Unemployment Benefits: A Recent Colorado Court of Appeals Case

by Kate W. Beckman

The Colorado Court of Appeals in Yotes, Inc. v. Industrial Claim Appeals Office, 2013 COA 124 (Co.App.2013) recently heard an appeal from the Industrial Claims Appeals Office regarding unemployment benefits. While rare, unemployment cases do sometimes achieve this final level of review.

In Colorado, unemployment benefit insurance is handled through the Department of Labor and Employment. Unemployment Insurance provides temporary and partial wage replacement to workers who have become unemployed through no fault of their own. The newly unemployed worker, also called the claimant, can file a claim for unemployment by either calling the Department of Labor directly or through visiting its website. A hearing officer will review the claim and either grant or deny benefits.

Once a decision has been rendered, the employee or employer can appeal the officer’s decision and a hearing will be held on the issue. Both employee and employer have the right to be represented at the hearing. The employee or employer can appeal the hearing officer’s decision to the Industrial Claims Appeals Office where a panel of three administrative law judges will review the transcript of the original hearing and make a determination. Finally, the employee or employer can appeal the decision of the Industrial Claims Appeals Office to the Colorado Court of Appeals.

In the Yotes case, the employee worked as a sales associate for the Employer and had a personal relationship with a female coworker resulting in a pregnancy. After the relationship ended, the coworker initiated unwelcomed communication and demanded that claimant take a paternity test to determine whether he fathered her child. Claimant wrote a letter to his supervisor asking him to help stop the coworker from sexually harassing him at work. The supervisor authorized Claimant to take a paid leave of absence pending an investigation and excused him from attending meetings where the coworker would be present. Later that day, Claimant resigned stating that the employer did not address his report within forty-eight (48) hours, and was therefore, not taking the matter seriously.

The Claimant filed a claim for unemployment benefits and the deputy awarded him benefits. The Employer appealed the deputy’s decision which resulted in a hearing. Following the hearing, the hearing officer found that the Employer was taking the complaint seriously and the Claimant did not allow the Employer reasonable time to conduct an investigation and determine appropriate action. The officer determined that the Claimant was at fault for the separation and therefore should be disqualified from unemployment benefits.

The Employee appealed to the Industrial Claims Appeals Office which reversed the hearing officer’s decision and again awarded benefits to the Claimant. The Employer appealed to the Colorado Court of Appeals. Under the statute, CRS 8-73-108(4)(o), when an employee quits because of personal harassment by the employer, not related to the performance of the job, benefits must be awarded to the employee (emphasis added). The employer argued that the claimant’s coworker was not an employer under the applicable statute; stating therefore, the Panel erred as a matter of law when it defined “employer” to include claimant’s coworker. The Court held that the Employer removed Claimant from the adverse working conditions and Claimant did not remain at the job long enough to learn whether or not the adverse conditions would be eliminated. Finally, there was no evidence of personal harassment by the Employer. Ultimately, the Employee was held to be not entitled to benefits.

Kate BeckmanKate W. Beckman is an associate at Bryan E. Kuhn, Counselor at Law, P.C. Her practice focuses on employment law, business law, and civil litigation. Kate is an active member of the Colorado Bar Association and Denver Bar Association. She is admitted to practice in Colorado, the United States District Court for the District of Colorado and the Tenth Circuit Court of Appeals. Kate received her J.D. from the University of Denver Sturm College of Law in 2010. She can be reached by email, her firm’s website, Facebook, and invites you to reach out to her on LinkedIn.