THE IOWA SUPREME COURT ON UNEMPLOYMENT LAW

Jail cell

On Friday, the Iowa Supreme Court issued a 57-page opinion in Irving v. Employment Appeal Board.  Sondra Irving appealed a judgment from the district court that affirmed the denial of her unemployment benefits after she was terminated from her job at the University of Iowa Hospitals and Clinics (UIHC).  Irving was absent from work while she was incarcerated on criminal charges unrelated to her job (which were ultimately dismissed).

Irving missed work beginning on December 3, 2013, and had her mother call UIHC each day Irving was scheduled to work to report her absence.  On December 11, UIHC told Irving’s mother that UIHC was putting Irving on a leave of absence, so there was no need to report further absences.  After Irving was released on December 24, she tried to return to work but UIHC told her she no longer had a job.  Irving then reapplied for her job and was rejected, so she applied for unemployment insurance benefits.  Iowa Workforce Development found she was ineligible for benefits, stating, “Our records indicate you voluntarily quit work on 12/20/13, because you were arrested and confined in jail.  Your quitting was not caused by your employment.”

Irving appealed the denial of benefits and was once again rejected.  The administrative law judge who heard her appeal held that excessive unexcused absences due to incarceration qualified as misconduct, thus disqualifying Irving from benefit eligibility.  Irving kept appealing, this time to the Employment Appeal Board, claiming she was eligible for benefits because she did not voluntarily resign and because her absences weren’t “a matter of personal responsibility” and therefore were not “misconduct,” citing Iowa Code section 96.5(1) and Iowa Administrative Code rule 871—24.25(16).  The EAB also affirmed Irving’s denial of benefits, finding she voluntarily resigned from UIHC and that her absences were “a matter of personal responsibility” and thus constituted misconduct.

Irving filed a third appeal, this time to the district court, which also affirmed the denial of benefits.  Finally, Irving appealed the district court decision and the Iowa Supreme Court retained the case.  The EAB raised a new argument when Irving appealed the district court decision, noting that Irving had a second part-time job at the same time she held her UIHC job, which she also lost while incarcerated.  Evidence about Irving’s part-time job was not in the record, but the EAB asserted that she was disqualified from benefits “based on discharge for misconduct arising out of her failure to report her arrest.”

Irving apparently did not appeal the district court’s determination that she was disqualified from benefits from her part-time job.  The EAB argued that this made Irving ineligible for benefits from UIHC as well, based on a “spill-over” theory.  The Supreme Court spent considerable time analyzing this argument, ultimately rejecting the EAB’s claim that Irving’s challenge to her denial of unemployment benefits from UIHC should be barred by the unappealed determination that she was terminated for misconduct from her part-time job.  In explaining this holding, the Court pointed to the liberal purposes of the Iowa Employment Security Law and the requirement that the provisions related to disqualification be narrowly construed.

The Court then turned to the issue of whether Irving’s absences as a result of incarceration constituted disqualifying misconduct.  Part of the reason Irving was incarcerated for so long was because she was financially unable to make bail, which the EAB argued was “a matter of personal responsibility that does not affect her obligation to arrive at work.”  Irving argued caselaw in Iowa states that “misconduct connotes volition,” and in this case she was not guilty of the charges for which she was incarcerated and therefore was not absent for any “volitional” reason.  The Court agreed with Irving, likening absences resulting from involuntary incarceration (“at least where the charges are dismissed”) to absences resulting from illness, and holding that both are involuntary.

Finally, the Court addressed the issue of whether absence from employment due to incarceration for criminal charges that are ultimately dismissed constitutes voluntary resignation.  Iowa Code section 96.5(1) provides that claimants are disqualified from benefits if they have left work “voluntarily without good cause attributable to the individual’s employer.”  Iowa Administrative Code rule 871—24.25(16) says “the following reasons for a voluntary quit shall be presumed to be without good cause attributable to the employer: . . . The claimant is deemed to have left if such claimant becomes incarcerated.”

Irving asserted that she was involuntarily incarcerated, did not leave her work voluntarily under the statute, and cannot be regarded as voluntarily resigning her job under the administrative rule.  The EAB argued both that the administrative rule (which states incarceration will be presumed to be a voluntary quit) is a rational interpretation of the Iowa Employment Security Law and that to hold otherwise would result in an employer needing to investigate the employee’s guilt before termination or being required to prove the employee’s guilt at the unemployment appeal hearing.

The Iowa Supreme Court again agreed with Irving, holding “that incarceration in and itself does not establish a voluntary quit.  Instead, the circumstances that led to the incarceration must establish volitional acts of a nature sufficient to allow a fact finder to draw the conclusion that the employee by his intentional acts has purposively set in motion a chain of events leading to incarceration, absence from work, and ultimate termination from employment.”  The Court used the example of failing to pay child support, which could reasonably and predictably lead to incarceration, as a situation where incarceration might be considered “misconduct.”

Additionally, the Court pointed out that “the employer has the burden of proving that a claimant’s departure from employment was voluntary.  The term ‘voluntary’ requires volition and generally means a desire to quit the job.”  Applying this interpretation to the facts of Irving’s case, the Court found that UIHC failed to meet its burden of proving Irving’s absences were voluntary, and therefore reversed the decision of the Employment Appeal Board.

Justice Appel wrote the majority opinion, in which Chief Justice Cady, Justice Wiggins, and Justice Hecht joined.  Justice Waterman, joined by Justices Mansfield and Zager, wrote an opinion concurring in part and dissenting in part.  Chief Justice Cady also wrote a special concurrence (joined by Justice Wiggins), “to point out the importance of carefully considering how rules and statutes enacted over the years to resolve various issues can adversely impact a particular segment of people in society.”

In this case, Irving was incarcerated on a bailable offense and lacked the financial resources to post bail, thus prolonging her incarceration (again, for charges that were ultimately dropped).  The special concurrence points out that the absenteeism rule at issue in this case has been in place for forty-plus years and was in danger of disproportionately affecting individuals who were unable to post bail for financial reasons.  As Chief Justice Cady notes, “Justice in our state will be advanced when all implicit bias found in our laws and rules can be identified and eliminated.  This case is one example and is a step in the right direction.”

photo credit: <a href=”http://www.flickr.com/photos/8003324@N02/27273295086″>San Francisco</a> via <a href=”http://photopin.com”>photopin</a&gt; <a href=”https://creativecommons.org/licenses/by-sa/2.0/”>(license)</a&gt;

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