SKEES (LESA BORNTRAEGER) VS. KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION, ET AL.
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RENDERED: AUGUST 12, 2011; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2010-CA-000389-MR
LESA BORNTRAEGER SKEES
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE OLU A. STEVENS, JUDGE
ACTION NO. 08-CI-001838
KENTUCKY UNEMPLOYMENT
INSURANCE COMMISSION AND
AMERICA’S DIRECTORIES
APPELLEES
OPINION
REVERSING
** ** ** ** **
BEFORE: STUMBO AND THOMPSON, JUDGES; SHAKE,1 SENIOR JUDGE.
THOMPSON, JUDGE: Lesa Borntraeger Skees appeals from an Opinion and
Order of the Jefferson Circuit Court affirming a decision of the Kentucky
Unemployment Insurance Commission (KUIC) denying Skees’s claim for
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Senior Judge Ann O’Malley Shake, sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
(KRS) 21.580.
unemployment benefits. Skees contends that the KUIC’s determination that she
was properly terminated from employment due to employee misconduct was not
based on substantial evidence and was contrary to law. We conclude that KUIC’s
determination was based on an improper application of the law and reverse.
America’s Directories (Directories) is an Indiana based corporation
which conducts business in Kentucky as a publisher of telephone books and
directories. Its corporate office is located in Mishawaka, Indiana. On May 21,
2007, Skees began her employment with Directories as a full-time marketing
consultant at its Louisville, Kentucky office.
When Skees began her employment, she was instructed to read and
sign an “Employee Agreement” which set forth certain conditions of her
employment. The agreement provided in relevant part that Skees would be
required to engage in “out of town and overnight travel to other markets.” Skees
testified that prior to signing the agreement, she requested to have its terms
reviewed by her attorney but was told that the agreement “could not leave the
office.” After commencing her employment, Skees requested a copy of the
agreement but did not receive a copy until after her termination.
After receiving five-days’ training at the corporate headquarters in
Mishawaka, she began her employment at the Louisville office. Skees worked for
Directories at the Louisville location for approximately three months and was not
requested or instructed to work out of town or travel overnight on company
business.
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On Friday, September 7, 2007, Directories’ Sales Director Otis
Lockett initiated a conference call with the Louisville office employees, including
Skees. According to Skees, Lockett summoned all the employees to the corporate
headquarters in Mishawaka, “as soon as possible” for an indeterminate period of
employment at the corporate office for the purpose of boosting lagging advertising
sales and to conduct a sales canvas. Mishawaka is approximately 260 miles north
of Louisville.
Although Lockett testified that he described the relocation as
temporary, Skees testified that when she inquired into the specific duration of her
stay in Mishawaka, Lockett stated that it “might be for 3 or 4 weeks, or it might be
longer. We (the company) don’t really know.” During the conference, the
employees were told that the company would pay their food, gas, and lodging
while in Mishawaka but were offered no details.
Skees became concerned with the apparent lack of information
provided by Directories regarding the terms of the relocation, its duration, and the
lack of specifics regarding lodging and transportation expenses. Skees informed
Directories that the move would be difficult for her because she had a sick mother
living in Louisville, a child attending the University of Kentucky, and a home in
Louisville with three pets. She again asked Directories for specific information
about the 260-mile relocation to Mishawaka. She was assured that such
information would be forthcoming by the following Monday, September 10, 2007,
the date scheduled for her relocation.
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On the morning of September 10, 2007, Skees telephoned Lockett
who asked her why she had not reported to the Mishawaka headquarters as directed
the previous Friday. Skees responded that she could not relocate her employment
to Mishawaka on an indefinite basis without information regarding the length of
stay, hotel accommodations, and reimbursement of costs. Lockett testified that he
asked Skees if it was possible to resolve the difficulties with the relocation, to
which Skees replied that she could not come to Mishawaka at that time and was
not sure if she ever could. Lockett then terminated Skees’s employment with
Directories. As a result of the abrupt nature of the request, coupled with the lack
of information, six of the seven employees of the Louisville office resigned or had
their employment terminated.
That same day, Skees filed an application for unemployment
compensation benefits with the Division of Unemployment Insurance. Directories
received notice of the application on September 11, 2007, and faxed a written
protest to the Division of Unemployment Insurance on October 2, 2007.
The Division initially approved Skees’s application based on its
determination that Skees left Directories for cause attributable to her employment.
Additionally, the Division found that Directories failed to tender its protest within
the time period set out in KRS 341.370 and 787 KAR 1:070.
The matter then went before a special referee. The referee affirmed
that portion of the decision which denied Directories reserve account relief for lack
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of a timely protest, but found that Skees voluntarily quit her employment without
good cause and was not entitled to unemployment benefits.
Skees appealed to the KUIC. The KUIC rendered a decision on
January 28, 2008, finding that Directories discharged Skees from her employment
for misconduct connected with her employment pursuant to KRS 341.370(6) and,
therefore, denied unemployment benefits. It affirmed the referee’s determination
that Skees improperly received benefits in the amount of $1,833.
Skees appealed to the Jefferson Circuit Court. The court determined
that Lockett asked Skees to relocate to Mishawaka on a temporary basis for up to
three or four weeks, and that this request was consistent with the terms of Skees’s
employment as set out in the Employee Agreement. Citing Kentucky
Unemployment Ins. Comm’n v. Duro Bag Mfg. Co., 250 S.W.3d 351 (Ky.App.
2008), the court examined the statutory phrase “discharged for misconduct” and
concluded that Skees’s failure to obey reasonable instructions to temporarily work
out of the Mishawaka office justified Skees’s termination for cause. As such, it
concluded that that the KUIC’s denial of unemployment benefits was supported by
substantial evidence and that the KUIC applied the correct law. This appeal
followed.
Skees argues that the circuit court erred in affirming the KUIC’s
determination that Directories properly discharged her for cause because the
commission’s decision was not based on substantial evidence and was contrary to
law. She argues that the referee, the Commission, and the circuit court ignored
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uncontroverted evidence of record that she never received a copy of the
employment agreement until after her employment was terminated; that Directories
never relied on the agreement to order her relocation to the Mishawaka office; that
she had never previously been told by Directories to engage in overnight travel;
and, that she did not refuse to obey a “reasonable instruction of her employer” as
set forth in KRS 341.370(6). She further argues that the referee improperly
introduced the allegation of “misconduct” into the proceedings. She seeks an order
reversing the circuit court’s Opinion and Order and remanding the matter with
directions to reinstate her unemployment insurance benefits retroactive to
September 11, 2007.
An employee is disqualified from receiving unemployment benefits
after termination of employment if the employee has been discharged for
misconduct connected with the employee’s most recent work. KRS 341.370(1)(b).
The phrase “discharged for misconduct” as set out in KRS Chapter 341 includes an
employee’s act of “refusing to obey reasonable instructions.” KRS 341.370(6).
The question for our consideration is whether Skees’s refusal to abruptly relocate
her employment for an indeterminate time and with no information regarding
compensation for expenses was unreasonable.
On review of an administrative decision, the circuit court must not
reconsider the merits of the underlying claim nor substitute its judgment for that of
the agency. 500 Associates, Inc. v. Natural Res. and Envtl. Prot. Cabinet, 204
S.W.3d 121, 131 (Ky.App. 2006). “[A]n administrative agency's findings of fact
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are reviewed for clear error, and its conclusions of law are reviewed de novo.”
Hutchison v. Kentucky Unemployment Ins. Comm'n, 329 S.W.3d 353,
356 (Ky.App. 2010). “The judicial standard of review of an unemployment benefit
decision is whether the KUIC’s findings of fact were supported by substantial
evidence and whether the agency correctly applied the law to the facts.”
Thompson v. Kentucky Unemployment Ins. Comm’n, 85 S.W.3d 621, 624 (Ky.App.
2002) (citations omitted). We conclude that the KUIC improperly applied the facts
to the controlling law and, therefore, reverse.
Directories emphasizes the employment agreement signed by Skees
and its provision that she would be required to engage in “out of town and
overnight travel to other markets . . . as directed by Employer.” We are not
persuaded that the agreement controls our decision. A reasonable interpretation of
the cited provision is that “out of town” and “overnight travel” does not mean a
260-mile relocation from Skees’s daily work site for an indefinite period.
Moreover, even if the relocation was properly characterized as “temporary” by
Directories, Lockett did not definitively state how long Skees would work in
Mishawaka. We conclude that the case law and current statutory law require a
result different than that reached by the commission.
In Brock v. Kentucky Unemployment Ins. Comm’n, 693 S.W.2d 69
(Ky.App. 1985), Brock’s employer informed him that the company operations
were moving eighty miles from its current location. After Brock declined to move
and resigned from his employment, he was denied benefits because he
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“voluntarily” left his employment. The circuit court affirmed. This Court
reversed, holding that Brock was entitled to argue before the Commission’s referee
that the relocation rendered the work not “suitable” as used in KRS 341.370 (1)(c).
Id. at 70.
Consistent with Brock, KRS 341.370(1)(c)(2) now provides in part:
(c) No otherwise eligible worker shall be disqualified
from receiving benefits for:
2. Leaving work which is one hundred (100) road miles or
more, as measured on a one (1) way basis, from his home
to accept work which is less than one hundred (100) road
miles from his home….
The General Assembly codified the reasoning expressed in Brock: An employer
cannot avoid payment of unemployment insurance benefits by relocating an
employee more than one hundred miles from his original work place.
In this case, Skees was forced to abruptly relocate her employment 260
miles from home for an indefinite period of time. Her options were to move,
commute with no information regarding the payment of expenses, or resign.
Although Directories contends that the relocation was temporary, it remains that
there was no definite time period and no details regarding the relocation. The
uncertainty of the circumstances associated with the relocation and the abruptness
of the relocation rendered Directories’ order unreasonable and, therefore, Skees is
not precluded from receiving unemployment benefits.
Finally, because the referee’s decision regarding the timeliness of
Directories’ protest pursuant to KRS 341.370 and further defined in 787 KAR
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1:070 was not appealed to the KUIC, it refused to address the issue and it was not
considered by the circuit court. For the same reason, we likewise do not address
the issue.
For the foregoing reasons, we reverse the Opinion and Order of the Jefferson
Circuit Court and remand the case to the KUIC for an order reinstating Skees’s
unemployment insurance benefits, retroactive to September 11, 2007.
ALL CONCUR.
BRIEFS FOR APPELLANT:
Robert L. Heleringer
Louisville, Kentucky
BRIEF FOR APPELLEE,
KENTUCKY UNEMPLOYMENT
INSURANCE COMMISSION:
James C. Maxson
Frankfort, Kentucky
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