City of Monticello, Iowa v. Employment Appeal Board ( 2018 )

IN THE COURT OF APPEALS OF IOWA
No. 18-0400
Filed November 21, 2018
CITY OF MONTICELLO, IOWA,
Plaintiff-Appellant,
vs.
EMPLOYMENT APPEAL BOARD,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Jones County, Kevin McKeever,
Judge.
A city appeals the judicial review order upholding the grant of
unemployment benefits to a former employee. AFFIRMED.
Douglas D. Herman, Monticello, for appellant.
Richard R. Autry of Employment Appeal Board, Des Moines, for appellee.
Considered by Danilson, C.J., and Vogel and Tabor, JJ.
2
TABOR, Judge.
The City of Monticello challenges the Employment Appeal Board’s award of
unemployment benefits to Tamera Bartram, the former parks and recreation
director. The city contends Bartram is ineligible for benefits because she
voluntarily ended her employment without good cause attributable to the city. In
the alternative, the city argues Bartram cannot receive benefits because she
refused an offer to work.
Like the district court on judicial review, we reject the city’s arguments.
Substantial evidence supports finding the city eliminated Bartram’s position and
the agency correctly applied the law to the facts. And the refusal-to-work
disqualification does not apply because the city’s offers were outside the benefit
year. Thus, we affirm the award of benefits.
I. Facts and Prior Proceedings
Bartram started working for the city in 2003 and became director of the
parks and recreation department in 2004. In December 2016, the city
administrator notified Bartram he planned to eliminate her position. In its place,
the city would create two new positions: a parks and recreation director and a
superintendent of parks and facilities. The city invited Bartram to apply for either
position if she wished to remain employed. Bartram applied only for the director
position. When she learned the city “gave that job to somebody else,” she cried.
3
She testified: “It told me that I wasn’t worth what I had been doing all these years”
and, “Honestly, I thought they just wanted to get rid of me.”1
The city did offer Bartram the superintendent position. But she declined.
Despite the city’s repeated attempts, Bartram could not be persuaded to accept
the superintendent position. Bartram worked until the city eliminated her position
on February 28, 2017.
After her employment ended, Bartram filed a claim for unemployment
benefits. In March 2017, a representative of Iowa Workforce Development (IWD)
denied her claim, stating “our records indicate you voluntarily quit work on
02/28/17.” The IWD cited Iowa Code section 96.5(1) (2017) as the basis for her
disqualification from receipt of benefits.2
Bartram appealed the IWD decision to an administrative law judge (ALJ)
who overturned the disqualification and found Bartram eligible for unemployment
benefits. The ALJ wrote:
Claimant applied for the director position, but was notified in January
that someone else had been offered the job. Claimant was offered
the superintendent position, which would have included much of the
same job duties, at the same rate of pay and benefits she was
currently receiving. Claimant turned that position down. Claimant
was told the new director would be starting on March 1 and agreed
to stay on in her current position until that time. The employer agreed
claimant would not have been allowed to remain in her position
beyond February 28, 2017.
1
Bartram’s testimony brings to mind a quote from fictional parks and recreation Deputy
Director Leslie Knope: “This is where the rubber of government meets the road of actual
human beings.” Parks and Recreation: Pilot (NBC television broadcast Apr. 9, 2009).
2
Section 96.5(1) lists “voluntary quitting” absent good cause attributable to the employer
as a basis for disqualification from benefits.
4
The ALJ thus found Bartram’s “position was no longer available effective March 1,
2017 . . . her separation was a layoff due to lack of work.”
The city appealed the ALJ’s decision to the Employment Appeal Board
(EAB), arguing the facts did not support the ALJ’s findings. In the city’s estimation:
“If there was a lack of work, she would not have been offered continuing
employment. She chose, voluntarily, without good cause attributable to the
employer, to leave her employ with the city.”3 The city also argued because
Bartram refused to accept the superintendent position, the refusal-to-work
disqualification should apply. See Iowa Code § 96.5(3).4
The EAB rejected the city’s argument and affirmed the ALJ’s ruling with
modifications addressing the refusal-to-work disqualification. Relying on Dico, Inc.
v. Employment Appeal Board, 576 N.W.2d 352, 355 (Iowa 1998), the EAB held the
refusal-to-work disqualification applies only when the employer offers work after a
claimant files for unemployment benefits. Because the city’s offers of the
superintendent position all occurred before Bartram filed for unemployment
benefits, the EAB concluded she was not disqualified.
The city sought judicial review. The district court framed two arguments:
“(1) the EAB’s findings were not supported by substantial evidence and (2) the
EAB incorrectly interpreted the law and incorrectly applied the facts to the law.”
The court held, “The record provides substantial evidence for the EAB’s factual
findings, including that Bartram’s position was eliminated by the City.” And
3
The regulation cited by the ALJ defines “layoff” as “a suspension from pay status initiated
by the employer with prejudice to the worker for such reasons” as: “lack of orders” and
“model changeovers.” See Iowa Admin. Code. r. 871.24.1(113)(a).
4
Section 96.5(3) lists “failure to accept work” as a cause for disqualification from benefits.
5
because a voluntary quit requires a volitional act from the employee to end the
employer-employee relationship, the district court agreed with the EAB that
Bartram’s departure was not voluntary. The district court also affirmed the EAB’s
conclusion the refusal-to-work disqualification did not apply to Bartram’s claim
because its “decision was not clearly against reason or evidence.”
The city now appeals the judicial review order, contending the EAB
misapplied the law to the facts in determining whether Bartram voluntarily quit, and
did not base its decision on substantial evidence, incorrectly interpreted and
misapplied the refusal-to-work disqualification.
II. Scope and Standards of Review
Iowa Code chapter 17A (the Iowa Administrative Procedure Act) governs
our review in unemployment benefit cases. Harrison v. Emp’t Appeal Bd., 659
N.W.2d 581, 586 (Iowa 2003). We employ the standards described in chapter
17A in determining whether we reach the same conclusion as the district court.
City of Des Moines v. Iowa Dep’t of Transp., 911 N.W.2d 431, 438 (Iowa 2018).
The agency’s findings of fact are binding if they are supported by substantial
evidence when we review the record 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
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the findings actually made. Cedar Rapids Cmty. Sch. Dist. v. Pease, 807 N.W.2d
839, 845 (Iowa 2011).
When reviewing a challenge to the agency’s interpretation of law, we do not
defer to an agency’s interpretations of statutes and case law unless the legislature
vested interpretive authority in the agency. Neal v. Annett Holdings, Inc., 814
N.W.2d 512, 518 (Iowa 2012).
In appeals challenging an agency’s application of the law or its own rules to
the facts, we review for an abuse of discretion, reversing when we find the agency
employed “wholly irrational reasoning or ignor[ed] important and relevant
evidence.” City of Des Moines, 911 N.W.2d at 440.
Finally, in appeals challenging the EAB’s application of law, we review for
an abuse of discretion, only disturbing the EAB’s application of chapter 96 to the
facts of Bartram’s claim if that application was “irrational, illogical, or wholly
unjustifiable.” See City of Des Moines, 911 N.W.2d at 440; Brewer-Strong v. HNI
Corp., 913 N.W.2d 235, 243 (Iowa 2018) (quoting Iowa Code § 17A..
III. Analysis
The city raises two issues in this appeal. First, the city insists Bartram
voluntarily quit under Iowa Code section 96.5(1). From that premise, it decries the
EAB’s decision she was entitled to unemployment benefits as lacking substantial
evidence and misapplication of law to the facts. Second, the city contends the
EAB misinterpreted and misapplied the refusal-to-work disqualification under
section 96.5(3), resulting in an “irrational result, contrary to the public interest.” We
will address each issue in turn.
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A. Voluntary Quit
Turning to the first issue, we find substantial evidence Bartram did not quit,
but rather the city eliminated her position. We also conclude the EAB properly
applied the law to the facts in concluding Bartram did not voluntarily quit.
On the substantial evidence question, we look to the agency’s key fact
findings: (1) the city eliminated Bartram’s position; (2) the city then invited her to
reapply but did not guarantee it would rehire her; and (3) the city agreed Bartram
“would not have been allowed to remain in her position beyond February 28, 2017.”
The undisputed record reinforces the agency’s finding Bartram’s job was
eliminated—the city did not meet the factual prerequisites for a voluntary-quit
disqualification. See Dico, 576 N.W.2d at 355.
Based on this evidence, the EAB’s conclusion Bartram did not voluntarily
quit was not unreasonable. In Irving, our supreme court determined “a voluntary
quit as a matter of law requires a volitional act on the part of the employee.” 883
N.W.2d 179, 209 (Iowa 2016). And “a voluntary quit must be volitional at its
inception.” Id. (emphasis added). In other words, a voluntary quit must stem from
the employee’s own free will to end the employer-employee relationship. Id. (citing
Wills v. Emp’t Appeal Bd., 447 N.W.2d 137, 137–38 (Iowa 1989)); Iowa Admin.
Code r. 871-24.25(96).
Here, Bartram “gave notice that she would leave at the end of February after
her position was eliminated.” It was impossible for Bartram to remain in her current
position after February 28. Bartram’s resignation did not stem from a desire to
terminate her employment with the city—instead, it resulted from the city’s
8
elimination of her position.5 The EAB’s conclusion Bartram did not voluntarily quit
was not irrational, illogical, or unjustifiable. See id. We find no ground for reversal.
B. Refusal-to-Work Disqualification
Next, we address the city’s argument the refusal-to-work disqualification
should preclude Bartram from receiving benefits. We agree with the district court’s
conclusion this disqualification does not apply in Bartram’s case. The timing is
critical—the city’s offers of the superintendent position came before Bartram filed
for unemployment benefits.
Our supreme court addressed a similar issue in Dico—an employer
intended to eliminate job positions but offered alternative employment
opportunities within the parent company. See 576 N.W.2d at 353. The EAB
awarded benefits to employees who turned down the offer. Id. at 353–54. The
employer appealed, arguing the refusal-to-work disqualification precluded receipt
of benefits because the employees declined the prior job offers. Id. at 354. The
employer argued awarding benefits to these employees undermined public policy
because the unemployment compensation act aimed to provide funds for those
who are unemployed through no fault of their own. Id. at 356. In short, because
the employer tried to provide alternative jobs for the employees, it should not be
liable for unemployment payments. See id.Our supreme court rejected the employer’s argument, finding it was
reasonable for the agency to limit the refusal-to-work disqualification to job offers
5
In its reply brief, the city contends for the first time that it merely changed the job
description for Bartram’s position. We decline to consider this late assertion. See Young
v. Gregg, 480 N.W.2d 75, 78 (Iowa 1992) (“We have long held that an issue cannot be
asserted for the first time in a reply brief.”).
9
after a claimant files for unemployment benefits. Id. The Dico court concluded the
EAB could have reasonably determined the limitation on the disqualification would
reduce the administrative burden of possible case-by-case determinations and
conserving those funds for unemployment benefit payments. Id. at 356–57.
Here, the city presents policy arguments similar to those made in Dico,
urging the refusal-to-work disqualification should apply because the city offered
Bartram the superintendent position several times before she resigned. See id. at
353–54. The city contends finding Bartram qualified for benefits would be
“backwards and totally against the public interest and policy of maintaining people
in employment.” But our supreme court rejected these arguments in Dico, finding
the bright-line rule was a reasonable manner of fulfilling the legislative goals of the
unemployment compensation act. See id. at 356–57.
The city next attempts to distinguish Dico from Bartram’s case based on the
terms of the job offers. In Dico, the employer arranged for its parent company to
offer employees job opportunities at a different facility in the same city. Id. at 353.
Here, the city contends because it offered Bartram work “with the same employer,
at the same location, at the identical wages and benefits[,]” Dico is not controlling.
We find unconvincing the city’s efforts to distinguish Dico. What matters is
when the employer makes the offer, not the particulars of the offer. See id. at 357
(“[T]he agency's decision that a claimant has an obligation to look for and accept
another job only during the claimant's benefit year is a reasonable application of
the refusal-to-work disqualification.”). We therefore affirm the district court’s ruling
and find the refusal-to-work disqualification does not apply to Bartram.
AFFIRMED.