Over The Rainbow Daycare v. Mississippi Department of Employment Security

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2014-CC-01798-COA

OVER THE RAINBOW DAYCARE APPELLANT

v.

MISSISSIPPI DEPARTMENT OF APPELLEE
EMPLOYMENT SECURITY

DATE OF JUDGMENT: 11/20/2014
TRIAL JUDGE: HON. ROBERT B. HELFRICH
COURT FROM WHICH APPEALED: FORREST COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: ROBIN L. ROBERTS
CHRISTOPHER DENT NOBLES
ATTORNEYS FOR APPELLEE: ALBERT B. WHITE
ANNA CRAIN CLEMMER
NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES
TRIAL COURT DISPOSITION: AFFIRMED BOARD OF REVIEW’S
JUDGMENT
DISPOSITION: AFFIRMED – 03/29/2016
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

BEFORE IRVING, P.J., BARNES AND ISHEE, JJ.

IRVING, P.J., FOR THE COURT:

¶1. This appeal ensued after the Circuit Court of Forrest County affirmed the decision of

the Board of Review of the Mississippi Department of Employment Security (the Board of

Review) granting unemployment benefits to Tempestt Griffin, a former employee of Over

The Rainbow Daycare (Rainbow). Rainbow argues that the circuit court erred in upholding

the Board of Review’s decision because the Board of Review failed to adequately consider

the evidence undergirding the agency’s initial decision.
¶2. Finding no error, we affirm.

FACTS

¶3. When Griffin arrived for work on July 18, 2014, Rainbow informed her that she was

being suspended for failing to attend a mandatory meeting held the day before. Griffin was

instructed to leave and return at 2:00 p.m. to pick up her check. However, Griffin did not

return until after 4:00 p.m. Griffin was then instructed to remain in the office, in compliance

with company policy for suspended employees. Rather than doing as instructed, Griffin went

to her classroom. Upon entering her classroom, a physical altercation occurred between her

and her supervisor, Renae Causey. As a result of the physical altercation, Rainbow

terminated her employment.

¶4. Thereafter, Griffin applied for unemployment benefits with the Mississippi

Department of Employment Security (MDES). The MDES found that Griffin had been

discharged for misconduct and denied her claim for benefits. Following the denial, Griffin

appealed. An administrative law judge (ALJ) set a date for a telephonic hearing and notified

both parties of the date and time of the hearing. On the day of the scheduled hearing, the

ALJ attempted several times, over a ten-minute period, to contact Rainbow at two different

numbers that the MDES had on file for it. On the first attempt, someone answered

Rainbow’s phone but immediately terminated the call by hanging up. According to the

statement of the ALJ, as reflected in the transcript record, he thereafter tried unsuccessfully

for the next ten minutes to reach someone at the numbers provided by Rainbow. As a result,

the ALJ conducted the hearing without Rainbow and advised Griffin that she would be

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awarded benefits because of Rainbow’s failure to offer any evidence at the hearing that she

had been discharged for misconduct.

¶5. In his opinion, issued the day after the hearing, the ALJ explained that Rainbow had

failed to meet its burden of proof of establishing that Griffin had been terminated for

misconduct connected with her employment. Based on those facts, the ALJ reversed the

MDES’s previous finding that Griffin was not entitled to unemployment benefits. After

receiving the ALJ’s decision, Rainbow appealed to the Board of Review. The Board of

Review, without comment, affirmed the ALJ’s decision to grant Griffin unemployment

benefits. Shortly after, Rainbow filed an appeal in the circuit court and attached the incident

report that Causey had filed with the City of Hattiesburg Police Department against Griffin,

charging her with simple assault. The circuit court affirmed the Board of Review’s decision,

and, as stated, Rainbow has appealed.

DISCUSSION

¶6. This appeal is governed by Mississippi Code Annotated section 71-5-531 (Rev. 2011),

which provides in part:

In any judicial proceedings under this section, the findings of the Board of
Review as to the facts, if supported by evidence and in the absence of fraud,
shall be conclusive, and the jurisdiction of said court shall be confined to
questions of law.

It is well settled that “[a] rebuttable presumption exists in favor of the administrative agency,

and the challenging party has the burden of proving otherwise.” Allen v. Miss. Emp’t Sec.

Comm’n, 639 So. 2d 904, 906 (Miss. 1994) (internal citations omitted). In addition, “[an

appellate] [c]ourt must not reweigh the facts of the case or insert its judgment for that of the

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agency.” Id.

¶7. “In misconduct cases, ‘the employer bears the burden to prove by substantial, clear,

and convincing evidence that a former employee’s conduct warrants disqualification of

benefits.’” Little v. Miss. Emp’t Sec. Comm’n, 754 So. 2d 1258, 1260 (¶10) (Miss. Ct. App.

1999) (quoting Shannon Eng’g & Constr. Inc. v. MESC, 549 So. 2d 446, 450 (Miss. 1989)).

¶8. Here, Rainbow argues that the circuit court erred by upholding the Board of Review’s

decision because the Board of Review failed to adequately consider the evidence relied upon

by the MDES in its initial decision. According to Rainbow, the Board of Review’s reliance

on Rainbow’s failure to participate in the hearing before the ALJ caused the Board of Review

to overlook Griffin’s “egregious and harmful” actions, and such oversight resulted in the

Board of Review enforcing a technicality, rather than considering the appropriate facts.

Rainbow contends that the MDES’s reversal of its initial decision constitutes an abuse of

discretion and was arbitrary and capricious, because the ALJ should not have ignored the

MDES’s prior investigation of the matter and its factual findings. Rainbow also contends

that the MDES’s initial decision should have been considered at every stage of the appeal

process, despite the facts that the hearing before the ALJ was de novo and that it failed to

present any evidence during that hearing. Rainbow further contends that (1) the only

information available during the hearing before the ALJ was the information collected by the

MDES during the agency’s initial investigation that resulted in a finding that Griffin had

been dismissed for misconduct; (2) its absence from the ALJ hearing was not willful or

intentional; and (3) its failure to appear for the hearing before the ALJ should not

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automatically result in a victory for Griffin because she has unclean hands.

¶9. In explaining its failure to appear for the hearing, Rainbow states that its employee,

Causey, was sitting by the phone awaiting the ALJ’s call, and while she admits that she hung

up on the ALJ when he called, she explains that that occurred because she did not recognize

the number that he was calling from and that she was trying to keep the line open for his call.

To that end, Rainbow states that Causey hung up on every call displaying a number that was

not the MDES’s number. In support of its arguments, Rainbow points out that the MDES’s

website states that (1) the ALJ will make a decision based on testimony given by the

appearing party or, in the event that a party fails to appear during an ALJ hearing, the record

previously made; and (2) the ALJ will act on the basis of the file’s information.

¶10. In response, the MDES argues that Rainbow failed to meet its burden of proving

misconduct by clear and convincing evidence at the hearing. The MDES contends that the

hearing’s notice informed the parties that the purpose of the hearing was to determine both

the reason for Griffin’s departure and whether Rainbow’s account should be charged.

¶11. In support of its argument, the MDES cites Little.1 In Little, this Court addressed a

case very similar to the matter before us. There, a claimant was denied unemployment

benefits after the claims examiner disqualified the claimant for misconduct. Little, 754 So.

2d at 1259 (¶3). Following the disqualification, the claimant appealed. Id. at (¶4). However,

the employer failed to appear and testify at the ALJ hearing. Id. at (¶5). The ALJ2 conducted

1
At the time of the Little decision, the MDES was referred to as the Mississippi
Employment Security Commission (MESC).
2
At that time the ALJ was referred to as the “MDES referee.”

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the hearing without the employer, receiving testimony from the claimant. Id. Based on the

claimant’s testimony alone, the ALJ affirmed the claims examiner’s decision, disqualifying

the claimant for misconduct. Id. at (¶4). The claimant then appealed to the Board of Review,

which affirmed the decision of the ALJ. Id. The claimant then appealed to the Circuit Court

of Monroe County, which affirmed the decision of the Board of Review without discussion.

Id. Thereafter, the claimant appealed, and this Court reversed the judgment of the lower

court. Id. at 1261 (¶14). In reversing, this Court stated:

In the absence of evidence of misconduct established by [the employer], Little
was not required to offer rebuttal evidence or an explanation. The requirement
by the referee that Little offer evidence to rebut [the employer’s] allegation of
misconduct, when no evidence of misconduct had been offered, was an
improper shifting of the burden of proof. . . . We find this action to be contrary
to the provision of the Unemployment Compensation Act. . . . When the
improperly obtained evidence is excluded,3 there is no substantive evidence to
support denial of benefits. Accordingly, the Court reverses and renders
[j]udgment for Little.

Id. at 1260 (¶¶11-13).

¶12. Citing one of its own regulations, the MDES contends that because the hearing was

de novo, Rainbow’s failure to appear and offer proof constituted reasonable grounds for a

default ruling under both caselaw and the department’s regulations. We agree. Section

200.05 of title 20, part 101 of the Mississippi Administrative Code4 states in pertinent part:

The Board of Review or the Appeals Department may make informal
disposition of any adjudicatory proceeding by default when the appealing party

3
The testimony elicited from Little during the ALJ hearing constituted improperly
obtained evidence.
4
The regulations of the MDES are codified as title 20, part 101 of the Mississippi
Administrative Code.

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or the party with the burden of proof fails to appear at the scheduled hearing.
A party shall be deemed to have failed to timely appear at a hearing when the
party fails to appear as provided in the notice of hearing, including calling an
Appeals Department telephone number or providing in advance a telephone
number as required by the notice of hearing, or by failing to be present at the
telephone number provided by the party for ten (10) or more minutes past the
scheduled start time of the hearing.

The MDES also contends that Rainbow has misinterpreted the statement found on its website

regarding the process to be utilized when a party does not appear for a hearing. The MDES

explains that the information pertains only to situations where a claimant fails to appear or

participate, in which case it will be deemed by the MDES that the claimant has abandoned

his appeal, and the MDES’s prior decision will be applied.

¶13. Additionally, the MDES references Mississippi Code Annotated section 71-5-531 and

Rules 5.01, 5.02, 5.03, and 5.05 of the Uniform Rules of Circuit and County Court Practice

as authorities for the proposition that appeals from an administrative agency are not de novo

appeals and must be based entirely on the record made before the administrative agency.

Therefore, the MDES points out that it was inappropriate for Rainbow to attach the incident

report to the appeal that it filed in the circuit court and that no statute or regulation permits

a reviewing court to consider the incident report while making its decision. Again, we agree

with the MDES on this point.

¶14. In rebuttal, Rainbow, attempting to distinguish the facts of this case from those in

Little, points out that, although Little was discharged by her employer for theft, Little had

maintained that she had intended to pay for the stolen items but had gotten distracted, causing

her to forget to pay for them. Apparently, Rainbow surmises that Little is distinguishable

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because in Little, unlike here, Little’s explanation was at least plausible but Griffin’s is not

because there was a witness and a police report verifying Griffin’s assault on Causey.

Rainbow further argues that it did not abandon the appeal, citing to its continued appeals

after the ALJ’s decision. Rainbow misses the point of Little. Little supports the MDES’s

position that the employer bears the burden of proving disqualifying misconduct on the part

of the claimant. Interestingly, Rainbow apparently overlooks the fact that in Little, the

employer, like the employer here, failed to appear for a telephonic appellate hearing. Our

reversal was based on the fact that the ALJ had erroneously required the claimant to go

forward and rebut something that had not been established by the absent employer. Stated

another way, the ALJ in Little erroneously shifted the burden of proof away from the

employer to the claimant, and that was the basis for the reversal.

¶15. We find that Rainbow had adequate notice of the telephonic hearing before the ALJ.

While we draw no conclusion as to why Rainbow failed to participate during the de novo

review of Griffin’s claim, we agree with the Board of Review’s, and the circuit court’s

decisions finding that, by failing to appear for the hearing, Rainbow failed to meet its burden

of proof under section 71-5-513(A)(1)(c) to establish that Griffin was discharged for

misconduct. In arriving at this conclusion, we note that from the very beginning Griffin’s

position was that it was Causey, not she, who started the altercation. Her position in this

regard was stated in the documents that were submitted to the MDES before the claims

examiner issued his findings.

¶16. In regard to the website information discussed earlier in this opinion, we agree with

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the MDES that that information cannot and does not trump statutes and caselaw mandating

that an employer, who seeks to have a terminated employee denied unemployment benefits,

has the burden to prove that the employee committed disqualifying misconduct. And finally,

we note that Rainbow has neither alleged nor shown that the language on the MDES’s

website influenced or caused its failure to appear or that it relied on the language in any way

in failing to appear. So even if the language is confusing, and we are not saying that it is,

that confusion did not in any way contribute to the situation that Rainbow found itself in.

Therefore, we cannot find that the circuit court erred in affirming the decision of the Board

of Review. Accordingly, we affirm.

¶17. THE JUDGMENT OF THE FORREST COUNTY CIRCUIT COURT IS
AFFIRMED.

LEE, C.J., GRIFFIS, P.J., BARNES, ISHEE, FAIR, JAMES, WILSON AND
GREENLEE, JJ., CONCUR. CARLTON, J., DISSENTS WITHOUT SEPARATE
WRITTEN OPINION.

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