Rob M. Galey v. Employment Appeal Board and Wapello Rural Water Association, Inc.

IN THE COURT OF APPEALS OF IOWA

No. 17-1199
Filed July 18, 2018

ROB M. GALEY,
Plaintiff-Appellant,

vs.

EMPLOYMENT APPEAL BOARD and WAPELLO RURAL WATER
ASSOCIATION, INC.,
Defendants-Appellees.
________________________________________________________________

Appeal from the Iowa District Court for Polk County, Robert B. Hanson,

Judge (remand), and Eliza J. Ovrom, Judge (ruling).

A fired worker appeals the judicial review order upholding a denial of

unemployment benefits. AFFIRMED.

Billy J. Mallory of Brick Gentry, P.C., West Des Moines, for appellant.

Rick Autry, of Employment Appeal Board, Des Moines, for appellees.

Considered by Vaitheswaran, P.J., and Potterfield and Tabor, JJ.
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TABOR, Judge.

A fired worker challenges the denial of unemployment benefits based on

the revocation of his driving privileges following an arrest for operating while

intoxicated (OWI). The worker, Rob Galey, contends “an isolated OWI first offense

and anticipated loss of a driver’s license” should not be viewed as disqualifying

job-related misconduct under Iowa Code section 96.5(2) (2015). Because the bulk

of Galey’s job as a service technician for the Wapello Rural Water Association

required driving a truck from location to location to meet customer needs, the

Employment Appeal Board (EAB) identified his failure to maintain a driver’s license

as misconduct connected to his work. On judicial review, the district court upheld

the agency decision.

In this appeal, Galey raises two issues. First, Galey contends the district

court abused its discretion in remanding for additional evidence to be submitted to

the agency. Second, he maintains the record does not support the determination

he was fired for job-related misconduct and the EAB decision is irrational, illogical,

or wholly unjustifiable. Because Galey’s subsequent guilty plea and sentence was

relevant to the question of misconduct, we find no abuse of discretion in the

remand. And because, like the district court, we find substantial evidence

supporting the agency’s identification of misconduct, and the decision was not

irrational, illogical, or wholly unjustifiable, we affirm.

I. Facts and Prior Proceedings

Galey worked as a full-time service technician for the rural water association

from 2005 until 2016. As a service technician, he was continually called to drive
3

around the multi-county territory served by the association. A valid driver’s license

was essential to completing his job duties.

On February 7, 2016, police arrested Galey for first-offense OWI while he

was driving his personal vehicle. Galey notified his supervisor and the

association’s general manager about the arrest and the possibility Galey would

lose his driver’s license. On February 10, the association’s governing board met

and discussed Galey’s situation. The board decided if Galey lost his license the

association would need to end his employment immediately. The board informed

Galey of its decision on February 11. Galey then informed his supervisors on

February 15 that he was required to surrender his driver’s license that same day.

The association followed through with the board’s decision and terminated Galey’s

employment February 15, 2016.

Galey filed a claim for unemployment benefits but the claim was denied

because the Iowa Workforce Development, Claims Section, determined Galey was

discharged for misconduct. Galey appealed, and an administrative law judge (ALJ)

upheld the denial of benefits. The ALJ found (1) Galey was terminated because

he no longer held a valid driver’s license; (2) Galey was aware his job required him

to have a valid license and he would not be able to complete his duties without

one; and (3) Galey’s failure to maintain his driver’s license, as a known condition

of his employment, constituted misconduct sufficient to deny unemployment

benefits. Galey appealed to the EAB, contending an arrest for OWI first offense

and anticipated loss of a driver’s license did not constitute misconduct. Galey also

claimed the evidence was insufficient to find misconduct because at the time he

was discharged he had not yet lost his license—contrary to what he had informed
4

his employer. The EAB unanimously affirmed the ALJ’s decision and adopted the

findings of fact and conclusions of law as its own. Galey then sought judicial

review.

In the district court, Galey contended the EAB’s ruling was not supported by

substantial evidence in the record made before the agency and was irrational,

illogical, or wholly unjustifiable. Part of Galey’s contention stemmed from apparent

miscommunication as to when his license revocation began. Despite telling his

employer he could not legally drive as of February 15, Galey later claimed he was

not required to surrender his license until February 17. So Galey reasoned the

association’s decision to terminate his employment could not have been based on

his lack of a driver’s license.

Galey also argued no evidence showed he intentionally or deliberately did

any of the following: (1) set out to lose his driver’s license; (2) acted in a manner

that would prevent him from carrying out his job duties; (3) materially breached the

duties of his employment; (4) acted in willful or wanton disregard of the employer’s

interest or in deliberate violation or disregard of standards of behavior which the

employer has the right to expect of employees; or (5) repeatedly acted in a manner

inconsistent with the employer’s interests or his job duties. See generally Iowa

Admin. Code r. 871–24.32(1)(a) (defining misconduct within meaning of Iowa Code

section 96.5(2)).

Lastly, Galey noted the EAB had commented in its written decision,

“[U]nderstanding that DOT regulations for license revocation occurs only when a

driver tests positive on a test administered for drunk driving, we find that the

Claimant’s positive test result is sufficient for the Board to find that job-related
5

misconduct was established.” Galey asserted nothing in the record supported the

suggestion he had failed a chemical test administered for OWI and he claimed the

EAB misstated the conditions for revocation of a driver’s license.

After Galey raised the evidentiary issues related to his OWI, the employer

and the EAB filed a joint motion under Iowa Code section 17A.19(7) to remand for

the parties to submit additional evidence before the agency. The employer wanted

the agency to consider three documents from Galey’s OWI case: the trial

information, his written guilty plea, and the judgment order. Galey resisted the

motion, but the district court concluded the three documents were material,

addressed an issue Galey continued to contest, and good cause existed for the

employer’s failure to present the documents in the contested case proceeding.

The district court remanded the matter to the EAB.

The EAB then reviewed the entire record including the three new

documents and affirmed its prior decision with two modifications: (1) it added to

the findings of fact, “On February 7, 2016, the Claimant drove a motor vehicle in

violation of 321J.2(1)(a). It was this act by the Claimant that caused him to lose

his driver’s license pursuant to Iowa Code § 321J.12, which in turn meant that he

could no longer perform his job for the Employer.” And (2) it added to the

conclusions of law,

Since the Claimant’s intentional criminal act led to his loss of
his license, and since he knew his license was an essential job
requirement, he committed job-related misconduct when he drove
drunk and as a result lost his driver’s license. See Cook v. IDJS, 299
N.W.2d 698, 702 (Iowa 1980) (‘While he received most of his driving
citations during non-work hours and in his personal car, they all bore
directly on his ability to work for Hawkeye.’).
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Upon return to the district court, Galey maintained his prior contentions and

also asserted the new documents did not establish he committed an intentional or

deliberate act constituting misconduct. Galey insisted the plea, judgment, and

sentencing occurred after he was fired and therefore could not be the reason for

his discharge.

The district court concluded Galey’s loss of his driver’s license, whether it

resulted from conduct on or off duty, was connected to his employment. In the

court’s view, because Galey was aware he needed a valid driver’s license to

perform his job duties, his decision to operate a motor vehicle while intoxicated

resulting in the loss of his license showed a willful and wanton disregard of his

duties and obligations to his employer. The district court concluded the EAB’s

decision was supported by substantial evidence and that the determination Galey

losing his license constituted misconduct was not irrational, illogical, or wholly

unjustifiable. The court affirmed the EAB. Galey now contests the judicial review

decision.

II. Scope and Standards of Review

Our review of unemployment benefit cases is governed by the

Administrative Procedure Act, Iowa Code chapter 17A. Harrison v. Emp’t Appeal

Bd., 659 N.W.2d 581, 586 (Iowa 2003). In appeals from judicial review of agency

action, our review is limited to correction of errors at law. Gaffney v. Dep’t of Emp’t

Servs., 540 N.W.2d 430, 433 (Iowa 1995). We review the district court’s decision

by applying the standards of section 17A.19 to agency action to determine if our

conclusions are the same as those reached by the court. Univ. of Iowa Hosps. &

Clinics v. Waters, 674 N.W.2d 92, 95 (Iowa 2004).
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We review the district court’s decision to remand to the agency to take and

consider new evidence for an abuse of discretion. Zenor v. Iowa Dep’t of Transp.,

558 N.W.2d 427, 431 (Iowa Ct. App. 1996). To show an abuse of discretion, Galey

must show the court exercised its discretion “on grounds or for reasons clearly

untenable or to an extent clearly unreasonable.” See id. (citation omitted).

The EAB is authorized by the legislature to determine if a claimant “has

been discharged for misconduct in connection with the individual’s employment.”

Iowa Code § 96.5(2). The agency’s findings of fact are binding on appeal if they

are supported by substantial evidence when the record is reviewed as a whole.

Sharp v. Emp’t Appeal Bd., 479 N.W.2d 280, 282 (Iowa 1991). Substantial

evidence is “the quantity and quality of evidence that would be deemed sufficient

by a neutral, detached, and reasonable person, to establish the fact at issue when

the consequences resulting from the establishment of that fact are understood to

be serious and of great importance.” Iowa Code § 17A.19(10)(f)(1). Our task is

not to determine whether the evidence supports a different finding but to determine

whether substantial evidence supports the findings actually made. Cedar Rapids

Cmty. Sch. Dist. v. Pease, 807 N.W.2d 839, 845 (Iowa 2011). We do not afford

deference to an agency’s legal interpretations unless the legislature vested

interpretive authority in the agency. Renda v. Iowa Civil Rights Comm’n, 784

N.W.2d 8, 11 (Iowa 2010). Here, we do not defer to the EAB’s legal interpretation

regarding what constitutes misconduct in connection with employment. See Irving

v. Emp’t Appeal Bd., 883 N.W.2d 179, 185 (Iowa 2016).
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III. Analysis

A. Did the district court abuse its discretion when it remanded to

the agency for the taking of additional evidence?

“In judicial review of a contested case proceeding the district court is limited

to the record made before the agency.” Mary v. Iowa Dep’t of Transp., 382 N.W.2d

128, 131 (Iowa 1986). But the court may order “additional evidence be taken

before the agency” if the court believes the evidence is material and good reasons

appear for the failure to present it in the contested case proceeding. Iowa Code

§ 17A.19(7). The agency may modify its findings and decision in the case based

on the additional evidence. Id.

Galey contends the district court abused its discretion in remanding for the

agency to consider additional evidence—his guilty plea and sentence—which he

argues could not have been material to the employer’s reason for firing him

because those events did not occur until months later. 1 The EAB defends the

remand, urging the additional evidence was material because Galey attacked the

agency’s finding that the DOT would revoke his driver’s license.2

1
Galey relies on Lee v. Employment Appeal Board., 616 N.W.2d 661, 669 (Iowa 2000) for
the proposition that the EAB cannot deny benefits based on an employee’s conduct—in
Lee’s case refusal to accept a two-week suspension—which occurs after the events giving
rise to the employer’s decision to fire. Galey’s subsequent act of pleading guilty was not
new conduct considered by the agency; rather, the plea and sentence verified the reasons
already cited by the employer.
2
Galey questions the accuracy of the EAB’s analysis concerning the DOT regulations for
license revocations and chemical testing. The agency record, even after the additional
evidence, does not reveal whether Galey tested over the legal limit or refused a chemical
test. But in either instance, he would face a license revocation by the DOT—see Iowa
Code §§ 321J.9, 321J.12—as he informed his employer.
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Evidence fits the definition of “material” if it is “reasonably capable” of

influencing an agency’s decision. Interstate Power Co. v. Iowa State Commerce

Comm’n, 463 N.W.2d 699, 702 (Iowa 1990). Here, Galey’s admission to the

conduct that lead to his loss of driving privileges could reasonably bolster the EAB

decision to deny benefits; in fact, the agency’s modifications to its decision

following the remand bear this out. See id. at 703. The district court did not abuse

its discretion.

B. Does substantial evidence support the EAB determination the

employee committed misconduct?

Iowa law disqualifies employees from receiving unemployment

compensation if they are discharged for misconduct. See Iowa Code § 96.5(2);

Freeland v. Emp’t Appeal Bd., 492 N.W .2d 193, 196 (Iowa 1992). The statute

does not define “misconduct,” but agency rules describe it as a “deliberate act or

omission by a worker which constitutes a material breach of duties and obligations

arising out of such worker’s contract of employment.” Iowa Admin. Code r. 871–

24.32(96)(1); Freeland, 492 N.W.2d at 196. Our supreme court has held the

agency rule definition to be an accurate reflection of legislative intent. Freeland,

492 N.W.2d at 196 (citing Kleidosty v. Emp’t Appeal Bd., 482 N.W.2d 416, 416–17

(Iowa 1992)).

Misconduct leaving a worker ineligible for unemployment benefits is not the

same as misconduct for purposes of termination by an employer. See Lee, 616

N.W.2d at 665 (“Misconduct serious enough to warrant the discharge of an

employee is not necessarily serious enough to warrant a denial of benefits.”

(quoting Reigelsberger v. Emp’t Appeal Bd., 500 N.W.2d 64, 66 (Iowa 1993))).
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The denial-of-benefits question is whether the employee engaged in a “deliberate

act or omission,” conduct “evincing such willful or wanton disregard of an

employer’s interest as is found in deliberate violation or disregard of standards of

behavior which the employer has the right to expect of employees,” or conduct with

“carelessness or negligence of such degree of recurrence as to manifest equal

culpability.” See Iowa Admin. Code. r. 871–24.32(1)(a).

In this appeal, Galey reprises his two-pronged protest of the EAB decision.

Galey’s first objection involves timing. In his estimation, his employer could not

have based his February 15 discharge on the loss of his driver’s license because

that did not technically occur until two days later. Gailey’s second point is that loss

of his license was not job-related misconduct.

The district court rejected Galey’s first contention in a footnote: “The record

clearly demonstrates Petitioner informed Wapello he no longer had a valid driver’s

license on February 15, 2016, the date he was discharged from employment.” Like

the district court, we are unconcerned with the exact timing of Galey’s license

revocation. Substantial evidence supports the agency’s finding that Galey’s

inability to legally drive after his OWI arrest was the motivation for ending his

employment.

We turn to Galey’s second contention. Galey maintains because he was

not working or on call at the time of his arrest, and he was driving his personal

vehicle, the incident was not connected with his employment and cannot disqualify

him from unemployment benefits. Galey also insists he did not intentionally lose

his license or otherwise act in a way that would fit the regulatory definition of

misconduct. EAB counters that Galey’s deliberate act of driving while intoxicated
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impaired his ability to function on the job and thus constitutes employment-

connected misconduct.

Cook v. Iowa Department of Job Services, 299 N.W.2d 698 (Iowa 1980) is

instructive here. Cook worked as a delivery driver and notified his employer he

had numerous speeding citations, mostly for offenses during non-work hours. Id.

at 699. The employer’s insurance carrier could not insure Cook due to his driving

record, and the employer had no position available for Cook that did not require

driving. Id. at 700. In denying benefits, the agency concluded Cook voluntarily

quit his job, but the district court concluded he was discharged for misconduct,

which it described as “self-inflicted uninsurability.” Id. at 702. Although Cook did

not set out to become uninsurable, he persisted in violating traffic laws knowing

his citations affected his ability to work for his employer. See id. (affirming district

court’s rationale that Cook engaged in misconduct even though his violations

occurred during non-work hours and in his personal car). We see significant

parallels between Cook and Galey.

The disqualification statute does not mandate misconduct be committed on

the employer’s time or property—the misconduct need only be “in connection with

the individual’s employment.” See Iowa Code § 96.5(2). When it is not possible

to complete one’s job duties without a driver’s license, as is the case here, the loss

of an employee’s license due to a deliberate act, such as OWI, can be job-related

misconduct. This is true regardless of whether the employee was off duty or in a

personal vehicle at the time of the deliberate act. See Kleidosty, 482 N.W.2d at

418–19 (observing “[d]enial of unemployment compensation benefits for conduct

off the premises comports with cases decided by other jurisdictions.”); Pongdara
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v. Emp’t Appeal Bd., No. 08-0789, 2008 WL 4725334 at *5 (Iowa Ct. App. Oct. 29,

2008) (“We find the location [of the misconduct] irrelevant to the issue. To be

disqualifying, misconduct need only be ‘in connection with the individual’s

employment.’”).

Like Cook, Galey’s inability to carry out his key job duty—driving—was self-

inflicted. See Cook, 299 N.W.2d at 702. Galey drove while intoxicated, knowing

a valid driver’s license was a requirement of his continued employment. The

district court concluded Galey’s conduct evinced willful and wanton disregard of

his duties and obligations to his employer. We agree.

Substantial evidence supports the EAB’s finding Galey was discharged for

misconduct. Under the circumstances of this case, it was not irrational, illogical or

wholly unjustifiable for the EAB to decide Galey’s loss of his driving privileges due

to an OWI charge was employment-connected. We affirm the district court.

AFFIRMED.