Benton County Home Health Care v. Director, Employment Security Department and Pat K. Hough

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E 05-21

NOVEMBER 9, 2005


REVIEW, [NO. 2004-BR-02201]


John B. Robbins, Judge

Appellee Pat K. Hough was a one-fourth owner of appellant Benton County Home Health Care, Inc., and worked there as office manager from April 1, 2003, to April 24, 2004. Upon her separation from employment, Ms. Hough filed a claim for unemployment benefits. The agency denied her claim, and the appeal tribunal affirmed that finding on the basis that Ms. Hough was discharged from her last work for misconduct in connection with the work. However, the Board of Review reversed the decision of the appeal tribunal and awarded benefits on the basis that Ms. Hough voluntarily quit her employment for good cause connected with the work.

Benton County Home Health Care now appeals, arguing that the Board's decision is not supported by substantial evidence. Appellant does not challenge the Board's finding that Ms. Hough voluntarily left her work, but contends that benefits should have been denied pursuant to Ark. Code Ann. § 11-10-513(a)(1) (Repl. 2002), which provides:

If so found by the Director of the Arkansas Employment Security Department, an individual shall be disqualified for benefits if he or she voluntarily and without good cause connected with the work left his or her last work.

We affirm.

Our scope of review in cases such as this is well-settled and oft-stated:

On appeal, the findings of the Board of Review are conclusive if they are supported by substantial evidence. Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. We review the evidence and all reasonable inferences deducible therefrom in the light most favorable to the Board's findings. Even when there is evidence upon which the Board might have reached a different decision, the scope of judicial review is limited to a determination of whether the Board could reasonably reach its decision upon the evidence before it.

Fleming v. Director, 73 Ark. App. 86, 88, 40 S.W.3d 820, 822 (2001).

Karen Turner, an employee of Benton County Home Health Care, testified that she was Ms. Hough's supervisor. Ms. Turner stated that Ms. Hough's last date of employment was April 24, 2004. After that date, Ms. Hough failed to show up for work and Ms. Turner considered her terminated on May 7, 2004. Ms. Turner acknowledged that Ms. Hough continued to draw her paychecks after that date, and that she received payments from the company through August 27, 2004, by paying herself as an owner authorized to write checks.

Ms. Turner testified that she was aware of a board of director's agreement dated April 23, 2004, whereby Ms. Hough would stay at home and continue to get paid. However, Ms. Hough never signed the agreement. Ms. Turner stated that she was never aware of any work performed by Ms. Hough after April 24, 2004. She stated that at some point Ms. Hough requested information concerning her employment, so she sent Ms. Hough a letter on August 26, 2004, informing her that on May 7, 2004, she was considered to havequit without notice. Ms. Turner acknowledged that Ms. Hough had been asked to stay out of the office because she was disruptive to the business.

Ms. Hough testified on her own behalf, and she stated that during her employment she handled marketing in addition to managing the office. She stated that one of the other owners, Rob Neville, called her on April 23, 2004, and informed her that Ms. Turner and all of the staff were going to quit if she continued to come to the office. Mr. Neville further told her that if that happened, no more employees would be hired and the business would shut down. According to Ms. Hough, she told Mr. Neville, "Ok, fine. I'll come in on the weekends and work and just do the marketing." Ms. Hough testified that she continued to work on weekends, and also did off-site marketing work during the week, until August 13, 2004, when she was locked out of the office. She stated that she was forced to leave her own business. At that time she quit paying herself, except for a check on August 27, 2004, that represented compensation for unused vacation time.

Ms. Hough acknowledged that she had been earning $30,000 per year, and that Mr. Neville presented her with a written agreement whereby she would have been paid $31,200 per year while being relieved of all of her duties and required to remain away from the office on weekdays. Ms. Hough explained that she did not sign the agreement on the advice of her attorney. She further noted that the agreement would have nonetheless been ineffective even had she signed it, because another owner, Patrick Edwards, did not sign the agreement. In this regard, the owners had previously agreed that any changes in salary or job titles must be unanimously approved.

Mr. Neville testified that he had received information from Ms. Turner and Mr. Edwards that Ms. Hough was having problems with the other people in the office, who had a difficult time working with Ms. Hough and did not want her around. Mr. Nevilleindicated that he informed Ms. Hough about the proposed agreement where she would stay away from the office and continue to draw a salary. According to Mr. Neville, Ms. Hough verbally agreed but then changed her mind and refused to sign the agreement. Mr. Neville stated that he told Ms. Hough she either had to sign the agreement or resume her office duties in order to continue to get paid.

For reversal of the Board's decision, the appellant argues that there was no substantial evidence to support the finding that Ms. Hough's decision to quit was for good cause connected with the work. Appellant asserts that Ms. Hough was given the opportunity to continue her employment at an increased salary, and with no job responsibilities. It maintains that her failure to accept such an arrangement, which thereby ended her employment, constituted leaving her job without good cause.

"Good cause" is a cause that would reasonably impel an average able-bodied, qualified worker to give up his or her employment. Garrett v. Director, 58 Ark. App. 7, 944 S.W.2d 865 (1997). It is dependent not only on the good faith of the employee involved, which includes the presence of a genuine desire to work and to be self-supporting, but also on the reaction of the average employee. Id. What constitutes good cause is ordinarily a question of fact for the Board to determine from the particular circumstances of each case. Id.

We hold that there was substantial evidence to support the Board's finding that Ms. Hough's voluntary termination was for good cause connected with the work. Even though Ms. Hough declined to sign the agreement proposed by Mr. Neville, she correctly asserts that this was of no consequence because another owner had not signed it either. Ms. Hough was confronted with a situation where her presence at the office would effectively result in the termination of the business. She testified that, as an owner with afiduciary duty to the business, she decided to stay away from the office. Upon being physically locked out of the office, Ms. Hough decided to stop doing any work on behalf of the company and terminate her income. In consideration of these rather unusual and extreme circumstances, we affirm the finding that an average worker in Ms. Hough's position would have quit her employment.

Benton County Home Health Care also contends that Ms. Hough should have been denied benefits because, after being confronted by Mr. Neville, she failed to take any action toward correcting the problems leading to termination of her employment. In Claflin v. Director, 53 Ark. App. 126, 920 S.W.2d 20 (1996), we stated that an element of "good cause" is whether the employee took appropriate steps to rectify the problem. The appellant in the present case maintains that in order to be eligible for benefits , Ms. Hough was first required to try to resolve the conflict with the other owners.

We disagree with appellant's argument because, as noted in the Board's decision, an employee is not required to engage in an act of futility as a precursor to obtaining unemployment benefits. See Magee v. Director, 75 Ark. App. 115, 55 S.W.3d 321 (2001). The Board found that at least two of the three other owners were allied against her, and this is supported by the fact that two of them signed the agreement which would have prohibited her from visiting the office. Moreover, while owner Patrick Edwards did not sign the agreement, he reported to Mr. Neville that there was a problem so serious that Ms. Hough's presence in the office could not be tolerated by the other employees. In light of these facts, we affirm the Board's finding that "as only a one-fourth owner of this business, she lacked the power to control the situation," and that she was entitled to benefits despite making no further efforts to resolve the problem.

Finally, the appellant urges us to remand this case to the Board because it failed to make adequate and complete findings of fact to support its decision. While we will remand a case where adequate findings were not made by the Board, see Sanders v. Employment Security Dep't, 80 Ark. App. 110, 91 S.W.3d 520 (2002), we conclude that in this case the Board made sufficient findings to support its decision to award benefits.


Gladwin and Baker, JJ., agree.