KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION, ET AL. VS. SUN VENTURES, INC.
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RENDERED: DECEMBER 17, 2010; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-001718-MR
KENTUCKY UNEMPLOYMENT
INSURANCE COMMISSION; AND
ANTHONY D. ADKINS
v.
APPELLANTS
APPEAL FROM LAWRENCE CIRCUIT COURT
HONORABLE JOHN DAVID PRESTON, JUDGE
ACTION NO. 09-CI-00018
SUN VENTURES, INC.
APPELLEE
OPINION
AFFIRMING IN PART,
REVERSING IN PART
AND REMANDING
** ** ** ** **
BEFORE: ACREE, DIXON AND STUMBO, JUDGES.
DIXON, JUDGE: This appeal concerns a judgment rendered by the Lawrence
Circuit Court, which set aside a decision issued by the Kentucky Unemployment
Insurance Commission. After careful consideration of the issues presented on
appeal, we affirm in part, reverse in part, and remand this case to the Commission
for further proceedings.
Sun Ventures, Inc. owns and operates a gas station and convenience store in
Kenova, West Virginia, where Anthony D. Adkins was employed as a cashier from
June 10, 2008, until August 10, 2008. When he was hired, Adkins advised the
manager, Charlie Pigg, that he needed to work forty hours per week. Thereafter,
Adkins worked as a cashier and earned $6.55 per hour for a forty-hour workweek.
On August 7, 2008, Adkins learned that his hours would be reduced to less than
forty hours per week. Adkins then gave his manager three days’ notice that he
would be leaving his employment with Sun Ventures due to the reduction in hours.
Adkins worked his last “full time” shift on August 10, 2008.
Following his separation from employment, Adkins sought unemployment
benefits, which were denied. Adkins appealed the initial decision, and an appeals
referee conducted an evidentiary hearing on October 22, 2008. The referee heard
testimony from Adkins, Pigg, and Brian Unrue, the store supervisor. Adkins
testified that he “quit” his employment at Sun Ventures because of the decreased
work schedule. Pigg testified that the company reduced employee hours due to a
decrease in business, and Unrue characterized the reduction as a “winter schedule.”
On November 6, 2009, the referee rendered a decision affirming the initial
denial of benefits, concluding that Adkins was disqualified from receiving benefits
because he voluntarily quit his job at Sun Ventures. Adkins appealed the referee’s
decision to the Commission and the Commission subsequently reversed the
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referee’s decision. The Commission found that Sun Ventures reduced Adkins’s
hours due to business needs, and Adkins left the employment once the new
schedule with reduced hours was instituted. In its decision, the Commission
stated:
In Unemployment Insurance Program Letter Number
984, issued September 20, 1968, the United States
Department of Labor addressed the issue of what
constitutes ‘New Work.’ The Department held, in part,
that if a worker’s present employer tells the worker that
terms, or conditions of his employment, which are not
authorized by the existing employment contract, then the
worker has been discharged and offered ‘New Work.’
The Commission concluded that Sun Ventures “implemented new conditions of
employment beginning August 11, 2008. The changes in the conditions of work,
that is, part time work beginning August 11, 2008, constituted a new offer of
work.” The Commission held that Adkins had been “discharged for reasons other
than misconduct and is not disqualified from benefits based on this job separation.”
As a result, the Commission reversed the Referee’s decision on the job separation
issue, and remanded the claim to the local office to address whether it was
reasonable for Adkins to reject Sun Ventures’ offer of “new work.”1
Thereafter, Sun Ventures filed a complaint in Lawrence Circuit Court
seeking judicial review of the Commission’s decision. On August 27, 2009, the
circuit court rendered a judgment setting aside the Commission’s decision. The
court found that the Commission misapplied the law, and the court concluded that
1
We note that the parties have indicated in their briefs that Adkins was awarded benefits after
the local office addressed the work refusal issue on remand. That determination was not
appealed.
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the federal program letter was inapplicable to Adkins’s separation from
employment. As a result, the court held that Adkins was disqualified from
receiving unemployment benefits because he voluntarily quit his employment
without good cause. The Commission and Adkins now appeal the circuit court’s
judgment.
I. Standard of Review
In Burch v. Taylor Drug Store, Inc., 965 S.W.2d 830, 834-35 (Ky. App.
1998), this Court stated as follows:
The standard of review before the circuit court and before
this Court is the same. Judicial review of the acts of an
administrative agency is concerned with the question of
arbitrariness. American Beauty Homes Corp v.
Louisville and Jefferson County Planning and Zoning
Commission, 379 S.W.2d 450, 456 (Ky. 1964). The
findings of fact of an administrative agency which are
supported by substantial evidence of probative value
must be accepted as binding by the reviewing court.
Kosmos Cement Co. v. Haney, 698 S.W.2d 819, 820 (Ky.
1985). The court may not substitute its opinion as to the
weight of the evidence given by the Commission.
McCracken County Health Spa v. Henson, 568 S.W.2d
240, 242 (Ky. App. 1977). Upon determining that the
Commission's findings were supported by substantial
evidence, the court's review is then limited to
determining whether the Commission applied the correct
rule of law. Southern Bell Telephone & Telegraph Co. v.
Kentucky Unemployment Insurance Commission, 437
S.W.2d 775, 778 (Ky. 1969).
II. Findings of Fact
We are mindful that the Commission sits in a unique position, as it is free to
review an appeal of a referee’s decision de novo, without deference to the referee’s
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findings of fact. Id. at 834. At the outset of our appellate review, we must
determine whether the Commission’s factual findings were supported by
substantial evidence. Id. at 835. It is well settled that substantial evidence exists
where, “when taken alone or in the light of all the evidence it has sufficient
probative value to induce conviction in the minds of reasonable men.” Kentucky
State Racing Comm’n v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972).
In the case at bar, the underlying facts were largely undisputed. The
Commission found, in relevant part, as follows:
On August 7, 2008, claimant was informed that his
scheduled hours would be cut (exact amount not
provided) due to the employer’s business needs. The
claimant was the newest employee and therefore his
hours were the first to be cut.
The claimant observed that the new work schedule
reflected that his hours had been reduced to part-time
hours. The claimant completed his fulltime work
schedule on August 10, 2008. The claimant did not
accept the reduced work hour schedule, and did not work
after August 10, 2008.
Based upon our review of the appellate record, we conclude these findings,
while minimal, were supported by substantial evidence.
III. Application of Law to the Facts
Appellants contend the circuit court erred by concluding the federal program
letter relied upon by the Commission was inapplicable to Adkins’s claim, as
“[s]uch Federal guidance is binding upon the Commission” pursuant to Kentucky
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Revised Statutes (KRS) 341.980.2 Appellants opine that the Commission correctly
concluded that Sun Ventures discharged Adkins without cause by decreasing his
schedule to part-time hours.
First, we believe the trial court correctly disregarded the federal program
letter, as it is inapplicable to the circumstances presented here. The federal letter
addresses 26 U.S.C. § 3304(a)(5)(B), which provides that a state’s unemployment
compensation act cannot disqualify a claimant from receiving benefits for refusing
new work “if the wages, hours, or other conditions of the work offered are
substantially less favorable to the individual than those prevailing for similar work
in the locality[.]” The analogous provision in our unemployment compensation act
is KRS 341.100(2)(b). Nevertheless, we simply believe that the undisputed facts
of this case indicate that Adkins quit his job after his hours were reduced;
consequently, we conclude the Commission erred as a matter of law by analyzing
this case as an employer discharge and subsequent offer of new work.
KRS 341.370 addresses specific circumstances that disqualify a claimant
from receiving unemployment benefits, including when a claimant leaves suitable
employment “voluntarily without good cause attributable to the employment.”
KRS 341.370(1)(c). The Kentucky Supreme Court has recently addressed this
provision, recognizing, “[i]nherent in that language is the idea that work conditions
must be sufficiently bad that the employee can reasonably feel compelled to quit.”
2
KRS 341.980(1) provides that the construction of Kentucky’s unemployment compensation
statutes “should be consistent with such federal act and interpretations thereof[.]”
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Brownlee v. Kentucky Unemployment Ins. Comm’n, 287 S.W.3d 661, 664 (Ky.
2009). The Court went on to note, “separation is voluntarily initiated by the
employee when the act of leaving is ‘freely given’ and proceeds from personal
choice and consent.” Id.
Here, the Commission specifically found that Adkins “did not accept the
reduced work hour schedule, and did not work after August 10, 2008.” We believe
these facts indicate Adkins simply chose to leave his employment, rather than work
less than forty hours per week. Despite the Commission’s argument to the
contrary, we conclude that Adkins was not discharged by Sun Ventures and then
offered a new part-time job; rather, Adkins voluntarily quit his job due to
dissatisfaction with the reduced schedule. Accordingly, we affirm the portion of
the circuit court’s judgment relating to Adkins’s job separation.
Because we conclude Adkins voluntarily quit his employment, he is
disqualified from receiving benefits if he quit “without good cause attributable to
the employment.” KRS 341.370(1)(c). The Kentucky Supreme Court has stated,
“Good cause for voluntarily quitting work exists only when the worker is faced
with circumstances so compelling as to leave no reasonable alternative but loss of
employment.” Kentucky Unemployment Ins. Comm’n v. Murphy, 539 S.W.2d 293,
294 (Ky. 1976). Thus, the issue here is whether Sun Ventures’ unilateral reduction
in Adkins’s schedule created circumstances so compelling that Adkins had no
reasonable choice but to quit his job. Based on the record before us, however,
there is insufficient evidence to review this issue. The Commission did not address
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this issue, since it erroneously concluded Adkins’s separation from his
employment was a discharge, rather than a quit. Accordingly, the trial court erred
by concluding as a matter of law that Adkins quit without good cause, and we
reverse the court’s judgment on that issue. We remand this case to the
Commission to determine whether the reduction in work hours constituted good
cause attributable to Sun Ventures for Adkins to leave his employment.
For the reasons stated herein, we affirm the Lawrence Circuit Court’s
judgment as to the separation of work issue, we reverse the judgment as to the
good cause issue, and we remand this case to the Commission for further
proceedings consistent with this opinion.
ALL CONCUR.
BRIEFS FOR APPELLANT
KENTUCKY UNEMPLOYMENT
INSURANCE COMMISSION:
BRIEF FOR APPELLEE:
Nelson T. Sparks
Louisa, Kentucky
James C. Maxson
Frankfort, Kentucky
NO BRIEF FOR APPELLANT
ANTHONY D. ADKINS
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