Kimberly A. Sparkman v. Burns Phillips, Commissioner, Tennessee Department of Labor And Workforce Development, and First Tennessee Bank, N. A.

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

March 21, 2014 Session

KIMBERLY A. SPARKMAN

v.

BURNS PHILLIPS, COMMISSIONER, TENNESSEE DEPARTMENT OF LABOR

AND WORKFORCE DEVELOPMENT, AND FIRST TENNESSEE BANK, N.A.

An Appeal from the Chancery Court for Maury County

No. 10-228 Stella L. Hargrove, Chancellor

No. M2013-01235-COA-R3-CV - Filed July 7, 2014

This appeal involves the denial of unemployment compensation benefits. The petitioner was

employed by the defendant bank. When the petitioner employee arrived for work, the

employee’s supervisor smelled alcohol on her and asked her to take an alcohol test. The

employee refused to take the alcohol test, and as a result her employment was terminated.

The employee filed for unemployment benefits. The defendant commissioner held that the

employee was discharged for work-related misconduct and was disqualified from receiving

unemployment benefits, and the denial of benefits was affirmed in the administrative appeals

process. The employee then filed the instant lawsuit for judicial review of the administrative

decision. The trial court affirmed the agency’s decision, and the petitioner now appeals.

Discerning no error, we affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Affirmed

H OLLY M. K IRBY, J., delivered the opinion of the Court, in which D AVID R. F ARMER, J., and

J. S TEVEN S TAFFORD, J., joined.

Kathryn Evans Moss, Nashville, Tennessee, and David Kozlowski, Columbia, Tennessee,

for the Plaintiff/Appellant, Kimberly A. Sparkman

Robert E. Cooper, Attorney General & Reporter, and Derek C. Jumper, Assistant Attorney

General, Nashville, Tennessee, for the Defendant/Appellee, Burns Phillips, Commissioner,

Tennessee Department of Labor and Workforce Development

Russell W. Jackson, Memphis, Tennessee, for the Defendant/Appellee, First Tennessee Bank

(no brief filed)1

OPINION

F ACTS AND P ROCEEDINGS B ELOW

In April 1998, Plaintiff/Appellant Kimberly Sparkman began working for

Defendant/Appellee First Tennessee Bank, N.A. (“the Bank”). She worked as a financial

services representative, so her work station was in the lobby of the Bank. Her job duties

required personal face-to-face interaction with customers as they came in the door. Ms.

Sparkman worked for the Bank in this capacity for about 11 years.

One day in June 2008, Ms. Sparkman came to work late. When she arrived, she was limping.

Her supervisor at the time, Lane Hargrove, smelled alcohol on Ms. Sparkman right away.

Mr. Hargrove called a Bank human resources specialist, Paula Hulette, to report his

observations. The next day, Mr. Hargrove met with Ms. Sparkman, and together they had

a teleconference with Ms. Hulette. Ms. Hulette explained to Ms. Sparkman that the Bank

had a policy that prohibited employees from performing their duties while under the

influence of alcohol. Ms. Hulette told Ms. Sparkman that if it ever happened again, that is,

if Ms. Sparkman smelled of alcohol again while at work, Ms. Hulette “would expect her to

take a blood alcohol test.” If she were asked to take a blood alcohol test and she refused to

take the test, Ms. Sparkman was warned, the Bank would terminate her employment.

Almost a year later, on May 16, 2009, Ms. Sparkman again smelled of alcohol while she was

at work at the Bank. On that day, Ms. Sparkman’s supervisor, Rachel Stampley, and another

Bank supervisor, Stephen Witt, smelled alcohol on Ms. Sparkman. As a result, they initiated

a teleconference with Ms. Hulette. Based on the reports that Ms. Sparkman smelled of

alcohol, Ms. Hulette asked Ms. Sparkman to take a blood alcohol test. Ms. Sparkman

1

Appellee First Tennessee Bank did not file an appellate brief but has indicated that it adopts the position

of the Commissioner in this appeal.

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refused. The Bank terminated Ms. Sparkman’s employment that day for refusing to take the

alcohol test as requested.

On May 20, 2009, Ms. Sparkman filed a claim for unemployment benefits with the

Defendant/Appellee Tennessee Department of Labor and Workforce Development

(“Department”). On June 3, 2009, the Department denied her claim for benefits. The

Department based its decision on the fact that, at the time of the incident, Ms. Sparkman was

aware of the Bank’s policies on the use of intoxicants and had received warnings in the past

related to those policies. The Department concluded that Ms. Sparkman’s refusal to take an

alcohol test under those circumstances constituted work-related misconduct under Tennessee

Code Annotated § 50-7-303(a)(2)(A), and so disqualified her from receiving benefits.2 Ms.

Sparkman filed an administrative appeal from the Department’s decision.

On August 17, the Department’s Appeals Tribunal conducted an evidentiary hearing in Ms.

Sparkman’s appeal. Ms. Sparkman was present at the hearing and was represented by

counsel. Other than herself, Ms. Sparkman had no witnesses present to testify on her behalf.

The Bank, represented by Ms. Hulette, submitted the testimony of four witnesses besides Ms.

Hulette — employees Paula Hulette, Rachel Stampley, Stephen Witt, and Lane Hargrove.

At the outset of the administrative hearing, Ms. Hulette testified about the Bank’s written

policy prohibiting employees from “performing any work for [the Bank] while under the

influence of alcohol or other drugs.” The Bank’s written policy did not address a request to

take an alcohol test or a refusal to take such a test.

Rachel Stampley testified that, on the day in question, another Bank employee told her that

Ms. Sparkman arrived at work smelling of alcohol. Ms. Stampley then approached Ms.

Sparkman, and she too smelled alcohol on Ms. Sparkman. Ms. Sparkman explained to Ms.

Stampley that alcohol odor allegedly detected on her was possibly caused by medication she

was taking. Ms. Stampley called Ms. Hulette, who told Ms. Stampley that Ms. Sparkman

needed to be tested for alcohol that day. Ms. Hulette directed Ms. Stampley to arrange a

meeting via teleconference with Ms. Sparkman to discuss the matter.

After Ms. Stampley concluded the telephone call with Ms. Hulette, she called a different

Bank branch manager, Stephen Witt. Ms. Stampley asked Mr. Witt to serve as a witness in

Ms. Stampley’s meeting with Ms. Sparkman. Once Mr. Witt came in proximity with Ms.

Sparkman, he too smelled alcohol on her. With Ms. Sparkman present, Ms. Stampley and

2

Under this subsection, a claimant is disqualified from receiving unemployment benefits “[i]f the

administrator finds that a claimant has been discharged from the claimant’s most recent work for misconduct

connected with the claimant’s work . . . .” Tenn. Code Ann. § 50-7-303(a)(2)(A) (Supp. 2013).

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Mr. Witt called Ms. Hulette for the teleconference. During the teleconference, Ms. Hulette

advised Ms. Sparkman that she must take an alcohol test. If she refused, Ms. Hulette told

Ms. Sparkman, her Bank employment would be terminated. Ms. Sparkman refused to

consent to the alcohol test, and her employment was terminated on the spot.

Mr. Hargrove testified that he was Ms. Sparkman’s supervisor from August 2007 through

December 2008. He described the 2008 incident in which he perceived an alcohol smell on

Ms. Sparkman while she was at work. Mr. Hargrove confirmed that Ms. Sparkman was told

at that time that, if she again smelled of alcohol while at work, she would be asked to take

an alcohol test.

Ms. Sparkman testified at the hearing on her own behalf. She denied that she was drunk,

under the influence of alcohol, or drinking on the job on the day the Bank terminated her

employment, but she admitted to drinking alcohol the night before. Ms. Sparkman testified

that she refused to consent to the alcohol test because she “was in shock” that she had been

asked to take such a test when “there was no alcohol involved.” Ms. Sparkman admitted that

she was previously warned that, if she refused to take an alcohol test, her employment would

be terminated.

After her employment was terminated and she was driving home, Ms. Sparkman said, a

police officer stopped her. As it turned out, Ms. Stampley had called the police when Ms.

Sparkman left the Bank because she suspected that Ms. Sparkman was driving under the

influence of alcohol. The police officer who stopped Ms. Sparkman did not charge her with

a DUI or any other offense and allowed her to drive home, Ms. Sparkman testified, because

“there was no suspicion of alcohol.”

On August 18, 2009, the Appeals Tribunal issued its decision. It credited Ms. Sparkman’s

testimony that she “was not intoxicated or drinking alcohol while at work” on the day her

employment was terminated, and her assertion that she “showed no signs of drinking other

than having the smell of alcohol” on her. The Appeals Tribunal made a factual finding that

three financial center managers smelled alcohol on Ms. Sparkman on the day in question, and

that Ms. Sparkman refused to take an alcohol test as requested. Finally, the Appeals Tribunal

found that Ms. Sparkman “had been warned previously that refusing to be tested would result

in discharge.” Based on these findings, the Appeals Tribunal held that Ms. Sparkman was

guilty of workplace misconduct under Section 50-7-303(a)(2)(A) and was therefore not

eligible for unemployment benefits. It reasoned that the Bank “had a right to expect that

[Ms. Sparkman] take an alcohol test, especially after warning that failure to do so would

result in discharge. The claimant disregarded the employer’s interests, and this is

disqualifying.” Thus, the Appeals Tribunal affirmed the initial agency decision denying Ms.

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Sparkman unemployment benefits. Ms. Sparkman then appealed the Appeals Tribunal’s

decision to the Department’s Board of Review (“Board”).

On March 9, 2010, the Board issued its decision, affirming the decision of the Appeals

Tribunal. In its decision, the Board adopted the entire decision of the Appeals Tribunal,

including its findings of fact and conclusions of law.

On April 16, 2010, Ms. Sparkman filed the instant lawsuit against the Department and the

Bank (collectively, “Defendants”), seeking judicial review of the Board’s decision affirming

the denial of her unemployment benefits.3 In her complaint, Ms. Sparkman alleged: “The

administrative record fails to contain, as a matter of law, substantial and material evidence

to support the Department’s legal conclusion that [Ms. Sparkman] is guilty of misconduct.”

In their answers, the Defendants did not dispute the underlying facts but denied that Ms.

Sparkman was entitled to the relief she sought.

On February 27, 2013, the trial court heard oral argument on Ms. Sparkman’s petition for

judicial review. On April 3, 2013, the trial court issued a memorandum opinion. The trial

court found substantial and material evidence in the record to support the Board’s decision,

and held that the Board had a reasonable basis in law to support its conclusion that Ms.

Sparkman’s refusal to take the alcohol test constituted work-related misconduct. The trial

court reasoned:

Three co-workers of the Plaintiff testified that she smelled of alcohol. The

employer made a simple request that Plaintiff submit to an alcohol test. The

request was reasonable. Plaintiff’s refusal to comply with this simple and

reasonable request is misconduct. Her refusal placed the employer in a

difficult position in that the employer could not determine if the Plaintiff was

indeed working under the influence of alcohol, in clear violation of [the

Bank’s] Alcohol Policy. Plaintiff’s refusal to be tested was not in the best

interest of the employer.

Plaintiff made the decision to refuse the alcohol test, thereby leading to

termination of her job. She refused to conform her behavior to the employer’s

policies and rules. She had a prior warning. Plaintiff refused to honor a

simple, reasonable request. It is her own fault that she was terminated.

For these reasons, the trial court affirmed the Board’s conclusion that Ms. Sparkman was

discharged for work-related misconduct and thus was ineligible to receive unemployment

benefits. From this order, Ms. Sparkman now appeals.

3

In the lawsuit, Ms. Sparkman was permitted to proceed as an indigent person.

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I SSUE ON A PPEAL AND S TANDARD OF R EVIEW

The only issue Ms. Sparkman raises on appeal is whether the trial court erred in concluding

that her refusal to take an alcohol test constituted work-related misconduct under Section 50-

7-303(a)(2)(A).

Tennessee statutes governing unemployment compensation provide that a person who is

aggrieved by an agency decision is entitled to judicial review of that decision. Tenn. Code

Ann. § 50-7-304(i)(1). In an appeal from an agency decision on unemployment

compensation benefits, the same standard of review applies to both the trial court and the

appellate court. Hale v. Neeley, 335 S.W.3d 599, 601 (Tenn. Ct. App. 2010). The standard

is set forth in Section 50-7-304(i)(2):

(2) The chancellor may affirm the decision of the commissioner or the

chancellor may reverse, remand or modify the decision if the rights of the

petitioner have been prejudiced because the administrative findings,

inferences, conclusions or decisions are:

(A) In violation of constitutional or statutory provisions;

(B) In excess of the statutory authority of the agency;

(C) Made upon unlawful procedure;

(D) Arbitrary or capricious or characterized by abuse of

discretion or clearly unwarranted exercise of discretion; or

(E) Unsupported by evidence that is both substantial and

material in the light of the entire record.

Tenn. Code Ann. § 50-7-304(i)(2) (Supp. 2013).

In the course of arguing that the trial court erred in holding that her refusal to take an alcohol

test constituted work-related misconduct, Ms. Sparkman challenges the sufficiency of the

evidence. “Substantial and material evidence” is defined as “such relevant evidence as a

reasonable mind might accept to support a rational conclusion and such as to furnish a

reasonably sound basis for the action under consideration.” Southern Rwy. Co. v. State Bd.

of Equalization, 682 S.W.2d 196, 199 (Tenn. 1984). “When the evidentiary basis of a

decision involving an unemployment compensation claim is attacked, Tenn. Code Ann. § 50-

7-304(i)(2)(D) and (E) direct the courts to review the entire record, including any proof that

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fairly detracts from the agency’s decision, to determine whether it is arbitrary, capricious,

characterized by an abuse of discretion, or unsupported by substantial and material

evidence.” Armstrong v. Neel, 725 S.W.2d 953, 955 (Tenn. Ct. App. 1986) (footnote

omitted). The court may not substitute its judgment for that of the agency as to the weight

of the evidence on questions of fact, and it may not reverse, remand, or modify the agency

decision except for errors that affect the merits of the final agency decision. Tenn. Code

Ann. § 50-7-304(i)(3).

Ms. Sparkman acknowledges that the pertinent facts are not disputed. Where the facts are

essentially undisputed, the question of whether the employee’s actions constitute

“misconduct” under the statute is a question of law that we review de novo. See Hallowell

v. Vestco, Inc., No. W2004-01322-COA-R3-CV, 2005 WL 1046795, at *4 (Tenn. Ct. App.

May 4, 2005).

A NALYSIS

As stated above, Ms. Sparkman argues overall that the trial court erred in holding that her

refusal to take an alcohol test constituted work-related misconduct under Section 50-7-

303(a)(2)(A). As described more fully below, she contends that, by law, the Bank had to

have “reasonable suspicion” to ask her to take an alcohol test, and that it did not have such

reasonable suspicion. Ms. Sparkman also asserts that the Bank may not terminate her

employment for “work-related misconduct” when the Bank’s written policies did not state

when an employee can be required to take an alcohol test or that refusal to take an alcohol

test would result in termination.

As background, Tennessee Code Annotated § 50-7-303(a)(2)(A) provides: “A claimant shall

be disqualified for [unemployment] benefits . . . [i]f the administrator finds that a claimant

has been discharged from the claimant’s most recent work for misconduct connected with

the claimant’s work . . . .” Tenn. Code Ann. § 50-7-303(a)(2)(A) (Supp. 2013). In general,

the statutes governing unemployment compensation “should be construed liberally in the

employee’s favor and . . . the disqualification provisions in the statutes should be construed

narrowly.” Armstrong, 725 S.W.2d at 955 (citing Weaver v. Wallace, 565 S.W.2d 867, 869-

70 (Tenn. 1978)).

Section 50-7-303 provides: “A discharge resulting from a refusal to take a drug test or an

alcohol test authorized by chapter 9 of this title shall be deemed to be a discharge for

misconduct connected with work where it is based upon substantial and material evidence

of the employee’s refusal.” Tenn. Code Ann. § 50-7-303(a)(2)(B)(iii). The allusion to

“chapter 9” in Section 50-7-303 refers to the Drug-Free Workplace Act (“the Act”),

Tennessee Code Annotated § 50-9-101, et seq. In this case, the testimony before the Appeals

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Tribunal indicates that the Bank is not certified as a Drug-Free Workplace under the Act but

nevertheless chose to base its alcohol policies on the Act.

In arguing that the Bank had to have “reasonable suspicion” in order to ask her to take an

alcohol test, Ms. Sparkman relies on language in the Drug-Free Workplace Act as well as

Section 50-7-303 of the unemployment compensation statutes. She asserts: “Under the Drug-

Free Workplace Act, an employee not in a safety-sensitive position can be tested for alcohol

only when the test is based upon ‘reasonable suspicion,’ which is also the reason [the Bank]

claims to have requested Ms. Sparkman to submit to a test.” She then notes that the term

“reasonable suspicion” under the Act is defined as “a belief that an employee is using or has

used . . . alcohol in violation of the employer’s policy drawn from specific objective and

articulable facts and reasonable inference drawn from those facts in light of experience.”

Tenn. Code Ann. § 50-9-103(15). Construing these provisions of the Act in conjunction with

the unemployment statutes and the Bank’s written policy, Ms. Sparkman argues that the

refusal to take an alcohol test cannot constitute “misconduct” absent a showing that the

employer’s request to the employee was prompted by “reasonable suspicion” that the

employee was “under the influence of alcohol.” In this case, she contends, the mere smell

of alcohol, absent some other physical symptom or outward manifestation of being under the

influence — such as slurring, stumbling, or being incoherent — does not rise to the level of

reasonable suspicion that an individual is under the influence of alcohol. Ms. Sparkman

insists that “merely the smell of alcohol alone is not enough to show intoxication in violation

of company policy amounting to misconduct.”

Ms. Sparkman raises an interesting argument, but under the facts of this case, we need not

address it to resolve this appeal. The testimony before the Appeals Tribunal indicates that

Ms. Sparkman’s employment was not terminated because she was “under the influence” of

alcohol in violation of the Bank’s written policy. The testimony indicates instead that the

Bank asked her to take an alcohol test based on the fact that two Bank supervisors smelled

alcohol on her at work, and she refused the Bank’s request that she take the alcohol test. Ms.

Sparkman admitted that she had been specifically warned that, if she smelled of alcohol

while at work again, she would be asked to take an alcohol test, and if she refused to take the

test, her employment would be terminated. Ms. Sparkman did not deny, and does not deny

in this appeal, that she smelled like alcohol on the day in question, that she was asked to take

an alcohol test, and that she refused to take the test. The fact that the Bank’s written policies

did not include a provision specifying that refusal to take an alcohol test could result in

termination is of no consequence where the employee admits that she was verbally informed

of it.

Though Ms. Sparkman does not deny that she smelled of alcohol on the day her employment

was terminated, she maintains that she did not actually use alcohol on that day and did not

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exhibit outward behavior indicating that she was “under the influence of alcohol.” Under

these circumstances, she insists, the Bank did not have the required “reasonable suspicion”

to ask her to take an alcohol test to begin with.

We respectfully decline to adopt this reasoning.4 Where three Bank employees perceived that

Ms. Sparkman smelled of alcohol when she arrived for work in the morning, this is a

reasonable basis for the Bank to ask her to take an alcohol test. “This Court . . . is not

required to check common sense at the courthouse door.” Dattel Family Ltd. P’ship v.

Wintz, 250 S.W.3d 883, 892 (Tenn. Ct. App. 2007).

Regardless, well prior to the day Ms. Sparkman’s employment was terminated, she was

informed that, if she came to work smelling of alcohol again, she would be asked to take an

alcohol test and would be subject to termination if she refused. The Bank simply followed

through on a policy of which Ms. Sparkman was aware. As held by the Department and by

the trial court below, Ms. Sparkman’s refusal to take the test was not in the best interest of

the Bank and constituted work-related misconduct under the unemployment statutes. See

Newman v. Davis, No. W2013-00696-COA-R3-CV, 2014 WL 507100, *9 (Tenn. Ct. App.

Feb. 7, 2014) (an employee who violates a known company policy or fails to follow a

reasonable employer directive is guilty of work-related misconduct).

Ms. Sparkman also challenges the sufficiency of the evidence in this case. As noted above,

when a claimant attacks the evidentiary basis for the denial of a claim for unemployment

compensation benefits, we must review the entire record to determine whether the decision

is supported by substantial and material evidence. Armstrong, 725 S.W.2d at 955. We have

done so. Ms. Sparkman does not dispute the determinative facts, namely, that she was

4

Most of the cases cited by Ms. Sparkman are inapposite or address only the question of whether the smell

of alcohol on an employee, in and of itself, is sufficient to show that the employee was intoxicated on the

job. See, e.g., Wyoming Dep’t of Employment v. Rissler & McMurry Co.,837 P.2d 686, 688, 690 (Wyo.

1992) (employer observed only unspecified erratic behavior and did not follow its own policy); City of Ark.

City v. Kansas Dep’t of Human Resources, 898 P.2d 665 (Kan. Ct. App. 1995) (interpretation of specific

statute on random testing); Robert v. Ross, 55 A.D.2d 492, 495 (N.Y. App. Div. 1977) (no proof claimant’s

breath smelled of whiskey when fired); Thompson v. Brown, 163 So. 2d 868 (La. Ct. App. 1964) (employee

not asked to take alcohol test). In this case, however, Ms. Sparkman’s employment was not terminated

because she was intoxicated; her employment was terminated because she came to work smelling of alcohol

and, when asked to take an alcohol test, refused to do so. At least one case cited by Ms. Sparkman supports

the conclusion that this is misconduct within the meaning of the unemployment compensation statutes. See

Federoff v. Rutledge, 332 S.E.2d 855, 858 (W. Va. 1985) (“Accordingly, we hold that . . . reporting to work

smelling of alcoholic beverages, after previously being admonished not to do so, supports a determination

that an unemployment compensation claimant was discharged for ordinary misconduct and thereby subject

to . . . disqualification from the receipt of benefits.”).

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warned that she would be asked to take an alcohol test if she came to work smelling of

alcohol, that she was warned of the consequences of refusing the alcohol test, that she came

to work smelling of alcohol on the day her employment was terminated, that she was asked

to take an alcohol test, and that she refused to take it. Ms. Sparkman made the choice to

refuse to take the alcohol test with full knowledge of the consequences. “[T]he burden of

producing substantial and material evidence is not an onerous one.” Roberts v. Traughber,

844 S.W.2d 192, 196 (Tenn. Ct. App. 1991). We hold that it was clearly met in this case.

Accordingly, we affirm the trial court’s decision to uphold the Board’s denial of Ms.

Sparkman’s claim for unemployment benefits.

C ONCLUSION

The decision of the trial court is affirmed. Costs on appeal are to be taxed to

Plaintiff/Appellant Kimberly A. Sparkman, for which execution may issue, if necessary.

_________________________________

HOLLY M. KIRBY, JUDGE

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