Sokol v. Labor & Industrial Relations Commission of Missouri

LOWENSTEIN, Judge,

dissenting.

Bad facts in a case can lead an appellate court to strain to attempt to do what it feels to be “the right thing.” The fact that the employer’s conduct here was shabby in its method of changing the contract with Sokol, does not change or negate eligibility require- *29 mente of a worker under Missouri’s unemployment compensation law so as to bestow benefits in this case. For all the rhetoric and logic put forth either in the court’s opinion, or in this dissent, this case will now be the common law in Missouri, and will stand for the following proposition: an employment contract, terminable by either party on 30 days notice, if modified by the employer, only as to, 1) the non-compete clause by broadening the area limitation to reflect current area limitations and reducing the time limitation, 2) reflecting increased current compensation; and 3) adding language that the law governing the contract will be that of the state of situs of the employer’s home office, will all be sufficient to allow an employee to reject those terms and to then collect unemployment benefits. Such a result goes against the purpose of and reason for this law.

The effort to help the claimant receive benefits has resulted in the following:

1)It has caused the scope of review to be mentioned and then ignored. In the interest of brevity a few examples are noted. The question of termination versus quit (pages 7 — 12 of the majority) is a fact question for the Commission, and the courts are not at liberty to over turn the determination of the Commission of a voluntary quit by Sokol. Whether the employee voluntarily quit, as opposed to being terminated, is a matter of fact to be determined by the Commission. If there is competent and substantial evidence to support a finding of a quit, or resignation by the employee’s actions, the Commission’s finding is binding on the court. Allen v. Green Ridge R-VIII Sch. Dist., 892 S.W.2d 635, 637 (Mo.App.1994); Chilton v. Labor & Industrial Relations Comm’n, 805 S.W.2d 722, 723 (Mo.App.1991). In addition, and by way of example, on page 2 of the facte, the majority’s conclusion that “[M]r. Sokol continued in TAI’s employ until he was terminated ...” (emphasis added), makes a 1800 turn via a leap over the Commission’s express findings of a quit. Although judges may not have found a quit as did the Commission, nevertheless, the Commission’s finding was supported by competent and substantial evidence and may not be now ignored or altered. Campbell v. Labor and Industrial Relations Commission, 907 S.W.2d 246—249 (Mo.App.1995).

2) It has caused this court to discount and ignore the facte as found by the Commission on the issues presented to it, and take as gospel such statements of appellant as, “they lied to me.” There is nothing in the transcript to back up Sokol’s conclusions, and should not now be considered here. Crestwood Commons Redevelopment Corp. v. 66 Drive-In, 812 S.W.2d 903, 909 (Mo.App.1991); Woodard v. Director of Revenue, 876 S.W.2d 810, 816 (Mo.App.1994).

No matter how the majority attempts to interpret (at page -) the Commission’s failure to include as a finding that Sokol had somehow been “lied to” as a justification that this court could now on appeal, make such a finding of fact, it simply remains and results in this court’s making findings not in the record and not made by the fact-finder.

The findings of the Commission are printed in the Appendix to this Dissent. Also shown in the Appendix are the pertinent provisions of both the first and second contracts on non-competition.

3) The court has seized upon the additional language that Georgia law shall govern the contract as another reason for the reversal. It was simply never in the record what effect, if any, this provision would have. Sokol has not, other than pointing to the addition of this provision, made any mention, nor cited any authority regarding how this provision impacted his employment. It is not the duty of a court to search for error nor to raise matters not presented or argued by an appellant School Dist. of Springfield v. Transamerica Ins. Co., 633 S.W.2d 238, 253 (Mo.App.1982); Morovitz v. Morovitz, 693 S.W.2d 189, 191 (Mo.App.1985); Brown v. Michigan Millers Mut. Ins., Co., 665 S.W.2d 630, 632 (Mo.App.1983). Also on page 2 of the facte, the majority recognizes the salary increase included in the second contract but says it was, “... below that which Mr. Sokol was actually earning.” This reflects on an unproven fact which was not found by the Commission and not addressed prior to this court’s opinion. Neither Sokol’s salary nor his commissions were at issue at the hearing. *30 The sole issue both at the hearing and presented on appeal is the effect of the non-competition clause. What is inescapable is the fact the second contract, rescinded by Sokol, calls for a salary of $23,922 based on his testimony of a salary of $24,000, while the first contract has a figure of $14,400.

4) It has caused the court to lose sight of the fact that claims here are claims against a state fund. This is not a suit versus an employer, so repeated references in the majority opinion that “the employer wants us to hold that it could not only violate Mr. Sokol’s contract rights with impunity ...” though seized upon by the court to justify a reversal, are not relevant. The following language from Haynes v. Unemployment Compensation Comm’n., 353 Mo. 540 , 183 S.W.2d 77, 80 (1944) a case cited by the majority as part of the scope of review is apropos.

While it has been said that the “unemployment compensation laws are not necessarily designed for the adjustment of rights between employees and employers in the sense that they are adversary litigants,” S.S. Kresge Co. v. Unemployment Compensation Comm’n., 349 Mo. 590 , 162 S.W.2d 838, 841 (1942), we think it is apparent that the burden of proof to establish a claimant’s right to benefits under the Unemployment Compensation Law rests upon the claimant. Queener v. Magnet Mills, Inc., 179 Tenn. 416 , 167 S.W.2d 1 (1942). An unemployed individual is eligible to receive benefits only if the commission finds that the required conditions have been met. The claimant assumes the risk of non-persuasion and we think the general rule applicable to ordinary court proceedings applies.

As a postscript, the Court in Haynes considered only the issue of whether an employee had made herself available for work after she quit for health reasons. Most importantly here, Haynes reversed a circuit court’s legal conclusions based on facts found by the Commission somewhat in line with paragraph above.

5) The court’s result is based on contract law principles. This is not a contract case. While I do not condone the lack of 30 days notice called for in the first contract, the lack of notice doesn’t seep into an unemployment compensation case under these facts, any more than an evaluation under contract law of the effect of Sokol’s rescission. The focus here is whether Sokol may collect unemployment benefits against and out of a state fund which is to be a safety net for workers unemployed through no fault of their own, for the changes made in the contract of employment and his working conditions.

The second matter, also a contract law question, concerns TAI’s separate circuit court suit that resulted in the employer’s being able to enforce the second contract’s noncompete clause nationwide, but particularly in the states of Missouri, Kansas, Nebraska and Iowa. Sokol was represented by counsel in that case. He did not appeal that judgment, so he is barred to compete for TAI customers for eighteen months, while under this action, he is unable to collect benefits. I am not unsympathetic to the anomaly created, but this appeal is solely for unemployment benefits, and the other two matters are strictly in contract and cannot alter or divert the inquiry of this case: Did Sokol have good cause to reject the second contract? As the Supreme Court points out in Kresge and Haynes , this action is for unemployment benefits under the applicable law of Chapter 228, and not for an adjudication of all matters between the parties.

The controlling statute here is § 288.050.1(1) which disqualifies a claimant from benefits if the deputy finds “... he has left his work voluntarily without good cause attributable to his work or his employer ...” The determination of a voluntary quit is one of fact for the Commission, arid will be affirmed if supported by competent and substantial evidence. Price v. Labor & Industrial Relations Comm’n., 811 S.W.2d 457, 459 (Mo.App.1991); Schomaker v. Labor & Industrial Relations Com. of Missouri, 675 S.W.2d 450, 451 (Mo.App.1984). Despite all the efforts of the majority at page 12, to the contrary, this court is stuck with case law firmly holding the issue of termination versus quit is a fact question to be reviewed as such by this court. Our attempts to do otherwise constitute a departure from the common law of this state.

*31 Once a determination is made the leave is voluntary, it is then necessary to determine if it was for “good cause.” Allen, 892 S.W.2d at 637 . The burden of proof is on the claimant to establish the right to benefits. Producers Produce, Co. v. Industrial Com. of Missouri, 365 Mo. 996 , 291 S.W.2d 166, 173 (1956). The claimant has the burden to prove “good cause,” which is reviewed as question of law. Heavy Duty Trux v. Labor and Industrial Relations Comm’n., 880 S.W.2d 637, 641 (Mo.App.1994). St. John’s Regional Medical Center v. Labor and Industrial Relations Comm’n, 814 S.W.2d 698, 699 (Mo.App.1991).

“Good cause,” is what would motivate an average worker in a similar situation, with known wages, working conditions, etc., to enter the ranks of the unemployed. Belle State Bank v. Industrial Comm’n., 547 S.W.2d 841, 846 (Mo.App.1977). The circumstances motivating termination must be real, substantial, reasonable and in good faith, and result from external pressures so compelling a reasonably prudent person would give up the employment. Clark v. Labor & Industrial Relations Comm’n, 875 S.W.2d 624, 627 (Mo.App.1994). Good cause must emanate from the work itself or from the employer, as opposed to the employee. Chilton, 805 S.W.2d at 723 . The good cause requirement shows the legislative intent of Chapter 288 to create an incentive for employed persons to remain employed by withholding benefits to those who quit without good cause. Hessler v. Labor and Industrial Relations Comm’n., 851 S.W.2d 516, 518 (Mo.1993).

There appears to be a discrepancy in the eases as to the review of the disqualifying provisions such as § 288.050.1. The majority points to Citizens Bank of Shelbyville v. Industrial Comm’n, 428 S.W.2d 895, 898 (Mo.App.1968); Kroger Co. v. Industrial Comm’n, 314 S.W.2d 250, 254 (Mo.App.1958) for a construction in favor of entitlement. On the other hand, even though there is to be a liberal construction of the law, the disqualifying provisions in § 288.050 “must be strictly construed.” Citizens Bank of Shelbyville , 428 S.W.2d at 897—98.

With the sole issue of whether the changes in the contract were of such a nature that Sokol could, without disqualification of Unemployment benefits, refuse to abide by the changes proposed by his employer, several cases need be examined. As the Eastern District said in Citizens Bank of Shelbyville 428 S.W.2d at 899 , “We must interpret the words ‘good cause’ by their plain and rational meaning in the light of the purpose of the Employment Security Law.... [G]ood cause for voluntary unemployment is caused by external pressures so compelling that a reasonably prudent person would be justified in giving up employment.” The words “good cause” have no fixed meaning and are read in light of the unique facts of each case. Belle State Bank, 547 S.W.2d at 846 . The employee in Citizens Bank of Shelbyville quit because her supervisor gave her the “cold treatment,” and “she didn’t speak to me ... unless she had to.” The court held a lack of cordiality did not amount to an external pressure so compelling to justify a prudent person in giving up her employment, and did not give her good cause for a quit. Citizens Bank of Shelbyville, 428 S.W.2d at 901 .

Most common factors causing the employee to quit involve pay reduction, substantial changes in either working conditions or other terms of the employment.

Here are some factual examples of cases delineating good cause:

CHANGES IN WORKING CONDITIONS

S.S. Kresge Co., 162 S.W.2d at 841 held there is no provision in the law to plant a ruling that the former work or the new work is more suitable, and each case rests on its own merits. The opinion tells the Unemployment laws “are not necessarily designed for the adjustment of rights between employees and employers in the sense that they are adversary litigants ...,” but contemplates the settling of issues under the stated public policy of providing reserves to benefit persons unemployed through no fault of their own.

Allen, 892 S.W.2d at 636 , was a claim by a para-professional to help a blind student in the employer school district. The student moved to a neighboring school district some eleven miles away and the employer *32 assigned Allen to the new district. After a few months Allen decided not to work in the new district and wanted another job in the defendant district. This was denied. This court held Allen’s objection to the extra travel time, “without further explanation as to why this imposes a hardship, does not represent a ‘compelling’ external pressure.” Id. at 638 .

In Bank of Shelbyville, 428 S.W.2d at 899 , the opinion contains a compendium of out-of-state cases revolving around workplace conditions and what constitutes good cause, and holds that a person who quit when her supervisor failed to speak to her, or would “snap her off’ was “not enough,” to constitute “external pressure so compelling that a reasonably prudent person would be justified in giving up employment.” Id. 900-01 .

In a management reorganization the claimant’s responsibilities were divided, a salary cut and job title changed. Under a statute that required a substantial change in working conditions that were less favorable to the employee, the court held the employee was entitled to benefits. Musgrave v. Eben Ezer Lutheran Institute, 731 P.2d 142, 143-44 (Colo.App.1986).

Changes In Terms Of Employment

In Belle State Bank , the court said good cause means, “a cause reasonably sufficient to justify an employee in voluntarily leaving the ranks of the employed and joining the ranks of the unemployed” Belle State Bank, 647 S.W.2d at 846. Otherwise, said the court, if every reason which appeals to the claimant’s head or heart counted as good cause, then the law would fail in its stated purpose. Applying the standard of reasonableness to the facts that the employer changed the dates of payment, minor changes in working hours, and minimal changes in sick leave benefits, the court said such changes had only a limited and relatively minor economic impact on the claimant and did not amount to good cause. Id. at 847.

The employee in Charles v. Missouri Div. of Employment Sec., 750 S.W.2d 658, 659-661 (Mo.App.1988) left a job expecting to make more with her new employer. She resigned. This court held the employee’s expectations were not those as outlined by the employer, so mere dissatisfaction with working conditions does not constitute good cause unless it is based on a substantial change in wages or working conditions “from those in force at the time the claimant’s employment commenced.”

Good cause was found in Heavy Duty Trux, 880 S.W.2d at 644 where the employer docked the pay of the driver for the tow, when the truck slid into a ditch during an ice storm. The quit was determined to be for good cause since the quit “was in response to appellant’s unreasonable actions; i.e., determining that claimant was negligent without any investigation of the incident....”

Olson v. Employment Appeal Board, 460 N.W.2d 865, 867-68 (Iowa App.1990), presented the court with an employee who had his hours reduced, pay cut, and was employed for seven months in the lesser job before the quit. The court held the changes were substantial, but the claim was disallowed because the employee had accepted the changes and worked for seven months, so a dissatisfaction with conditions did not constitute good cause.

The Supreme Court of Utah in Larry Munger Enterprises, Inc. v. Industrial Comm’n. of Utah, Department of Employment Security, 716 P.2d 808, 809 (Utah 1986), was faced with an over-the-road trucker who abandoned his rig after being tendered “a lengthy proposed contract of employment” containing what the employee thought were “unfair and possibly even illegal terms.” Those terms were on employee liability, bonding requirements, pay advances and cost reimbursement policies, and work quotas and standards. The employee was told to sign the contract without modification. The Utah Board found some of the contract provisions were unreasonable and indeed unlawful and constituted conditions caused by external pressures so compelling a reasonable person would be justified in the quit. Id. at 810 . The Supreme Court affirmed.

*33 In re Claim of Aquilina v. New York Telephone Company, 62 A.D.2d 1096 , 404 N.Y.S.2d 424 (1978) presented the question of a hire of a temporary employee for six months, who after the temporary period might or might not have been offered permanent employment with fringe benefits. The employer did not make a permanent hire after six months, but allowed the employee to stay on. The employee quit because she could not get the fringe benefits. The court denied benefits since good cause did not exist because the employee suffered no economic loss. The court referred back to the purpose of the law was to ease the hardship of involuntary employment “due to economic conditions or other conditions beyond the control of the employee”. Id. at 425.

Pay Reduction

A forty-four percent pay reduction due to an announced demotion to a lesser job constitutes good cause under the “accepted rule” that a substantial reduction in wages does indeed constitute good cause. Armco Steel Corp. v. Labor and Industrial Relations Comm'n, Div. of Employment Sec., 553 S.W.2d 506, 508 (Mo.App. 1977). A substantial reduction of earnings ($165 down to $130) due to loss of guaranteed overtime constitutes good cause. Tombigbee Lightweight Aggregate Corp. v. Roberts, 351 So.2d 1388, 1390 (Ala.App. 1977). Delaney v. Unemployment Compensation Board of Review, 133 Pa.Cmwlth. 107 , 574 A.2d 1198, 1199-1201 (1990), involved an investment broker who, for a period of months continued to negotiate an employment contract, but refused to sign a final offer of the same salary with substantial yearly increases and benefit package, with rights to accrue commissions and equity over what he was making. The new contract reduced his commissions on certain transactions. The court affirmed the denial of his claim for benefits under the statute saying “[C]laimants who, while employed, refuse to accept an offer of continued employment are deemed to have quit their position ...,” and in order to gain benefits must show the voluntary quit was of a “necessitous and compelling nature.” Id. at 1200 and 1201. The court said there was “no talismanic percentage figure” that defines a substantial reduction in pay, but the fact the claimant was offered in the proposed contract of continued employment, substantial gains in other areas, as a matter of law, supported a denial. Id. at 1201.

In Brewster v. Rutledge, 176 W.Va. 265 , 342 S.E.2d 232, 233 (1986), a night watchman’s pay was reduced from $3.25 an hour to $2.25, and he was given extra duties as a janitor. The court held these unilateral changes were substantial and constituted good cause and benefits were allowed.

None of the facts on compulsion to give up the job and collect benefits under Chapter 288 are present. Sokol suffered no loss of wages, no undue burden of added duties, nor any change in his working conditions. The vast majority of the new contract was the same as the 1988 contract of hire.

The relatively simple explanation for the result in this unemployment compensation claim is this: the employee had no practical or legal right to have the 1988 contract of employment remain unchanged forever, the changes proposed by the employer were not so substantial and harmful to the employee so he should have given up the employment and become eligible for unemployment benefits.

The Ryan case from Oregon relied on by the majority should not be used to supply good cause under Missouri law. In Ryan the situation changed from the employee having a no compete clause in his contract as a health club manager, to the employer including one. In fact, and even more glaring, Ryan went from an oral to a written agreement and his compensation was changed (presumably downward). In the case at bar, Sokol’s remuneration was increased, the non-compete clause was changed to reflect his current conditions. Here, rather than packing belongings and leaving as a victim as in Ryan, Sokol negotiated changes in other parts of the contract, signed it, and then later had second thoughts and cancelled. Here, as can be seen in the contracts in the Appendix, an employer dealing in sophisticated heating, *34 ventilating and air conditioning equipment products and their testing, sought to update a previous agreement with one of its salesmen, so he couldn’t use its products and techniques with its customers after he left.

The only other avenue for Sokol’s recovery would be to utilize the theory of “constructive discharge” as set out in Div. of Employment Sec. v. Labor and Industrial Relations Commission of Missouri, 739 S.W.2d 747, 748-49 (Mo.App.1987), but the facts here do not justify such a finding.

I cannot abide by the conclusion that the change in a non-competition clause constitutes, without any other factors, a substantial change allowing this claimant to collect from the fund. “An appellate court should not become an advocate for one of the parties in an effort to see if it can find a theory for reversal.” Stroup v. Facet Automotive Filter Co., 919 S.W.2d 273, 277 (Mo.App.1996).

I would deny the other two points raised by Sokol and would affirm the judgment affirming the Commission.

Contrary to Allen, 892 S.W.2d at 635 , Chilton, 805 S.W.2d at 722 and Campbell v. Labor and Industrial Relations Commission, 907 S.W.2d 246, 249 (Mo.App.1995), which hold that the determination and review of the Commission’s finding of a resignation to be a finding of fact, the majority opinion in this case treats and reviews this determination as a matter of law.

APPENDIX

1988 Contract Provision

In consideration of the Employer employing the Employee in a position wherein he will gain specialized knowledge and experience and will establish personal relationships with the Employer’s customers, suppliers, and other employees, the Employee covenants and agrees as follows:

On termination of his employment whether by termination of this Agreement, by wrongful discharge, or otherwise, the Employee shall not directly or indirectly within the existing marketing area of the Employer in the southeastern states of the United States or any future marketing area of the Employer began during employment under the terms of this Agreement, enter into or engage generally in direct competition with the Employer in the business of eddy current testing of tubes either as an individual on his own or as a partner or joint venturer, or as an employee or agent for any person, or as an officer, director, or shareholder, or otherwise for a period of two years after the date of termination of his employment hereunder. This covenant on the part of the Employee shall be construed as an agreement independent of any other provision of this Agreement; and the existence of any claim or cause of action of the Employee against the Employer whether predicated on this agreement or otherwise shall not constitute a defense to the enforcement by the Employer of this covenant. In the event of a breach or threatened breach by the Employee of his obligations under this restrictive covenant, the Employee acknowledges that the Employer will not have any adequate remedy at law and shall be entitled to such equitable and injunctive relief as may be available to restrain the Employee from the violation of the provisions hereof. Nothing herein shall be construed as prohibiting the Employer from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages from the Employee.

July 1994 Provision

In consideration of the Employer employing the Employee in a position wherein he will gain specialized knowledge and experience and will establish personal relationships with the Employer’s customers, suppliers and other employees, the Employee covenants and agrees as follows:

Employee agrees that during the term of this Agreement and for a period of eighteen months immediately following cessation for any reason of Employee’s employment with TAI SERVICES, INC., Employee shall not, on Employee’s own behalf or on behalf of any person, firm, partnership, association, corporation or business organization, entity or enterprise, solicit, contact, call upon, communicate with, or attempt to communicate with any current customer of TAI SERVICES, *35 INC., with a view to the sale or providing of any product, equipment or service competitive or potentially competitive with any product, equipment or service sold or then being provided or under development by TAI SERVICES, INC., provided that the restrictions set forth in this section shall apply to customers of TAI SERVICES, INC., or representatives of customers of TAI SERVICES, INC. with Employee had contact during his employment with TAI SERVICES, INC. The actions prohibited by this section shall not be engaged in by Employee directly or indirectly, whether as a manager, salesman, agent, sales or service representative, engineer, technician or otherwise. It is expressly understood that the restrictions imposed hereby will survive the termination of this agreement for a period of 18 calendar months.

State of Missouri DIVISION OF EMPLOYMENT SECURITY

Jefferson City

FINDINGS OF FACT:

The claimant worked for the employer for nearly six years as an analyst, last working on July 15, 1994. The claimant was hired under the terms of a written employment contract which was in effect from his date of hire until July 5,1994. The employer decided to implement minor changes in such contract in order to properly update same, notifying the claimant of its decision on July 5, 1994, and requiring the claimant to sign the new contract in order to continue his employment. The claimant signed the contract on July 5 after having negotiated a minor change which was handwritten at the end of the contract and signed by both parties. The next day the claimant faxed a letter to the employer notifying the employer of the claimant’s intent to void the contract he signed the previous day, claiming he was coerced into signing the contract without the benefit of legal counsel and that he did not understand the contract or its implications, expressing a desire to continue working for the employer. After mailing the claimant a copy of the signed contract and permitting him sufficient time to evaluate its contents, the employer contacted the claimant on July 15 to discuss the matter. The claimant refused to sign the contract based upon advice of counsel, believing the contract was unfair and unreasonable, referring to three specific provisions of the contract at the hearing. The evidence indicated those three provisions were substantially, if not exactly, the same as was included in the original contract of hire. The claimant could have continued in his employment had he signed the contract as required. The employer notified the claimant on July 15 that his refusal to sign the written employment contract would be considered as a termination of the employment relationship, providing the claimant with three days to reconsider his decision. The claimant’s continued refusal to sign a contract resulted in his termination of employment. The employer considered the claimant’s letter of July 6 to constitute notice of the claimant’s intent to terminate the contract he signed on July 5, consistent with the provision in such contract permitting either party to terminate same upon thirty days advanced written notice to the other.