Unemployment Appeal Results in Good Decision for Colorado Employers

Unemployment AppealAs a contributing author to The Practitioner’s Guide to Colorado Employment Law, I have the responsibility of reviewing the annual developments in unemployment compensation law and synthesizing that information for Colorado attorneys. I just completed the research for the 2014 update and thought I would share with the MSEC community a case that I found particularly interesting. There are numerous morals to this story, besides the obvious dangers of intimate relationships in the workplace.

In Yotes, Inc. v. ICAO (CO Ct. App. 2013), Mr. Miller quit his job and filed for unemployment benefits. Before quitting, he had an intimate relationship with a female co-worker. After the relationship was over, the female co-worker demanded that Miller take a paternity test to determine if he was the father of her child. Miller found the communication unwelcome and complained that the female co-worker was sexually harassing him. He wrote a complaint letter to his supervisor on a Saturday. The supervisor called Miller three days later, on Tuesday, and set a meeting with Miller for Friday, six days after he filed his complaint. At that meeting, the supervisor authorized Miller to take a paid leave and excused him from meetings that involved the female co-worker until the supervisor could address the issue the following week. This delay was due to the supervisor’s travel schedule.

Miller received another unwelcome cell phone call from the female co-worker later that day, outside of the workplace, and he resigned. Miller asserted that Yotes normally handled important business matters within 48 hours and since it had not yet resolved his issue, Yotes wasn’t taking his complaint seriously. Should Miller receive unemployment benefits under these circumstances?

Miller’s unemployment claim ping-ponged its way through the unemployment system. A deputy initially granted Miller benefits, but a hearing officer overruled the deputy on appeal. Upon further appeal, the Industrial Claim Appeals Office reversed the hearing officer and granted benefits to Miller. Yotes appealed the ICAO’s decision to the Colorado Court of Appeals, a step not often taken in unemployment claims. At issue were two sections of the unemployment statute. The ICAO granted benefits based upon C.R.S. § 8-73- 108 (4)(o) which provides a full award of unemployment benefits if the claimant separates because of “personal harassment by the employer not related to the performance of the job.” In addition, the ICAO felt that Miller had been subjected to unsatisfactory working conditions in violation of C.R.S. § 8-73-108 (4)(c).

The Court of Appeals held that the co-worker’s behavior did not constitute harassment by the employer, therefore Section (4)(o) was not applicable. The female co-worker, who was not empowered to take tangible employment action, was not a supervisor and therefore not the claimant’s employer.

The court also found that Miller was not subjected to unsatisfactory work conditions. The court held that C.R.S. § 8-73-108 (4)(c) requires that an objective, not subjective, standard be applied. In determining whether the working conditions were objectively unsatisfactory, it looked at whether the conditions existed at the time of separation and were likely to continue to exist. By quitting before Yotes could complete its investigation, Miller could not establish the second requirement.

The court also found that Yotes acted reasonably, since Miller was authorized to take leave until the investigation was completed. There was no risk of continuing harassment. Further, the court said Yotes was not responsible for protecting Miller from the co-worker’s off-duty cell phone call.

What are the morals of the story? If you feel the employee is “at fault” for the separation, don’t be shy about exercising your unemployment appeal rights, even up to the Colorado Court of Appeals. We would not have this good decision unless Yotes felt strongly enough to appeal. Second, in an unemployment context, what happens between employees outside of work shouldn’t be factored into what constitutes unsatisfactory work conditions. Third, make sure you apply an objective standard to the unemployment statutes. Here, Miller’s failure to let Yotes complete its investigation was fatal to his unemployment claim. Fourth, always take immediate action to prevent additional harassing conduct. Here, Yotes placing Miller on paid leave was persuasive to the court. Finally, react quickly to harassment complaints. While Yotes was  successful here, this was not the textbook timing on how to handle a harassment complaint. The delay in responding cost Yotes an employee who thought it was not acting fast enough.