No. 2-249 / 01-1289Court of Appeals of Iowa.
Filed October 30, 2002
Appeal from the Iowa District Court for Winnebago County, John S. Mackey, Judge.
The respondents appeal from the district court’s ruling on judicial review reversing an agency decision denying the petitioner unemployment benefits. REVERSED AND REMANDED.
Lee P. Hook and Joseph M. Barron of Peddicord, Wharton, Spencer Hook, P.C., Des Moines, for appellant Winnebago Industries, Inc.
Richard R. Ramsey, Des Moines, for appellant Employment Appeal Board.
N. Leroy Walters of Walters Law Office, Mason City, and Mindi M. Vervaecke of Fitzsimmons Vervaecke, Mason City, for appellee.
Heard by Huitink, P.J., and Zimmer and Miller, JJ.
ZIMMER, J.
Winnebago Industries, Inc. (Winnebago) and the Employment Appeal Board (Board) appeal from a district court’s ruling on judicial review reversing an agency decision denying unemployment benefits to former Winnebago employee Robert Anderson, Jr. Winnebago and the Board contend the district court erred in reversing the finding of misconduct by the Board. We agree, and thus we reverse the district court and affirm the agency decision.
I. BACKGROUND FACTS AND PROCEEDINGS.
Anderson commenced his employment with Winnebago on April 26, 1993. He was discharged from his employment on January 22, 1998 for insubordination occurring the prior day. Anderson was a product assembler/fabricator.
The policy of Winnebago concerning complaints was that an employee should first raise his or her concerns with his or her immediate supervisor, and then with the area manager. From there, the employee should address his or her concerns with the respective director, then the vice president of the employee’s area, and finally with the personnel department. Anderson had previously failed to follow this chain of command and had been reprimanded and even suspended from work for insubordination. He received a warning in 1997 that unless immediate improvement was shown in the area of insubordination, he would be terminated immediately.
On January 21, 1998, Winnebago announced a two-hour delay for its employees due to severe weather. Employees were told to report at 9:00 a.m. When Anderson arrived for work at about 8:45, there were other employees already working. He had previously been told no one was allowed to work during snow delays. Anderson believed he and others were denied thirty-five dollars in pay by not being able to work during the snow delay.
Anderson brought up the issue of whether employees could work during snow delays with his immediate supervisor. The supervisor agreed to have a meeting to clarify this issue the following day. Without waiting for the meeting, and without consulting his area manager, Anderson first attempted to contact the personnel director and then twice attempted to contact the CEO of Winnebago regarding the snow delay issue. For his insubordination, Anderson was terminated.
Anderson’s application for unemployment benefits was denied at the administrative level. He appealed, and the matter was remanded back to the agency for another hearing. Following the remand hearing, the administrative law judge denied Anderson unemployment benefits. On appeal, the Board affirmed. It determined that Anderson’s last act on January 21, 1998 was unreasonable and constituted a continual, blatant disregard of Winnebago’s interests.
On judicial review, the district court reversed the agency decision, determining Anderson’s actions on January 21 did not constitute misconduct. It concluded that utilization of Winnebago’s own “employee relations philosophy” could not be said to amount to misconduct justifying the denial of unemployment benefits as a matter of law. Winnebago, it determined, subverted its own philosophy and put Anderson in a catch-22, where he could not question his immediate supervisor further up the chain of command on nonfrivolous issues without risking repercussions. Winnebago appeals.
II. SCOPE AND STANDARD OF REVIEW.
Our review of unemployment benefits cases is governed by the Iowa Administrative Procedure Act, Iowa Code chapter 17A. Lee v. Employment Appeal Bd., 616 N.W.2d 661, 664 (Iowa 2000). The district court acts in an appellate capacity to correct errors at law on the part of the agency when engaging in judicial review under Iowa Code section 17A.19(10) (2001).[1] Holland Bros. Constr. v. Bd. of Tax Review, 611 N.W.2d 495, 499 (Iowa 2000).
When we review a district court’s judicial review decision, we apply the standards of section 17A.19(10) to determine whether our conclusions are identical to those of the district court. Id. Here, the issue concerns whether there was substantial evidence to support the agency’s finding of misconduct on the part of Anderson. Accordingly, the standard we apply is whether the agency’s decision is supported by substantial evidence in the record before the court when that record is viewed as a whole. See Iowa Code § 17A.19(10)(f).
We are bound by agency fact findings that are supported by substantial evidence. Norland v. Iowa Dep’t of Job Serv., 412 N.W.2d 904, 913 (Iowa 1987). Evidence is substantial when reasonable minds could accept it as adequate to reach the same finding. Id.
III. MERITS.
Winnebago and the Board argue the district court erred in determining Anderson’s act of contacting the CEO of Winnebago did not constitute misconduct. They point out that by Anderson’s own admission, he knew at the time he contacted the CEO that this action constituted misconduct and that he had been warned previously about going outside the chain of command set forth in the employee handbook. They contend that, in light of his previous history of conduct, Anderson’s action on January 21, 1998 constituted a deliberate and willful disregard of the standards of behavior he knew were expected, and that Winnebago had a right to expect. They maintain the agency decision is supported by substantial evidence.
A claimant is disqualified from unemployment benefits if he or she has been discharged for misconduct. Iowa Code § 96.5(2). Misconduct is:
a deliberate act or omission by a worker which constitutes a material breach of the duties and obligations arising out of such worker’s contract of employment. Misconduct as the term is used in the disqualification provision [is] limited to 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 in carelessness or negligence of such degree of recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations to the employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed misconduct within the meaning of the statute.
Iowa Admin Code r. 871 — 24.32(1)(a). The employer bears the burden of proving a claimant is disqualified for benefits because of misconduct. Reigelsberger v. Employment Appeal Bd., 500 N.W.2d 64, 66 (Iowa 1993). Misconduct serious enough to warrant the discharge of an employee is not necessarily serious enough to justify a denial of benefits. Breithaupt v. Employment Appeal Bd., 453 N.W.2d 532, 535 (Iowa Ct.App. 1990).
We conclude the agency finding that Anderson engaged in misconduct, and thus was ineligible for unemployment benefits, is supported by substantial evidence. Anderson failed to wait for the departmental meeting prior to attempting to raise his concerns with the personnel director and the CEO. He did not follow company policy by failing to broach the issue with his area manager. His actions came after his prior occurrences of insubordination and his prior warning for failure to follow the proper chain of command. Anderson knew his conduct on January 21 violated that warning and company policy. We determine that his actions are a deliberate act or omission constituting a material breach of the duties and obligations arising out of his employment with Winnebago. Thus, we reverse the trial court’s decision on judicial review awarding Anderson unemployment benefits, and we remand for the entry of judgment consistent with this opinion.
REVERSED AND REMANDED.