Zen'd Out v. ICAO

25CA1447 Zen’d Out v ICAO 01-15-2026

COLORADO COURT OF APPEALS

Court of Appeals No. 25CA1447
Industrial Claim Appeals Office of the State of Colorado
DD No. 6098-2025

Zen’d Out Massage Spa,

Petitioner,

v.

Industrial Claim Appeals Office of the State of Colorado and Kaelyn Norman,

Respondents.

ORDER AFFIRMED

Division I
Opinion by JUDGE MEIRINK
J. Jones and Lum, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced January 15, 2026

Massey Kelly & Priebe, PLLC, Jennifer Tiedeken, Rhonda Reed Weiner, Fort
Collins, Colorado, for Petitioner

No Appearance for Respondent Industrial Claim Appeals Office

HKM Employment Attorneys LLP, Adam M. Harrison, Cynthia J. Sánchez,
Hayden G. DePorter, Denver, Colorado, for Respondent Kaelyn Norman
¶1 Zen’d Out Massage Spa appeals the award of unemployment

compensation benefits to a former employee, Kaelyn Norman. We

affirm.

I. Background

¶2 Zen’d Out employed Norman as a lead esthetician and

massage therapist. In January 2025, Norman’s supervisor, Maria

Sumner, presented the massage therapists with a list of

expectations and asked them to sign it. Norman expressed

concerns with the expectations because she believed that they

required her to work “at least an extra hour a day without being

paid.” After the meeting, Sumner met Norman in the hallway and

asked her if she was going to sign the list of expectations. Norman

said that she did not want to sign it until she had more time to

review the list and could show it to her attorney. Sumner told

Norman that, if she did not want to sign the expectations, “the next

day could be her last day.” Norman said that she was “done” and

left the spa.

¶3 Norman filed for unemployment benefits, asserting that she

had been terminated because she refused to sign the list of

expectations. A deputy for the Division of Unemployment Insurance

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determined that Norman was disqualified from receiving benefits

under section 8-73-108(5)(e)(I), C.R.S. 2025, finding that Norman

quit her job because she was dissatisfied with the rate of pay.

¶4 Norman requested a hearing before a hearing officer. After

considering the evidence, the hearing officer reversed the deputy’s

decision and determined that Norman was eligible for benefits

under section 8-73-108(4)(c), which provides that a person may

receive a full award of benefits based on unsatisfactory working

conditions. In doing so, the hearing officer concluded that “[t]he

pressure to sign the list of expectations without time to review the

list and talk to her attorney created working conditions that were

unsatisfactory.”

¶5 Zen’d Out appealed to the Industrial Claims Appeals Office

(the Panel), which affirmed the hearing officer’s decision. The Panel

determined that Norman’s decision not to sign the list of

expectations and to quit was objectively reasonable because

Norman “likely was being paid less than state law required.” In

reaching its decision, the Panel relied on the Colorado Division of

Labor Standards and Statistics’ Interpretive Notice & Formal

Opinion (“INFO”) #20B: What’s Owed for “Time Worked” for

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Different Types of Pay, Hourly and Non-Hourly (last updated Dec. 8,

2023), https://perma.cc/S7CT-SGC4 (INFO #20B).

II. Discussion

¶6 Zen’d Out asserts that the Panel erred by concluding that

Norman was entitled to unemployment benefits under section 8-73-

108(4)(c). We disagree.

A. Legal Principles and Standard of Review

¶7 Workers can receive unemployment benefits only if they

become unemployed through no fault of their own. See Debalco

Enters., Inc. v. Indus. Claim Appeals Off., 32 P.3d 621, 623 (Colo.

App. 2001). Determining whether a claimant is at fault for an

employment separation requires a case-specific consideration of the

totality of the circumstances. Morris v. City & County of Denver,

843 P.2d 76, 79 (Colo. App. 1992).

¶8 Under section 8-73-108(4)(c), a claimant is not at fault for an

employment separation when the claimant was forced to quit

because of unsatisfactory working conditions. See Campbell v.

Indus. Claim Appeals Off., 97 P.3d 204, 212-13 (Colo. App. 2003)

(evidence that the employer had unilaterally increased the

claimant’s working hours supported finding that the claimant’s

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working conditions were unsatisfactory). The statute provides a list

of factors that a hearing officer must consider when determining

whether a claimant’s working conditions are unsatisfactory. See

§ 8-73-108(4)(c). But the factors listed in the statute “are not all-

inclusive,” and the hearing officer may consider other factors that

are pertinent to the determination. Campbell, 97 P.3d at 209.

¶9 Ultimately, in deciding whether a claimant’s working

conditions were unsatisfactory, the hearing officer must determine

whether a reasonable person in the claimant’s position would have

found the actual working conditions to be so detrimental to the

worker as to warrant resignation. Rodco Sys., Inc. v. Indus. Claim

Appeals Off., 981 P.2d 699, 701-02 (Colo. App. 1999); see also

Yotes, Inc. v. Indus. Claim Appeals Off., 2013 COA 124, ¶ 31 (noting

that the hearing officer “must consider the working conditions that

existed when the separation occurred and the extent to which the

conditions were likely to continue”). Said another way, evidence of

a claimant’s “personal perspectives or beliefs” are insufficient to

establish unsatisfactory working conditions. Rodco, 981 P.2d at

701; see also Rotenberg v. Indus. Comm’n, 590 P.2d 521, 523 (Colo.

App. 1979) (the claimant’s “own subjective statements of

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discomfort” are insufficient to establish unsatisfactory working

conditions).

¶ 10 We will uphold the Panel’s decision unless (1) the Panel acted

without or in excess of its powers; (2) the decision was procured by

fraud; (3) the findings of fact do not support the decision; or (4) the

decision is erroneous as a matter of law. § 8-74-107(6), C.R.S.

2025; see Mesa Cnty. Pub. Libr. Dist. v. Indus. Claim Appeals Off.,

2017 CO 78, ¶ 17. We review de novo ultimate conclusions of fact

and legal conclusions. Harbert v. Indus. Claim Appeals Off., 2012

COA 23, ¶¶ 8-9. But we will not disturb the hearing officer’s factual

findings if they are supported by substantial evidence or reasonable

inferences drawn from the evidence. Goodwill Indus. v. Indus. Claim

Appeals Off., 862 P.2d 1042, 1046 (Colo. App. 1993).

¶ 11 This appeal requires us to interpret regulations and agency

opinions explaining those regulations. See Brunson v. Colo. Cab

Co., LLC, 2018 COA 17, ¶ 11 (“[I]f the language of a regulation or

administrative rule is ambiguous or unclear, we may consider an

agency’s interpretation of its own regulation or rule.”). The rules

governing our interpretation of administrative regulations are the

same as those governing our interpretation of statutes. Pilmenstein

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v. Devereux Cleo Wallace, 2021 COA 59, ¶¶ 15-16. Our review is de

novo. See Brunson, ¶ 10.

B. The Panel Did Not Misinterpret INFO #20B

¶ 12 Zen’d Out first asserts that the Panel misinterpreted INFO

#20B to conclude that Norman was being paid less than what state

law required. Because it was paying Norman in accordance with

INFO #20B, Zen’d Out’s argument continues, the Panel erred as a

matter of law by concluding that Norman quit because of

unsatisfactory working conditions. We discern no reversible error.

¶ 13 As a preliminary matter, Norman asserts that we should

decline to address Zen’d Out’s argument because it did not raise

this specific issue during the administrative proceeding. See

Debalco, 32 P.3d at 624 (declining to address issues that were not

raised in the administrative proceeding). But in its brief to the

hearing officer, Zen’d Out asserted that it was paying Norman in

accordance with INFO #20B. We therefore conclude that Zen’d Out

preserved this argument for appeal.

¶ 14 The Colorado Department of Labor and Employment’s Division

of Labor Standards and Statics publishes formal opinions

interpreting the Department’s regulations, which are referred to as

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INFOs. See 303 Beauty Bar LLC v. Div. of Lab. Standards & Stats.,

2025 COA 20, ¶ 21 n.4 (noting that an INFO is “an officially

approved notice, opinion, or explanation on a topic of labor law” but

“is not binding law”). For example, the Division published INFO

#20B describing what constitutes “time worked,” as defined by

regulation, for different “non-hourly” pay types. See Div. of Lab.

Standards & Stats. Reg. Rule 1.9, 7 Code Colo. Regs 1103-1:1

(defining “time worked” as “time during which an employee is

performing labor or services for the benefit of an employer”). INFO

#20B provides that “[n]on-hourly pay can serve as the pay for all

time worked” but that “extra pay is required” if, for example, the

non-hourly pay is (1) below minimum wage or (2) limited to certain

time worked. INFO #20B at 2. There are two categories of non-

hourly work discussed in INFO #20B that are pertinent to this

appeal: (1) commissions and (2) piece rates.

¶ 15 A commission is defined as “‘compensation paid upon results

achieved,’ including pay that depends on sales or other revenue,

rather than on time.” INFO #20B at 4 (quoting Div. of Emp. &

Training v. Moen, 767 P.2d 1230, 1233 (Colo. App. 1988)). Under

INFO #20B, a “commission can serve as the pay for all time worked

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that produces the commission-generating sale,” but extra pay is

required for “other time worked that doesn’t generate a sale.” INFO

#20B at 4.

¶ 16 INFO #20B provides Example 11 as a guide. This example

involves a maintenance worker who visits homes for service

appointments. Id. The worker also spends time (1) driving to

appointments; (2) communicating with customers; and (3) attending

weekly staff meetings. Id. Because the time spent on the first two

categories (i.e., driving and communicating) are necessary to

generate the commission, the employer does not owe any extra pay.

But because the third category — weekly meetings — does not

produce a commission, the employer must pay extra. Id.

¶ 17 A piece rate is defined as “pay per item or task finished . . .

regardless of the time worked.” Id. at 5. For a person paid on a

piece rate, the piece rate typically serves as pay for (1) work that

produces the piece and (2) work directly related to the piece

production “if the parties agreed and understood that the piece rate

serves as the pay for that work.” Id. But it does not pay for “more

general time worked . . . regardless of what was agreed and

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understood” because the piece rate cannot serve as pay for time

that does not produce a piece. Id.

¶ 18 INFO #20B provides two examples — Examples 13 and 15 —

that are relevant here. Example 13 involves a startup business that

sells hour-long mock job interviews and pays its employees “$25 for

each one-hour session.” Id. The employee also spends five to ten

minutes of prep time before each session reviewing the personal

information from the customer. Id. INFO #20B concludes that “the

piece rate can’t serve as the pay for prep time” because “the parties

agreed that the $25.00 piece rate is for only the hour of in-session

time.” Id.

¶ 19 Example 15 involves the same factual scenario as Example 13,

but this time the business’s handbook describes the piece rate as

“all work for the client who purchased the session.” Id. at 7. By

changing the language, the business makes clear that “the prep

time is directly related to producing the session” and therefore “the

employer now owes nothing extra.” Id. at 7.

¶ 20 The hearing officer found that Norman was paid forty dollars

for a one-hour massage and sixty dollars for a ninety-minute

massage and that she worked about twenty-four hours a week. The

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hearing officer found that Norman had expressed concern about

“not being fully compensated for the time she was working,” which

included a requirement that she “be at the facility 30 minutes

before [her] first client and to perform cleaning and closing duties

after [her] last client.” The hearing officer also found that Norman

was “reluctant” to sign the list of expectations presented to her in

January 2025 because she “was concerned that she would be

working at least an extra hour a day without being paid.”

¶ 21 In its order, the Panel noted Norman’s concerns that she was

not being paid for the time spent at the spa before and after her

first and last appointment. It also noted that the employees were

not being paid for the time “spent at the spa between an earlier and

later appointment.” The Panel then noted that Zen’d Out believed

that, if it was paying the massage therapist at least minimum wage,

it did not need to pay them for anything else. But, relying on INFO

#20B, the Panel determined that “the additional time the employer

requires its employees to spend both before and after massage

appointments must be paid and the rate is not limited to an average

of the minimum hourly wage.” The Panel concluded that “[i]nsofar

as the claimant was being prohibited by the employer from being

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paid for all periods of time she was required to be present at the

employer’s spa, [she] likely was being paid less than state law

required.”

¶ 22 Throughout the testimony, Sumner described Norman’s pay as

commission-based, but Norman testified that she was paid “per

service” and noted that she would get paid the same amount

“regardless of the amount of money that [Zen’d Out was] charging.”

The hearing officer did not make any specific findings about

whether Norman was being paid a commission, but the Panel

described her pay as a commission, and it referred to the part of

INFO #20B that describes commissions. However, the Panel also

referred to Example 13, which, as noted above, involves piece rate

pay.

¶ 23 It is unclear to us whether the Panel considered Norman’s pay

to be a commission or a piece rate. Likewise, in its briefing, Zen’d

Out refers to the pay as a commission but relies on the examples in

the piece rate section of INFO #20B. In our opinion, the evidence

shows that Norman was paid a piece rate — forty to sixty dollars

per massage — rather than a commission. At any rate, whether we

conclude that Norman was paid a piece rate or a commission, we

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still conclude that the Panel did not reversibly err in its

interpretation of INFO #20B.

¶ 24 Zen’d Out’s Wage Policy describes two types of “direct wages”:

(1) commissions for massages and (2) other wages for work,

including any wages a therapist is paid if there is no scheduled

massage. As noted, Zen’d Out paid between forty and sixty dollars

per massage; the Wage Policy indicates that a massage therapist

should receive an extra fifteen dollars per hour for “no

appointment.” The Wage Policy also identifies tasks that are

considered “time worked”: (1) the thirty-minute period before a

massage therapist’s first appointment; (2) the time for each

massage; (3) the gap between massages; (4) all other gaps between

appointments; and (5) all time an employee is asked to be on-call.

Finally, the Wage Policy provides that employees are entitled to ten-

minute breaks every two hours.

¶ 25 Notably, although the Wage Policy includes the thirty-minute

period before the first massage in “time worked,” it does not

mention the thirty minutes for closing activities. Therefore, like

Example 13 described above, Zen’d Out would have needed to pay

Norman extra for this time. See INFO #20B at 5. Even if Norman

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was paid on a commission, the record does not indicate that the

closing time activities generated the commission. In other words,

the tasks described by the witnesses were more general and for

Zen’d Out’s benefit, not to generate a commission. See INFO #20B

at 4 (noting that employers must pay extra for “an activity for the

employer’s benefit that . . . doesn’t go toward producing any

commission”).

¶ 26 The record also indicates that Norman may not have been paid

for other activities. For example, the Wage Policy also acknowledges

that therapists should be paid an hourly wage when a massage is

not scheduled. But Norman testified that, even though she had to

be at the spa for eight hours, she only performed about five

massages and had never been paid for time when she did not have

a massage appointment. Norman also testified that she was not

given any breaks.

¶ 27 We therefore conclude that, although the Panel may have

erred by concluding that Zen’d Out had to pay Norman extra for the

thirty minutes before her first massage, it did not err by

determining that Norman “likely was being paid less than state law

required” because the evidence established that Zen’d Out was not

13
paying Norman for all her time as required by INFO #20B. Because

the evidence supports the Panel’s determination that Zen’d Out was

not paying Norman in accordance with applicable law, we discern

no error in its decision that an objectively reasonable person in the

Norman’s position would have found the actual working conditions

— i.e., requiring work without pay — were so detrimental as to

warrant resignation. See Rodco, 981 P.2d at 701-02.

C. The Panel Did Not Create a Right to Consult an Attorney

¶ 28 Zen’d Out next asserts that the Panel improperly created a

right to consult an attorney. In the alternative, it argues that the

evidence did not establish that Norman was prevented from

consulting an attorney. We disagree with both contentions.

¶ 29 To begin, Norman again asserts that we should decline to

address these issues because Zen’d Out did not raise them in the

administrative proceeding. To be sure, Zen’d Out did not

specifically raise either of these issues before the hearing officer or

the Panel. However, it is unclear to us how Zen’d Out could have

challenged the Panel’s determination that “[p]rohibiting an

employee from making inquiry and having terms of work reviewed

by an attorney represents an unsatisfactory working condition”

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before this appeal. See Rinker v. Colina-Lee, 2019 COA 45, ¶ 26

(when the trial court rules sua sponte on an issue, the merits of its

ruling are subject to review on appeal, whether timely objections

were made or not). And because Zen’d Out’s alternative argument

is based on the determination above, we will address the merits of

both arguments.

¶ 30 First, we disagree with Zen’d Out that the Panel exceed its

authority by creating a right to consult an attorney. Rather, we

agree with Norman that, when the Panel made its decision, it did so

by considering a relevant factor — whether it would be reasonable

for Norman to ask for more time to review the list of expectations

and consult an attorney before agreeing to the list. See Campbell,

97 P.3d at 209 (noting that the Panel can consider factors not

explicitly listed in section 8-73-108(4)(c) if they are pertinent to its

determination). The Panel’s decision did not create a right to

consult an attorney in every case; it only determined that, given the

circumstances presented in this case, a reasonable person would

have acted as Norman did. See Rodco, 981 P.2d at 701-02.

¶ 31 Second, we conclude that the Panel did not err by concluding

that Norman was prohibited from speaking to an attorney. The

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record shows that Sumner gave Norman the ultimatum to sign the

list of expectations late on a Friday afternoon and said that the

following day would be her last if she did not immediately sign the

list. Under those circumstances, the record indicates that Norman

did not have an opportunity to consult an attorney before signing.

Nor are we convinced by Zen’d Out’s assertion that the “record

strongly indicates that Ms. Norman had consulted her attorney

before the meeting even started.” Even if she had done so, the

record still indicates that she was not given the opportunity to

consult with an attorney after receiving the list of expectations.

Therefore, substantial evidence supports the hearing officer’s

factual findings, and we cannot disturb them on appeal. See

Goodwill, 862 P.2d at 1046.

D. Zen’d Out Did Not Preserve Any Evidentiary Arguments

¶ 32 Finally, Zen’d Out asserts that the hearing officer erred by

preventing it from introducing evidence about how or how much

Norman was paid. We decline to address the merits of this

argument because Zen’d Out did not preserve it for appeal.

¶ 33 At the hearing, Norman’s attorney objected to questions about

how much Norman made and whether she was paid at least

16
minimum wage, asserting that the questions were not relevant to

the issues in the case. The hearing officer sustained the objections.

In its appeal to the Panel, Zen’d Out did not assert that the hearing

officer had erred by excluding this evidence. Rather, Zen’d Out

asserted only that the hearing officer’s decision was “based on

incorrect facts and a misapplication of law.”

¶ 34 Because Zen’d Out did not assert in its appeal to the Panel

that the hearing officer had erred by excluding evidence, we

conclude that Zen’d Out failed to preserve its appellate argument.

See Debalco, 32 P.3d at 624; see also People in Interest of K.L-P.,

148 P.3d 402, 403 (Colo. 2006) (noting that, if the court of appeals

serves as a second layer of appellate review, a party must raise the

issue in the district court to preserve it for review in the court of

appeals). We therefore decline to address the merits of its

argument.

III. Disposition

¶ 35 The order is affirmed

JUDGE J. JONES and JUDGE LUM concur.

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