COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 67630 HELGA J. HALLER : : : PLAINTIFF-APPELLEE : JOURNAL ENTRY : v. : AND : : OPINION ADMN. BUR. OHIO EMPLOYMENT : SERVICES : : DEFENDANT-APPELLANT : DATE OF ANNOUNCEMENT OF DECISION: MAY 18, 1995 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court, Case No. CV-263704. JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-appellee: Andrew M. Wargo, Esq., Reid, Berry & Stanard, 1300 Illuminating Building, 55 Public Square, Cleveland, Ohio 44113. For Defendant-appellant: Angela R. Stokes, Assistant Attorney General, 615 West Superior Avenue, State Office Building, 12th Floor, Cleveland, Ohio 44113-1899. For American World Trade Co: American World Trade Co., 4161 Ridge Road, Cleveland, Ohio 44114. SPELLACY, LEO M., P.J.: Defendant-appellant Administrator, Ohio Bureau of Employment Services ("OBES") appeals from the trial court's June 23, 1994, determination that the decision of the Board of Review was unlawful, unreasonable and against the manifest weight of the evidence. For the reasons adduced below, we affirm. A review of the record on appeal indicates that plaintiff- appellee Ms. Helga J. Haller ("Haller") was employed by defendant- appellant American World Trade Company, Inc. ("AWTC"), a small closely held computer technology trading company incorporated in July of 1991, as a sales representative from November 19, 1991, to 1 October 30, 1992. Starting in 1992, AWTC began experiencing financial difficulties, averaging a monthly loss of approximately $8,200. As a response to the declining fortunes of the company, the president of AWTC instituted in August of 1992, across the board cuts to employee salaries and hospitalization benefits and the total elimination of employee tuition reimbursements. On October 20, 1992, Haller and the other two sales representatives were informed by the company president that they were going to be laid off. At this same time, Haller was told by the company president (which the president denied) that the company was considering filing for federal bankruptcy protection. On October 21, 1992, the other two sales representatives received their lay- 1 At the time of Haller's employment, AWTC also employed two other sales representatives. - 3 - off notices. On October 28, 1992, the company's secretary and bookkeeper, Miss Hayes, tendered her immediate resignation. At this time, the only people working at the company were the president, the treasurer, Haller, and perhaps a temporary foreign 2 intern. It was Haller's belief that she would be laid off on October 30, 1992, after she had completed her agreement to assist with the company's bookkeeping through the end of the month. On October 30, 1992, after the company president refused to give her a lay-off notice as anticipated according to Haller, Haller quit her employment, believing that she, too, had been laid off on the basis of her prior agreement to work through the end of that month. The president and treasurer of the company testified that Haller was not laid off because they had made the decision to retain her services. Evidence adduced at the Board of Review hearing indicated that Haller and the other two laid-off sales representatives had started a business called Hallbroek International and were soliciting business in competition with AWTC, using a telephone number registered to Haller's Lakewood, Ohio, apartment on the letterhead, from as early as October 22, 1992. On November 2, 1992, Haller filed her initial application with OBES for a determination of her right to participate in the 2 During the October-November time period, the company treasurer, Mr. Wilson, also resigned. - 4 - unemployment fund of the State. Haller also filed a claim for benefits for the week ending November 7, 1992. On December 4, 1992, the Administrator of OBES determined that Haller was discharged by AWTC without just cause and allowed the claim. AWTC filed a request for reconsideration on December 9, 1992. On January 20, 1993, the Administrator affirmed the initial determination. On January 25, 1993, AWTC filed a notice of appeal of the reconsideration decision with the Board of Review. Following two days of hearings, at which time all the parties were present and represented by counsel, the referee issued a decision on August 5, 1993, reversing the January 20, 1993, reconsideration decision of the Administrator pursuant to R.C. 4141.29(D)(2)(a) on the basis that Haller had quit her employment without just cause, stating the following: "Claimant quit employment with the American World Trade Company, Inc. to start her own business with a co-worker in competition with her former employer. Claimant quit employment without just cause." See Board of Review decision of August 5, 1993. On August 23, 1993, Haller applied for further review with the Board of Review. This application was denied on December 10, 1993. On January 6, 1994, Haller filed her notice of appeal with the trial court pursuant to R.C. 4141.28(O), which limits the common pleas court's scope of review to whether the Board of Review's - 5 - determination was unlawful, unreasonable or against the manifest weight of the evidence. On June 23, 1994, the trial court, without opinion and by status form entry, reversed the Board of Review's decision of August 5, 1993, declaring it to be unlawful, unreasonable and against the manifest weight of the evidence. OBES filed a timely notice of appeal with this court on July 25, 1994. The following assignment of error is presented for review: THE CUYAHOGA COUNTY COMMON PLEAS COURT ERRED BY REVERSING THE BOARD OF REVIEW WHERE THE MANIFEST WEIGHT OF THE EVIDENCE SUPPORTED THE FINDING THAT APPELLANT QUIT HER EMPLOYMENT WITHOUT JUST CAUSE WITHIN THE MEANING OF R.C. 4141.29(D)(2)(a). The standard of appellate review from an administrative appeal is whether the trial court abused its discretion. Angelkovski v. Buckeye Potato Chips Co. (1983), 11 Ohio App.3d 159. Abuse of discretion connotes more than an error of judgment, it implies a decision which is without a reasonable basis and one which is 3 R.C. 4141.29(D)(2)(a) provides in pertinent part the following: (D) Not-withstanding division (A) of this section, no individual may serve a waiting period or be paid benefits under the following conditions: * * * (2) For the duration of his unemployment if the Administrator finds that: (a) He quit his work without just cause or has been discharged for just cause in connection with his work, . . .. - 6 - clearly wrong. Id. In the present case, at issue is whether Haller quit her employment with AWTC with just cause. Under the circumstances in this case, we conclude that she had just cause. The evidence provided at the Board of Review hearing demonstrated quite clearly that AWTC was experiencing continuing severe financial difficulties during 1992. By all indications, the company as it was then constituted was going under. To stave off extinction, cutbacks in expenses were instituted starting in August, 1992. At this point the evidence starts to conflict on some points. On October 20, 1992, the sales representatives were told they were to be laid off, two the next day and Haller by the end of the month, Haller having agreed to stay the extra week at the president's request to wrap up some affairs. Also on this date, Haller and one of the other sales representatives testified that the president told them that the company was going to close due to the company's poor financial picture. The president and treasurer acknowledged that the two representatives would go, but stated that they never had any intention to lay off Haller and never said that the company was going out of business. Beyond this, it is a fact that the company secretary and bookkeeper tendered her resignation on October 28, 1992, to pursue the prospect of increased income as a waitress at a local Brown Derby restaurant. It is also a fact that the company treasurer, who also owned approximately 27% of the shares of the company, resigned during the October-November, 1992, time period, leaving only the - 7 - president and perhaps a temporary intern working at the company, an employee attrition rate in excess of 70%. The letter reflecting the presence of Hallbroek International as of October 22, 1992, which was the linch-pin in the Board of Review's decision, is somewhat disturbing on its face. However, if one were to believe the sales representatives' assertions as to the content of the October 20, 1992, meeting between the president and the sales representatives, a decision by the soon-to-be-released sales representatives to start their own company at that point in response to the employer's imminent lay-off action is justified and reasonable. See Holbrook v. Board of Review (Trumbull, 1985), 22 Ohio App.3d 88, syllabus ("A quit by a claimant-employee to accept other employment after being notified that he 'would be laid off within the next week' is a quit with just cause within the meaning of R.C. 4141.29(D)(2)(a)."); also see Boggs v. Ohio Bur. of Emp. Serv. (Feb. 4, 1983), Trumbull App. No. 1117, unreported (an employee who quit for the reason that it was precipitated by notice that the employer was going bankrupt was a quit with just cause pursuant to R.C. 4141.29(D)(2)(a)). Thus, this letter alone is not dispositive. Considering these facts, we conclude that the weight of the evidence, as correctly found by the trial court, was that Haller quit her employment for just cause where, by all indications, she: (1) was due to be laid off at the end of the month; (2) was notified that the company-employer was going out of business; and, - 8 - (3) she terminated her employment when her employer would not provide her with her lay-off notice at the end of that month as expected. Assignment overruled. Judgment affirmed. - 9 - It is ordered that appellee recover of appellant her costs herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. DONALD C. NUGENT, J., and JOSEPH J. NAHRA, J., CONCUR. LEO M. SPELLACY PRESIDING JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time .