Rob M. Galey v. Employment Appeal Board and Wapello Rural Water Association, Inc. , 922 N.W.2d 105 ( 2018 )

IN THE COURT OF APPEALS OF IOWA
No. 17-1199
Filed July 18, 2018
ROB M. GALEY,
Plaintiff-Appellant,
vs.
EMPLOYMENT APPEAL BOARD and WAPELLO RURAL WATER
ASSOCIATION, INC.,
Defendants-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Robert B. Hanson,
Judge (remand), and Eliza J. Ovrom, Judge (ruling).
A fired worker appeals the judicial review order upholding a denial of
unemployment benefits. AFFIRMED.
Billy J. Mallory of Brick Gentry, P.C., West Des Moines, for appellant.
Rick Autry, of Employment Appeal Board, Des Moines, for appellees.
Considered by Vaitheswaran, P.J., and Potterfield and Tabor, JJ.
2
TABOR, Judge.
A fired worker challenges the denial of unemployment benefits based on
the revocation of his driving privileges following an arrest for operating while
intoxicated (OWI). The worker, Rob Galey, contends “an isolated OWI first offense
and anticipated loss of a driver’s license” should not be viewed as disqualifying
job-related misconduct under Iowa Code section 96.5(2) (2015). Because the bulk
of Galey’s job as a service technician for the Wapello Rural Water Association
required driving a truck from location to location to meet customer needs, the
Employment Appeal Board (EAB) identified his failure to maintain a driver’s license
as misconduct connected to his work. On judicial review, the district court upheld
the agency decision.
In this appeal, Galey raises two issues. First, Galey contends the district
court abused its discretion in remanding for additional evidence to be submitted to
the agency. Second, he maintains the record does not support the determination
he was fired for job-related misconduct and the EAB decision is irrational, illogical,
or wholly unjustifiable. Because Galey’s subsequent guilty plea and sentence was
relevant to the question of misconduct, we find no abuse of discretion in the
remand. And because, like the district court, we find substantial evidence
supporting the agency’s identification of misconduct, and the decision was not
irrational, illogical, or wholly unjustifiable, we affirm.
I. Facts and Prior Proceedings
Galey worked as a full-time service technician for the rural water association
from 2005 until 2016. As a service technician, he was continually called to drive
3
around the multi-county territory served by the association. A valid driver’s license
was essential to completing his job duties.
On February 7, 2016, police arrested Galey for first-offense OWI while he
was driving his personal vehicle. Galey notified his supervisor and the
association’s general manager about the arrest and the possibility Galey would
lose his driver’s license. On February 10, the association’s governing board met
and discussed Galey’s situation. The board decided if Galey lost his license the
association would need to end his employment immediately. The board informed
Galey of its decision on February 11. Galey then informed his supervisors on
February 15 that he was required to surrender his driver’s license that same day.
The association followed through with the board’s decision and terminated Galey’s
employment February 15, 2016.
Galey filed a claim for unemployment benefits but the claim was denied
because the Iowa Workforce Development, Claims Section, determined Galey was
discharged for misconduct. Galey appealed, and an administrative law judge (ALJ)
upheld the denial of benefits. The ALJ found (1) Galey was terminated because
he no longer held a valid driver’s license; (2) Galey was aware his job required him
to have a valid license and he would not be able to complete his duties without
one; and (3) Galey’s failure to maintain his driver’s license, as a known condition
of his employment, constituted misconduct sufficient to deny unemployment
benefits. Galey appealed to the EAB, contending an arrest for OWI first offense
and anticipated loss of a driver’s license did not constitute misconduct. Galey also
claimed the evidence was insufficient to find misconduct because at the time he
was discharged he had not yet lost his license—contrary to what he had informed
4
his employer. The EAB unanimously affirmed the ALJ’s decision and adopted the
findings of fact and conclusions of law as its own. Galey then sought judicial
review.
In the district court, Galey contended the EAB’s ruling was not supported by
substantial evidence in the record made before the agency and was irrational,
illogical, or wholly unjustifiable. Part of Galey’s contention stemmed from apparent
miscommunication as to when his license revocation began. Despite telling his
employer he could not legally drive as of February 15, Galey later claimed he was
not required to surrender his license until February 17. So Galey reasoned the
association’s decision to terminate his employment could not have been based on
his lack of a driver’s license.
Galey also argued no evidence showed he intentionally or deliberately did
any of the following: (1) set out to lose his driver’s license; (2) acted in a manner
that would prevent him from carrying out his job duties; (3) materially breached the
duties of his employment; (4) acted in willful or wanton disregard of the employer’s
interest or in deliberate violation or disregard of standards of behavior which the
employer has the right to expect of employees; or (5) repeatedly acted in a manner
inconsistent with the employer’s interests or his job duties. See generally Iowa
Admin. Code r. 871–24.32(1)(a) (defining misconduct within meaning of Iowa Code
section 96.5(2)).
Lastly, Galey noted the EAB had commented in its written decision,
“[U]nderstanding that DOT regulations for license revocation occurs only when a
driver tests positive on a test administered for drunk driving, we find that the
Claimant’s positive test result is sufficient for the Board to find that job-related
5
misconduct was established.” Galey asserted nothing in the record supported the
suggestion he had failed a chemical test administered for OWI and he claimed the
EAB misstated the conditions for revocation of a driver’s license.
After Galey raised the evidentiary issues related to his OWI, the employer
and the EAB filed a joint motion under Iowa Code section 17A.19(7) to remand for
the parties to submit additional evidence before the agency. The employer wanted
the agency to consider three documents from Galey’s OWI case: the trial
information, his written guilty plea, and the judgment order. Galey resisted the
motion, but the district court concluded the three documents were material,
addressed an issue Galey continued to contest, and good cause existed for the
employer’s failure to present the documents in the contested case proceeding.
The district court remanded the matter to the EAB.
The EAB then reviewed the entire record including the three new
documents and affirmed its prior decision with two modifications: (1) it added to
the findings of fact, “On February 7, 2016, the Claimant drove a motor vehicle in
violation of 321J.2(1)(a). It was this act by the Claimant that caused him to lose
his driver’s license pursuant to Iowa Code § 321J.12, which in turn meant that he
could no longer perform his job for the Employer.” And (2) it added to the
conclusions of law,
Since the Claimant’s intentional criminal act led to his loss of
his license, and since he knew his license was an essential job
requirement, he committed job-related misconduct when he drove
drunk and as a result lost his driver’s license. See Cook v. IDJS, 299
N.W.2d 698, 702 (Iowa 1980) (‘While he received most of his driving
citations during non-work hours and in his personal car, they all bore
directly on his ability to work for Hawkeye.’).
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Upon return to the district court, Galey maintained his prior contentions and
also asserted the new documents did not establish he committed an intentional or
deliberate act constituting misconduct. Galey insisted the plea, judgment, and
sentencing occurred after he was fired and therefore could not be the reason for
his discharge.
The district court concluded Galey’s loss of his driver’s license, whether it
resulted from conduct on or off duty, was connected to his employment. In the
court’s view, because Galey was aware he needed a valid driver’s license to
perform his job duties, his decision to operate a motor vehicle while intoxicated
resulting in the loss of his license showed a willful and wanton disregard of his
duties and obligations to his employer. The district court concluded the EAB’s
decision was supported by substantial evidence and that the determination Galey
losing his license constituted misconduct was not irrational, illogical, or wholly
unjustifiable. The court affirmed the EAB. Galey now contests the judicial review
decision.
II. Scope and Standards of Review
Our review of unemployment benefit cases is governed by the
Administrative Procedure Act, Iowa Code chapter 17A. Harrison v. Emp’t Appeal
Bd., 659 N.W.2d 581, 586 (Iowa 2003). In appeals from judicial review of agency
action, our review is limited to correction of errors at law. Gaffney v. Dep’t of Emp’t
Servs., 540 N.W.2d 430, 433 (Iowa 1995). We review the district court’s decision
by applying the standards of section 17A.19 to agency action to determine if our
conclusions are the same as those reached by the court. Univ. of Iowa Hosps. &
Clinics v. Waters, 674 N.W.2d 92, 95 (Iowa 2004).
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We review the district court’s decision to remand to the agency to take and
consider new evidence for an abuse of discretion. Zenor v. Iowa Dep’t of Transp.,
558 N.W.2d 427, 431 (Iowa Ct. App. 1996). To show an abuse of discretion, Galey
must show the court exercised its discretion “on grounds or for reasons clearly
untenable or to an extent clearly unreasonable.” See id. (citation omitted).
The EAB is authorized by the legislature to determine if a claimant “has
been discharged for misconduct in connection with the individual’s employment.”
Iowa Code § 96.5(2). The agency’s findings of fact are binding on appeal if they
are supported by substantial evidence when the record is reviewed as a whole.
Sharp v. Emp’t Appeal Bd., 479 N.W.2d 280, 282 (Iowa 1991). Substantial
evidence is “the quantity and quality of evidence that would be deemed sufficient
by a neutral, detached, and reasonable person, to establish the fact at issue when
the consequences resulting from the establishment of that fact are understood to
be serious and of great importance.” Iowa Code § 17A.19(10)(f)(1). Our task is
not to determine whether the evidence supports a different finding but to determine
whether substantial evidence supports the findings actually made. Cedar Rapids
Cmty. Sch. Dist. v. Pease, 807 N.W.2d 839, 845 (Iowa 2011). We do not afford
deference to an agency’s legal interpretations unless the legislature vested
interpretive authority in the agency. Renda v. Iowa Civil Rights Comm’n, 784
N.W.2d 8, 11 (Iowa 2010). Here, we do not defer to the EAB’s legal interpretation
regarding what constitutes misconduct in connection with employment. See Irving
v. Emp’t Appeal Bd., 883 N.W.2d 179, 185 (Iowa 2016).
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III. Analysis
A. Did the district court abuse its discretion when it remanded to
the agency for the taking of additional evidence?
“In judicial review of a contested case proceeding the district court is limited
to the record made before the agency.” Mary v. Iowa Dep’t of Transp., 382 N.W.2d
128, 131 (Iowa 1986). But the court may order “additional evidence be taken
before the agency” if the court believes the evidence is material and good reasons
appear for the failure to present it in the contested case proceeding. Iowa Code
§ 17A.19(7). The agency may modify its findings and decision in the case based
on the additional evidence. Id.
Galey contends the district court abused its discretion in remanding for the
agency to consider additional evidence—his guilty plea and sentence—which he
argues could not have been material to the employer’s reason for firing him
because those events did not occur until months later. 1 The EAB defends the
remand, urging the additional evidence was material because Galey attacked the
agency’s finding that the DOT would revoke his driver’s license.2
1
Galey relies on Lee v. Employment Appeal Board., 616 N.W.2d 661, 669 (Iowa 2000) for
the proposition that the EAB cannot deny benefits based on an employee’s conduct—in
Lee’s case refusal to accept a two-week suspension—which occurs after the events giving
rise to the employer’s decision to fire. Galey’s subsequent act of pleading guilty was not
new conduct considered by the agency; rather, the plea and sentence verified the reasons
already cited by the employer.
2
Galey questions the accuracy of the EAB’s analysis concerning the DOT regulations for
license revocations and chemical testing. The agency record, even after the additional
evidence, does not reveal whether Galey tested over the legal limit or refused a chemical
test. But in either instance, he would face a license revocation by the DOT—see Iowa
Code §§ 321J.9, 321J.12—as he informed his employer.
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Evidence fits the definition of “material” if it is “reasonably capable” of
influencing an agency’s decision. Interstate Power Co. v. Iowa State Commerce
Comm’n, 463 N.W.2d 699, 702 (Iowa 1990). Here, Galey’s admission to the
conduct that lead to his loss of driving privileges could reasonably bolster the EAB
decision to deny benefits; in fact, the agency’s modifications to its decision
following the remand bear this out. See id. at 703. The district court did not abuse
its discretion.
B. Does substantial evidence support the EAB determination the
employee committed misconduct?
Iowa law disqualifies employees from receiving unemployment
compensation if they are discharged for misconduct. See Iowa Code § 96.5(2);
Freeland v. Emp’t Appeal Bd., 492 N.W .2d 193, 196 (Iowa 1992). The statute
does not define “misconduct,” but agency rules describe it as a “deliberate act or
omission by a worker which constitutes a material breach of duties and obligations
arising out of such worker’s contract of employment.” Iowa Admin. Code r. 871–
24.32(96)(1); Freeland, 492 N.W.2d at 196. Our supreme court has held the
agency rule definition to be an accurate reflection of legislative intent. Freeland,
492 N.W.2d at 196 (citing Kleidosty v. Emp’t Appeal Bd., 482 N.W.2d 416, 416–17
(Iowa 1992)).
Misconduct leaving a worker ineligible for unemployment benefits is not the
same as misconduct for purposes of termination by an employer. See Lee, 616
N.W.2d at 665 (“Misconduct serious enough to warrant the discharge of an
employee is not necessarily serious enough to warrant a denial of benefits.”
(quoting Reigelsberger v. Emp’t Appeal Bd., 500 N.W.2d 64, 66 (Iowa 1993))).
10
The denial-of-benefits question is whether the employee engaged in a “deliberate
act or omission,” conduct “evincing such willful or wanton disregard of an
employer’s interest as is found in deliberate violation or disregard of standards of
behavior which the employer has the right to expect of employees,” or conduct with
“carelessness or negligence of such degree of recurrence as to manifest equal
culpability.” See Iowa Admin. Code. r. 871–24.32(1)(a).
In this appeal, Galey reprises his two-pronged protest of the EAB decision.
Galey’s first objection involves timing. In his estimation, his employer could not
have based his February 15 discharge on the loss of his driver’s license because
that did not technically occur until two days later. Gailey’s second point is that loss
of his license was not job-related misconduct.
The district court rejected Galey’s first contention in a footnote: “The record
clearly demonstrates Petitioner informed Wapello he no longer had a valid driver’s
license on February 15, 2016, the date he was discharged from employment.” Like
the district court, we are unconcerned with the exact timing of Galey’s license
revocation. Substantial evidence supports the agency’s finding that Galey’s
inability to legally drive after his OWI arrest was the motivation for ending his
employment.
We turn to Galey’s second contention. Galey maintains because he was
not working or on call at the time of his arrest, and he was driving his personal
vehicle, the incident was not connected with his employment and cannot disqualify
him from unemployment benefits. Galey also insists he did not intentionally lose
his license or otherwise act in a way that would fit the regulatory definition of
misconduct. EAB counters that Galey’s deliberate act of driving while intoxicated
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impaired his ability to function on the job and thus constitutes employment-
connected misconduct.
Cook v. Iowa Department of Job Services, 299 N.W.2d 698 (Iowa 1980) is
instructive here. Cook worked as a delivery driver and notified his employer he
had numerous speeding citations, mostly for offenses during non-work hours. Id.
at 699. The employer’s insurance carrier could not insure Cook due to his driving
record, and the employer had no position available for Cook that did not require
driving. Id. at 700. In denying benefits, the agency concluded Cook voluntarily
quit his job, but the district court concluded he was discharged for misconduct,
which it described as “self-inflicted uninsurability.” Id. at 702. Although Cook did
not set out to become uninsurable, he persisted in violating traffic laws knowing
his citations affected his ability to work for his employer. See id. (affirming district
court’s rationale that Cook engaged in misconduct even though his violations
occurred during non-work hours and in his personal car). We see significant
parallels between Cook and Galey.
The disqualification statute does not mandate misconduct be committed on
the employer’s time or property—the misconduct need only be “in connection with
the individual’s employment.” See Iowa Code § 96.5(2). When it is not possible
to complete one’s job duties without a driver’s license, as is the case here, the loss
of an employee’s license due to a deliberate act, such as OWI, can be job-related
misconduct. This is true regardless of whether the employee was off duty or in a
personal vehicle at the time of the deliberate act. See Kleidosty, 482 N.W.2d at
418–19 (observing “[d]enial of unemployment compensation benefits for conduct
off the premises comports with cases decided by other jurisdictions.”); Pongdara
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v. Emp’t Appeal Bd., No. 08-0789, 2008 WL 4725334 at *5 (Iowa Ct. App. Oct. 29,
2008) (“We find the location [of the misconduct] irrelevant to the issue. To be
disqualifying, misconduct need only be ‘in connection with the individual’s
employment.’”).
Like Cook, Galey’s inability to carry out his key job duty—driving—was self-
inflicted. See Cook, 299 N.W.2d at 702. Galey drove while intoxicated, knowing
a valid driver’s license was a requirement of his continued employment. The
district court concluded Galey’s conduct evinced willful and wanton disregard of
his duties and obligations to his employer. We agree.
Substantial evidence supports the EAB’s finding Galey was discharged for
misconduct. Under the circumstances of this case, it was not irrational, illogical or
wholly unjustifiable for the EAB to decide Galey’s loss of his driving privileges due
to an OWI charge was employment-connected. We affirm the district court.
AFFIRMED.