                                                                                              10/17/2017


                                           DA 17-0163
                                                                                          Case Number: DA 17-0163

                  IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2017 MT 254



JOYCE CROUSE,

              Petitioner and Appellant,

         v.

STATE OF MONTANA, DEPARTMENT OF
LABOR, AND MADISON COUNTY, MONTANA,

              Respondents and Appellees.



APPEAL FROM:           District Court of the Fifth Judicial District,
                       In and For the County of Madison, Cause No. DV-29-2016-21
                       Honorable Luke Berger, Presiding Judge


COUNSEL OF RECORD:

                For Appellant:

                       Brian K. Gallik, Gallik, Bremer & Molloy, P.C., Bozeman, Montana

                For Appellee Madison County:

                       Maureen H. Lennon, Mitchell A. Young, MACo Defense Services,
                       Helena, Montana



                                                   Submitted on Briefs: September 20, 2017

                                                              Decided: October 17, 2017


Filed:

                       __________________________________________
                                         Clerk
Chief Justice Mike McGrath delivered the Opinion of the Court.


¶1     This is an appeal from a decision by the Unemployment Insurance Appeals Board

(Board), and affirmed by the Fifth Judicial District Court, denying Joyce Crouse’s

(Crouse) claim for unemployment compensation benefits. We affirm.

¶2     We restate the issue on appeal as follows:

       Whether the District Court erred when it affirmed the Board’s conclusion that
       Crouse was disqualified for unemployment benefits because her voluntary
       termination did not constitute “good cause” pursuant to § 39-51-2302, MCA.

                  PROCEDURAL AND FACTUAL BACKGROUND

¶3     Crouse was hired as Madison County Sanitarian in December 2013.1 Her job

duties included inspecting establishments for compliance with sanitation requirements

and issuing septic permits to contractors. During her employment Crouse experienced a

number of issues, including problems with contractors and co-workers.

¶4     On numerous occasions, contractors complained about how Crouse performed her

job. Crouse attributes the contractor complaints to her being less flexible in approving

septic permits and being more strict than her predecessor. Crouse also found an email

from her secretary to Crouse’s mentor, calling Crouse “clueless” and claiming other co-

workers “dislike[d] her very much and would love to see her gone.” This caused Crouse

to frequently close herself off in her office.




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         The following facts are taken from the Hearing Officer’s February 12, 2016 decision
and the District Court’s order.
                                                 2
¶5     Crouse expressed her concerns about her working environment to the Madison

County Commissioners (Commissioners).             One Commissioner told her to “hang in

there.” Crouse’s secretary was suspended and later let go by the Commissioners.

¶6     On August 6, 2014, the Commissioners sent Crouse her first written warning,

which stated that she could expect disciplinary action if she failed to change her behavior

regarding missed appointments, scheduling problems, and lack of communication. Many

of the complaints received from contractors and customers concerned Crouse’s timeliness

in making it to appointments as well as the amount of time it took for Crouse to process

applications. The Commissioners also expressed concern with Crouse double-booking

appointments due to lack of communication with her secretary.

¶7     In April 2015, the Commissioners issued a second written warning to Crouse for

being late to two more appointments. The Commissioners informed Crouse that she must

call contractors when she was running late.

¶8     Crouse performed many inspections during the summer of 2015. Crouse denied

three permits because the soil did not support the septic systems the contractors installed.

A soil scientist agreed with Crouse’s evaluations. One contractor went to Crouse’s office

and expressed his frustration with her denial of his permit. Other contractors contacted

Commissioner James Hart, expressing their frustration with Crouse. One such interaction

turned into a heated confrontation.

¶9     It was also during the summer of 2015 that additional concerns arose regarding

Crouse’s work performance. On September 2, 2015, the Commissioners hand-delivered

Crouse a “due process letter,” informing her that it appeared she had violated county

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policies and that “termination due to an inability to adequately perform [her] duties may

be warranted.” The due process letter listed five areas of concern:

       1.      Regularly missing scheduled appointments with customers.
       2.      Lack of timely responses to customer e-mails, phone calls,
               appointments, permit approvals or disapprovals.
       3.      Lack of communication with your immediate supervisors to inform
               them of your request for time off from work.
       4.      Have not returned the County car to Madison County per
               Commissioners’ request.
       5.      Consistently late with time sheet.

Crouse was given forty-eight hours to present her response to the Commissioners either

verbally or in writing. While Crouse was denied the list of complaints, she was given a

list of names of those who made the complaints.

¶10    On September 4, 2015, Crouse met with the Commissioners and asked for

additional time to submit her responses in written form. Her request was denied. Crouse

then presented her response to the Commissioners and they informed her they would

reach a decision in ten to fourteen days.

¶11    Before the decision was reached Crouse handed in her written resignation notice,

dated September 14, 2015. The resignation letter stated that Crouse had no other choice

but to quit because of retaliation for performing her job duties, harassment, inability to

work in a hostile work environment, and because she felt that she was facing certain

termination.

¶12    After her resignation, Crouse filed a claim for unemployment benefits. Crouse

asserted that the County’s conduct created a hostile work environment which effectively




                                            4
amounted to constructive discharge. She contends she had good cause to leave work,

entitling her to benefits under § 39-51-2302(1), MCA.

¶13    The parties called in for a telephonic hearing before a Montana Department of

Labor and Industry Department Hearing Officer on February 9, 2016. On February 12,

2016, the Hearing Officer concluded that Crouse resigned without good cause and denied

her claim for unemployment benefits. Crouse appealed to the Unemployment Insurance

Appeals Board. On March 23, 2016, the Board adopted the Hearing Officer’s report,

including the findings of fact.

¶14    Crouse filed a Petition for Judicial Review in the Fifth Judicial District Court. On

February 21, 2017, the District Court affirmed Crouse’s denial of unemployment

compensation benefits. Crouse appeals.

                                  STANDARD OF REVIEW

¶15    When reviewing the finality of a decision on claims for unemployment benefits

made by the Unemployment Insurance Appeals Board, this Court must apply a statutory

standard of review. Pursuant to § 39-51-2410(5), MCA, “the findings of the board as to

the facts, if supported by evidence and in the absence of fraud, are conclusive and the

jurisdiction of the court is confined to questions of law.” More specifically, the findings

of fact must be supported by substantial evidence. Johnson v. W. Transp., LLC, 2011 MT

13, ¶ 16, 359 Mont. 145, 247 P.3d 1094 (citing Ward v. Johnson, 242 Mont. 225, 228,

790 P.2d 483, 485 (1990)).         Substantial evidence is “such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion . . . .” Noone v.

Reeder, 151 Mont. 248, 252, 441 P.2d 309, 311-12 (1968) (citations omitted). It is more

                                             5
than a scintilla, but less than a preponderance of the evidence. Johnson, ¶ 17 (citations

omitted).

¶16    District courts review Board of Labor Appeals decisions on conclusions of law for

correctness. Sayler v. Mont. Dep’t of Labor & Indus., 2014 MT 255A, ¶ 13, 376 Mont.

369, 336 P.3d 358 (citations omitted).    This Court applies the same standard when

reviewing the district court decision. Gary & Leo’s Fresh Foods, Inc. v. Mont. Dep’t of

Labor & Indus., 2012 MT 219, ¶ 12, 366 Mont. 313, 286 P.3d 1218 (citations omitted).

                                    DISCUSSION

¶17    Issue: Whether the District Court erred when it affirmed the Board’s conclusion
       that Crouse was disqualified for unemployment benefits because her voluntary
       termination did not constitute “good cause” pursuant to § 39-51-2302, MCA.

¶18    An individual who leaves work without “good cause attributable to the

individual’s employment” will be disqualified for benefits.      Section 39-51-2302(1),

MCA.        Part 23 of Title 39, chapter 51 in the Montana Code Annotated covers

disqualification for benefits and does not define good cause. However, part 12 of Title

39, chapter 51, which addresses paid unemployment benefits that are chargeable to the

employer’s account, does. Good cause is clarified in § 39-51-1214, MCA. It provides

good cause exists when: “(i) the claimant had compelling reasons arising from the work

environment that caused the claimant to leave and the claimant; (A) attempted to correct

the problem in the work environment; and (B) informed the employer of the problem and

gave the employer reasonable opportunity to correct the problem.”                Section

39-51-1214(2)(a)(i)(A), (B), MCA. That definition is adopted by the Department of

Labor and Industry in the Administrative Rules of Montana.              Admin. R. M.

                                           6
24.11.457(1)(a)(i), (ii). Compelling reasons include but are not limited to: “unreasonable

actions by the employer concerning hours, wages, terms of employment, or working

conditions . . .” or “unreasonable rules or discipline by the employer so severe as to

constitute harassment.”      Section 39-51-1214(3)(b), (d), MCA; Admin. R. M.

24.11.457(2)(b), (d). The claimant bears the burden of proof to establish good cause.

Johnson, ¶ 30.

¶19   The Board reviewed the record pursuant to Admin. R. M. 24.7.306 and found

specific reasons for affirming the Hearing Officer’s findings of fact. This Court must

determine whether the Board’s findings of fact are supported by substantial evidence. If

there is substantial evidence, the Board’s factual findings are conclusive. Johnson, ¶ 17

(citing Phx. Physical Therapy v. Unemployment Ins. Div., 284 Mont. 95, 99, 943 P.2d

523, 526 (1997)).

¶20   The District Court found all but two of the Board’s findings were supported by

substantial evidence. The first finding that lacked substantial evidence was that Crouse

did not work after September 4. There is substantial evidence in the record showing that

Crouse returned to work on September 7 and worked through September 9. Second, the

Board found that Crouse never requested additional time to present written findings

before meeting with the Commissioners on September 4. There is substantial evidence in

the record showing that Crouse did make such a request and that it was denied. We agree

with the District Court. However, these two findings did not impact the Board’s final

decision and thus do not affect our review.



                                              7
¶21    To establish she had good cause to leave her position as Sanitarian, Crouse is

required to demonstrate she had a compelling reason arising from her work environment.

Admin. R. M. 24.11.457(1)(a). Crouse alleges she had a compelling reason to leave her

employment because she feared a potential unfavorable decision by the Commissioners

regarding termination and that personality differences between co-workers and contractor

aggression created a hostile working environment. She contends the Commissioners

acted unreasonably.

¶22    This Court has yet to directly discuss the “compelling reasons” language of

§ 39-51-1214(3), MCA, in a published opinion.2 However, Admin. R. M. 24.11.457 was

cited by this Court in Cruson v. Missoula Elec. Coop., Inc., 2015 MT 309, ¶ 19, 381

Mont. 304, 359 P.3d 98. Although the “reasonable opportunity” prong of the good cause

test and not the “compelling reason” prong was at issue in Cruson, we still find the

analysis helpful because this Court held that while Cruson may have had good reasons to

leave his job at MEC, “evidence supports the Board’s decision that those reasons were

not ‘compelling,’ as defined by Admin. R. M. 24.11.457(2), in light of MEC’s responsive

actions.” Cruson, ¶ 35.

¶23    We have reached decisions regarding Board of Labor Appeals cases by applying

the term “good cause” more broadly.          In McCarthy v. Mont. Power Co., a woman

voluntarily terminated her employment so that she could accompany her husband to


       2
        The District Court attempted to address this gap by noting this Court’s rationale from an
unpublished opinion, Huset v. State Bd. of Labor Appeals, 2014 MT 271N, 377 Mont. 432, 348
P.3d 169. However, the Huset opinion is unpublished and the District Court did not cite it as
precedent.
                                               8
California for three months. McCarthy v. Mont. Power Co., 143 Mont. 134, 138, 387

P.2d 438, 440-41 (1963). This Court held that while the woman may have subjectively

thought she had good reason to leave her employment, her desire to be with her husband

did not constitute good cause and thus, she was properly denied unemployment benefits.

McCarthy, 143 Mont. at 140, 387 P.2d at 442. In Sheila Callahan & Friends, Inc. v.

Mont. Dep’t of Labor & Indus., a woman voluntarily terminated her employment so that

she could care for her mother. Sheila Callahan & Friends, Inc. v. Mont. Dep’t of Labor

& Indus., 2012 MT 133, ¶¶ 5, 18, 365 Mont. 283, 280 P.3d 895. This Court held that the

woman did not have good cause to leave her employment and she was denied

unemployment benefits. Callahan, ¶ 20. While the District Court refers to these cases in

its order, they are factually distinguishable. Crouse’s voluntary termination was due to

circumstances arising out of her work environment, whereas in McCarthy and Callahan,

the employees voluntarily terminated their employment for familial reasons and

circumstances arising outside of the work environment.

¶24   Crouse alleges she had a compelling reason to quit her position as Sanitarian

because she felt she was facing certain termination as a result of the due process letter,

creating a hostile work environment.       Government employees are entitled to fair

termination proceedings. To initiate a formal termination, public employers must send a

“due process letter” to the employee. It describes the employer’s concerns with the

employee’s work performance. The public employee is given an opportunity to respond

and address those concerns. See Bird v. Cascade Cnty., 2016 MT 345, ¶¶ 4, 6, 7, 386

Mont. 69, 386 P.3d 602 (Cascade County Board of Commissioners properly terminated

                                            9
the employment of a woman by sending her a reprimand letter that addressed job

performance concerns, and later a due process letter further detailing the Commissioners’

reasons for discharge). Here, the Commissioners sent the due process letter to Crouse

after sending warning letters in August 2014 and April 2015. Despite these warnings, the

Commissioners continued to receive complaints. The due process letter gave Crouse the

opportunity to demonstrate to the Commissioners that they should continue her

employment. However, Crouse did not avail herself of that opportunity. Crouse did not

have a compelling reason to quit because she feared termination after receiving a due

process letter.

¶25    Crouse alleges that the tension with co-workers, and a lack of response from the

Commissioners regarding this tension, contributed to a hostile work environment that

provided her with a compelling reason to voluntarily terminate her employment. The

District Court determined that allegations of hostile working conditions did not support

her argument that she had good cause to resign. Other courts have reached similar

conclusions. In Esselman v. Job Serv. N.D., the North Dakota Supreme Court held that

although Michelle Esselman felt intimidated and verbally attacked by her co-workers, she

did not have good cause to quit. Esselman v. Job Serv. N.D., 548 N.W.2d 400, 403-05

(N.D. 1996). The North Dakota Supreme Court also noted testimony that “the stress and

tension in the office was primarily caused by ‘a lack of communication’ and ‘maybe

some personality conflicts.’”   Esselman, 548 N.W.2d at 404. The tension between

Crouse and her co-workers did not give her a compelling reason to leave her position as

Sanitarian.

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¶26      Crouse faced numerous complaints from contractors.           Crouse argues these

complaints added to the hostile work environment and that the Commissioners failed to

address them, giving her a compelling reason to voluntarily terminate her employment.

Crouse did not present evidence as to any specific actions that the County should have

taken.    In fact, a review of the record shows that the Commissioners did address

contractor complaints. Commissioner Hart met with contractors who were upset with

Crouse’s work performance and even defended Crouse in a heated meeting with one

contractor.

¶27      It was also these complaints that gave rise to the reprimand letters sent to Crouse.

While Crouse argues complaints were made because she was stricter in her enforcement

of sanitation rules, evidence in the record indicates other factors. Crouse missed and was

late to numerous appointments with contractors, and that conduct apparently continued

even after the Commissioners’ first letter was given to Crouse. Noting that she was asked

by a Commissioner at the September 4 meeting why she refused to issue a particular

permit, Crouse asserts the Commissioner asked her to violate her duties and the law.

However, Commissioner Shultz testified that the Commissioners never asked Crouse to

violate the law, and in fact, none of the reprimand letters sent to Crouse mentioned

concern with Crouse’s application of the law as Sanitarian. The record does not support

this assertion.

¶28      Crouse voluntarily resigned her position with the County. Montana law precludes

awarding unemployment benefits to former employees unless they can demonstrate they

had good cause to resign.        Section 39-51-2302(1), MCA.        Administrative Rule of

                                              11
Montana 24.11.457 further defines the term good cause in the context of employment

disputes. The claimant had to have a compelling reason based within the employment

relationship to leave, and must have made an attempt to resolve the problem and give the

employer an opportunity to correct it.

                                    CONCLUSION

¶29    Crouse has not satisfied her burden to establish that she left her position as

Madison County Sanitarian for good cause. The findings of the Board were supported by

substantial evidence; as such they are conclusive. The District Court correctly affirmed

the Board’s decision to deny Crouse’s claim for benefits because she voluntarily resigned

her position.

¶30    Affirmed.


                                                /S/ MIKE McGRATH


We Concur:

/S/ JAMES JEREMIAH SHEA
/S/ BETH BAKER
/S/ MICHAEL E WHEAT
/S/ DIRK M. SANDEFUR




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