MAGNOLIA HEALTH SYSTEMS INC v. REVIEW BOARD OF INDIANA DEPARTMENT OF WORKFORCE DEVELOPMENT (2024)

MEMORANDUM DECISION

Statement of the Case

[1] After Magnolia Health Systems Inc.¹ (“Magnolia”) terminated Derrick Young's employment, he filed for unemployment benefits. An Indiana Department of Workforce Development (the “Department”) claims investigator denied Young's claim for those benefits, and an administrative law judge (“ALJ”) reversed that decision, determining he was eligible. The Review Board of the Department affirmed the ALJ's decision. Magnolia now appeals the Review Board's decision and presents three issues for our review, which we revise and restate as the following two issues:

1. Whether the Review Board abused its discretion by not considering Magnolia's additional evidence; and

2. Whether the Review Board erred in determining that Young is eligible for unemployment benefits.

[2] We affirm.

Facts and Procedural History

[3] Young worked for Magnolia as a full-time certified nursing assistant from October 10, 2023, to April 8, 2024. On Young's first day of work, he received and signed the employee handbook, which stated in relevant part that “accumulation of one (1) verbal and three (3) written warnings of any kind within any one-year period will result in discharge,” Tr. Vol. III at 40.

[4] In November 2023, Young received a verbal warning for “fail[ing] to produce quality and timely work or meet performance expectations.” Tr. Vol. III at 31. In January 2024, Young received a written warning for missing three scheduled shifts (the “Absence Warning”). (Id. at 32.) On April 4, 2024, Young received a written warning for “[f]ailing to produce quality and timely work or meet performance expectations.” Id. at 33.

[5] On April 8, 2024, Young received a written warning resulting in discharge for being absent “from any portion of a shift without notice and failure to return to work,” Tr. Vol. III at 34, (the “Final Warning”). The warning included the following description of Young's violation:

[Young] requested to be seen by a medical provider due to reoccurring back pain. [Young] was set up for an appointment at 10:00am with Healthy Companies. [Young] left for the appointment and never return[ed] to work. Per Dr. note from 4/5/2024 stated “You may return to work today on regulater [sic] duty with recommendations to self[-]modify activity as needed for pain.

Id. The warning also included a handwritten notation at the bottom of the page: “Employee verbally stated he was aware he was to return to work and received a copy of Dr Recommendations.” Id. Magnolia terminated Young's employment that same day.

[6] Young subsequently filed for unemployment, and a Department claims adjuster determined Magnolia had discharged him for just cause, thereby making Young ineligible for unemployment benefits. Young appealed this determination, and on June 6, 2024, the ALJ held a telephonic hearing at which Dusty Sizemore, Magnolia's regional director; Samantha Biddle, one of Young's supervisors; and Young testified. Although Biddle did not testify about the details of the verbal warning and first two written warnings, Magnolia offered and the ALJ admitted into evidence the documentation for all the warnings Young received. Regarding the Final Warning, Biddle testified that Young “had hurt his back previously a few weeks before that, and he had said he was having more pain, so we set him up with an appointment to see them that day.” Tr. Vol. II at 13–14. Biddle testified that Magnolia received paperwork from Young's appointment, including a summary of his visit with aftercare instructions, because “it was a workman's comp case.” Id. at 14. Magnolia offered and the ALJ admitted this documentation into evidence. The aftercare instructions stated in relevant part: “You may return to work today on regular duty with RECOMMENDATIONS to self[-]modify activity as needed for pain.” Tr. Vol. III at 35.

[7] According to Biddle, when she told Young that he was fired,

[h]e just verbally stated that he was aware that he was to return to work and that he received a copy of it, and he didn't say much else after that․ He said that he was aware that he was to return to work, and that he - that he received a copy of his work letter that he was to return to work.

Tr. Vol. II at 14. Young did not cross-examine Biddle.

[8] Concerning the Absence Warning, Young testified that he had been diagnosed with severe glaucoma in April 2023, which caused him to periodically have impaired vision, and that he had informed Magnolia of this diagnosis during his first interview. Young claimed his absences were due to his glaucoma: “[T]hey knew about that, but I was still getting written up because - if I can't see, how I am going to drive?” Tr. Vol. II at 28. Young confirmed that he did not have medical documentation for missing work that would have made his glaucoma-related absences excused.

[9] Regarding the Final Warning, Young testified that he was injured in March 2024 while discharging his duties, and he twice visited Healthy Companies to address that injury. At the end of the second visit on April 5, 2024, for which Young had left work, Young claimed that the nurse “told me verbally, out her own mouth, go home, take a hot shower, and relax. She did not tell me to go back to work.” Tr. Vol. II at 31. So, Young followed her instructions. When he returned to work on April 8, 2024, he had a meeting with Sizemore, Biddle, and his immediate supervisor about his failure to return to work on April 5, and he relayed the nurse's verbal instructions to them. Young testified that “Mr. Sizemore was the only one that spoke up and said, well, the paperwork said you're supposed to come back to work. I told them that's not what the lady - what the nurse told me.” Id. Young further testified that he thought Magnolia was looking for a reason to fire him because of his glaucoma-related absences and worker's compensation claim. Neither Sizemore nor Biddle cross-examined Young.

[10] On June 7, 2024, the ALJ issued a written decision reversing the claims investigator's determination of ineligibility and concluding Young was eligible for unemployment benefits. The ALJ made the following relevant findings and conclusions:

[Young] was discharged on April 8, 2024[,] for violating [Magnolia]’s policy regarding progressive disciplinary actions.

* * *

On April 5, 2024[, Young] was having back pain due to caring for a patient at work the previous month. He was sent to occupational health during his shift. The provider told him that he needed to go home, take a hot shower, and rest. However, the provider wrote in the summary and instructions that [Young] was released to return to work that day with self-modification. When [Young] returned to work on April 8, 2024[,] he was provided his 3rd written warning and was discharged.

* * *

[Young] did not knowingly violate the [progressive discipline] rule when he failed to return to work on April 5, 2024. He was told by his provider to go home, take a shower, and rest. The written aftercare instructions contradicted this information, but [Young] believed he was to follow the provider's oral instructions.

The Administrative Law Judge concludes that [Young] did not knowingly violate the rule.

The Administrative Law Judge concludes that [Young] was discharged but not for good cause as defined by Indiana Code Section 22-4-15-1(d).

Tr. Vol. III at 49–50.

[11] Magnolia appealed the ALJ's decision to the Review Board. As part of this appeal, Magnolia proffered additional evidence concerning Young's glaucoma. On June 21, 2024, the Review Board adopted the ALJ's findings and conclusions, and it affirmed the ALJ's decision that Young is eligible for unemployment benefits because Magnolia fired him without just cause. In its decision, the Review Board stated that it did not accept additional evidence. Magnolia now appeals.

Discussion and Decision

1. The Review Board Did Not Abuse Its Discretion by Not Accepting Magnolia's Additional Evidence

[12] Magnolia first challenges the Review Board's decision to not accept additional evidence, namely, the evidence Magnolia submitted regarding Young's glaucoma. The Indiana Administrative Code provides that a “hearing before the review board shall be confined to the evidence submitted before the administrative law judge unless it is an original hearing”; however, the Review Board “may hear or procure additional evidence upon its own motion, or upon written application of either party, and for good cause shown, together with a showing of good reason why the additional evidence was not procured and introduced at the hearing before the administrative law judge.” 646 Ind. Admin. Code 5-10-11(b). We review the Review Board's decision to accept or reject additional evidence for an abuse of discretion. E. Wind Acupuncture, Inc. v. Rev. Bd. of Ind. Dep't of Workforce Dev., 71 N.E.3d 391, 395 (Ind. Ct. App. 2017) (citing Telligman v. Rev. Bd. of Ind. Dep't of Workforce Dev., 996 N.E.2d 858, 865 (Ind. Ct. App. 2013)). An abuse of discretion occurs only if the decision is “clearly against the logic and effect of the facts and circumstances.” Hancz-Barron v. State, 235 N.E.3d 1237, 1246 (Ind. 2024) (quoting McCoy v. State, 193 N.E.3d 387, 390 (Ind. 2022)).

[13] Although not specifically stated, Magnolia seemingly contends that the Review Board should have considered the additional evidence it proffered concerning Young's glaucoma because it “belies [Young]’s sworn testimony” regarding the Absence Warning. Appellant's Am. Br. at 24. Even if we assume that the additional evidence does undercut Young's testimony about the Absence Warning, the fact remains that the ALJ's decision and the Review Board's decision relied on the Final Warning, not the Absence Warning. Because the additional evidence about Young's glaucoma is not relevant to the Final Warning, the Review Board did not abuse its discretion by not accepting that evidence.

2. The Review Board Did Not Err in Determining that Young Is Eligible for Unemployment Benefits

[14] Magnolia next argues the Review Board erred by concluding that Young is eligible for unemployment benefits. “Consistent with appellate review of other administrative adjudications,” we categorize the Review Board's findings three ways: (1) basic facts, (2) ultimate facts, and (3) legal conclusions. Chrysler Grp. v. Rev. Bd. of Ind. Dep't of Workforce Dev.,960 N.E.2d 118, 122 (Ind. 2012) (citing McClain v. Rev. Bd. of Ind. Dep't of Workforce Dev., 693 N.E.2d 1314, 1317 (Ind. 1998)). When we review the basic facts, we determine whether they are supported by substantial evidence. Id. (quoting McClain, 693 N.E.2d at 1317). In making this determination, “we neither reweigh the evidence nor assess its credibility,” we “consider only the evidence most favorable to the Board's findings.” Id. (citing McClain, 693 N.E.2d at 1317). “[A]bsent limited exceptions,” we “treat those findings as conclusive and binding.” Id. (quoting McClain, 693 N.E.2d at 1317, 1317 n.2). “Such exceptions include if the evidence ‘was devoid of probative value,’ or ‘was so proportionally meager as to lead to the conviction that the finding does not rest upon a rational basis,’ or the result of the proceedings was unduly influenced, fraudulent, or arbitrary.” Id. at 122 n.2 (quoting McClain, 693 N.E.2d at 1317 n.2).

[15] When we review the Review Board's findings of ultimate fact—which are “derived as inferences or conclusions from the basic, underlying facts” and are “typically mixed questions of fact and law”—are reasonable in light of its findings of the basic, underlying facts. Chrysler Grp., 960 N.E.2d at 122 (quoting McClain, 693 N.E.2d at 1317–18). If the “matter lies within the particular expertise of the administrative agency, we afford the finding a greater level of deference.” Id. (citing McClain, 693 N.E.2d at 1318). If the matter “does not lie within the particular expertise of the agency,” we are more likely to exercise our own judgment.” Id. at 122–23 (quoting McClain, 693 N.E.2d at 1318). “Regardless, ‘the court examines the logic of the inference drawn and imposes any rules of law that may drive the result.’ ” Id. at 123 (quoting McClain, 693 N.E.2d at 1318). We will reverse the Review Board's conclusion “if the underlying facts are not supported by substantial evidence or the logic of the inference is faulty, even where the agency acts within its expertise, or if the agency proceeds under an incorrect view of the law.” Id. (quoting McClain, 693 N.E.2d at 1318).

[16] Finally, we review de novo the Review Board's legal conclusions. Chrysler Grp., 960 N.E.2d at 123 (citing LTV Steel Co. v. Griffin, 730 N.E.2d 1251, 1257 (Ind. 2000)). Importantly, “[a]n interpretation of a statute by an administrative agency charged with the duty of enforcing the statute is entitled to great weight, unless this interpretation would be inconsistent with the statute itself.” Id. (alteration in original) (quoting LTV Steel, 730 N.E.2d at 1257).

[17] Magnolia specifically contends that the Review Board's decision was erroneous because Young “defrauded” the ALJ, the Review Board, and Magnolia, Appellant's Am. Br. at 21; and the evidence does not support the Review Board's determination that Young did not knowingly violate the progressive discipline rule. We address each contention in turn. Court of Appeals of Indiana | Memorandum Decision 24A-EX-1479 | December 20, 2024 Page 10 of 13

[18] First, Magnolia argues the Review Board's findings of basic fact regarding the Absence Warning and the Final Warning are not supported by substantial evidence because they are based in part on Young's allegedly “false, misleading and/or perjurious sworn testimony” at the ALJ hearing. Appellant's Am. Br. at 22. Concerning the Absence Warning, Magnolia asserts “the following must be true,” id. (emphasis in original): Young “misrepresented” (1) “his consent to the [Absence] Warning by signing [it] without protest,” and (2) “that [he] was excused from working each and all of the three ‘shifts’ referenced by and within the [Absence] Warning because [he] ‘couldn't see’ and ‘if I can't see, how can I drive?’ ” Id. (emphasis in original). Concerning the Final Warning, Magnolia asserts it “must be true” that Young “misrepresented ․ that [he] did not return to work on April 5, 2024, based upon alleged oral advice not to do so when, in actual fact, each and all of the following are true”: Young signed the Final Warning “without protest,” the Final Warning states Young “verbally stated he was aware he was to return to work,” and the aftercare instructions from Young's appointment stated he “may return to work today on regular duty.” Id. at 22–23 (emphasis in original).

[19] Magnolia's arguments amount to a request for us to reweigh the evidence and reassess witness credibility, which we cannot do, see Chrysler Grp., 960 N.E.2d at 122 (citing McClain, 693 N.E.2d at 1317). In fact, there is nothing in the record to suggest that Young lied at the ALJ hearing; rather, the record shows that Young testified to a more detailed version of events that somewhat conflicted with Biddle's version of events. For instance, Biddle testified that she was the one who fired Young, he told her “he was aware he was to return to work,” and “he didn't say much else after” that. Tr. Vol. II at 14. Biddle's testimony neither confirmed nor denied Young's testimony about his alleged meeting with her, Sizemore, and another Magnolia employee during which he claims he explained he did not return to work on the nurse's recommendation. Notably, Magnolia chose not to cross-examine Young. On this record, we cannot say that Young “defrauded” the ALJ, the Review Board, and Magnolia by providing “false, misleading and/or perjurious sworn testimony” such that the Review Board's findings of basic facts regarding the Absence and Final Warnings are unsupported by substantial evidence.

[20] Second, Magnolia claims the Review Board's determination that Young did not knowingly violate the progressive discipline rule is not supported by substantial evidence. In support, Magnolia primarily points to the Final Warning, which describes Young's alleged violation and includes the handwritten note regarding Young's alleged verbal statement that he was aware he was to return to work after his appointment on April 5, 2024. Magnolia also states that Young signed the Final Warning “without protest.” Appellant's Am. Br. at 27. According to Magnolia, the Review Board's decision “fail[s] to correctly appreciate the importance of the fact(s) that [Young] signed both [the Absence and Final] Warnings without protest.” Id. at 28. This argument amounts to a request for us to reweigh the evidence and reassess witness credibility, which we cannot do, see Chrysler Grp., 960 N.E.2d at 122 (citing McClain, 693 N.E.2d at 1317). Therefore, because Magnolia has not shown that the Review Board's findings of basic fact are unsupported by substantial evidence, we cannot say that the Review Board erred in determining that Young was not fired for just cause such that he is eligible for unemployment benefits.

Conclusion

[21] In sum, the Review Board did not abuse its discretion by not accepting Magnolia's additional evidence, and it did not err by determining Magnolia fired Young without just cause such that he was eligible for unemployment benefits. We therefore affirm the Review Board on all issues raised.

[22] Affirmed.

FOOTNOTES

1.   The parties did not file an affirmative request to keep their names confidential. “Our court has previously found that, notwithstanding the confidentiality mandate of Indiana Code section 22-4-19-6 and Indiana Administrative Rule 9(G), ‘it is appropriate for this [c]ourt to use the full names of parties in routine appeals from the Review Board.’ ” Bailey v. Rev. Bd. of Ind. Dep't of Workforce Dev., 132 N.E.3d 386, 387 n.1 (Ind. Ct. App. 2019) (quoting Moore v. Rev. Bd. of Ind. Dep't of Workforce Dev., 951 N.E.2d 301, 306 (Ind. Ct. App. 2011)); see also J.M. v. Rev. Bd. of Ind. Dep't of Workforce Dev., 975 N.E.2d 1283, 1285 n.1 (Ind. 2012) (noting that the court's practice “going forward will be to keep the [ ] parties confidential only if they make an affirmative request”).

Felix, Judge.

Pyle, J., and Weissmann, J., concur.