Gladden

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
INGLESIDE HOMES, INC. )
Employer Below - Appellant, )
)
v. ) C.A. No. 02A-12-009 PLA
)
MARIE C. GLADDEN, )
Claimant Below - Appellee. )
Submitted: July 8, 2003
Decided: August 27, 2003
APPEAL FROM A DECISION OF THE
UNEMPLOYMENT INSURANCE APPEAL BOARD
REVERSED AND REMANDED.
ORDER
Davis H. Williams, Esq., and Jill S. Di Sciullo, Esq., of Morris, James, Hitchens &
Williams, LLP, Wilmington, Delaware, Attorneys for Employer Below - Appellant.
Joseph M. Bernstein, Esq., Wilmington, Delaware, Attorney for Claimant Below -
Appellee.
Stephani J. Ballard, Esq., Deputy Attorney General, Wilmington, Delaware, Attorney for
Unemployment Insurance Appeal Board.
ABLEMAN, JUDGE

In this appeal from the decision of the Unemployment Insurance Appeal Board, employer
Ingleside Homes, Inc. ("Ingleside") challenges the Board's determination that employee Marie C.
Gladden did not voluntarily quit her position, but was rather constructively discharged by the
adverse working conditions imposed upon her.

Gladden filed a claim for unemployment benefits based on her contention that she was
forced to resign from her employment. Ingleside, on the other hand, claims that Gladden
voluntarily quit her employment without good cause and was therefore disqualified from
benefits. The Claims Deputy found that Gladden voluntarily quit her employment without good
cause and the Appeals Referee affirmed that decision. On appeal, the Board reversed the
Appeals Referee's determination, finding that Gladden was faced with either working under very
difficult conditions or quitting, a situation that constituted constructive discharge. In the
alternative, the Board noted in its decision that "even were it to find that claimant's separation
constituted a voluntary quit, claimant had good cause in connection with the work to quit and
made genuine efforts to resolve the problems administratively before leaving."

Ingleside appeals the Board's decision to this Court, arguing that the Board erred as a
matter of law insofar as it 1) failed to make the threshold determination that Gladden is eligible
to receive benefits under 19 Del. C. §3314 before awarding her benefits, 2) improperly shifted
the burden to Ingleside to establish that Gladden was discharged for cause, and 3) disregarded
the substantial weight of the evidence. For the reasons stated below, the decision below is

REVERSED AND REMANDED.

Statement of Facts

Appellant Marie C. Gladden was employed by Ingleside Homes, Inc. ("Ingleside") from
August 2000 until February 28, 2002, as the Vice President of Fund Development, Marketing
and Public Relations. Over that time period, Gladden earned a salary ranging from $60,000 to
$62,000 per year.

In the fall of 2001, Ingleside underwent significant corporate restructuring, which
included the changing of job titles and responsibilities, as well as the physical rearranging of
employees' offices. Gladden was out of the office for part of the restructuring due to maternity
leave, which she began in December 2001. During her absence, it was decided that all corporate
functions should be moved to a single floor within the office, as opposed to scattered throughout
the building as it had been before. The employees were responsible for moving their respective
offices, but because Gladden was on maternity leave, another employee moved her possessions.
It was also decided that Gladden's position would be limited to fund development, thereby
eliminating her responsibility for public relations and marketing. Gladden's salary, however,
remained the same.

At some point in February 2002, Jim Cuart, another member of Ingleside's senior staff,
called Gladden to update her as to the changes within the company. Soon thereafter, Gladden
visited the office to show her co-workers pictures of her baby. Gladden returned to the office to
resume her work on Monday, February 25, 2002. According to Ingleside, Gladden was not
expected to return to work for a couple more weeks and her co-workers were surprised to see her
in the office. At that time Cuart showed Gladden to her new office, which, according to
Gladden, was a "disaster area", adjacent to the bathroom "in a cubby hole". Ingleside,
however, submits that the new office was actually three feet larger than Gladden's old office.
Gladden reported that her assistant was given a larger office and that another "marketing person"
had an office at least twice the size of her office.

Gladden also testified that her files were "trashed", her pictures were in the garbage, and
the back of her computer was removed. Her office was so packed with files that she had to walk
sideways to reach her desk. This was problematic because, as vice president of fund
development, Gladden was required to meet with donors in her office. The phone was unusable
because her pin number had been changed and her computer access was denied, presumably due
to a password change. Gladden testified that she called Cuart to inform him of these problems.
His response was "well you know we've moved everybody around and this is what we had to do
until we find somewhere to put you." Gladden suggested moving back to her old office, but
Cuart advised that her former office had been turned into a storage room. According to
Gladden, Cuart said he would meet with Steven Wisniewski, another senior staff member, to try
to resolve the situation. Gladden then went home.

Gladden testified that when she returned to work the following day, the door to her
office was blocked by a number of boxes. Since she had had a caesarian-section, Gladden was
unable to move the boxes. Gladden attempted to find Wisniewski to determine who had
authorized the boxes. At this point, Gladden admitted, she was "agitated", particularly because
no one seemed to have any information about the boxes. Eventually a co-worker, Deanna
Jenks, assisted Gladden in moving the boxes. Gladden expressed to Jenks her frustration with
the changes made during her leave, as well as her concern over the state of her office. At this
point, both Gladden and Jenks became emotional and upset. Karen Peterson, another co-
worker, testified that the boxes were placed outside her office because they were to be moved to
the fourth floor, near the location of the elevators. She further testified that Gladden was not
expected to return so soon and that had she returned to work at the scheduled time, none of these
problems would have arisen.

At some point after her return, presumably on Monday or Tuesday of her first full
week, Gladden spoke with Cuart about reactivating her phone and providing her access to the
computer system. Cuart told her to contact maintenance, but the maintenance department was on
vacation. In her testimony, Gladden seems to imply that Cuart knew that maintenance was
unavailable but told her to call them anyway.

On the next day, Wednesday, Cuart came to Gladden's office, to discuss a meeting that
Gladden had missed and the incident with Jenks that had upset her. Gladden said that Cuart
started "reaming" her about how she had offended Jenks. Gladden testified that she had spoken
with Jenks who reported to her that she was upset for personal reasons totally unrelated to
Gladden. According to Gladden, she confronted Cuart with what Jenks had told her, and that
they "just kept going back and forth, back and forth." Finally she just left. It was
approximately one or two o'clock.

Gladden returned to work on Thursday and Cuart again came to her office. The
discussion from the day before resumed, and, according to Gladden, Cuart again told her that if
she "wasn't satisfied" she "can always leave." The argument continued until Gladden "had it to
here" at which time she said "I'm out of here" and then "took her stuff and left."

On August 18, 2002, Gladden filed an application for unemployment benefits. The
Claims Deputy characterized the issue as whether Gladden voluntarily resigned or whether she
was forced to resign. The Claims Deputy found that Gladden had the burden of proof to show
good cause for leaving the job, but failed to satisfy her burden, thereby disqualifying her from
receiving benefits. On appeal, the Referee framed the issue as whether Gladden had good cause
to leave her employment and found that she had not.

The Board reversed the decisions below, reasoning as follows:

The majority of the Board finds that the adverse working conditions which
claimant was subject to following her return from maternity leave constituted a
constructive discharge. Claimant could not be expected to work under conditions
where her office was inaccessible and she could not have access to the business
phones. In addition, claimant was given a smaller office, while her assistant kept
her old larger office. The Board finds that claimant did not voluntarily terminate
her employment; rather, she was constructively discharged. An employee who is
faced with resignation induced under pressure may be considered to have been
constructively discharged and will be eligible for unemployment compensation
provided there was no just cause for discharge. See Anchor Motor Freight v.
UIAB, Del. Super., 325 A.2d 374 (1974). Under the circumstances, claimant was
faced with either working under very difficult conditions or quitting.
In a discharge situation, the burden is on the employer to show that
claimant engaged in some wilful or wanton misconduct which would justify the
discharge. No such evidence was presented here. Accordingly, the Board finds
that claimant was discharged from her work without just cause and is entitled to
the receipt of benefits. The majority notes that even were it to find that claimant's
separation constituted a voluntary quit, claimant had good cause in connection
with the work to quit and made genuine efforts to resolve the problems
administratively before leaving.

Parties' Contentions

Ingleside has appealed the Board's decision to this Court and argues three different
grounds for reversal. First, it asserts that the Board erred in failing to determine whether
Gladden is eligible to receive benefits under Section 3314 of Title 19 before awarding her
benefits. In this case, the Board reversed the Appeals Referee's determination that Gladden was
disqualified from receiving benefits under Section 3315, but never addressed the threshold issue
of eligibility. Therefore, Ingleside maintains, this Court must remand the case back to the Board
for further proceedings.

Second, Ingleside argues that the Board committed legal error insofar as it analyzed this
case under the "constructive discharge" framework, as opposed to the "voluntary quit"
framework. This error, it contends, resulted in the improper shifting of burdens to Ingleside.
Because the Board found a constructive discharge, it placed the burden on Ingleside to
demonstrate just cause for Gladden's dismissal. But Ingleside has never alleged that Gladden
was discharged for cause. Instead, the argument continues, Ingleside has consistently maintained
that Gladden left voluntarily and that the onus is on her to demonstrate that she had good cause
to leave work.

Ingleside's third argument is that the substantial weight of the evidence supports a finding
that Gladden voluntarily resigned her employment with Ingleside, and that Gladden failed to give
Ingleside an opportunity to remedy her problems before she resigned. Accordingly, she is not
entitled to benefits.

In response to Ingleside's first argument, Gladden points out that the Board noted in its
decision that Gladden is only entitled to benefits if she is "otherwise qualified and eligible as
determined by the Department of Labor."31 Therefore, she argues, although not in the record, the
Department of Labor presumably has determined that Gladden meets the eligibility requirements
of the statute. Additionally, she notes that Ingleside had the opportunity to contest such a
determination before the Referee and the Board, but saw no need to do so. Gladden further
maintains that the Board's finding of constructive discharge is supported by substantial evidence
and free from legal error.

The Board's brief "takes no position on whether its findings on the merits of the case
should be upheld."32 The Board does argue, however, that it did not err in failing to address
eligibility because Gladden's eligibility was never disputed at any point during the proceedings.
The Board also contends that it did not improperly shift the burden of proof. Rather, as the fact
finder, it merely determined that Gladden's separation from Ingleside constituted a constructive
discharge and not a voluntary dismissal.

Standard of Review

The duty of this Court on an appeal from the Board is to determine whether the Board's
decision is supported by substantial evidence and free from legal error.33 This Court does not sit
as a trier of fact with authority to weigh the evidence, determine questions of credibility, or make
its own factual findings and conclusions. 34 The Board's decision must be affirmed if it is
supported by substantial evidence.35 Substantial evidence means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.36 The credibility of
witnesses, the weight of their testimony, and the factual inferences drawn therefrom are for the
Board to determine.37 This Court does not substitute its judgment for that of the Board.38
Accordingly, this Court must view the record in the light most favorable to the party prevailing
below.

Discussion

Delaware's unemployment insurance program was statutorily created and is governed by
Title 19, Section 33 of the Delaware Code. The core of that Chapter is the interaction of Section
3314, which outlines eligibility requirements, and Section 3315, which addresses circumstances
where otherwise eligible persons shall be disqualified from benefits. This Court has described
the framework as follows:

Sections 3314 and 3315 establish a two-tier test which the Department of Labor
("Department") must employ in determining whether an unemployed individual is
entitled to unemployment benefits. First, the Department must determine if the
individual is eligible. If the individual is eligible, the Department must determine
if the individual is disqualified.

Generally speaking, a person is eligible for benefits under Section 3314 if he or she is
registered for work, has claimed benefits, is able to work, and is actively seeking employment.41
As noted above, however, even if an individual meets all of those requirements, he or she may
nevertheless be disqualified under Section 3315. The most common ways to be disqualified are
leaving work "voluntarily without good cause attributable to such work...." and being
"discharged from the individual's work for just cause...."

The issue presented in this appeal is whether this Court may presume that the Department
of Labor has reviewed and determined eligibility, even though the Claims Deputy, Appeals
Referee, and the Board have each failed to make such explicit findings, where none of the parties
have disputed the issue. Moreover, there is nothing in the record to raise the possibility of
ineligibility.

The tribunals below have focused exclusively on whether Gladden was disqualified from
receiving benefits, presumably because both the Claims Deputy and the Appeals Referee denied
benefits on disqualification grounds, such that there was no need to discuss eligibility. It was
only at the level of the Board that eligibility became determinative, after it ruled that Gladden
was not disqualified. But it is important to note that neither party has ever raised any eligibility
concerns and there is nothing in the record that suggests ineligibility.
Gladden argues that the Board's decision only granted benefits if she is "otherwise
qualified and eligible as determined by the Department of Labor."44 Therefore, she presumes,
the Department has made such a determination. The Board argues in it brief that eligibility is an
ongoing evaluation, susceptible to change at any point during the continuing submission of
claims. The Board also notes that most of the eligibility issues are determined by a claimant's
submission of weekly claim forms, certifying that the claimant is available for work and actively
seeking work, among other things. In short, according to the Board, eligibility is an issue that
needs to be addressed only if it is disputed.

This Court faced a similar issue in Division of Unemployment Ins. v. Unemployment Ins.
Appeal Bd.45 In that case, the claims deputy denied benefits after finding that the claimant had
refused to accept a job opportunity. In the alternative, the claims deputy also found that the
restrictions claimant placed on the work she would be willing to accept were so rigorous that she
could not be considered available for work as required. The appeals referee affirmed on both
grounds. The Board reversed the appeals referee, finding that the claimant's refusal of the job
opportunity did not disqualify her from benefits. The Board did not address the availability
issue. This Court remanded the case back to the Board, reasoning as follows:
The record below indicates that both the claims deputy and the appeals referee
found that the claimant was not available because of the restriction that claimant
placed upon the work that she was willing to accept. The Board did not address
this issue of availability, and hence eligibility. The Board should have addressed
all of the issues on claimant's eligibility that were raised by the referee before
reversing his decision. A remand is necessary for the Board to address this
issue.

A related issue arose in McManus v. Christina Service Co. There, the referee found the
claimant to be qualified to receive benefits. In reversing the referee, the Board found that the
claimant voluntarily quit without just cause, thereby disqualifying him from benefits under
Section 3315. However, the record contained evidence that the claimant may have accepted
work during the period for which he sought benefits. This Court held:
Although the parties have litigated and prior proceedings have focused on
whether Claimant was disqualified, this case appears to turn on whether Claimant
is eligible for benefits. The record suggests that had Claimant worked when work
was available, i.e., November 13, 1995, Claimant would be ineligible for benefits.
The Court, therefore, will remand this case for further consideration, including if
necessary, a new hearing.

The Court is mindful that if Claimant were disqualified, he could not
receive benefits despite his eligibility. Nevertheless, the Court cannot evaluate,
much less rely on, the administrative findings concerning disqualification until the
facts regarding eligibility have been determined and considered. Accordingly, if
the UIAB finds that Claimant is eligible for benefits, the UIAB must reconsider
its finding as to disqualification under the totality of the circumstances and in
light of its finding concerning eligibility.

United Propane, Inc. v. Sowers-Vescovi49 also bears on this case. In that case,
interestingly, the claims referee, who found no grounds for disqualification, determined that the
claimant was eligible for benefits if she was "otherwise qualified and eligible".50 The referee
reversed the claims deputy. The Board reversed the referee's determination that the claimant was
disqualified, but as in this case, failed to address eligibility. This Court found remand to be
appropriate. After explaining that Sections 3314 and 3315 establish a two-tier test, this Court
noted that, when making the determination of whether a claimant is both eligible and not
disqualified, the Board must make adequate findings of fact and conclusions of law as to the
pivotal issues raised by the claimant's application.51 The Court likened the situation to
McManus, explaining:

This case presents the same problem. The UIAB is required to apply a two-step
test but has glossed over or skipped the first step. This error first appears in the
Claims Deputy's Notice of Decision. There, the only determination the Deputy
made was that Claimant was "eligible for receipt of benefits, if otherwise qualified
and eligible...." The Findings of Fact, however, do not reflect that the Deputy
considered the factors required by §3314 for eligibility. That is, there is no
showing that the Deputy considered whether the claimant was both able to work
and available to work. The decision of the Appeals Referee suffers from the same
flaws. It skips straight to a determination that Claimant was discharged and that
the discharge was for "cause" thus disqualifying Claimant for benefits. Finally,
the decision of the UIAB does not indicate that the Board considered any issue
other than whether the Claimant was discharged for just cause.52
The Court finds this reasoning to be equally applicable to the case at bar. While the
Court recognizes that in each of the foregoing cases some evidence existed on the record tending

to put eligibility in doubt, the basic principle is nonetheless applicable here. In order to be
entitled to benefits, both eligibility and disqualification requirements must be met. And while
the parties certainly could have raised eligibility concerns before, the burden ultimately lies with
the Board to make a determination as to eligibility. Put simply, this Court cannot presume that
such a determination has been made, as Gladden would have it, when the record is completely
devoid of any discussion of the issue. This case must be remanded for further proceedings as to
Gladden's eligibility.

II.

The Court must now address the Board's findings as to Gladden with regard to
disqualification under Section 3315. The Board determined that Gladden did not voluntarily
quit, but instead was constructively discharged. Ingleside argues that the Board erred in using
the constructive discharge analysis rather than addressing the issue within the voluntary quit
framework.

In a termination situation, the employer has the burden of proving just cause. Employee
performance and conduct is highly relevant in assessing just cause.53 Just cause refers to a
"wilful or wanton act in violation of either the employer's interest, or of the employee's duties, or
of the employee's expected standard of conduct."54 Wilful and wanton conduct is that which is
evidenced by either conscious action, or reckless indifference leading to a deviation from
established and acceptable workplace performance; it is unnecessary that it be founded in bad
motive or malice.55

In a voluntary quit situation, on the other hand, the employee bears the burden of proving
good cause existed to justify quitting. "Good cause for quitting a job must be such cause as
would justify one in voluntarily leaving the ranks of the employed and joining the ranks of the
unemployed." "Good cause should be determined by the standard of a reasonably prudent
person under similar circumstances."57 "In Delaware, substantial reduction in an employee's pay
constitutes good cause for [an] employee's voluntary quitting."58 However, an employee must
make a good faith effort to resolve problems with the employer before quitting; the employee
must exhaust administrative remedies.59 An employee may not quit under the pretext of good
cause merely because he finds the employment situation personally untenable.6061

Here, the Board analyzed Gladden's separation within the discharge framework, ruling as
follows:

The Court concludes that the Board utilized the wrong standard in this case. A review of
Delaware case law has revealed that constructive discharge has arisen in two distinct types of
situations. The first, more traditional, and common situation involves an employer giving an
employee an ultimatum with regard to the employment. For instance, in Anchor Motor Freight
v. Unemployment Insurance Appeal Bd.,63 the case the Board cites herein, the claimant was
presented with a letter of resignation and was told to sign it or she would be terminated and
would forfeit vacation pay. Similarly, in MRPC Financial Management LLC v. Carter,64 the
Court found constructive discharge where the employee was faced with the decision of taking a
substantial demotion, including a significant reduction in pay, or resignation.

The second situation involves employee resignation due to poor working conditions.
This case falls squarely within this category. While the Court has found a few cases containing
some language supporting a finding of constructive discharge under such circumstances if the
work conditions are poor enough,65 no cases have been found which uphold a finding of
constructive discharge in a unemployment benefits situation based solely on poor working
conditions.

In this Court's judgment, that the facts of this case warrant analysis under "voluntary
quit" framework, such that the basic issue for the Board to decide is whether the claimant had
"good cause" to leave her employment. The burden should be on the claimant to demonstrate
such good cause, not on the employer to demonstrate just cause. The Board found constructive
discharge because Gladden's office, phone, and computer were inaccessible for three days
following her return from maternity leave, and Gladden's coworkers were given larger offices
than she was. While there may be situations where an employer's flagrant disregard for an
employee's working conditions and/or overt discriminatory/retaliatory work environment rises to
the level of constructive discharge, this case, at least based on the grounds cited by the Board, is
not one of them.

Lastly, the Board's alternative holding -- that "even were it to find that claimant's
separation constituted a voluntary quit, claimant had good cause in connection with the work to
quit and made genuine efforts to resolve the problems administratively before leaving" -- is
simply not sufficient for appellate review. This Court requires a more thorough analysis and
findings of fact before passing judgment on the Board's determination.

III.

On remand, the Board should first explicitly determine whether Gladden is eligible for
unemployment benefits under Section 3314. If the Board finds that she meets the requirements
of eligibility, it must then address disqualification under Section 3315. In particular, the Board
shall, with specificity, detail its findings as to whether Gladden had good cause for leaving work.

Conclusion

For the foregoing reasons, the Court REMANDS this case to the Unemployment
Insurance Appeal Board for proceedings consistent with this decision.
IT IS SO ORDERED.
__________________________________
PEGGY L. ABLEMAN, JUDGE
cc: Davis H. Williams, Esquire
Jill S. DiSciullo, Esquire
Joseph M. Bernstein, Esquire
Stephani J. Ballard, Esquire