Franklin County Court of Appeals Gets Tough with Unemployment Claimants

The Franklin County Court of Appeals issued two decisions yesterday denying unemployment compensation. In the first case, the employee was fired after not showing up for an investigatory interview that had been scheduled less than 24 hours earlier and even though he had been told by a Human Resources employee that she knew nothing about any such interview and there was a question whether the conduct underlying the investigation would have justified his termination. Williams v. Ohio Dept. of Jobs & Family Servs., 2009-Ohio-6328. In the second, an employee was fired for tardiness even though she admittedly only received one prior warning that her employer was dissatisfied with her timeliness and none about her general work performance. White v. DKS Group Inc., Proteam Staffing, 2009-Ohio-6329.

In Williams, the employee managed a group home for youths. After serving a two-week suspension for work issues, he was suspended again pending an investigation into additional allegations about his failure to take corrective action against a subordinate (which ultimately may have proved to be unfounded). He then filed a grievance against his two superiors and was placed on paid administrative leave pending an investigation of his grievance. Although the employer’s policy provided for resolving such grievances for two weeks, he heard nothing further from the employer for six weeks. The employer had attempted to contact him by mail, but the letters were returned by the Post Office. The employer also claimed to have left several voice mail messages, but the employee denied that. At that point, he received a telephone call that he was to meet with the employer’s attorney the following day, but was given no further details – such as a telephone number or location. He then called Human Resources, where an employee told him that no decision had been rendered on his grievance and she knew nothing about any meeting with the attorney. Therefore, he failed to attend the scheduled interview. Accordingly, the employer then terminated him for abandoning his job and he received notice the following month.

His unemployment compensation application was denied by the ALJ, the UCBR and the common pleas court. A divided Court of Appeals affirmed.

First, it was concluded that the employee failed to make reasonable efforts to maintain contact with his employer and ascertain the status of his grievance. He argued that he had been informed in writing and verbally to have no contact with his employer while on administrative leave, but the employer explained that this meant only his peers and subordinates – not HR or management. The Court found the employee’s testimony to be confusing on this point because he denied receiving the written instruction to not contact the employer and never claimed that he had been told not to contact HR. In fact, he contacted HR after receiving the telephone call and again three weeks later (when he learned he had been fired).

Second, it was concluded that the employee unreasonably failed to appear at the interview scheduled with the attorney. For reasons that were not explained in any detail, the Court concluded that it was unreasonable for the employee to rely on what he was told by HR and that, instead, he should have requested her to investigate further or to have requested more information – such as the attorney’s telephone number and email address so that he could independently confirm her information. It also found that if he found the short notice to be unreasonable, he should have requested the interview to be rescheduled instead of ignoring it altogether.

Third, the Court was unconcerned with the employee’s argument that the employer violated its own policy by not resolving his grievance within two weeks as called for in its policy because, among other things, the employee failed to introduce a copy of the policy into evidence. However, the dissent noted that the employee attempted to introduce the policy into the record, but the ALJ refused to accept it on the mistaken belief that it had been earlier admitted. The dissent also had difficulty affirming the denial of unemployment compensation to an employee who was terminated while on administrative leave pending a tardy resolution of his own grievance when there were no other grounds to support the termination and he had relied on incorrect information given to him by the employer’s HR employee and a direction to not contact any employee at the employer.

In White, the employee worked for a temporary staffing company, which claimed that she had been removed from 50% of her prior assignments for complaints about her poor work performance and from her last assignment because of tardiness. The employer “testified that [its] policy provided that, if an employee was tardy three or more times in a 30-day period, then discipline, including termination, could result. Upon learning from [the client] that [the employee] had attendance issues, and after reviewing [the employee’s client] timesheets, [the employer] concluded that [the employee] had violated the [company’s] attendance policy.”

In turn, the employee testified that no one had ever mentioned that her performance had been in any way unsatisfactory and that her temporary assignments had just ended as scheduled. However, the company did not produce the purchase orders she had subpoenaed to support her argument and her attorney failed to object to this to preserve the error. Instead, she testified that her last assignment had been scheduled to last another three months before she was fired. She also denied that her timeliness violated the client’s flex-time policy and that after it was first mentioned to her, she stopped using flex time. However, when confronted with copies of her time sheets, she admitted that she arrived after her scheduled start time on several occasions (because of, among other things, transportation issues) and sometimes failed to work 40 hours in a week.

The hearing officer reversed her grant of unemployment benefits, which was not reviewed by the Unemployment Compensation Board of Review and was affirmed by the common pleas court. On appeal, the Court found no error because of the evidence that the employee had been late on numerous occasions and sometimes failed to work 40 hours/week in violation of the policies of both her employer and its client. Further, it found insufficient evidence that missing evidence would have changed the result.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Appeals Court: Doesn’t Pay to Be Too Clever By Half

Last week, the Franklin County Court of Appeals ruled in favor of the defendant employer and ordered the rescission of a severance agreement where a typographical error in the agreement provided the employee with twelve extra months of severance pay which the employer had not intended to provide. Faivre v. DEX Corp. Northeast, 2009-Ohio-2660 (6/9/09). The employee admittedly had been told that the employer was only offering him three months of severance and he indicated that he would need to have at least twelve months. When he reviewed the agreement in detail after returning home, he realized that the offered severance agreement (which had been drafted by the employer and had already been signed by the employer’s Senior Vice President of Human Resources) promised to pay him severance through 2007 instead of three months later in 2006. Rather than clarifying the issue with the employer, he instead signed and returned the agreement. Quickly realizing its error, the employer immediately asked him to sign a revised page and said that if he did not agree to reform the agreement, it would consider the agreement to be rescinded due to mistake.

Instead, the employee filed suit against the employer for breach of contract. The trial court ruled in favor of the employer, but ordered a reformation of the contract to provide for the three months of severance pay initially offered by the employer. Both sides appealed. On appeal the court of appeals agreed that the parole evidence rule – which typically would bar extrinsic or outside evidence to contradict the clear terms of a contract – did not bar evidence of mistake. In this case, the employer made a mistake and the employee was admittedly aware of the mistake.

The court also agreed that the trial court had authority to reform the contract. However, the court found that was not a proper remedy because there had never been a mutual agreement on the amount of severance. The employer offered three months and the employee wanted twelve. Because there had never been a “meeting of the minds,” there could be no contract to resurrect by reformation.

The court agreed to rescind the contract altogether (meaning the employee would receive no severance). This was pursuant to a Restatement provision:

Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable
by him if he does not bear the risk of the mistake . . .

Thus, unless the mistaken party bears the risk of a mistake, a court may rescind a contract if: (1) one party made a mistake at the time the parties executed the contract, (2) the mistake had a material effect on the agreed exchange of performances that was adverse to the mistaken party, and (3) the other party had reason to know of the mistake.

The court rejected the employee’s argument that the employer had assumed the risk of mistake when it unilaterally prepared and presented the agreement. First, the employee knew about the mistake because the agreement’s terms did not match what he had been told in his exit interview. Finally, the court refused to put the risk on the employer even though it negligently drafted the agreement: “Pursuant to Section 154 of the Second Restatement of Contracts:

A party bears the risk of a mistake when

(a) the risk is allocated to him by agreement of the
parties, or
(b) he is aware, at the time the contract is made, that
he has only limited knowledge with respect to the facts to
which the mistake relates but treats his limited knowledge as
sufficient, or
(c) the risk is allocated to him by the court on the
ground that it is reasonable in the circumstances to do so.

. . .

Subsection (c) is a "catchall provision" that permits a court to allocate the
risk of a mistake to the mistaken party if, under the totality of the circumstances, it would be more equitable or reasonable to do so. . . . " '[A] party's negligence is immaterial where the mistake is in the expression of the contract and the other party knew of the mistake and took advantage of it.' "

. . .

As we concluded above, [the employee] had reason to know that the severance agreement contained a typographical error. Instead of seeking clarification regarding the length of the severance period, [the employee] attempted to take advantage of [the employer’s] error. Therefore, equity and reasonableness do not require us to place the risk of the mistake on [the employer] due to its negligence.

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-2660.pdf

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.