Rankhorn v. ADES/Quick Mart

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE IRENE F. RANKHORN, ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Appellant, v. ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an Agency, and QUIK MART STORES, INC., Appellees. No. DIVISION ONE FILED: 12/29/2011 RUTH A. WILLINGHAM, CLERK BY: GH 1 CA-UB 10-0363 DEPARTMENT E MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Appeals Board of the Department of Economic Security of the State of Arizona A.D.E.S. Appeals Board No. U-1190576-BR REVERSED AND REMANDED Irene F. Rankhorn Appellant in Propria Persona Tucson Thomas C. Horne, Attorney General By Carol A. Salvati, Assistant Attorney General Attorneys for Arizona Department of Economic Security J O H N S E N, Judge 1 Phoenix ¶1 Irene F. Rankhorn appeals the decision of the Appeals Board of the Arizona Department of Economic Security ( ADES ) disqualifying her from unemployment insurance benefits. For the reasons that follow, we reverse and remand for a new hearing. FACTS AND PROCEDURAL HISTORY ¶2 Rankhorn had worked for two years as assistant manager of a Quik Mart store in Tucson before quitting on March 31, 2010. An ADES deputy found she quit voluntarily without good cause and disqualified her from receiving unemployment benefits. Rankhorn filed an administrative appeal. ¶3 Rankhorn and two representatives testified at the Appeal Tribunal hearing. of Quik Mart Rankhorn admitted she quit her job, but explained that several incidents over the three weeks immediately preceding her departure drove her to do so. Rankhorn recounted being told by her supervisor on March 10 to lie to a Health Department inspector, asserted that Quik Mart cut her weekly hours and pay over the last three weeks of March and explained that her supervisor had offered her a manager position on March 4 but Quik Mart later gave the job to an outsider without explanation. 1 letting her know in advance and without She submitted a copy of her resignation letter, in 1 Rankhorn also complained that on March 11 a co-employee failed to pass on a telephone message that a relative had called to tell her of a death in her family. Because Rankhorn does not explain why the co-employee s conduct should be attributed to 2 which she had asserted that she had been treated different by Quik Mart and push[ed] out because she had told her supervisor she would not lie to a public official. Quik Mart s representatives at the hearing disputed each of these grounds. Rankhorn s supervisor testified he never told Rankhorn to lie, that she wasn t really cut back although she was scheduled for a couple less hours weekly after the new manager began work, and that he never offered (nor did he have authority to offer) the store manager position to Rankhorn. ¶4 During the hearing, the Tribunal allowed Rankhorn an opportunity to cross-examine both witnesses for Quik Mart; it did not, however, ask either of the witnesses questions Rankhorn had filed prior to the hearing. the written The Tribunal admitted several work schedules Rankhorn provided, but did not address them and explicitly stated, I m not quite sure why that is in here. Although the Tribunal acknowledged that Rankhorn had five witnesses waiting on the phone at the time of the hearing, calling it any closed of them failure to do so. evidence to and testify ended and the without hearing without explaining its The transcript of the hearing ends with Rankhorn asking, Judge? Hello? and receiving no response. the employer, we decline her assertion that it constitutes or contributes to good cause for her decision to terminate employment under the unemployment insurance statutes. 3 ¶5 The Appeal Tribunal affirmed the deputy s decision denying benefits, finding that Rankhorn left work voluntarily without good cause. The Tribunal explained that Rankhorn s disappointment with not receiving the promotion to manager did not constitute good cause to quit and concluded that the other grounds raised by Rankhorn did not constitute good cause. ¶6 Rankhorn petitioned for review of the decision, arguing on several grounds that she had not received a fair hearing. The Appeals Board affirmed, expressly adopting the Tribunal s findings of fact, reasoning and conclusions of law. On Rankhorn s request for further review the Board again affirmed, stating that [t]he essential elements of due process were observed. ¶7 Rankhorn then requested review by this court. We granted her application for appeal pursuant to Arizona Revised Statutes ( A.R.S. ) section 41-1993(B) (2011). 2 DISCUSSION ¶8 Rankhorn argues on appeal she did not receive a fair tr[ia]l because the Appeal Tribunal did not allow her to use all [her] means to prove her case, effectively denying her a meaningful opportunity to be heard. We generally will affirm the Board s decision if, viewing the evidence in the light most 2 Absent material alterations cite a statute s current version. 4 after the relevant date, we favorable to upholding the decision, it is supported reasonable interpretation of the evidence. by any Prebula v. Ariz. Dep t of Econ. Sec., 138 Ariz. 26, 30, 672 P.2d 978, 982 (App. 1983). We review de novo, however, the Board s conclusions and constitutional claims raised on appeal. legal Rice v. Ariz. Dep t of Econ. Sec., 183 Ariz. 199, 201, 901 P.2d 1242, 1244 (App. 1995) (legal conclusions); Hobson v. Mid-Century Ins. Co., 199 Ariz. 525, 528, ¶ 6, 19 P.3d 1241, 1244 (App. 2001) (constitutional claims). ¶9 job An unemployment claimant who has voluntarily left a must show good cause for quitting. ( A.A.C. ) R6-3-50190(B)(2)(b). Ariz. Admin. Code Good cause exists if, from the perspective of a reasonable worker in similar circumstances, the claimant s reasons would justify leaving the employment. A.A.C. R6-3-50210(A). ¶10 A claimant appealing a deputy s denial of benefits has a right to a fair hearing. § 23-671(D) (2011). A.R.S. § 23-773(B) (2011); A.R.S. The claimant is entitled to an opportunity to present evidence in accordance with principles of procedural due process. A.R.S. § 23-674(A) (2011) ( [O]pportunity shall be afforded all parties to present evidence and argument . . . . ). The constitutional administrative right hearing to procedural requires due nothing process less than opportunity to be heard . . . in a meaningful manner. 5 in an an Salas v. Ariz. Dep t of Econ. Sec., 182 Ariz. 141, 143, 893 P.2d 1304, 1306 (App. 1995). only if the We reverse for a violation of due process error resulted in substantial rights of a party. prejudice, impairing the Emp t Sec. Comm n v. Doughty, 13 Ariz. App. 494, 496, 478 P.2d 109, 111 (1970); see County of La Paz v. Yakima Compost Co., 224 Ariz. 590, 598, ¶ 12, 233 P.3d 1169, 1177 (App. 2010) (due process error reversible only if party is prejudiced); cf. Ariz. Const. art. 6, § 27 ( No cause shall be reversed proceedings when for upon technical the whole error case it in pleadings shall appear or that substantial justice has been done. ). ¶11 At the Appeal Tribunal hearing, Rankhorn testified she had quit in part because her supervisor had instructed her to lie to the health inspector. admitted as evidence Moreover, as noted, the Tribunal Rankhorn s resignation letter, which explained that she was cut hours [and] treated different[ly] because I told my superior I could not and would not lie to a public official. Her everything that could Rankhorn s supervisor letter have denied continued, been done to instructing I feel push her to me as though out was. deceive the health department. ¶12 Rankhorn s The Tribunal, and later the Appeals Board, discounted complaint about being instructed to lie. They concluded the alleged order turned out to be only theoretical 6 because the health department inspector did not visit the store and ask about the matter about which Rankhorn alleged she was instructed to lie. ¶13 A reason for leaving employment consistent with well defined public policy constitutes good cause for a voluntary quit. A.A.C. R6-3-50210(B). An employer s instruction to an employee to conceal alleged wrongdoing from public inspectors violates public policy. See Lloyd v. AMF Bowling Ctrs., Inc., 195 Ariz. 144, 146, ¶¶ 10-11, 985 P.2d 629, 631 (App. 1999) (describing public policy in context of at-will employment and wrongful termination); cf. A.A.C. R9-8-107 (requiring employer to remedy non-critical food-code violations within no more than 90 days (incorporating by reference U.S. Food and Administration Food Code (1999) at ¶ 8-406.11(A))). recognizes that an employer should not be able to Drug Arizona use the threat of [adverse employment action] to coerce employees into . . . concealing wrongdoing. Lloyd, 195 Ariz. at 146, ¶ 11, 985 an P.2d at 631. Moreover, employer may not retaliate against an employee for refusing to accede to the employer s demand to deceive regulators. Cf. A.R.S. § 23-1501(3)(c)(i)- (ii) (2011) (Arizona public policy precludes retaliatory firing for employee s refusal to violate Arizona law or for employee s reasonable disclosure of employer s violation of law). 7 ¶14 Given these principles, it is immaterial that it turned out that Rankhorn was not called upon to comply with her supervisor s alleged instruction to lie to the health inspector. The Tribunal and the Appeals Board therefore erred by discounting Rankhorn s allegation because she did not have to carry out the alleged request to lie. ¶15 We note that the Appeal Tribunal explicitly found, and the Appeals Board adopted as a finding of fact, that Rankhorn did not offer any evidence to show that her supervisor had instructed her to lie to the health department. own testimony constituted such evidence. But Rankhorn s See A.A.C. R6-3- 50190(A)(1) (oral statement by claimant is acceptable evidence). ¶16 Moreover, the Tribunal closed the record and ended the hearing without calling any of Rankhorn s witnesses and without explaining its failure to do so. 3 incompetent, evidence. however, Rankhorn s irrelevant, immaterial A.R.S. § 23-674(D). compelling witnesses the would The Tribunal may exclude and unduly repetitious There is nothing in the record, conclusion have that been immaterial or unduly repetitious. the testimony incompetent, of irrelevant, To the contrary, Rankhorn described at least three of the five witnesses she sought to 3 The Tribunal offered a belated explanation in a final note to its decision, stating that these witnesses were not called to testify because the reasons [Rankhorn] gave for the job separation were personal to her, suggesting the Tribunal found their potential testimony irrelevant. 8 call at the hearing as having knowledge possibly related to the health department incident. According to Rankhorn s pre-hearing disclosure, one co-worker witnessed all events at the store, another was witness and was at work with me when I helped the Health Department and a third was witness to H.D. The Tribunal s failure to call any of Rankhorn s witnesses denied her the opportunity to be heard . . . in a meaningful manner, violating her right to procedural due process of law. See Salas, 182 Ariz. at 143, 893 P.2d at 1306. ¶17 Not witnesses only to did testify, the it Tribunal also fail failed to to call ask Rankhorn s the Quik Mart witnesses the questions Rankhorn submitted prior to the hearing. Two weeks before the Appeal Tribunal hearing, ADES sent Rankhorn a Notice of Hearing setting the hearing time instructions for preparing for the hearing. and detailing The Notice stated, You also have the right to send relevant written questions to me [the Tribunal]. I will ask these questions if they are received before the hearing. you to Rankhorn Quik attend and provided Mart s Even if you send questions, I urge testify. written witnesses. Pursuant questions The to for questions that instruction, cross-examination sought to impeach of the supervisor s testimony about Rankhorn s potential promotion to manager, examined Quik Mart s 9 policies and procedures for promotion from within and addressed the circumstances surrounding the reduction in Rankhorn s scheduled work hours. ¶18 Where, as here, important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses. 254, 269 (1970). Goldberg v. Kelly, 397 U.S. On review, the Appeals Board correctly noted that Rankhorn had been given an opportunity at the hearing to cross-examine the Quick Mart witnesses herself. [t]he opportunity to the capacities and circumstances of those who are to be heard. Id. at 268-69. to be heard must be Nevertheless, tailored Although Rankhorn asked a few questions of a Quik Mart witness, she stopped immediately after the Tribunal mildly reprimanded her for her style of questioning. The pre-hearing instructions the Tribunal sent to Rankhorn had informed her that [the Tribunal] will ask [the] questions if they are received before the hearing. (Emphasis added.) An unemployment claimant reasonably may rely on ADES s written assurances that the Tribunal will ask [the] questions rather than attempt to ask the questions herself. Because the Tribunal did not do so in this case, Rankhorn was deprived of the opportunity to be heard . . . in a meaningful manner. See Salas, 182 Ariz. at 143, 893 P.2d at 1306. ¶19 are On appeal, ADES contends Rankhorn s claims of error irrelevant because her real 10 reason for quitting was her reduced hours, promote her. coupled with the company s decision not to It argues the Board s no-good-cause determination was proper because Rankhorn did not comply with her obligation to attempt to adjust those grievances. Although Rankhorn indeed testified that her biggest reason for quitting was that she did not receive the promotion to manager, she never testified that it was her sole reason. As we have explained, the supervisor s alleged instruction to lie to the health inspector could provide an alternative basis for a good-cause determination. ¶20 Further, the alleged withdrawal of the promised promotion was just one component in Rankhorn s claim that Quik Mart retaliated against her when she refused her supervisor s direction to lie to the health inspector. Rankhorn maintains she was treated different because I told my superior I could not and would not lie to a public official and that ever[y]thing that could have been done to push me out was. 4 The three issues the health department issue, her reduced hours and her failure to receive the promotion are related in Rankhorn s contention that she had good cause to quit her job. Indeed, her allegation of retaliatory action by her employer may bear on the feasibility of attempting to adjust grievances. 4 See We note that, on this theory, Rankhorn s time sheets and schedules may be relevant to show that she alone was targeted for reduced hours as part of the alleged retaliatory scheme. 11 A.A.C. adjust R6-3-50210(C)-(D) grievance impracticable (requirement before or that voluntary impossible, or worker quit would attempt waived is to if obviously not be fruitful ). ¶21 Finally, ADES contends that Rankhorn has failed show prejudice resulting from any procedural violations. to On this record, we cannot assume that, had the questions Rankhorn wanted to ask been asked and had the witnesses she wanted to call been called, the outcome would have remained the same. CONCLUSION ¶22 For these reasons, we reverse and remand for rehearing. /s/ DIANE M. JOHNSEN, Presiding Judge CONCURRING: /s/ PATRICIA A. OROZCO, Judge /s/ LAWRENCE F. WINTHROP, Judge 12

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