Department of Employment and Economic Development File No. 30254110-3
Tim L. Droel, J. Matthew Berner, Peter D. Sparby, Droel, PLLC, Minneapolis, Minnesota (for relator)
Lee B. Nelson, Department of Employment & Economic Development, St. Paul, Minnesota (for respondent department)
Considered and decided by Kalitowski, Presiding Judge; Worke, Judge; and Connolly, Judge.
Relator challenges an unemployment-law judge (ULJ) determination that he committed fraud by failing to report his receipt of severance pay, arguing that the decision is not supported by substantial evidence, and that the ULJ failed to make findings supporting his credibility determinations and acted in an adversarial manner during the appeal hearing. We affirm.
Relator Kory Neises was employed by QBE Americas, Inc., as a claim appraiser until his position was eliminated in January 2012. Neises called the Minnesota Department of Employment and Economic Development (DEED) to inquire about eligibility for unemployment benefits. A DEED employee took a verbal application to establish an account; this employee asked Neises a series of questions, including whether he would receive severance pay. Neises replied that he did not know. The DEED employee did not explain that the receipt of severance pay could make Neises ineligible to receive unemployment benefits.
Beginning February 1, 2012, Neises requested weekly benefits. When making his weekly online request for benefits, Neises was required to answer a series of questions, including "For this reporting period, did you or will you receive or apply for income, from any other source, that you have not previously reported to us?" Beneath this question is a link that states, "Please click Here for examples of other income sources." "Severance, notice, or retention pay, and any other payments made because of separation from employment" are included as examples of income that may affect benefits. These examples are highlighted in bold print.
On February 17, 2012, QBE paid Neises $39, 500 as a severance payment. Neises did not report this as a source of income on his request for benefits for that week or during any subsequent week. He continued to receive unemployment benefits through September 2012. After QBE reported the severance payment, DEED determined Neises was ineligible for benefits and that he had been overpaid due to fraud. DEED imposed the statutory penalty for fraud. Neises appealed the fraud determination.
When questioned at the telephone hearing about why he did not report this payment, Neises said that he thought that "income from any other source" meant another employer and that he did not think that severance pay was included. The ULJ asked him whether he had received an unemployment handbook and Neises was unsure; he recalled receiving "a lot of papers" but could not recall a handbook. The ULJ found a copy for the relevant period, described it as a "lightish purple color, " and asked if he recalled reading it. Neises did not recall reading the handbook. He remembered referring to some "coversheets" that described how to access the system but he "couldn't say for certain that [he] ever read the employee handbook."
The ULJ concluded that Neises should be assessed a fraud penalty. While not specifically using the word "credibility, " the ULJ noted that Neises
acknowledges that the Department representative who took his application over the telephone specifically asked him about severance payment. Neises received the Department's handbook informing him that severance payments can affect his eligibility to receive unemployment benefits, but he did not look at the handbook closely. Neises had information available to him that could have told him very clearly that he was not eligible to receive unemployment benefits, but he did not access it. The question on the weekly request for benefits asks if Neises had received income, from any other source, that he ...