Court Opinion

ID: 5137996
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:49:08.601274+00
Date Added: 2024-06-11T08:24:05.558499
License: Public Domain

2015 UT App 62
_________________________________________________________

              THE UTAH COURT OF APPEALS

                     EVOLOCITY, INC.,
                        Petitioner,
                             v.
             DEPARTMENT OF WORKFORCE SERVICES
                  AND DEABRA C. COLBERT,
                       Respondents.

                     Memorandum Decision
                       No. 20130025-CA
                      Filed March 19, 2015

                Original Proceeding in this Court

          Vincent C. Rampton, Attorney for Petitioner

         Amanda B. McPeck, Attorney for Respondent
             Department of Workforce Services

         David J. Holdsworth, Attorney for Respondent
                       Deabra C. Colbert

 JUDGE MICHELE M. CHRISTIANSEN authored this Memorandum
Decision, in which SENIOR JUDGES RUSSELL W. BENCH and JUDITH
                    M. BILLINGS concurred.1

CHRISTIANSEN, Judge:

¶1    Evolocity, Inc. seeks judicial review of the Department of
Workforce Services’ determination that Deabra C. Colbert was
discharged without just cause and therefore entitled to

1. The Honorable Russell W. Bench and the Honorable Judith M.
Billings, Senior Judges, sat by special assignment as authorized by
law. See generally Utah R. Jud. Admin. 11-201(6).
            Evolocity v. Department of Workforce Services

unemployment benefits. We decline to disturb the Department’s
decision.

¶2      In reviewing an agency’s adjudicative decision, we view the
facts in the light most favorable to the agency’s findings. See Swift
Transp. v. Labor Comm’n, 2014 UT App 104, ¶ 2 n.1, 326 P.3d 678.
Evolocity employed Colbert to perform training and consulting for
approximately four years, from August 2008 to July 2, 2012.2 On
July 2, 2012, Evolocity sent an email to Colbert terminating her
employment:

       Due [to] an exodus of clients since the first of the
       year—along with a substantial decrease in new
       clients during this same time, [Evolocity] is faced
       with making some difficult choices going forward.

       One of these choices is that we feel it necessary at this
       time to cut the amount we pay each month for IC
       retainers.[3]

       As such, we regret to inform you that we need to
       suspend services from you at this time.

       However, due [to] your service and level of
       commitment, we would be interested in retaining
       you again in the future should we be able to bring on

2. The nature of Colbert’s employment with Evolocity is discussed
in more detail in a related appeal, in which this court declined to
disturb the Department’s determination that Colbert was
Evolocity’s employee rather than an independent contractor. See
generally Evolocity v. Department of Workforce Servs., 2015 UT App 61.

3. Evolocity characterizes its workers as independent contractors.
An “IC retainer” is a set biweekly salary that each worker is paid
according to his or her employment contract. See Evolocity v.
Department of Workforce Servs. 2015 UT App 61, ¶ 3.

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           Evolocity v. Department of Workforce Services

      enough new clients and retain clients going forward
      so as to have the revenue needed to re-retain your
      services.

      We’d also like to offer you 2-weeks worth of regular
      payout to retain you/your time over these two
      weeks.

      During this two week period we’d like to pay you for
      consulting and training other IC team, completing
      projects in queue and otherwise fulfilling as
      previously expected.

      Again, we regret having to make this decision, and
      know that you must also know and understand that
      as a company we simply do not have the clientele
      base at present to sustain ongoing full IC retainers as
      we have done . . . .

      Be assured that, should you want to continue
      working with [E]volocity in the future and should
      [E]volocity be able to regain [its] needed revenue
      flow—we would strongly consider re-engaging your
      services.

Evolocity’s email to Colbert made no mention of Colbert’s
performance or any dissatisfaction with her work. Colbert
performed some work for Evolocity over the next few days but was
locked out of Evolocity’s system on July 5, 2012.

¶3     Colbert applied to the Department for unemployment
benefits. Evolocity opposed her application, arguing that Colbert
either quit or was discharged for just cause. An administrative law
judge held a hearing on the matter over the course of several days.
The administrative law judge ultimately concluded that Colbert
had been discharged without just cause and was therefore entitled
to unemployment benefits. Evolocity appealed to the Department’s

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           Evolocity v. Department of Workforce Services

appeals board, which affirmed the administrative law judge’s
decision. Evolocity now seeks judicial review of the Department’s
decision.

¶4     Evolocity first challenges the Department’s determination
that Colbert did not voluntarily quit but was discharged by
Evolocity. “Under rules governing the Department of Workforce
Services, a separation is considered voluntary if the claimant was
the ‘moving party in ending the employment relationship.’” Davis
v. Department of Workforce Servs., 2012 UT App 158, ¶ 3, 280 P.3d 442
(quoting Utah Admin. Code R994-405-101(1)). “‘A separation is a
discharge,’ however, ‘if the employer was the moving party in
determining the date the employment ended.’” Id. (quoting Utah
Admin. Code R994-405-201). The Department’s finding that Colbert
was discharged is a “fact-like” determination, and we grant
deference to the Department’s decision as a matter of institutional
competence. See Hansen v. Department of Workforce Servs., 2014 UT
App 231, ¶ 8, 336 P.3d 1087. Accordingly, we will not reweigh the
evidence and substitute our conclusion for that of the Department.
Migliaccio v. Labor Comm’n, 2013 UT App 51, ¶ 7, 298 P.3d 676.
Instead, we will “uphold the [Department’s] determination if it is
supported by substantial evidence.” Hansen, 2014 UT App 231, ¶ 8.
“Substantial evidence is more than a mere scintilla of evidence . . .
though something less than the weight of the evidence.” Cook v.
Labor Comm’n, 2013 UT App 286, ¶ 14, 317 P.3d 464 (omission in
original) (citation and internal quotation marks omitted).

¶5     Here, the Department determined that Evolocity was the
moving party in terminating the employment relationship because
Evolocity issued a notice of termination on July 2, “[t]he plain
language of the termination notice clearly shows [Evolocity’s]
intent to terminate [Colbert],” and Evolocity terminated Colbert
three days later. “If a separation decision has been made, it is
generally demonstrated by giving notice to the claimant.” Utah
Admin. Code R994-405-206(1). The July 2 termination notice alone
provides a sufficient evidentiary basis for the Department’s
determination that Evolocity was the moving party in terminating

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            Evolocity v. Department of Workforce Services

Colbert. However, other evidence from the hearing also supports
the Department’s decision, including testimony from Evolocity’s
“Independent Contractor Consultant,” who had prepared the
termination notice on behalf of Evolocity. While the consultant
testified that Evolocity had intended to terminate Colbert only if
she did not improve her performance, he conceded that the notice
could be interpreted as terminating Colbert’s employment at that
time. The Department’s determination is therefore supported by
substantial evidence. Hansen, 2014 UT App 231, ¶ 8.

¶6     Evolocity argues that Colbert’s separation was nevertheless
a quit because Colbert “walked away from her contractual
relationship with Evolocity two weeks before it was scheduled to
be concluded.” If a claimant leaves work in anticipation of a
discharge that would not disqualify the claimant from benefits, that
separation is a quit. Utah Admin. Code R994-405-204(2). Evolocity
claims that the Department “disregarded evidence” that
established Colbert was expected to work for Evolocity for an
additional two weeks and that Colbert left work before that two-
week period ended.

¶7      “It is the province of the [Department], not appellate courts,
to resolve conflicting evidence, and where inconsistent inferences
can be drawn from the same evidence, it is for the [Department] to
draw the inferences.” Davis, 2012 UT App 158, ¶ 6 (citation and
internal quotation marks omitted). The Department found that
Colbert “did not refuse available work and did not leave
employment.” Both Colbert and another Evolocity worker testified
at the hearing that Colbert continued to perform work for Evolocity
up until July 5 and possibly beyond that date.4 Thus, there is

4. Throughout its brief, Evolocity asserts that much of Colbert’s
testimony was disproven, shown to be false, or shown to be
perjured. However, the Department apparently found Colbert
credible, and Evolocity has directed us to no finding that Colbert
                                                     (continued...)

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           Evolocity v. Department of Workforce Services

evidence in the record to support the Department’s determination
that Colbert did not leave her employment before she was
discharged on July 5. Accordingly, “we defer to the [Department’s]
assessment of credibility and resolution of [the] conflicting
evidence.” Id. We therefore decline to disturb the Department’s
decision that Colbert did not voluntarily quit but was discharged
by Evolocity.5

¶8     Evolocity next challenges the Department’s determination
that Colbert’s discharge was not for “just cause.” Unemployment
benefits will be denied if the claimant was discharged for just
cause. Utah Admin. Code R994-405-201. “A just cause discharge
must include some fault on the part of the claimant,” id., and the
employer bears the burden to prove there was just cause for
discharging the claimant, id. R994-405-203. To establish just cause
for a discharge, the employer must prove three elements:
culpability, knowledge, and control. Id. R994-405-202. The
employer’s failure to establish any of the elements will result in a

4. (...continued)
perjured herself. Thus, because “it is not this court’s role to judge
the relative credibility of witnesses,” we defer to the Department’s
assessment of Colbert’s credibility and truthfulness. See Uintah
County v. Department of Workforce Servs., 2014 UT App 44, ¶ 4, 320
P.3d 1103 (citation and internal quotation marks omitted).

5. Evolocity argues that the Department improperly relied on the
termination notice in making its determination because rule R994-
405-204 of the Utah Administrative Code provides that “[t]he
conclusions on the employer’s records, the separation notice, or the
claimant’s report are not controlling.” (Emphasis omitted.)
However, this regulation merely provides that the Department is
not bound by the reasons expressed in the separation notice; it does
not preclude the Department from considering the separation
notice and affording it whatever evidentiary weight the
Department deems appropriate.

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           Evolocity v. Department of Workforce Services

determination that the employee was discharged without just
cause. Id.

¶9     To demonstrate culpability, the employer must show that
the claimant was discharged for conduct “so serious that
continuing the employment relationship would jeopardize the
employer’s rightful interest.” Id. R994-405-202(1). The Department
concluded that, while Evolocity “had concerns about [Colbert’s] job
performance on certain assignments, it failed to show [Colbert’s]
performance was consistently poor such that it justified the
decision to discharge her.” In support of this conclusion, the
Department observed that the termination notice makes no
mention of Colbert’s job performance and expressly states that as
a result of Colbert’s “service and level of commitment,” she would
be welcomed back to work if Evolocity had sufficient clients in the
future. The Department also noted that if Colbert’s performance
was so poor as to necessitate a discharge, it would not make sense
for Evolocity to offer Colbert the opportunity to work an additional
two weeks. Again, the termination notice alone is sufficient
evidence to support the Department’s determination on this point.

¶10 Evolocity asserts that the Department’s decision is erroneous
because the evidence shows a “litany of severe performance
deficienc[ies]” on Colbert’s part and that these “ongoing, repeated
performance deficiencies, dating back to the autumn of 2011,
created ongoing troubles for Evolocity.” However, the relevant
“cause for discharge is the conduct that motivated the employer to
make the decision to discharge the claimant.” Id. R994-405-206(1).
“If a separation decision has been made, it is generally
demonstrated by giving notice to the claimant.” Id. “If the
discharge did not occur immediately after the employer became
aware of an offense, a presumption arises that there were other
reasons for the discharge.” Id. R994-405-206(2). The Department
concluded that “[t]he termination notice is the best indication of
[Evolocity’s] intentions at the time of the discharge.” Thus, the
Department determined that at the time of Colbert’s discharge,
Evolocity had chosen to discharge her for “an inability to pay for

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            Evolocity v. Department of Workforce Services

her services any longer” and not as a result of her job performance.
While the Department recognized that Evolocity “had grown
dissatisfied with [Colbert’s] job performance,” it observed that any
performance deficiencies on Colbert’s part had been “ongoing and
left unchecked” and therefore could not be “so serious as to require
immediate separation.” Thus, any evidence that Colbert may have
performed poorly in the past does not undermine the Department’s
determination that Colbert was not discharged for conduct that
required her immediate separation.

¶11 The record evidence supports the Department’s
determination that Evolocity failed to establish Colbert’s culpability
for her discharge. Accordingly, we need not consider whether
Evolocity demonstrated Colbert’s knowledge of or control over the
circumstances of her discharge. Id. R994-405-202. We therefore
decline to disturb the Department’s determination that Colbert was
discharged without just cause.

¶12 Last, Evolocity argues that the administrative law judge
improperly limited the scope of testimony at the hearing to only
the issue of whether Colbert quit or was discharged and did not
allow testimony regarding whether any discharge was justified. As
a result, Evolocity asserts that it was “deprived of the opportunity
to present live testimony from other independent contractors who
had interacted with Ms. Colbert, and could explain the written
record and speak to both her performance deficiencies and their
impact on Evolocity’s business operations.” Evolocity claims that
the exclusion of this testimony deprived Evolocity of a full and fair
hearing in violation of both its statutory and constitutional rights.

¶13 Even if we assume that the administrative law judge
improperly limited Evolocity’s witnesses from testifying as to the
“just cause” issue, Evolocity has failed to demonstrate that it was
prejudiced by this error. Under the Administrative Procedures Act,
“an appellate court may reverse an agency’s decision ‘only if, on
the basis of the agency’s record, it determines that a person seeking
judicial review has been substantially prejudiced’” by the agency’s

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           Evolocity v. Department of Workforce Services

erroneous decision. Smith v. Department of Workforce Servs., 2010 UT
App 382, ¶ 16, 245 P.3d 758 (quoting Utah Code Ann. § 63G-4-
403(4)(e) (LexisNexis 2008)). Thus, an error will be deemed
harmless unless there is a reasonable likelihood that the outcome
of the proceedings would have been different absent the error. See
id. ¶¶ 16–18. The burden of establishing prejudice belongs to the
party challenging the agency’s decision. Id. ¶ 17.

¶14 Here, Evolocity concedes that the Department had “a
significant written record” detailing Colbert’s performance and the
circumstances of her discharge. However, Evolocity asserts that
additional live testimony would have “bolstered the written
record.” Yet Evolocity does not explain how the outcome of the
hearing would have been different if Evolocity had presented the
testimony it claims was improperly excluded. Particularly where
the Department relied in large part on the termination notice and
the testimony of the author of that notice in making its
determination, it is entirely unclear how the testimony of
independent contractors who had no role in Colbert’s discharge
would have made any difference to the Department’s decision. We
therefore conclude that Evolocity has failed to meet its appellate
burden on this point. Because Evolocity has not shown that it was
substantially prejudiced by the manner in which the administrative
law judge conducted the hearing, we conclude that any error
committed by the administrative law judge was harmless. Id. ¶ 16.

¶15    We decline to disturb the Department’s decision.

20130025-CA                      9                 2015 UT App 62