PROVIDENCE, SC DISTRICT COURT, SIXTH DIVISION

DEROBBIO, C.J. This matter is before the Court on the complaint of Patricia Voci, filed pursuant to Rhode Island General Laws § 42-35-15, seeking judicial review of a final decision rendered by the respondent, Board of Review, Department of Labor and Training, which upheld the finding of the Referee that the claimant, Patricia Voci was not entitled to receive employment security benefits.

The travel of the case is as follows. The claimant had last worked on June 17, 2001. In a decision dated December 4, 2001, the Director determined that the claimant had refused an offer of suitable work without good cause, under the
provisions of Section 28-44-20, and the claimant was declared overpaid, under the provisions of Section 28-42-68 of the Rhode Island Employment Security Act. The claimant filed a timely appeal. A hearing on the appeal was scheduled. A Notice of Hearing was sent to all interested parties. The hearing was held on January 7, 2002. The claimant appeared and testified represented by attorney. Employer representative appeared and testified.

Although there has been conflicting testimony presented, the Findings of Fact are based on the weight of the credible evidence presented.

The Referee held the claimant was not entitled to receive unemployment security benefits, based on the determination that claimant refused an offer of suitable work without good cause and was thus disqualified pursuant to Rhode Island General Laws § 28-44-20 and further was subject to recovery of payments pursuant to Section 28-42-68.

Thereafter, a timely appeal was filed and the matter was heard by the Board of Review. The Board determined that the Referee’s decision was a proper adjudication of the facts, and upheld the Referee’s decision. Thereafter, Patricia Voci filed a complaint for judicial review; jurisdiction for review of the decisions of the Board is vested in the District Court by Rhode Island General Laws § 28-44-52.

The standard of review is provided by Rhode Island General Laws § 42-35-15(g), a section of the state Administrative Procedures Act, which provides as follows:

42-35-15. Judicial review of contested cases.

(g) The court shall not substitute its judgment for that of the

agency as to the weight of the evidence on questions of

fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional or statutory provisions;

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

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6) Arbitrary or capricious or characterized by abuse

of discretion or clearly unwarranted exercise of

discretion.

 

Thus, on questions of fact, the District Court " . . . may not substitute its judgment for that of the agency and must affirm the decision of the agency unless its findings are clearly erroneous." Guarino v. Department of Social Welfare, 122 R.I. 583, 584, 410 A.2d 425 (1980) citing Rhode Island General Laws § 42-35-15(g)(5). The Court will not substitute its judgment for that of the Board as to the weight of the evidence on questions of fact. Cahoone v. Board of Review of the Department of Employment Security, 104 R.I. 503, 246 A.2d 213 (1968). Stated differently, the findings of the agency will be upheld even though a reasonable mind might have reached a contrary result. Cahoone v. Board of Review of Department of Employment Security, 104 R.I. 503, 246 A.2d 213, 215 (1968). See also D'Ambra v. Board of Review, Department of Employment Security, 517 A.2d 1039, 1041 (R.I. 1986).

The Court has recognized that a liberal interpretation shall be utilized in construing and applying the Employment Security Act:

. . . eligibility for benefits is to be determined in the light of the expressed legislative policy that "Chapters 42 to 44, inclusive, of this title shall be construed liberally in aid of their declared purpose which declared purpose is to lighten the burden which now falls upon the unemployed worker and his family." G.L.1956, § 28-42-73. The legislature having thus declared a policy of liberal construction, this court, in construing the act, must seek to give as broad an effect to its humanitarian purpose as it reasonably may in the circumstances. Of course, compliance with the legislative policy does not warrant an extension of eligibility by this court to any person or class of persons not intended by the legislature to share in the benefits of the act; but neither does it permit this court to enlarge the exclusionary effect of expressed restrictions on eligibility under the guise of construing such provisions of the act. Harraka v. Board of Review of Department of Employment Security, 98 R.I. 197, 201, 200 A.2d 595, 597 (1964).

The issue before the Court is whether the Board’s determination that the Referee’s decision was a proper adjudication of the facts and that the claimant refused an offer of suitable work without good cause and is subject to recovery of payments pursuant to 28-42-68 was supported by reliable, probative, and substantial evidence in the record and whether or not it was clearly erroneous.

The Board of Review adopted the following findings of fact of the Referee:

"The claimant had last worked on June 17, 2001 for Leon’s Restaurant. At that time, the business had closed because that owner had sold the business to the 5^th Street Incorporated. Prior to the closing of the business, the current owner met with the employees, the claimant included, and made a general offer of employment upon reopening the business. In addition, a specific one on one interview was conducted between the employer and the claimant at a prior business that was in existence under the ownership of 5^th Street Incorporated, allowing the claimant to view the operation of the other business. The claimant did complete an application for employment with this employer and was conditionally hired pending a starting date. Subsequently, the claimant was contacted and notified of the starting date. At that point, she notified the employer that she would not be starting to work for them but had other employment prospects. At the time of that notification, the claimant’s employment prospect was not scheduled to start until October of 2001, one month after this employer’s starting date. At the hearing, it was alleged that the claimant refused employment because she believed the employer would be operating a gay bar; however, when pressed for specifics as to the basis of her opinion, the claimant was unable to provide those specifics as there was no indication at the prior business that the claimant had viewed any situations to support that conclusion. During this time period, the claimant was receiving Employment Security benefits through the Tele-Serve process and one of the questions asked was whether or not she was offered and refused an offer of work, to which the claimant responded that she was not offered any work, resulting in the overpayment at issue."

 

The Board of Review adopted the following conclusions of the Referee:

"The issue in this case is whether or not the claimant is subject to disqualification under the provisions of Section 28-44-20 of the Rhode Island Employment Security Act.

Although there have been conflicting testimonies presented, the credible evidence does establish that the claimant did file an application with this employer for employment and was selected as an employee to work for their new business. It was the claimant that refused the employment offer. A perception or a conclusion that a particular operation would be a gay bar, without any supporting evidence to base that conclusion, does not constitute a refusal of work with good cause. In the absence of any other evidence to establish good cause, I hold that the claimant’s refusal is not for good cause and benefits must be denied on this issue.

The second issue in this case is whether or not the claimant is overpaid and subject to recovery of the overpayment under the provisions of Section 28-42-68 of the Rhode Island Employment Security Act.

28-42-68. RECOVERY OF ERRONEOUSLY PAID BENEFITS. -- (a) Any individual who, by reason of a mistake or misrepresentation made by himself or another, has received any sum as benefits under chapters 42 -- 44, in any week in which any condition for the receipt of the benefits imposed by those chapters was not fulfilled by him or her, or with respect to any week in which he or she was disqualified from receiving those benefits, shall in the discretion of the director be liable to have such that sum deducted from any future benefits payable to him or her under those chapters, or shall be liable to repay to the director for the employment security fund a sum equal to the amount so received, plus, if the benefits were received as a result of misrepresentation or fraud by the recipient, interest thereon at the rate set forth in section 28-43-15. That sum shall be collectible in the manner provided in section 28-43-18 for the collection of past due contributions. All interest received hereunder shall be credited to the unemployment security interest fund created by section 28-42-75.

(b) There shall be no recovery of payments from any person who, in the judgment of the director, is without fault on his or her part and where, in the judgment of the director, that recovery would defeat the purpose of chapters 42 -- 44 of this title.

In order for an overpayment to be not recoverable from the claimant it must be established that: (1) the overpayment is not as a direct result of fault on the part of the claimant, and (2) recovery of the amount would defeat the purpose of the Rhode Island Employment Security Act. Both aspects must be satisfied in order for the department to be barred from recovery.

The evidence presented on this issue establishes that the claimant is in fact overpaid for benefits received commencing with the week in which she was contacted to begin work, which is the week in which the refusal occurred. In addition, the evidence further establishes that the claimant did not divulge the fact that an offer had been made in that week through the Tele-Serve procedure. By withholding that information, the overpayment did become attributable to fault on the part of the claimant. Under that circumstance, I hold that the claimant is subject to recovery of that overpayment in accordance with the provisions of Section 28-42-68 of the Rhode Island Employment Security Act. I further hold that the second aspect of determining whether or not recovery would defeat the purpose to be a moot issue as the claimant must be successful on both aspects in order for the Department to be barred from seeking recovery."

 

The claimant/complainant raises various and specific issues regarding her failure to accept an offer of suitable work without good cause.

1) That Patricia Voci accepted an offer of employment by another employer prior to the call made by the employer, 5^th Street/TL/Cinco.

2) Whether the claimant can be required to breach a contract of employment when made an offer of employment.

A review of the record demonstrates that there is evidence on the record, which was accepted by the Board of Review as credible, that the claimant was offered a job.

The transcript page 15 employer Linda Cinco testified:

"ATTY: And when you spoke to her at the restaurant at Leon’s (inaudible) did you actually extend a formal job offer at that time?

EMPL: I want to if you don’t mind correct you. We spoke at Turtle Soup. I introduced myself at Leon’s and then invited anyone who was interested in the job at Turtle Soup to take a look at us. That was when I formally spoke to her at Turtle Soup and yes, I did make an offer right there and then.

ATTY: Okay, what did you say, do you recall?

EMPL: The job is yours.

ATTY: What job – could you describe it for us.

EMPL: I offered her the job of bartender/server. To give her the hours that she would want."

 

On Transcript page 16: "We followed up with a ‘phone call and we offered the job – and we’re ready."

The record shows that the claimant last worked for Leon’s on June 17, 2001 and that the new corporation closed on the transfer of business on July 12, 2001, and there would be a two week turn about, and the business opened on August 14, 2001.

The record also shows that the claimant was waiting for an opening sometime in September or October at a higher end restaurant under construction. The claimant testified that she had an offer of employment which was to start in the second week of October. As of the date the claimant had a job offer, the new restaurant under construction had not yet opened.

The Court finds that, based upon the record, there is sufficient evidence for the Board of Review to conclude that there was a job offer made by 5^th Street/TL/Cinco.

The claimant, based on the record, was not required to breach a contract for a job offer which did not exist and was still not existing at the time of the hearing. (It is unknown if the new restaurant is constructed and operating.) There is no evidence on the record to substantiate a breach of contract. There is no evidence on the record that demonstrates that she was otherwise engaged in a contract which would prevent her from working at 5^th Street/TL/Cinco.

Further, based upon her not having secured employment, there was neither a contract to work during her period of unemployment nor a contract for employment with a specific date of employment.

The claimant further argues that she cannot be required to accept a job where she feared for her health, safety and moral well-being. The claimant predicates this claim based upon a personal perception that the new operation would be a gay bar. The record does not support a conclusion that the intended restaurant be anything other than a full restaurant and was not doing it to be operated as a gay or lesbian bar. There is no evidence presented on the record to support the conclusion that the acceptance of employment at 5^th Street/TL/Cinco would be detrimental or would endanger the claimant’s health, welfare or moral well-being.

There is evidence to show that when 5^th Street/TL/Cinco purchased Leon’s they purchased the entire business; that the same type of employment would be offered, the same systems; everything would be the same. The sale was a turn key situation, and job offers were made to all employees.

The transfer of property included everything in Leon’s business, which included flour, sugar, food, forks, knives, cups, glasses, tissues, all heavy equipment, chairs and tables. It further included furnishings and fixtures, and the building itself, which was leased.

A review of the evidence demonstrates that 5^th Street/TL/Cinco is a successor business enterprise to the former owner, Leon’s. Leon’s rating is applicable to the new corporation or business as a successor business, whether a successor employer should be charged at a rate of it’s predecessor is governed by Rhode Island General Laws Section 28-43-10.

28-43-10. Application of predecessor’s payroll record to successor employer. – (a)(1) Whenever any employing unit in any manner succeeds to, or has succeeded to, or acquires, or has acquired, the organization, trade, * * *, or business, or substantially all the assets thereof and whenever the successor was not prior to that acquisition an employing unit, * * * such predecessor employing unit shall be deemed to have relinquished all rights to have its prior payroll records * * * used for the purpose of determining experience rates of employer contributions for that predecessor, and the director shall use those prior payroll records for the purpose of determining experience rates of employer contributions for that successor. * * *

 

See Dante, Inc. v. Department of Employment Security, A.A. No. 90-323, (Dist.Ct. 9/16/91)(DeRobbio, C.J.).

See also Fieldstone Inn, Inc. v. Department of Employment & Training, A.A. No. 93-73, (Master’s Findings, 1/27/94) Adopted by Order (Dist.Ct.)(Board found plaintiff, which had bought assets of prior, closed restaurant but did not hire any of prior employees, should be charged predecessor’s rate; Reversed, where court indicates record does not show plaintiff’s business was a continuation of predecessor’s in any meaningful way);

Specialty Publications, Inc. v. Department of Employment & Training, A.A. No. 93-17, (Dist.Ct. 2/18/94)(Indeglia, J.)(Upholding successor rate for business which purchased assets of predecessor business in bankruptcy);

Northeastern Telemessaging, Inc. v. Department of Employment & Training, A.A. No. 94-70, (Dist.Ct. 6/22/94)(DeRobbio, C.J.)(Transfer of rate affirmed based on sale of all assets).

This makes the new business owner an interested party pursuant to Section 28-44-39(c), and may be an aggrieved party pursuant to Section 42-35-15(a).

There is sufficient reliable evidence to demonstrate that 5^th Street/TL/Cinco has standing in this case.

A review of the record demonstrates that there is sufficient evidence to show that the claimant was in fact paid benefits from the date she received notice of employment, that this employment was a suitable job offer.

The claimant withheld this information from the Department. She was overpaid through actions that were attributable to her nondisclosure of a job offer. She was therefore at fault for this overpayment. Recovery of the overpayment would not defeat the purpose of the Act, and the Department of Employment and Training is not barred from recovery.

A review of the entire record demonstrates that there is substantial, probative and reliable evidence to support the findings of fact, conclusions and decision of the Board of Review.

On findings of fact, as to the weight of the evidence, this Court shall not substitute its judgment for that of the administrative agency.

The scope of judicial review by the Court is limited by Section 28-44-54 which in its pertinent part provides:

28-44-54. Scope of judicial review - Additional evidence - Precedence of proceedings. - The jurisdiction of the reviewing court  shall be confined to questions of law, and, in the absence of fraud, the findings of fact by the board of review, if supported by substantial evidence regardless of statutory or common law rules, shall be conclusive.

 

Upon careful review of the evidence, this Court finds that the decision of the Board was not "clearly erroneous in view of the reliable, probative and substantial evidence on the whole record," and that said decision was not "arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion." Rhode Island General Laws § 42-35-15(g)(5)(6).

Accordingly, the decision of the Board is hereby affirmed.