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Court of Appeals of Kentucky.


NO. 2012–CA–000415–MR

Decided: May 31, 2013




The Kentucky Unemployment Insurance Commission determined that Diann Gamble was discharged from her former employment with appellee Wagner Moving & Storage, Inc., for misconduct.   The Commission further determined that Gamble must refund the $17,125 in unemployment insurance benefits she has received.   Gamble now appeals a judgment of the McCracken Circuit Court affirming those determinations.   Finding no error, we likewise affirm.


The factual history, procedural posture, and issues raised in this appeal are inherent in the Commission's administrative order that denied Gamble unemployment benefits and reversed a prior decision from a referee to the contrary.   In relevant part, the Commission's order provides:


The claimant [Gamble] began her employment with the captioned employer [Wagner Moving & Storage] on November 18, 1999.   She was employed full-time as a customer account representative.   Claimant was advised upon hire that excessive tardiness and/or absenteeism results in disciplinary action up to, and including, discharge.   Claimant was instructed to report her absences in advance of her scheduled start time.   Claimant normally worked from 8:00 a.m. to 5:00 p.m. Claimant was supervised by Judy Oakley, office manager.

Claimant had a chronic and continuous history of poor attendance dating back to 2001.   In the last five (5) months of her employment the claimant was tardy approximately thirty (30) times, and absent between fifteen (15) and (20) times.   She was off with a broken ankle from March 30, 2010, through approximately April 7, 2010.   Mr. [Russell] Wagner had spoken to the claimant approximately six (6) times over the past two (2) years and given claimant warnings about her attendance on July 9, 2008, and March 19, 2010.   Ms. Oakley had spoken with the claimant seven (7) to eight (8) times over the past year about her attendance.   Claimant was advised her job was in jeopardy for her poor attendance.

Excuses claimant gave Mr. Wagner and Ms. Oakley for her tardiness included lost cell phone, sickness, car wouldn't start, overslept, did not get up on time, occasional traffic conditions, and couldn't find her keys.   However, the majority of the time, the claimant reported to Ms. Oakley that she overslept or did not get up on time.   The claimant's excuses for her absences primarily stemmed from illness.

On May 17, 2010, after she had not heard from the claimant, Ms. Oakley called the claimant at approximately 8:30 a.m. She told the claimant she had not heard from her and asked if she woke the claimant up.   The claimant replied she did not feel well.   Ms. Oakley and Mr. Wagner discussed the claimant's attendance history and the decision was made to terminate the claimant.


KRS 341.370(1)(b) and 341.530(3) combine to provide for the imposition of a duration disqualification from receiving benefits, and granting of reserve account relief to the employer, when a claimant has been discharged from the most recent employment for reasons of misconduct connected to the work.

KRS 341.370(6) states, “ ‘Discharge for misconduct’ as used in this section shall include but not be limited to separation initiated by an employer for falsification of an employment application to obtain employment through subterfuge;  knowing violation of a reasonable and uniformly enforced rule of an employer;  unsatisfactory attendance if the worker cannot show good cause for absences or tardiness;  damaging the employer's property through gross negligence;  refusing to obey reasonable instructions;  reporting to work under the influence of alcohol or drugs or consuming alcohol or drugs on employer's premises during working hours;  conduct endangering safety of self or co-workers;  and incarceration in jail following conviction of a misdemeanor or felony by a court of competent jurisdiction, which results in missing at least five (5) days work.”  (Emphasis added.)

The employer trying to show a disqualification under KRS 341.370 must bear the burden of proof by a preponderance of credible evidence.   See, Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299 (1962).

KRS 341.415 provides for repayment to the Division by a worker of an amount equal to the sum of benefits received by the worker during the weeks for which the worker was disqualified or held ineligible.

KRS 341.430(1) gives the Commission authority to affirm, modify, or set aside any decision of a referee on the basis of the evidence previously submitted.  787 KAR 1:110 Section 2(2)(a) and (4)(a) combine to give the Commission authority to hear all appeals upon the records of the division and the evidence and exhibits introduced at the referee hearing;  and to make a separate findings of fact, decision and reasons therefore, if the Commission disagrees with the referee in these matters.

The Kentucky Court of Appeals, in Kentucky Unemployment Insurance Commission v. Taylor Drug Store Inc.;   and Burch, Ky.App., 965 SW 2d 830 (1998), held that the above cited statute and regulations give the Commission the authority to conduct a de novo review of cases under appeal, and to judge both the weight of the evidence and the credibility of the witnesses.   Further, in Edward Thompson Jr. v. Kentucky Unemployment Insurance Commission and Packaging Unlimited Inc., Ky.App., 85 S.W.3d 621 (2002), the Kentucky Court of Appeals held that “As the fact-finder, the KUIC has exclusive authority to weigh the evidence and the credibility of the witnesses.”  (Emphasis added.)


The claimant knew or should have known if she continued to be absent or tardy her job was in jeopardy.   She had received two (2) documented warnings and had been talked to about her attendance approximately fourteen (14) times by Mr. Wagner and Ms. Oakley over the past two (2) years.   Claimant's main excuses for her tardiness were that she overslept or did not get up on time.   She was primarily absent due to illness.

Once the employer has shown the worker to have unsatisfactory attendance/tardiness, the burden of proof then shifts to the worker to show that she had good cause for her instances of tardiness and absenteeism in order to avoid a benefit disqualification.   The claimant has shown good cause for her absences.   However, she has not shown good cause for her instances of tardiness.   Accordingly, she is disqualified from receiving benefits as she was discharged for misconduct connected with the work as set forth in KRS 341.370(6).

Furthermore, it is noted that the testimony of Mr. Wagner and Ms. Oakley is determined to be credible.


WHEREFORE, the Commission, having reviewed the record and being advised, REVERSES the referee decision.   It is now held the claimant was discharged for misconduct connected with the work and she is disqualified from receiving benefits from May 16, 2010, throughout the unemployment.   Benefits paid constitute an overpayment of $17,125.00 which claimant must repay to the Division.   The employer's reserve account is relieved of charges.

Following the Commission's decision, Gamble contested it by filing an original action in McCracken Circuit Court.   The circuit court affirmed the Commission, and this appeal followed.


In reviewing an agency decision the reviewing court may only overturn that decision if the agency acted arbitrarily or outside the scope of its authority, if the agency applied an incorrect rule of law, or if the decision itself is not supported by substantial evidence on the record.  Kentucky State Racing Commission v. Fuller, 481 S.W.2d 298, 300–301 (Ky.1972).   When reviewing issues of law, the court may review them de novo without any deference to the agency.  Mill Street Church of Christ v. Hogan, 785 S.W.2d 263, 266 (Ky.App.1990).

On questions of fact, the court's review is limited to an inquiry of “whether the agency's decision was supported by substantial evidence or whether the decision was arbitrary or unreasonable.”  Cabinet for Human Resources, Interim Office of Health Planning and Certification v. Jewish Hospital Healthcare Services, Inc., 932 S.W.2d 388, 390 (Ky.App.1996).   Substantial evidence means “evidence of substance and relevant consequence having the fitness to induce conviction in the minds of reasonable men.”  Owens–Corning Fiberglas v. Golightly, 976 S.W.2d 409, 414 (Ky.1998).

If there is substantial evidence in the record to support the agency's findings, the court must defer to those findings even though there is evidence to the contrary.  Kentucky Comm'n on Human Rights v. Fraser, 625 S.W.2d 852, 856 (Ky.1981).   Likewise, a court may not substitute its own judgment as to the inferences to be drawn from the evidence of record for that of the administrative agency.  Railroad Commission v. Chesapeake & Ohio Ry. Co., 490 S.W.2d 763, 766 (Ky.1973).   If the court finds the rule of law was applied to facts supported by substantial evidence, the final order of the agency must be affirmed.  Brown Hotel Company v. Edwards, 365 S.W.2d 299, 302 (Ky.1963).   The function of the court in administrative matters “is one of review, not of reinterpretation.”  Kentucky Unemployment Insurance Commission v. King, 657 S.W.2d 250, 251 (Ky.App.1983).


Gamble urges us to reverse the circuit court and find that the Commission's order contains three instances of error.   The first error, as she describes it in her brief, is:

The Appellee/Employer terminated the Appellant's employment on May 17, 2010, due to excessive absenteeism—not tardiness.   At the third evidentiary hearing on April 7, 2011, Appeals Referee Burkeen specifically questioned Mr. Wagner:  “All right, sir, now you indicated that she was discharged for excessive tardiness and absenteeism.   Do you have a date of discharge?”   Mr. Wagner responded:  “She was actually discharged for that last reason on the 17 th, no call, no show[.]”  Thus, the Appellee/Employer conceded that the Appellant was not terminated for tardiness.   Since the Appellant's tardiness was not the grounds for which she was discharged, it would be ludicrous to conclude that her tardiness constituted willful or wanton misconduct.

In short, Gamble argues that the Commission was not authorized to cite her tardiness as a ground for misconduct because her employer, through Russell Wagner, conceded that her tardiness did not form the basis of her discharge.

This is an incomplete representation of Wagner's testimony.   The full exchange between Wagner and the Referee was as follows:

Q: And why was Ms. Gamble discharged?

WAGNER:  She was discharged because she had been verbally reprimanded on several occasions for her tardiness and absenteeism and her overall poor attendance to work which we had tolerated for a long time and it just finally came to a boil on the 17th.   She failed to call in or show up and due to her past record, I had no alternative but to let her go.   Her supervisor was upset with her.   We were working a very stressful demanding account situation there at the office and her attendance is very important to her job and we needed her and like I said, it just finally got to a boiling point and I had no alternative but to let her go.

Q: All right, sir, now you indicated that she was discharged for excessive tardiness and absenteeism.   Do you have a date of the list of the occurrences that contributed to her discharge?

WAGNER:  She was actually discharged for that last reason on the 17th, no call, no show, but she was tardy so many times that I mean it was probably in several—I don't know, 30 or 40 or more.   We just tolerated it as long as we could and I pleaded and begged with her to show up on time and it just went through deaf ears.

Q: So at this time, for the purpose of this hearing, you don't have a chronological or any listing of the dates that she was either tardy or absent that contributed to your decision to discharge her, is that true?

WAGNER:  I've got several of them.

Q: What I am asking you, sir, then once again, I want to go through the dates of the tardiness or absenteeism if you have them and for the ones that you have, whether or not she was tardy or absent and whether or not you have a reason, and you may not, for that tardiness or absenteeism.   So you say you do have a list of some dates but not all?

WAGNER:  We were rather lax in some of these dates but I've got a list here back in 2001.

Q: Sir, I assume that when she was discharged, I believe you've even indicated it was primarily the last incident on the 17th precipitated the discharge.   So when you were making your decision to discharge, did you consider tardiness or absenteeism that was back to 2001?   Did that affect your decision?

WAGNER:  I considered her overall attendance record for her entire employment period.

Q: Was there a point in time, say within a year ago, a year from the discharge date of May 17, 2010, during that past year, did her attendance get worse?

WAGNER:  It got consistently worse.

Taken in context, Wagner's testimony demonstrates that Gamble was discharged on the basis of her “overall attendance record,” and that his two primary considerations in that respect were Gamble's absenteeism and tardiness.   Accordingly, the Commission did not err in considering Gamble's tardiness as a ground of misconduct.

The second error asserted by Gamble involves the May 17, 2010 incident, described above in the Commission's order, involving Gamble's failure to show up to work at 8:00 a.m., and her failure to notify her employer that she was going to be absent that day due to illness until her supervisor, Judy Oakley, called her at 8:30 a.m. regarding her whereabouts.   Gamble assumes that this incident was strictly an example of her “absenteeism.”   Because her employer identified this incident as the final event leading to her discharge, Gamble further assumes that she was discharged solely because of her absenteeism.   With this in mind, Gamble's argument focuses upon the following sentence in the Commission's order:  “The claimant has shown good cause for her absences.”   And, as stated in her brief, the substance of her argument is that “It is not possible for the Appellant on the one hand to have shown good cause for her absences, and on the other hand for her discharge for being absent to constitute misconduct connected with the work.”   To summarize, Gamble believes that the Commission's order is contradictory because it found that she had good cause for her absenteeism, but also found that an instance of her absenteeism nevertheless qualified as misconduct and justified her discharge.

Gamble's argument merely reflects her misinterpretation of the Commission's order.   Contrary to her assumption, it is evident that the Commission regarded the May 17, 2010 incident as an instance of both absenteeism and tardiness.   To that effect, the Commission noted at the beginning of its order that “[Gamble] was instructed to report her absences in advance of her scheduled start time.   [Gamble] normally worked from 8:00 a.m. to 5:00 p.m.” (Emphasis added.)   The Commission noted that “after she had not heard from the claimant, Ms. Oakley called the claimant at approximately 8:30 a.m.” Eight-thirty a.m. was half an hour after Gamble's scheduled start time.   Gamble was already tardy when she informed Oakley at 8:30 a.m. on May 17, 2010, that she would not be coming to work that day.   And, as Oakley testified, Gamble's conduct on May 17, 2010 contributed to her discharge “[b]ecause she failed to call in.   You have to call in and let me know or if you cannot get hold of me, you tell someone within the office and then they will come tell me.”

As the ultimate finder of fact, the Commission was entitled to make reasonable inferences from the evidence of record.  Thompson v. Kentucky Unemployment Ins. Comm'n, 85 S.W.3d 621, 624 (Ky.App.2002).   And, in light of Wagner's and Oakley's testimony regarding the causes of Gamble's discharge, it was reasonable for the Commission to infer that Gamble had been discharged on March 17, 2010, due in part to her tardy report of her absence that day.   In short, the Commission did not err in relying upon the May 17, 2010 incident as one of the several other instances of Gambles' tardiness justifying her discharge.

Gamble argues lastly that even if she was terminated on the basis of her tardiness, substantial evidence of record supported that her tardiness did not rise to the level of misconduct that would disqualify her from receiving unemployment benefits.   In support, Gamble points to the following:

 A phone bill indicating that on May 17, 2010, she had called her employer at 7:21 a.m., and her own testimony that she had indeed spoken with Oakley at that time and had informed her prior to 8:00 a.m. that she would not be coming into work that day;

 Wagner's testimony that he had never asked Gamble for specific reasons for being late, or to provide a doctor's excuse, and that he did not get involved in the issue of her tardiness until Oakley told him about it;  and

 Oakley's testimony that she did not tell Gamble that if her tardiness was not remedied, she would lose her job.

The Commission correctly noted in its order, however, that it has the exclusive authority to weigh the evidence and the credibility of the witnesses.

The phone bill and Gamble's testimony were contradicted by Oakley's and Wagner's testimony that Gamble did not call in that day.   The Commission specifically found that Oakley's and Wagner's testimony was credible.   Also, Gamble's telephone bill does not demonstrate that she spoke with anyone, who she may have spoken with, or the substance of what, if anything, was said.   Indeed, Oakley testified that she may have been on another line at that time, and that Gamble may have simply reached a busy signal.

Wagner testified that he did not ask Gamble for specific reasons for her lateness or absenteeism.   When asked why, however, he further testified that he relied upon Oakley to gather that information.   To that effect, Oakley testified that she had documented Gamble's absences and instances of tardiness, had spoken with Gamble about them at least seven or eight times in 2010 prior to Gamble's discharge on May 17 of that year, and that most of Gamble's excuses for being tardy were “she either overslept or she didn't get up on time.   Occasionally it was traffic.   Occasionally she would have trouble of she couldn't find her keys or something in that way.   But the majority of the time, she didn't wake up on time.”   As noted previously, the Commission specifically found Oakley credible.

Oakley also testified that she never told Gamble that if the absences or instances of tardiness persisted, Gamble's job would be in jeopardy.   But, Oakley further testified that the matter of Gamble's absences and instances of tardiness was routinely turned over to Wagner.   To that effect, Wagner testified:

When it got to the point where it just got out of hand, Ms. Oakley, since she is a path in this and she likes harmony and peace, she called me and asked me to deal with it and that is when I would come over acting as the owner and talk to Ms. Gamble myself.   So I didn't get involved until Ms. Oakley called me.

When asked whether he warned Gamble that her excessive absenteeism and tardiness would place her job in jeopardy, Wagner testified that he had documented those warnings on July 9, 2008 and March 19, 2010.   He testified that he verbally warned Gamble about it on several other occasions toward the end of her employment.   Again, the Commission specifically found Wagner credible.

In short, substantial evidence of record supports the Commission's findings that Gamble lacked good cause for being late to work on most occasions (i.e., that “Claimant's main excuses for her tardiness were that she overslept or did not get up on time);  that she “had received two (2) documented warnings and had been talked to about her attendance approximately fourteen (14) times by Mr. Wagner and Ms. Oakley over the past two (2) years”;  and that she therefore “knew or should have known if she continued to be absent or tardy her job was in jeopardy.”   Gamble makes no argument that effectively contests these findings.

Moreover, the Commission's findings support the legal conclusion that Gamble had committed misconduct justifying discharge.   Those findings demonstrate that Gamble was aware of her responsibilities, had been warned of the consequences of her actions, and that her actions and behavior did not represent mere inefficiency or unsatisfactory conduct.   Rather, it was a refusal to follow company rules as ordered over a lengthy period of time.   See Runner v. Commonwealth, 323 S.W.3d 7, 11 (Ky.App.2010).


For these reasons, the judgment of the McCracken Circuit Court is AFFIRMED.