RENDERED: APRIL 13, 2018; 10:00 A.M. NOT TO BE PUBLISHED Commonwealth of Kentucky Court of Appeals NO. 2017-CA-000133-MR PHILOMENA SOARES-GAKPO APPELLANT APPEAL FROM FAYETTE CIRCUIT COURT v. HON. THOMAS L. CLARK, JUDGE ACTION NO. 12-CI-00402 KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION; AND BOARD OF TRUSTEES OF THE UNIVERSITY OF KENTUCKY APPELLEES OPINION VACATING AND REMANDING ** ** ** ** ** BEFORE: DIXON, JOHNSON, AND TAYLOR, JUDGES. TAYLOR, JUDGE: Philomena Soares-Gakpo brings this appeal from a December 20, 2016, Opinion and Order of the Fayette Circuit Court affirming the Order of the Kentucky Unemployment Insurance Commission that determined she was
disqualified from receiving unemployment insurance benefits. We vacate and remand. Appellant was employed as a medical technologist for the University of Kentucky Medical Center (UK) from September 17, 1990, until September 23, 2010. The underlying facts giving rise to this appeal were summarized by the circuit court as follows: In 1999, UK merged its hematology clinic with its chemistry laboratory in order to form a new core laboratory. Since Petitioner spent significant amounts of time in the operating room laboratory, she lost some of the skillsets necessary for general laboratory competencies. Later in 1999, Petitioner began crosstraining in order to meet the core laboratory competencies. Due to her commitment to the operating room laboratory, she was not able to fully complete these core laboratory competencies. Petitioner was the sole technologist assigned to the operating room laboratory and had limited time to engage in cross-training. In 2008, Petitioner began transitioning from the operation room laboratory to the core laboratory, which required her preparation through continued cross-training in certain laboratory competencies. On August 28, 2008, the core laboratory director, Melanie Browning (hereinafter "Browning"), issued a performance improvement plan to aid in Petitioner's transition. In 2009, Petitioner was fully reassigned and transitioned to the core laboratory and was required to be fully crosstrained in order to fulfill the competency requirements for the core laboratory. This reassignment included a change in Petitioner's job duties and requirements. During this time, there were also changes made to the laboratory competency requirements. -2-
Browning further expressed concern that Petitioner was not forming relationships with the staff in the core laboratory. A number of co-workers lodged complaints to Browning concerning Petitioner's inappropriate workplace behavior. In June, 2009, Browning placed Petitioner on a performance improvement plan in order to address questions and concerns about her work performance. On August 28, 2009, Petitioner received an oral warning due to her inappropriate behavior towards Browning. As Petitioner began working full-time in the core laboratory, she was given additional training on the core laboratory competency requirements. Her trainers noted that Petitioner was not able to reach proficiency in all required areas. On March 23, 2010, Browning prepared a memorandum documenting concerns with Petitioner's work performance. Petitioner was struggling to meet the ever-growing needs to the core laboratory, even during her transition period. Several days later, Browning issued Petitioner a written warning, discussing these issues. On April 16, 2010, Petitioner was offered early retirement with a severance package. UK informed Petitioner if she refused the offer, that she would receive ten more days of training and would have a final attempt to achieve competency in the core laboratory requirements. Petitioner filed a formal grievance with UK's human resources department, asserting racial discrimination and harassment. Following investigation into Petitioner's claims, UK responded with another offer of early retirement and severance. Petitioner refused retirement and during the summer of 2010, was given one additional opportunity to achieve competency in the chemistry area, which included ten days of training. Petitioner still did not meet competency levels in the chemistry area after this ten-day training. -3-
Once again, Petitioner was offered retirement, or in the alternative, a position in the core laboratory working in areas which she was trained and deemed competent. She would still need to meet new training requirements, but would not participate in areas which she has already been deemed incompetent. This offer, which was extended to Petitioner on September 10, 2010, additionally provided that Petitioner's pay would remain the same and that she would continue reporting to her same supervisor.[ 1 ] Petitioner's original position would no longer be available to her. Petitioner discontinued her employment with UK, effective September 23, 2010. Shortly after her departure from UK, Petitioner filed for unemployment benefits. The KUIC [Kentucky Unemployment Insurance Commission] denied her application and Petitioner appealed. After five hearings were conducted, the referee issued a decision on September 30, 2011, overturning the KUIC's initial determination. The referee found that Petitioner was entitled to unemployment benefits because her performance and behavior issues did not rise to a level of misconduct justifying [an involuntary] discharge of employment. UK appealed this decision to the KUIC, whereby the KUIC subsequently overturned the referee's decision. Citing KRS 341.370, the KUIC held that Petitioner voluntarily left her job with UK by "refusing to accept a change in her position at the same rate of pay but with slight change in responsibilities." Although the KUIC acknowledged a change in job title, they held that "the offered job was still quite similar to [Petitioner's] original position." Petitioner moved KUIC to reconsider its opinion on the grounds that the new position was different and inferior to her position as a medical 1 It is undisputed that the University of Kentucky s offers of continued employment included the provision that appellant release all existing claims against UK. -4-
technologist in the core laboratory. The KUIC denied reconsideration on January 10, 2012. On January 23, 2012, Petition filed a Complaint with [the Fayette Circuit] Court. Petitioner first argues that KRS 341.370 does not apply because the job Petitioner refused was not the most recent position she held at UK. Second, Petitioner argues that she had good grounds for refusal because UK conditioned the offer on a full release of discrimination claims she was then asserting against the University. Opinion and Order at 1-5. By Opinion and Order entered December 20, 2016, the circuit court affirmed the Order of the Commission determining that appellant was disqualified from receiving unemployment insurance benefits. The circuit court concluded that appellant voluntarily refused UK s offer of continued employment without good cause: Petitioner argues that she had good cause to refuse UK s offer for continued employment because the offer was contingent upon releasing her claims against UK for racial discrimination and harassment. During the referee hearing, Petitioner did not introduce evidence suggesting that releasing her legal claims would create a circumstance so compelling as to leave no reasonable alternative but loss of employment. In fact, the condition of releasing her legal claims against UK is a condition ancillary to the job and thus, is not attributable to the work. The record further shows that Petitioner did not attempt to negotiate the terms of this offer, but rather, refused the offer of continued employment outright. Substantial evidence supports the KUIC s finding that under KRS [Kentucky Revised Statutes] 341.370(1)(c), Petitioner voluntary [sic] refused suitable work without good cause attributable to the work. -5-
Opinion and Order at 7. This appeal follows. The judicial standard of review applicable to a decision of the Unemployment Insurance Commission has been recently set forth as follows: Judicial review of a decision of the Kentucky Unemployment Insurance Commission is governed by the general rule applicable to administrative actions. If the findings of fact are supported by substantial evidence of probative value, then they must be accepted as binding and it must then be determined whether or not the administrative agency has applied the correct rule of law to the facts so found. Southern Bell Tel. & Tel. Co. v. Kentucky Unemployment Ins. Comm'n, 437 S.W.2d 775, 778 (Ky. 1969) (citing Brown Hotel Co. v. Edwards, 365 S.W.2d 299 (Ky. 1962)). Substantial evidence has been defined as evidence which has sufficient probative value to induce conviction in the minds of reasonable people. Kentucky State Racing Comm'n v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972). If there is substantial evidence in the record to support an agency's findings, the findings will be upheld, even though there may be conflicting evidence in the record. Kentucky Comm'n on Human Rights v. Fraser, 625 S.W.2d 852, 856 (Ky. 1981). An agency's findings are clearly erroneous if arbitrary or unsupported by substantial evidence in the record. Id. If the reviewing court concludes the rule of law was correctly applied to facts supported by substantial evidence, the final order of the agency must be affirmed. Brown Hotel Co., 365 S.W.2d at 302. Ky. Unemployment Ins. Comm n v. Cecil, 381 S.W.3d 238, 245-46 (Ky. 2012). And, as an appellate court, we step into the shoes of the circuit court to directly review the Commission s decision. Id. -6-
Appellant contends the Commission erroneously found that she voluntarily quit her job with UK without good cause. Rather, appellant maintains that the evidence compels a finding that UK involuntarily discharged her from employment. Kentucky Revised Statutes (KRS) 341.370 sets forth the statutory disqualifications relating to unemployment insurance benefits: (1) A worker shall be disqualified from receiving benefits for the duration of any period of unemployment with respect to which: (a) He has failed without good cause either to apply for available, suitable work when so directed by the employment office or the secretary or to accept suitable work when offered him, or to return to his customary self-employment when so directed by the secretary; or (b) He has been discharged for misconduct or dishonesty connected with his most recent work, or from any work which occurred after the first day of the worker's base period and which last preceded his most recent work, but legitimate activity in connection with labor organizations or failure to join a company union shall not be construed as misconduct; or (c) He has left his most recent suitable work or any other suitable work which occurred after the first day of the worker's base period and which last preceded his most recent work voluntarily without good cause attributable to the employment. No otherwise eligible worker shall be disqualified from receiving benefits for: -7-
.... (6) Discharge for misconduct as used in this section shall include but not be limited to, separation initiated by an employer for falsification of an employment application to obtain employment through subterfuge; knowing violation of a reasonable and uniformly enforced rule of an employer; unsatisfactory attendance if the worker cannot show good cause for absences or tardiness; damaging the employer's property through gross negligence; refusing to obey reasonable instructions; reporting to work under the influence of alcohol or drugs or consuming alcohol or drugs on employer's premises during working hours; conduct endangering safety of self or co-workers; and incarceration in jail following conviction of a misdemeanor or felony by a court of competent jurisdiction, which results in missing at least five (5) days work. Under KRS 341.370(1)(b), a worker is disqualified from receiving unemployment insurance benefits if she was discharged by the employer for misconduct or dishonesty. And, under KRS 341.370(1)(c), a worker is also disqualified from receiving unemployment benefits if she left suitable work voluntarily and without good cause attributable to her employment. In this appeal, the pivotal issue is whether appellant was discharged from employment by UK or voluntarily quit her employment with UK. The referee determined that appellant was discharged by UK and was entitled to unemployment benefits; however, the Commission reversed the referee s decision, concluding that appellant voluntarily quit her employment. The relevant facts surrounding this pivotal issue are undisputed, and our case law has defined -8-
voluntary, as utilized in KRS 341.370(1)(c), to mean a decision to quit that is freely given and proceeding from one s own choice or full consent. Thompson v. Ky. Unemployment Ins. Comm n, 85 S.W.3d 621, 625 (Ky. App. 2002) (quoting Ky. Unemployment Ins. Comm n v. Young, 389 S.W.2d 451, 453 (Ky. 1965) and Nichols v. Ky. Unemployment Ins. Comm n, 677 S.W.2d 317, 321 (Ky. App. 1984)). Based upon the uncontroverted facts, it is clear that appellant did not voluntarily quit her employment with UK. Rather, UK terminated appellant. In a Notice of Termination dated September 23, 2010, UK informed appellant that she was immediately terminated from her position and listed the reasons for her involuntary discharge as unsuitable job performance, inability to perform assigned duties and failure to act in a courteous or appropriate manner toward University employees. September 23, 2010, Notice of Termination. The Commission erroneously equated appellant s failure to accept UK s offers of alternative job placement with her voluntarily refusing continued employment with UK. Additionally, UK s offers of alternative job placement and early retirement with severance were made strictly contingent upon appellant fully releasing all existing claims she had against UK. These offers were fundamentally more than simple offers of continued employment or retirement and legally appear to be of settlement offers. More importantly, the undisputed facts do not reveal that -9-
appellant s separation from employment was freely given or was the result of her full consent. See Thompson, 85 S.W.3d 621. Accordingly, we conclude that the Commission erred by determining that appellant voluntarily quit her employment within the meaning of KRS 341.370(1)(c). We, thus, reverse the circuit court s opinion and order affirming the Commission s order reversing the referee s decision. Upon remand, the Commission shall determine whether the involuntary discharge of appellant was for misconduct or dishonesty as set forth in KRS 341.370(1)(b). If the Commission concludes that the involuntary discharge was attributed to appellant s misconduct or dishonesty, appellant is disqualified from receiving unemployment insurance benefits KRS 341.370(1)(b). If the Commission concludes otherwise, appellant is entitled to such benefits. 2 We view any remaining contentions of error as moot or without merit. For the foregoing reasons, the Opinion and Order of the Fayette Circuit Court is vacated and remanded for proceedings consistent with this Opinion. ALL CONCUR. 2 We believe that the Kentucky Unemployment Insurance Commission as fact-finder is better suited to initially decide the issue of misconduct or dishonesty under Kentucky Revised Statutes 341.370(1)(b). As an appellate court, we simply review such decisions for arbitrariness. -10-
BRIEFS AND ORAL ARGUMENT AND FOR APPELLANT: Katherine K. Yunker Lexington, Kentucky BRIEF AND ORAL ARGUMENT FOR APPELLEE KENTUCKY UNEMPLOYMENT INSURANCE COMMISION: Kevin A. Osborne Frankfort, Kentucky BRIEF AND ORAL ARGUMENT FOR APPELLEE BOARD OF TRUSTEES OF THE UNIVERSITY OF KENTUCKY: Barbara A. Kriz Lexington, Kentucky -11-