Indiana Law Review Survey of Recent Developments in Indiana Employment Law MiTzi H. Martin* Todd M. Nierman** I. Introduction Indiana employment law evolves continuously and, at times, un- predictably. Although this survey period (June 1989 to October 1990) did not provide Indiana employers and employment law practitioners with any single landmark issue, Indiana courts, the Unemployment In- surance Review Board of the Indiana Department of Employment and Training Services, and the state and federal legislatures continued the evolutionary process through several noteworthy decisions and pieces of legislation. This Article focuses on developments in: (1) the employment- at-will doctrine, (2) Indiana's unemployment compensation, wage pay- ment, and child labor statutes, (3) public sector employment, and (4) handicap discrimination. II. The Employment-At-Will Doctrine: The ** Public Policy'' Exception Further Defined Although common-law exceptions to employment-at-will in Indiana remain limited, the Indiana Court of Appeals provided further definition to those exceptions during this survey period. A. Divergent Signals From The Court Of Appeals 1. Call V. Scott Brass, Inc.—A careful reading of Call v. Scott Brass, IncJ suggests that the Fourth District Court of Appeals dealt a solid blow to the "narrow" public policy exceptions created by the Indiana Supreme Court in Frampton v. Central Indiana Gas Co.^ and McClanahan v. Remington Freight Lines? Call claimed that she was * Associate, Baker & Daniels, Indianapolis; Member of Indiana Bar. B.S., Auburn University, 1968; M.S., Indiana University, 1975; J.D., Indiana University School of Law- Indianapolis, 1985, ** Associate, Baker & Daniels, Indianapolis; Member of Indiana Bar. B.B.A., University of Michigan, 1983; J.D., Vanderbilt University, 1986. 1. 553 N.E,2d 1225 (Ind. Ct. App. 1990). 2. 260 Ind. 249, 297 N.E.2d 425 (1973). 3. 517 N.E.2d 390 (Ind. 1988). 952 INDIANA LAW REVIEW [Vol. 24:951 terminated from her position as Corporate Human Resource Manager for Scott Brass because she complied with a summons and appeared for jury duty. The Starke County Circuit Court granted Scott Brass's motion for summary judgment, holding that Indiana Code section 34-4-29-1* provides the exclusive remedy for an employee discharged because she responded to a jury summons, and Call had not filed her claim within the statute's ninety-day limitation period.^ The Court of Appeals framed the issue as whether Indiana Code section 34-4-29-1 is the exclusive remedy for an at-will employee dis- charged for compliance with a summons to appear for jury service.^ To guide its course through the murky and often uncharted waters of Indiana's employment-at-will doctrine, the court proffered an oft-cited principle of statutory construction: **[W]hen the legislature enacts a statute which creates a right, which did not exist previously, and prescribes a remedy for the infringement of that right, the statutory remedy is exclusive."^ The court's mission was: Determine which came first, the 1987 enactment of section 34-4-29-1 or the common-law public policy exception to employment-at-will.^ In ruling that the public policy exception for employees discharged for refusing to violate a statutory duty predated the statutory enactment,^ the court rejected Scott Brass's arguments that the Indiana Supreme Court's 1973 Frampton decision was limited either to its specific facts (discharge for filing a worker's compensation claim)'° or, at most, to 4. IND. Code § 34-4-29-1 (1990). 5. Call, 553 N.E.2cl at 1226. 6. Id. at 1226, 1227. Ind. Code § 34-4-29-1 provides: A person who is dismissed from employment [because the employee has received or responded to a summons, served as a juror, or attended court for prospective jury service] may bring a civil action, within ninety [90] days of the dismissal, against the employer who dismissed him: (1) To recover the wages he lost as a result of the dismissal; and (2) To obtain an order requiring reinstatement by the employer. If the person obtains a judgment against the employer, the court shall award a reasonable attorney's fee to the person's attorney. 7. Call, 553 N.E.2d at 1227 (citing PubUc Serv. Comm'n v. City of Indianapolis, 235 Ind. 70, 131 N.E.2d 308 (1956); City of Fort Wayne v. Bishop, 228 Ind. 304, 92 N.E.2d 544 (1950); Environmental Properties v. City of Fort Wayne, 178 Ind. App. 645, 383 N.E.2d 481 (1978); Richmond Power & Light v. Indiana & Michigan Elec. Co., 170 Ind. App. 458, 353 N.E.2d 467 (1976)). 8. Id. 9. Id. at 1229. 10. Id. at 1228. The court observed that no Indiana appellate court interpreting Frampton has restricted Frampton to worker's compensation claimants. In Indiana De- partment of Highways v. Dixon, 512 N.E.2d 1113 n.l (Ind. Q. App. 1987), the First District Court of Appeals noted that the supreme court's decision in Morgan Drive Away, 1991] EMPLOYMENT LAW 953 employees discharged for exercising a statutory right.'' Thus, the court rejected the argument that a separate exception for refusing to violate a statutory duty did not exist until the Indiana Supreme Court's 1988 McClanahan decision. '^ According to the court, Frampton created a broad public policy exception for employees discharged either for exercising a statutory right or for refusing to violate a statutory duty.'^ The court deemed that discharge for complying with a jury summons fell within the broadly stated Frampton exception.''* Thus, the court held that the statutory remedy was not exclusive.'^ The court did not stop there. It further held that even if the statute had preceded Frampton, it would not be inclined to consider the statute exclusive because Indiana Code section 34-4-29-1 does not specify its exclusivity, and the jury is an indispensable part of the justice system.'^ The court's dicta is surprising, and unnecessary, given the ascribed unequivocal character of the **which came first" principle of statutory construction underlying the court's holding. Scott Brass also argued that Call, who was eligible to seek redress under the statute, could not state a cause of action because the public policy exceptions to employment-at-will are limited to remediless plain- tiffs.'^ In a rather remarkable exercise of statutory interpretation, the court rejected this argument by concluding that because the statutory remedies in section 34-4-29-1 are not stated in the disjunctive and Call did not seek all of the remedies therein. Call had no statutory remedy.'* Once again the court saw fit to add questionable dicta to its holding. The court stated that neither Frampton nor McClanahan discussed whether the existence of an employee's cause of action depended upon the Inc. V. Brant, 489 N.E.2d 933 (Ind. 1986) "appears to limit actions for retaliatory discharge to cases where the plaintiff was fired for seeking worker's compensation as in Frampton.^* See also Reeder-Baker v. Lincoln Nat'l Corp., 644 F. Supp. 983, 984-85 (N.D. Ind. 1986). 11. Call, 553 N.E.2d at 1228-29. 12. Id. at 1229. The court appears to ignore the Indiana Supreme Court's statement in McClanahan that **[a] separate but tightly defined exception to the employment at will doctrine is appropriate under these facts." McClanahan, 517 N.E.2d at 393 (emphasis added). However, prior to McClanahan, two Indiana federal district courts had recognized an exception to the at-will doctrine for an employee discharged for fulfilling a statutory duty. See Sarratore v. Longview Van Corp., 2 Individual Empl. Rts. Cas. (BNA) 922 (N.D. Ind. 1987); Perry v. Hartz Mountain Corp., 537 F. Supp 1387 (S.D. Ind. 1982). 13. Call, 553 N.E.2d at 1229. 14. Id. 15. Id. 16. Id. 17. Id. 18. Id. at 1230. 954 INDIANA LAW REVIEW [Vol. 24:951 employee's ability to obtain a statutory remedy.'^ This pronouncement leads one to wonder whether the court read Frampton carefully. In Frampton, the Indiana Supreme Court emphasized the dilemma in which an employee finds herself because of the threat of discharge for filing a worker's compensation claim. ^° Because of the fear of discharge, employees **will not file claims for justly deserved compen- sation — opting, instead, to continue their employment without inci- dent.*'^' The court emphasized that '*[o]nce an employee knows he is remediless if retaliatorily discharged, he is unlikely to file a claim. "^^ Without a cause of action for wrongful discharge, therefore, employers would be free to undermine the purpose of the worker's compensation statute." In contrast, when plaintiffs have alternative remedies available, courts consistently have refused to recognize a cause of action for retaliatory discharge. In Vantine v. Elkhart Brass Mfg. Co., the Federal District Court for the Northern District of Indiana held that Frampton should not apply when the existence of a collective bargaining agreement provides the plaintiff with a remedy for unjust discharge.^'* Likewise, in Reeder- Baker v. Lincoln National Corp., the same court held that Frampton should not apply to a plaintiff alleging that she was fired for filing a discrimination charge with the Equal Employment Opportunity Com- mission.^^ The court stated, *'[T]he Frampton exception to the at will doctrine was intended to protect an employee without a remedy. "^^ Reeder-Baker had a statutory remedy: Title VII's retaliation provisions.^^ Most recently, in Lawson v. Haven Hubbard Homes, Inc. , the Fourth District Court of Appeals (the same court that decided Call) refused to extend Frampton to an employee on medical leave who was discharged for fiUng a claim for unemployment compensation.^^ The court reasoned that the employee would receive unemployment compensation benefits either way.^^ In other words, she was not without remedy. CaWs significance in the evolution of Indiana's employment-at-will doctrine may lie beyond its substantive holdings. In its closing remarks, the court clarified its approach to the application of the public pohcy 19. Id. 20. Frampton, 260 Ind. at 249, 297 N.E.2ci at 425. 2L Id. at 251, 297 N.E.2cl at 427. 22. Id. at 252, 297 N.E.2d at 428. 23. Id. at 251-52, 297 N.E.2d at 427. 24. 572 F. Supp. 636 (N.D. Ind. 1983), aff'd, Idl F.2d 511 (7th Cir. 1985). 25. 644 F. Supp. 983 (N.D. Ind. 1986). 26. Id. at 986. 27. 42 U.S.C. § 2000e-3 (1988). 28. 551 N.E.2d 855 (Ind. Ct. App. 1990). 29. Id. at 860. 1991] EMPLOYMENT LAW 955 exception to employment-at-will.^° Given the opportunity, the Fourth District appears ready to erode further Indiana's employment-at-will doctrine. 2. Lawson v. Haven Hubbard Homes, Inc.—Two months prior to deciding Call, the same court decided Lawson v. Haven Hubbard Homes, Inc.^^ Reading the majority opinions in Call and Lawson may lead one to question whether they were issued from the same court. While Judge Chezem's opinion in Call reflects a desire to be at the forefront of employment-at-will doctrine erosion, Judge Miller's majority opinion in Lawson, in which Judge Chezem dissented, is a refusal to expand Frampton to an unusual, but sympathetic, set of facts. Lawson was injured on the job and was unable to work for several months, during which time she received worker's compensation benefits. On August 2, 1982, a doctor hired by Haven Hubbard's worker's compensation insurance carrier released Lawson to return to work without restriction. However, the chiropractor who treated Lawson indicated that Lawson should not lift objects weighing more than twenty-five pounds. Haven Hubbard refused to re-employ Lawson until she secured a release from the chiropractor. For several months, Lawson contacted Haven Hubbard in an attempt to return to work but was consistently advised that she could not return. During this time, she was maintained on medical leave of absence status. When Lawson filed for unemployment compensation benefits. Haven Hubbard terminated her employment. Law- son claimed that she had been discharged in retaliation for exercising a statutory right. ^^ The St. Joseph County Circuit Court granted Haven Hubbard's motion for summary judgment, holding that the public policy exception to the employment-at-will doctrine announced in Frampton was specif- ically limited to employees discharged for filing worker's compensation claims." Although the court of appeals acknowledged that the Frampton exception applied beyond the worker's compensation context, it refused to extend Frampton to the facts before it.^"^ The court stated that the Frampton exception is limited to those situations in which the fear of discharge would have a deleterious effect upon the exercise of the 30. Call, 553 N.E.2d at 1230 ("Violation of state statutes will not be tolerated, in either criminal or civil forums. A violation of state public policy by employers, as expressed by the statutes enacted by the legislature, should carry with it attendant civil liability where it invades an employee's legally protected interests."). 31. 551 N.E.2d 855. 32. Id. at 856. 33. Id. at 857. 34. Id. at 859-60. 956 INDIANA LAW REVIEW [Vol. 24:951 statutory right in question. ^^ The court reasoned that an employee will not file an unemployment compensation claim unless he or she is un- employed or unless the employer is refusing to allow the employee to return to work. In either case, the employee will receive unemployment compensation benefits. The court opined that the fear of discharge has no effect on the exercise of the right to file for unemployment com- pensation.^^ 3. Bowlen v. ATR Coil Company, Inc.—In Bowlen v. ATR Coil Company, Inc.,^^ the court readily dismissed the plaintiffs' wrongful discharge claim on federal preemption grounds. In Bowlen, supervisory workers alleged that they were discharged for engaging in union activity, and brought suit against ATR for wrongful discharge and intentional infliction of emotional distress. The supervisors claimed that their ter- mination violated the express statutory public policy reflected in section 22-7-1-2 of the Indiana Code.^^ The Monroe Superior Court granted ATR's motion to dismiss; the First District Court of Appeals affirmed. Noting that federal labor law denies protection to supervisors discharged for union activity,^^ the court held that the alleged state statutory cause of action was preempted by federal labor law.'*° The supervisors* claim of intentional infliction of emotional distress failed because it was not supported by an underlying wrongful act.'*' 4. Smith V. Electrical System Division of Bristol Corp.—Most re- cently, the Third District Court of Appeals had an opportunity to provide onlookers with insight into its employment-at-will tendencies. Like the Fourth District in Lawson, the Third District was faced with an unusual and sympathetic set of facts in Smith v. Electrical System Division of Bristol Corp.*^ In May 1986, Smith sustained a serious injury in an industrial accident. She applied for and received worker's compensation 35. Id. at 860. 36. Id. 37. 553 N.E.2cl 1262 (Ind. Ct. App. 1990). 38. iND. Code § 22-7-1-2 (1990). This section provides: No worker or group of workers who have a legal residence in the state of Indiana shall be denied the right to select his or their bargaining representative in this state, or be denied the right to organize into a local union or association to exist within and pursuant to the laws of the state of Indiana .... 39. See National Labor Relations Act, 29 U.S.C. §§ 152(3), 152(11) (1988) (as amended). Sections 152(3) and 152(11) exclude supervisors from the definition of "em- ployees" protected under § 7. 40. Bowlen, 553 N.E.2d at 1264. 41. Id. at 1265. 42. 557 N.E.2d 711 (Ind. Ct. App. 1990). 1991] EMPLOYMENT LAW 957 benefits. She was allowed a medical leave of absence until February 1989, when her employment was terminated pursuant to Bristol's absence control policy. The policy provided that a leave of absence for illness or injury could continue for one year or an amount of time equal to the employee's length of service, whichever was less. Smith brought suit against Bristol for wrongful discharge, alleging that her discharge had been in retaliation for her pursuit of worker's compensation benefits. It was clear from her deposition testimony that Smith's was not the classic Frampton case it had initially appeared to be. Smith was not alleging that she was discharged because she filed for worker's com- pensation. Rather, Smith claimed that Bristol's absenteeism policy in- directly penalized the exercise of a statutory right. She contended that the absenteeism policy discouraged employees from applying for worker's compensation for fear of discharge. The St. Joseph Superior Court granted Bristol's motion for summary judgment; the Court of Appeals affirmed."*^ The court held that to come within either the Frampton or Mc- Clanahan exceptions to Indiana's employment-at-will doctrine, an em- ployee must prove that his or her discharge was solely in retaliation for the exercise of a statutory right or the fulfillment of a statutorily imposed duty, [citation omitted.]. . . . [A]bsent evidence of retaliatory intent, a neutral policy effecting an incidental detriment to an employee . . . [does not] consti- tute[ ] a violation of Indiana law.'^ Applying this principle to the facts before it, the court ruled that Smith had been penalized for excessive absences, a penalty that would have been incurred even if she had decided to take unpaid leave. As a result, her discharge had not been ''solely'' because of her exercise of a statutory right."^^ B. The Future Of The Employment-At-Will Doctrine It is unlikely that the plaintiff bar's enthusiasm for chipping away at the employment-at-will doctrine will diminish during the next survey period. The divergent signals sent by the courts during the survey period and the wiUingness of at least one court to ignore the underlying rationale in Frampton and to add **the threat of common law suits in tort" to 43. Id. at 712. 44. /c^. at 712-13 (emphasis added). 45. Id. at 713. 958 INDIANA LAW REVIEW [Vol. 24:951 '*the statutory remedy'* provides encouragement for the plaintiff bar."^ On the other hand, those who represent employers may need to steer more carefully as they navigate the waters of employment-at-will liti- gation, for the waters may prove more turbulent in the future. III. Handicap Discrimination In Indiana In May 1990, the Indiana Supreme Court examined an employer's obligations under the handicap discrimination provisions of the Indiana Civil Rights Law (the *'Act'').'*^ In Indiana Civil Rights Commission v. Southern Indiana Gas and Electric Co.,'** a five-feet one-inch tall, 124- pound female applied for the job of **meter man" with Southern Indiana Gas and Electric Co. ('^SIGECO'*). The position required heavy lifting. After the company physician examined the applicant and concluded that she had a congenital back disorder that made her * 'unfit for heavy work," SIGECO denied her employment.'*^ The applicant's own physician confirmed the back disorder but concluded that it would cause her no more problems than a normal back.^° The apphcant filed a handicap discrimination charge with the Indiana Civil Rights Commission C'ICRC"), which determined that SIGECO had violated the statute. SIGECO appealed and the Pike County Circuit Court found in its favor. The ICRC appealed; the Fourth District Court of Appeals reversed the lower court. ^' SIGECO appealed to the Indiana Supreme Court, which ruled in SIGECO's favor. The Indiana Supreme Court concluded that both the ICRC and the court of appeals had ignored the Act's provision that handicap discrim- ination does not occur when an employer refuses to employ a person who, because of a handicap, is physically unable efficiently and safely to perform the duties required in the job." The court found that the applicant's small size, coupled with her back disorder, placed her in a category of persons whom SIGECO was well within its rights in finding could not efficiently and safely perform the duties required in the meter man position." This case is significant to Indiana employers for two reasons. First, the Indiana Supreme Court has recognized a good faith defense to 46. See Call v. Scott Brass, Inc., 553 N.E.2d 1225, 1230 (Ind. Ct. App. 1990). 47. iND. Code §§ 22-9-l-3(q), -13 (1990). 48. 553 N.E.2d 840 (Ind. 1990). 49. Id. at 841. 50. Id. 51. Id. 52. iND. Code § 22-9-l-13(a) (1990). 53. Southern Ind. Gas and Elec. Co., 553 N.E.2d at 842. 1991] EMPLOYMENT LAW 959 allegations of handicap discrimination in screening prospective employees. The court stated: If a physical examination engenders in a qualified expert's opinion an applicant for employment is physically unfit to perform the work required and the employer in good faith refuses to hire the applicant for that reason, the employer has a good defense to a later action, even though the initial expert's opinion is later proven wrong. ^"^ Second, the Indiana Supreme Court, in dicta, implicitly approved the lower court's conclusion that persons who are discriminated against because they are perceived as having handicaps are protected even if they, in fact, are not ** handicapped."^^ Adopting the rationale of other state courts and federal law,^^ the court of appeals held that '^persons who are discriminated against because they are perceived as having handicaps are protected by the Act."^^ This adoption extended Indiana's narrow statutory definition of a handicapped person. ^^ The federal def- inition of a handicapped individual is significantly broader because it includes persons who had a handicap in the past as well as those individuals who do not have a handicap but are simply "regarded" as having a handicap as, for example, when an employer believes that an individual has AIDS simply because the employer knows the individual is a homosexual.^' Indiana courts have had few occasions to interpret the Act's handicap discrimination provisions which are much narrower in scope than federal handicap discrimination law.^ On July 26, 1990, the President signed 54. Id. at 843 (quoting with approval Indiana Civil Rights Comm'n v. Southern Indiana Gas and Elec. Co., 544 N.E.2d 536, 542 (Ind. Ct. App. 1989) (Conover, J., dissenting)). The court of appeals had imposed "an affirmative duty upon employers, once the opinion of their medical expert is challenged, to double check, and correct when necessary, the decisions based on their medical expert's opinions." Indiana Civil Rights Comm'n, 544 N.E.2d at 541. 55. Southern Ind. Gas and Elec. Co., 553 N.E.2d at 842. 56. Rehabilitation Act of 1973, 29 U.S.C. § 701-7961 (1988). The Rehabilitation Act prohibits employers who have federal contracts in excess of $2,500, or who receive federal financial assistance, from discriminating against handicapped individuals. Id. § 793. 57. Indiana Civil Rights Comm'n, 544 N.E.2d at 539-40. 58. '"Handicap or handicapped' means the physical or mental condition of a person that constitutes a substantial disability [and] also means the physical or mental condition of a person that constitutes a substantial disability unrelated to the person's abiUty to engage in a particular occupation." Ind. Code § 22-9-l-3(q) (1988). 59. The Rehabilitation Act defines an "individual with handicaps" as "any person who (i) has a physical or mental impairment which substantijilly limits one or more of such person's major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment." 29 U.S.C. § 706(8)(B). 60. For example, Indiana's statute, unlike the Rehabilitation Act, does not require 960 INDIANA LAW REVIEW [Vol. 24:951 into law the Americans V^ith Disabilities Act of 1990 (**ADA'').^' The ADA is likely to diminish further the impact of the state discrimination law because the ADA's protection of handicapped or disabled individuals is broader than that provided by Indiana law. With three exceptions,^^ the ADA will eventually prohibit all employers with fifteen or more employees from discriminating against disabled individuals.^^ Therefore, it is unlikely that employees will seek relief under state law unless their employers are outside the coverage of the ADA.^ Any attorney who counsels clients with respect to employment dis- crimination matters is well advised to become familiar with the provisions of the ADA. The ADA is frequently referred to as the most significant piece of civil rights legislation since the passage of the Civil Rights Act of 1964.^5 On the ADA's effective date, more than 40 million Americans with disabilities will come within its protections. IV. Indiana's Wage Payment Statute Indiana's wage payment statute mandates that employers pay "wages" semi-monthly and pay, within ten days, to an employee whose employ- ment has terminated, all **wages" earned to the date of the termination.^^ Since its enactment, the wage payment statute has received little judicial interpretation. The most important case interpreting the statute an employer to provide reasonable accommodation to handicapped individuals. Compare 41 C.F.R. § 60-741.2 (A '"[qjualified handicapped individual' means a handicapped individual . . . who is capable of performing a particular job, with reasonable accom- modation to his or her handicap.") with Ind. Code §§ 22-9-l-13(b), (c) ("[T]he employer shall not be required ... to promote or transfer such handicapped person to another job or occupation, unless, prior to such transfer, such handicapped person by training or experience is qualified .... This section shall not be construed to require any employer to modify any physical accommodations or administrative procedures to accommodate a handicapped person."). 61. Americans With Disabilities Act, 42 U.S.C. § 12101 (1990). 62. The ADA excludes from the definition of "employer" the United States gov- ernment, a bona fide private membership club (other than a labor organization) exempt under § 501(c) of the Internal Revenue Code of 1986, and Indian tribes. 42 U.S.C. § 12111(5)(B) (1990). 63. The ADA'S employment discrimination provisions become effective July 26, 1992, for employers with 25 or more employees. After July 26, 1994, all employers with 15 or more employees are subject to the ADA. 42 U.S.C. § 12111(5)(A) (1990). 64. With three limited exceptions (not-for-profit organizations with exclusive fra- ternal or religious purposes, church-related institutions, and not-for-profit exclusively social organizations), the state statute covers employers with six or more employees within Indiana. Ind. Code § 22-9-l-3(h) (1988). 65. 42 U.S.C. § 2000e (1964). 66. Ind. Code §§ 22-2-5-1 to -3 (1990). 1991] EMPLOYMENT LAW 961 is Die & Mold, Inc. v. Western. ^"^ In Die & Moldy the court of appeals held that vacation pay is deferred compensation in lieu of wages and, absent a clear policy to the contrary, accrues as services are rendered. Upon termination, therefore, accrued vacation pay constitutes wages owed to the employee under the statute. ^^ Die & Mold teaches Indiana employers who do not wish to pay terminated employees accrued vacation pay to include express language in their employee handbooks clearly indicating that (1) their vacation programs are intended only to com- pensate employees during the period spent on vacation; (2) unused vacation time is lost and may not be taken as compensation in lieu of time off; and (3) terminated employees will not be paid for any earned, but unused, vacation. During the survey period, the First District Court of Appeals revisited the definitional breadth of the statutory term **wages. '*^^ In Jeurissen V. Amisub, Inc.,'^^ two employees who quit their employment with Amisub in September claimed they were entitled to the incentive bonus that was tied to the employer's performance as of August 31. The court ruled that the amounts in question were a **bonus" which, in contrast to vacation pay, was not tied to regular work done on a periodic basis. As such, the court held that the incentive payments were not **wages" within the meaning of the statute."" V. Indiana's Unemployment Compensation Statute Indiana's Employment Security Act^^ provides that an unemployment compensation claimant is disqualified from receiving benefits if he or she voluntarily leaves his or her employment without good cause in connection with the work or is discharged for just cause. ^^ 67. 448 N.E.2d 44 (Ind. Ct. App. 1983). 68. Id. at 46-48. 69. Ind. Code § 22-2-5-1. 70. 554 N.E.2d 12 (Ind. Ct. App. 1990). 71. Id. at 13. 72. Ind. Code §§ 22-4-1-1 to -38-3 (1990). 73. "Discharge for just cause" is defined to include separation initiated by an employer for: (a) falsification of an employment application; (b) knowing violation of a reasonable and uniformly enforced rule; (c) unsatisfactory attendance, if the individual cannot show good cause for absences or tardiness; (d) damaging the employer's property through willful negligence; (e) refusing to obey instructions; (0 reporting to work under the influence of alcohol or drugs or consuming alcohol or drugs on the employer's premises during working hours; (g) conduct endangering the safety of the employee or his co- workers; (h) incarceration in jail following the conviction of a misdemeanor or felony by a court of competent jurisdiction; or (i) any breach of duty in connection with the work that is reasonably owed by the employee to the employer. Ind. Code § 22-4-15-l(d) (1988). 962 INDIANA LAW REVIEW [Vol. 24:951 During the survey period, the court of appeals discovered that it is not always clear whether a claimant has quit or has been fired. Even when it is clear that the claimant terminated the employment voluntarily, an issue may arise as to whether or not the claimant left the employment for good cause. Also, the Unemployment Insurance Review Board of the Indiana Department of Employment and Training Services (the ** Re- view Board") issued three significant survey period decisions addressing discharges related to drug testing. A. Voluntary Terminations In Cheatem v. Review Board of the Indiana Department of Em- ployment and Training Services,^"^ the claimant appealed the Review Board's determination that she be denied benefits because she voluntarily quit her employment. Cheatem was a retail store employee who was informed on a Wednesday afternoon that she was being placed on a three-day disciplinary suspension. Cheatem replied, **No, you might as well fire me,"^^ then departed her supervisor's office, clocked out, and left the store before the end of her shift. Later that afternoon, Cheatem telephoned her union steward to request a hearing on her suspension. The steward denied the request. The following Monday, Cheatem reported for work and was informed that she was no longer employed.^^ The Fourth District Court of Appeals held that Cheatem had been discharged. The court found no '^manifestation of intent to quit" in Cheatem' s actions. The court noted that Cheatem had not stated expressly that she was quitting and that in attempting to file a grievance over her suspension, she had evidenced that she did not intend to quit.^^ In Thomas v. Review Board of the Department of Employment and Training Services,''^ the claimant quit his job after being told by his employer that he would be fired if he filed a claim for unpaid overtime compensation with the Wage and Hour Division of the United States Department of Labor. The Review Board ruled that Thomas had quit without good cause. ''^ The Second District Court of Appeals reversed the Review Board, holding that an employee has good cause voluntarily to leave his employment when his employer refuses to pay a statutorily mandated wage after the employee's demand.®° 74. 553 N.E.2d 888 (Ind. Ct. App. 1990). 75. Id. at 890. 76. Id. at 892. 77. Id. 78. 543 N.E.2d 397 (Ind. Ct. App. 1989). 79. Id. at 399. 80. Id. at 399-400. 1991] EMPLOYMENT LAW 963 B. Just Cause Discharge One noteworthy judicial decision directly involving just cause dis- charge was rendered during the survey period. Additionally, as noted, the Review Board issued three important decisions addressing workplace drug testing. 1. Court Looks to the Stated Reason for Discharge.—In Burnett v. Department of Employment and Training Services,^^ the Second District Court of Appeals reaffirmed that the Review Board and unemployment hearing referees are permitted to consider only whether the stated grounds for discharge have a basis in fact and constitute just cause. Reasons for discharge that are not communicated to the employee at the time of termination may not be relied upon as a basis for discharge in an unemployment compensation proceeding. ^^ 2. The Review Board's Drug Testing Cases.—In three survey period decisions," the Review Board addressed the right to unemployment compensation benefits of employees discharged for failing a drug test. These cases are significant because many employers are implementing drug testing policies to comply with obligations under federal law^'* or as part of a voluntary effort to maintain a drug-free workplace.®^ 81. 550 N.E.2d 78 (Ind. Ct. App. 1990). 82. Id. at 80-81 (citing Voss v. Review Bd. Dep't of Employment and Training Serv., 533 N.E.2d 1020 (Ind. Ct. App. 1989)). 83. Review Board decisions are unpublished. Copies of the written decisions re- ferenced herein do not reveal either party's name. When available, citation is made to the Review Board's case number. These decisions are on file in the Indiana Law Review office. 84. See, e.g., Drug-Free Workplace Act of 1988. 41 U.S.C. § 701 (1988); Department of Transportation Drug Testing Regulations, 49 C.F.R. pt. 40 (1989); Federal Highway Administration Regulations, 49 C.F.R. pt. 219 (1989); Federal Railway Administration Regulations, 49 C.F.R. § 391.81 (1989); Coast Guard Regulations, 46 C.F.R. pt. 16 (1989); Urban Mass Transit Workers Regulations, 49 C.F.R. pt. 653 (1989); Research and Special Programs Administration Regulations (pipeline and liquified natural gas facilities), 49 C.F.R. pt. 199 (1989). 85. A poll of 500 Indiana workers conducted by the Gallop Organization in March 1990 revealed the following: (1) While on the job, one in ten of the workers have been offered illegal drugs; (2) 42% of the workers have "personally seen or heard" that their co-workers have used drugs either before or after work while 32'7o report knowledge of on-the-job use; and (3) 97