06-11T13:48:05.269027
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                          FILED
regarded as precedent or cited before any                                 Nov 13 2020, 10:43 am
court except for the purpose of establishing                                   CLERK
the defense of res judicata, collateral                                    Indiana Supreme Court
                                                                              Court of Appeals
estoppel, or the law of the case.                                               and Tax Court

ATTORNEY FOR APPELLANT                                  ATTORNEYS FOR APPELLEE
Sheila M. Sullivan                                      INDIANA DEPARTMENT OF
Flynn & Sullivan PC                                     WORKFORCE DEVELOPMENT
Indianapolis, Indiana                                   Curtis T. Hill, Jr.
                                                        Attorney General
                                                        Frances Barrow
                                                        Deputy Attorney General
                                                        Indianapolis, Indiana

                                          IN THE
    COURT OF APPEALS OF INDIANA

S.F.,                                                   November 13, 2020
Appellant,                                              Court of Appeals Case No.
                                                        20A-EX-996
        v.                                              Appeal from the Review Board of
                                                        the Department of Workforce
Review Board of the Indiana                             Development
Department of Workforce                                 The Honorable Larry A. Dailey,
Development;                                            Chairperson
Federal Express Corporation,                            The Honorable Heather D.
Appellees                                               Cummings, Member
                                                        Review Board No.
                                                        20-R-0369

Vaidik, Judge.

Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020                   Page 1 of 8
                                          Case Summary
[1]   S.F. appeals the decision of the Review Board of the Indiana Department of

      Workforce Development affirming the decision of the Administrative Law

      Judge (“ALJ”) that he was discharged for just cause and therefore not entitled

      to unemployment benefits. We reverse and remand.

                            Facts and Procedural History
[2]   S.F. worked as a manager at FedEx from April 15, 1996, to July 6, 2019. He

      was discharged on July 6, 2019, because he received “three letters of

      deficiencies within a 12 month period.” Ex. p. 94.

[3]   S.F. filed for unemployment benefits, and a claims investigator with the

      Department of Workforce Development found S.F. “was discharged due to a

      violation of [FedEx’s] policy. [However,] [i]nformation available establishes the

      policy was not uniformly enforced.” Id. at 4; see Ind. Code § 22-4-15-1(d)(2).

      The claims investigator concluded S.F. was not discharged for just cause and

      therefore entitled to unemployment benefits.

[4]   FedEx appealed, and a hearing was held before an ALJ in October 2019. At the

      hearing, Linda Mallender, Senior Manager of Internal Operations at FedEx,

      testified about FedEx’s progressive-discipline policy. Although FedEx didn’t

      introduce the written policy into evidence, Mallender testified it consists of

      these six steps: (1) verbal counseling; (2) written counseling; (3) letter of

      Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020   Page 2 of 8
      concern; (4) warning letter;1 (5) performance reminder;2 and (6) termination.

      According to Mallender, an employee is discharged if they receive three

      performance reminders or any combination of three warning letters and

      performance reminders in twelve months.3 Mallender testified S.F. was

      discharged because he received three letters in twelve months: (1) a warning

      letter on April 11, 2019; (2) a performance reminder on June 15; and (3) a

      warning letter on June 19.

[5]   S.F. testified about the circumstances of each letter and why he didn’t think the

      letters were justified. He also testified FedEx doesn’t discharge “everybody”

      who receives three letters in twelve months. Tr. p. 28. S.F. said he knew a

      manager, C.L., who received “three letters” in twelve months but was allowed

      to “step down” to an hourly position. Id. S.F. testified if C.L. hadn’t stepped

      down, he would’ve been discharged. Id. at 29. S.F. said after he received his

      second letter, he asked Mallender if he could step down, but she said he didn’t

      need to do so because he would be “fine.” Id. at 28.

[6]   Mallender took the stand again and disputed S.F.’s testimony that he asked her

      about stepping down:

      1
          A warning letter is for “unacceptable conduct.” Tr. p. 12.
      2
          A performance reminder is for “not performing their job.” Id.
      3
       However, Mallender testified an employee can be terminated for receiving just one warning letter
      “depending on the severity . . . of the infraction.” Id. at 21.

      Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020                Page 3 of 8
              [A]t no time did [S.F.] come and ask me if he could step down,
              because had he had done that, then I would’ve gone back to
              H.R., and my Director, and talked to them.
Id. at 32. Although Mallender didn’t know “why [C.L.] received his letters, or

      what they were about,” she acknowledged C.L. was still employed at FedEx

      and didn’t otherwise dispute S.F.’s claim that managers may step down to an

      hourly position after receiving three letters in twelve months. Id.

[7]   On October 29, the ALJ issued a decision reversing the claims investigator’s

      award of unemployment benefits. Ex. pp. 53-56. S.F. appealed this decision to

      the Review Board, and the Review Board, for reasons not relevant here,

      remanded the case for the ALJ to “rewrite her decision” and hold a hearing if

      necessary. Id. at 61.

[8]   The ALJ conducted a second hearing in February 2020. S.F. appeared by

      counsel. Because S.F. was now represented by counsel, FedEx declined to

      participate. See Tr. pp. 36-41. S.F. testified that just because an employee

      receives three letters in twelve months doesn’t mean they are “automatically”

      discharged. Id. at 44. S.F. again discussed C.L., who was “going to be let go,

      [but FedEx] allowed him to step down into an hourly job.” Id. S.F. said other

      managers were allowed to step down, but he couldn’t remember their names.
Id. During closing statement, S.F.’s attorney argued FedEx’s policy that an

      employee is discharged after receiving three letters in twelve months was not

      uniformly enforced because FedEx allowed managers to step down to an hourly

      position after receiving three letters in twelve months. Id. at 54.

      Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020   Page 4 of 8
[9]    On February 21, the ALJ again issued a decision reversing the claims

       investigator’s award of unemployment benefits. Specifically, the ALJ found that

       “[a]ll employees who had received three letters of deficiencies within a 12

       month period have been discharged.” Ex. p. 92. The ALJ then concluded

       FedEx “uniformly enforced the policy,” S.F. knowingly violated the policy

       because he received three letters in twelve months, each letter was justified, and

       therefore S.F. was discharged for just cause. Id. at 93.

[10]   S.F. appealed the ALJ’s decision to the Review Board, which adopted the

       ALJ’s findings and conclusions and affirmed the ALJ. Appellant’s App. Vol. II

       p. 32.

[11]   S.F. now appeals.

                                 Discussion and Decision
[12]   The Indiana Unemployment Compensation Act provides that any decision of

       the Review Board is conclusive and binding as to all questions of fact. Ind.

       Code § 22-4-17-12(a). Review Board decisions may be challenged as contrary to

       law, in which case we examine the sufficiency of the facts found to sustain the

       decision and the sufficiency of the evidence to sustain the findings of facts. I.C.

       § 22-4-17-12(f). Under this standard, we review (1) findings of basic fact to

       ensure “substantial evidence” supports those findings, (2) conclusions of law for

       correctness, and (3) inferences or conclusions from basic facts, often called

       Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020   Page 5 of 8
       “mixed questions of law and fact,” for reasonableness. Q.D.-A., Inc. v. Ind. Dep’t

       of Workforce Dev., 114 N.E.3d 840, 845 (Ind. 2019).

[13]   S.F. contends “[t]he record does not support the [Review] Board’s decision that

       [he] was discharged for just cause.” Appellant’s Br. p. 11. A claimant

       discharged from employment for just cause is ineligible for unemployment

       benefits. I.C. § 22-4-15-1(a). “Discharge for just cause” includes a “knowing

       violation of a reasonable and uniformly enforced rule of an employer, including

       a rule regarding attendance.” Id. at (d)(2). Subsection (d)(2) applies if

       substantial evidence establishes 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. Co. v. Review Bd. of Ind.

       Dep’t of Workforce Dev., 58 N.E.3d 175, 178 (Ind. Ct. App. 2016). “[A]n

       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’” under subsection (d)(2). Reed

       v. Review Bd. of Ind. Dep’t of Workforce Dev., 32 N.E.3d 814, 823 (Ind. Ct. App.

       2015).

[14]   S.F. makes two arguments on appeal. First, he argues FedEx’s progressive-

       discipline policy wasn’t uniformly enforced because other managers were

       allowed to step down to an hourly position after receiving three letters in twelve

       months. Second, he argues that even if the policy was uniformly enforced, he

       didn’t “knowingly violate” it because his three letters weren’t justified.

       Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020   Page 6 of 8
       Appellant’s Br. p. 13. Because we find the first issue dispositive, we don’t

       address the second.

[15]   The reason for requiring uniform enforcement of a rule is to (1) give notice to

       employees about what punishment they can reasonably anticipate if they violate

       the rule and (2) protect employees against arbitrary enforcement. Coleman, 905
N.E.2d at 1020. A uniformly enforced rule is carried out so all persons under

       the same conditions and in the same circumstances are treated alike. Reed, 32
N.E.3d 814, 823 (Ind. Ct. App. 2015).

[16]   We first note it’s difficult for us to say what FedEx’s progressive-discipline

       policy states. This is because FedEx didn’t introduce its written policy into

       evidence at the hearing. In addition, FedEx didn’t participate in the second

       hearing, when S.F. gave additional testimony about FedEx’s policy.4 Had

       FedEx participated, perhaps the record would be clearer on this point. In any

       event, S.F. claims the ALJ’s finding that “[a]ll employees who had received

       three letters of deficiencies within a 12 month period have been discharged” is

       not supported by substantial evidence. He highlights that other managers,

       including C.L., were allowed to step down to an hourly position after receiving

       three letters in twelve months. At the first hearing, Mallender didn’t dispute

       S.F.’s testimony that C.L. had been allowed to step down; rather, she claimed

       S.F. didn’t ask her. But as S.F. points out on appeal, Mallender’s testimony that

       4
           FedEx also has not filed a brief in this case.

       Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020   Page 7 of 8
       S.F. didn’t ask her is “further evidence that such an exception to the rule

       existed.” Appellant’s Reply Br. p. 5. And S.F. testified at the second hearing

       that more managers had been allowed to step down, and FedEx wasn’t present

       to dispute this claim. We agree with S.F. that substantial evidence doesn’t

       support the ALJ’s finding that “all” employees who receive three letters in

       twelve months are discharged, which is the basis of the ALJ’s conclusion that

       FedEx uniformly enforced its policy. Accordingly, the record lacks substantial

       evidence that S.F. was discharged for just cause. We reverse the Review

       Board’s denial of unemployment benefits and remand for further proceedings.

[17]   Reversed and remanded.

       Bailey, J., and Weissmann, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 20A-EX-996 | November 13, 2020   Page 8 of 8