-: SJC 13440 Fallon Community Health Plan, Inc.
V Katie Dishnica and another.
-: Good morning, Your Honors, and may I please the court.
Francesco DeLuca on behalf
of Fallon Community Health Plan, Inc.,
the appellant in this matter.
This court should reverse the District Court's judgment
awarding Ms. Jefferson unemployment benefits,
because the evidence conclusively demonstrates
that she knowingly violated a reasonable
and uniformly enforced policy that Fallon had maintained,
namely, a mandatory vaccination policy
requiring its home healthcare workers
to receive a vaccine against the COVID-19 virus.
Chief Budd: But she wasn't able to comply
due to her firmly-held religious beliefs, right?
Francesco: That's correct, Your Honor.
That was her justification for not receiving the vaccine.
-: And it wasn't somehow she was making it up,
or anything like that?
-: No, Your Honor, Fallon had no reason to doubt it.
Fallon did not address the sincerity or integrity
of any of its employee's religious beliefs.
What it did was it went through a process of evaluating
whether it could accommodate those beliefs
while accounting for patient safety.
Chief Budd: And they realized they couldn't do that.
-: They realized they could not do that.
Chief Budd: And she was dismissed.
-: Yes, correct.
-: Didn't she get unemployment benefits?
Justice Gaziano: This is related
to the chief's question. -: Hold up for one second.
Justice Gaziano: This is related
to the chief's question, Your Honor.
Because I was a little bit biased at your reply brief.
When we sent out the amicus solicitation,
both basis referenced the sincerely held religious beliefs.
How is that not directly implicating
the establishment clause?
And when we now talk about the other statutory basis
and whether or not there's substantial evidence for this,
how do we not consider that implication?
-: So, Your Honor, throughout the proceeding,
the issue has always focused on the statutory text.
And on the knowing policy violation prong,
the DUA's brief concedes that the only issue
is reasonableness, whether the policy
was reasonable on its face and as applied to Ms. Jefferson.
-: [Justice Wendlandt] But don't we have
to interpret the statute in light
of the First Amendment rights?
-: Your Honor, and Amici make that argument,
but our position is that puts the cart before the horse
because the First Amendment in Article 46,
it takes a two step approach: Does a, an action,
a government activity substantially burden
a religious belief or the exercise of a religious belief?
And if so, we go to the second step, which is,
is there a sufficiently compelling government interest
to justify that burden?
And because no, well, no party,
neither Ms. Jefferson nor the DUA had ever raised
that awarding her benefits
would infringe her religious beliefs,
there was no reason to establish a record
on that second step,
which is, is there a compelling government interest?
For example,
how many claims did the DUA anticipate receiving
of this nature?
How many did it in fact receive?
How long did they take to process?
What was the impact on the fund?
What was the status of the unemployment fund
and the financial integrity of the program
during the pandemic?
Another critical issue is why did the DUA issue a memo,
an internal policy memo, setting forth
a list of questions for its adjudicators to ask
at the initial stage saying,
"A claimant will be found ineligible for benefits
under the knowing policy violation prong
and/or the deliberate misconduct prong
if his or her failure to receive vaccination
was due to a medical condition,
or a sincerely held religious belief
provided there was an opportunity to see itself recognized,
that it had an interest in denying benefits to claimants,
even those who couldn't comply with the vaccination mandate
for religious or medical reasons."
It had an interest in denying benefits
and it's the statutes, in fact, required it to do so,
opportunity for the employee to seek an exemption.
And that opportunity was provided here.
Ms. Jefferson-
Justice Kafker: I'm confused by what you're arguing.
Are you saying because there was
an exemption request provision, even though it's denied,
that saves the constitutionality of the statute or what-
-: No, your Honor -: Just it explains what
the agency.
-: The point there was,
when we get to the second step
of First Amendment Article 46, strict scrutiny
to justify a burden on religion,
a question that we would've asked the DUA potentially
had the DUA or Ms. Jefferson raised,
Oh, would've been, what was the department's purpose
or intent in issuing this memo saying
the department could deny benefits
under these circumstances.
So why was the department doing that?
What was the study?
What was the analysis?
What was the thought process?
Because the department contemplated
denying religious objectors unemployment benefits,
provided there was a policy.
The issue there is, at the second step
of strict scrutiny, why was that policy memo issued?
-: But the department avoids the issue,
and the district court avoids it on different grounds.
But you know, one of the amicus briefs makes
the point we've made,
which is we gotta interpret these statutes
in a way that avoids First Amendment problems.
And isn't what you're arguing
that someone who knowingly who's not to do something
is still knowingly violating a policy?
And doesn't that raise First Amendment problems
if particularly given the US Supreme Court's
extremely protective decisions lately in this area?
-: Your Honor, the United States Supreme Court decisions
in this area of Sherbert, Hobby, and Thomas all got
to the second.
Wendlandt: You're saying go back?
That we have to send this case back,
is that what you're saying?
So you have an opportunity to marshal the evidence
and cross-examine the department
as to why they had phrased the regulation
so that it was just an opportunity,
not an in fact allowance of an exemption?
-: That would be one position
is the First Amendment issue itself is waived,
and this court recognizes
that parties can waive First Amendment issues.
In a very similar case,
Commonwealth versus Obie.
This court found in 2016, defendant who has a condition
of probation was required to attend a class on Islam,
waive the argument that that requirement violated
the establishment and free exercise clauses
because she never brought it up in the lower court court.
-: Wouldn't she win in the lower court?
-: I believe so, your Honor.
But that issue is still found to be-
-: Well, I'm wondering because when you take
the victory, you don't marshal all sorts of arguments.
I'm wondering if the waiver argument applies
in the context here where she's won.
-: That's correct, your Honor.
It could be a potential distinction,
but there are numerous other cases
where a constitutional,
a very important constitution issue
was not raised below, raised belatedly on appeal.
And this court has found it's waived
and we cycle those three.
Justice Georges: You keep saying that,
but that's still the part that confuses me,
that this was brought up as a result
of our amicus solicitation, and they shouldn't directly,
it doesn't come right out and say establishment cause,
but it comes out and says sincerely held religious beliefs.
So that amicus solicitation is gonna elicit
what we got back from the ACLU.
But let me just sidestep that for a second.
You are making an argument that on the statutory basis
in the review that you should win. Okay?
Do you agree that if when it got to Judge LoConto
that he could affirm the agency's decision
on any basis that appears in the record?
-: Yes, your Honor, he could have.
-: Okay. So it brings up my concern about
the reasonableness of all of this.
Looking at the hearing officer's findings of fact,
they could be more robust.
But one of the things about the reasonableness issue
about as applied, there was a lot more evidence here
than the hearing officer talked about in the record
that was before Judge LoConto, right?
So one of the things that your arguing is,
because of the direct contact that she had
with the population you served,
the offer of wearing PPE or even a full on hazmat suit
just wasn't feasible, wasn't viable, right?
But record, that's what she was required to do.
Because, you know, you keep saying,
or at least the appearance is that she was in,
going into people's homes directly
administering aid in the record was.
She worked at a group facility where, up until a point,
I don't know what the exact period of time was,
Fallon required their employees
to use exactly what she was proposing.
There was also evidence in the record
that Fallon set up a, I don't know if it was hospitals,
too strong of a word, but there was a facility
that Fallon set up where people had COVID
that were sending in employees
like her in with PPE to treat these folks.
So in assessing of this offer of exemption,
why isn't it that we could just affirm
on the basis that you just didn't sustain your burden
because there's lots of evidence here
that what she was proposing with stuff
that Fallon already required folks to do,
and she was just echoing and offering
to continue to do that to save her religious belief?
-: The review examiner expressly found
that Fallon's expectation that its employees receive
a vaccination was reasonable.
And the DUA has made the point, it's brief,
that's an expectation, not a policy.
But the DUA referred to, in the same breath,
before the district court, when it acknowledged that-
-: Is that a factual finding or is that a legal conclusion?
-: It's a factual finding, Your Honor.
And we have cases reviewing findings
of reasonableness for substantial evidence.
And there are other accommodate that,
so you're correct that prior
to the Mass Health Bulletin 69 coming out,
requiring agencies like Fallon
to have its employees vaccinated against COVID-19,
Fallon was allowing its employees
to work directly with its vulnerable patient population
in protective equipment.
After that bulletin came out, that changed,
that changed the way Fallon had to operate it.
After the bulletin, Fallon also required its employees
not only to receive vaccinations,
but to continue to wear masks and other protective equipment
when dealing with patients.
And another point that's important, Your Honor,
is if there's evidence in the record testimony
from Fallon that once the bulletin came out,
many of Fallon's third parties,
the entities that host the adult day program
where Ms. Jefferson worked
and other group homes required anyone coming
onto their premises to be vaccinated against COVID-19.
Justice Kafker: I get all that and I understand,
you're complying with government regulation.
But it's the government regulation on UI
that's really, what you do with your employees
is different from whether they get unemployment insurance.
'Cause unemployment insurance is designed to, you know,
be provided for people who are discharged
for lots of different reasons,
as long as they're not engaging in deliberate misconduct
or knowing violations of policy.
And I guess interpretation,
you're asking us to adopt for you to win, I think,
is that an employee exercising
their sincerely held religious beliefs
that they can't do something are knowingly violating
a policy and therefore not entitled
to unemployment insurance,
which is different from getting terminated
from a job, right?
And also, the state is now doing something
besides what Fallon's doing.
We're preventing these religious observers
from collecting unemployment insurance.
That's asking for trouble, isn't it?
-: So two brief points.
The interpretation that Fallon advanced here
and has advanced throughout the proceeding
is exactly the interpretation that
the DUA told its adjudicators to apply.
And I know the DUA will say,
well, that memo is just issued to adjudicators.
It's not something that our review examiners have to follow.
-: [Justice Wendlandt] But you're sidestepping
justice Kafker's question,
which is really fundamentally about the ability,
the differential treatment
between somebody who receives unemployment benefits
and somebody who doesn't.
And the difference
is because this particular religious belief,
and to me that squarely presents
a First Amendment violation,
and you say that issue's waived.
I'll go and see if the other cases say
that you can waive an argument.
When you win, a huge problem I think for your position.
Even if the statute literally complies
with what Fallon has done,
and your interpretation is literally correct,
why would we adopt it when it creates
this differential treatment
between those who have firmly held religious beliefs
and those who don't?
-: Your Honor, on that point,
it gets back to the second step of strict scrutiny because-
-: Right, well, so articulate for me the best case scenario
for the state denying somebody unemployment benefits
on the basis of the religious beliefs?
Francesco: Well, it could be a number of reasons.
It could be the impact these claims-
-: [Justice Wendlandt] So money?
-: Financial could be part of it, resources-
-: In any strict scrutiny analysis,
are you aware of any where the money
is a compelling enough state interest
to preclude a First Amendment violation?
Francesco: No, your Honor.
But it would be more than the money,
it would be the burden on the department
in processing these claims.
The delay other claimants might face in a claimant
for non-religious reasons,
delaying their claim and the receipt of benefits
because of processing, potentially frivolous claims.
Another factor would be,
how many frivolous religious objections
did the DUA receive?
How many did they find or not well found
or sincerely held?
There could be a num-
-: Sincerely held religious belief,
'cause you don't challenge that, right?
-: No, no. But- -: Okay.
-: In denying benefits to people who hold
sincerely- -: You would be able
to deny benefits to somebody who has
a firmly held religious belief
because there may be some people who willing
to commit fraud?
-: Not necessarily fraud, your Honor,
but that could be a factor,
just a sheer number of these claims,
which is why the DUA denied these claims
for religious reasons.
Justice Lowy: Was the district court sort of getting
at the First Amendment issue,
even if Free Exercise Clause was never mentioned
by saying, "This is all unreasonable.
Nobody's getting a religious-"
-: I didn't review that opinion that way, Your Honor,
there are lots of unemployment cases
that have nothing to do with the First Amendment
that turn on reasonableness.
There's City of Boston where the appeals court
address reasonableness-
-: Getting a religious exemption here, not those other cases.
No one's getting a religious exemption.
-: I would take the position reasonableness
is different from,
this is a First Amendment or Article 46 issue
that can't withstand strict scrutiny.
None of that analysis was ever done.
None of the parties ever invited that analysis.
It was incumbent on Ms. Jefferson
or the DUA to raise that issue as the party
that would face potential First Amendment issues,
and they never did so.
And I see that my time is up.
So unless there are other questions from Your Honors,
I'll just rely on my brief for the remaining issues.
Chief Budd: Thank you. -: Thank you.
Chief Budd: Okay, Attorney Tretyakov.
-: Good morning,
chief Justice and may I please the court.
Office assistant attorney general
on behalf of acting director
of the Department of Unemployment Assistance.
Ms. Jefferson is entitled to unemployment benefits
in this case.
While her refusal to get a COVID vaccine
may well have constituted a good cause to
that is not an issue that this case presents.
Instead, the issue before this court
is whether or not her employer, Fallon,
met its burden of proof to establish either
a deliberate misconduct in willful disregard
of her employer's interests
or in knowing violation of a reasonable policy.
And the facts, and the evidence introduced
in this case established that felon failed-
Wendlandt: Is the First Amendment issue waived?
Konstantin: Your Honor,
I would say that the First Amendment issue here
is not dispositive because the court can affirm
the decision of the department based-
-: Oh, yes, I understand your position.
Is it waived?
-: I would not concede to that, Your Honor.
-: Where was it raised, Amici?
-: It was not raised below.
-: Okay, isn't that the definition of waiver?
-: Your Honor, the best way I can answer
that question is there are certain constitutional,
sort of structural claims that may or may not be waived.
But again, your Honor, in this-
-: Your opposing counsel suggested that there
are cases where somebody can waive
their First Amendment rights.
-: Your Honor, I will say that in this case,
I will be happy to provide the 16 letter to this court
if the court requires
and some sort of briefing on this matter, but-
-: No, so let's just stick with your actual argument.
So why under the second prong of that 25-A,
did Fallon not meet their burden?
-: Reasonableness of the policy under still case requires
the inquiry in two respects.
One, policy as written and the other one
is policy as applied.
If the court looks at the policy as written
and that's page
27 of the record see that when Fallon
was describing the review process for religious
or medical exemption requests on two crucial juncture,
one, the review of the request itself,
and the issuance of the request itself, the
It only- Justice Kafker: but isn't,
I mean they're complying with the law.
I mean, I look at the UI issue separately from the policy.
But how can we say their policy
is not reasonable when it's dictated by the state?
The state is saying,
"If you're in this kind of business,
and you're providing direct care to patients,
vaccinate your employees."
And they're saying, "She's a direct care worker,
you're telling us to vaccinate
and she works in homes with the elderly
where these people are vulnerable and dying."
I can't imagine their policy isn't reasonable.
And I can't imagine
that she has deliberately done anything wrong.
But the issue is whether this is a knowing violation,
and that gets really complicated
because she does understand the policy.
That's why I just think we inevitably get
to the First Amendment.
Because she's knowingly not complying with their policy,
and their policy is being dictated by the state.
-: Your Honor, I would-
-: I don't know how you win unless it's
the first free exercise clause
that provides the win for you.
And that may very well do it,
but I just don't know how you do it without it.
Konstantin: Certainly, Your Honor.
Going back to what previously,
the policy itself creates a disparate treatment
between religious and medical exemption, so-
Justice Georges: I have to add to that.
There's two things.
So when you're talking
about the reasonableness aperture
where just, Kafker were on this,
how you gotta get to that First Amendment issue.
Because with the reasonable issue,
you're making an argument that it's unreasonable
because there's not the same robust review process
that's specifically identified
in the policy itself like they have for the medic.
But the evidence before,
the hearing officer was she did get a robust review process.
There was testimony about that
that the request was made, it was considered by HR.
They met with her.
They got the letter from her advisor.
So the fact that it's not explicitly laid out
in the policy doesn't comport
with what actually happened.
So that's one.
The second is you have to also deal with the fact
that the hearing officer makes
a specific finding that their policy was reasonable.
So how do you get out from underneath that,
in terms of arguing that it was unreasonable
if your two bases are gonna be,
you don't have the same review robust policy
that's explicitly articulated
like they do for the medical, but you got it?
And secondly, the review examiner says-
-: Thank you, Your Honor, to start with your second point,
the review examiner said
that the expectation that the employee
would be vaccinated was reasonable.
How that expectation translated
into the actual policy and into the implementation,
I would argue that's a separate issue.
And on the implementation of the policy, Your Honor,
we have again, undisputed evidence
that the religious exemption
was denied to every single employee of Fallon.
Everybody who requested it was denied.
At Ms. Jefferson's site were denied it.
People who worked on different sites were denied it.
And Fallon failed to provide any evidence
to the reviewing examiner establishing
what those employees functions were.
Were they-
-: [Justice Wendlandt] This as applied challenge
that you're marshaling now,
and that the district court found persuasive,
was that the basis for the agency decision?
-: Your Honor? No.
-: No, and so given that we usually don't make decisions
for the agency, even if we can find one out there,
wasn't that improper then for the district court,
and for you even to suggest that we supply an argument?
-: Your Honor, in the unique context of chapter 151-A,
this court in the past refused to remand
the cases to the district court
if the substantial findings of fact,
the subsidiary findings of fact, excuse me,
were in the record.
And they allowed the court to analyze
how the principles of law should be applied
to those findings.
On those cases, I'm referring specifically,
I believe to the case of Jones,
the court said that remanding
would serve no meaningful purpose
where all the findings of fact are made.
And the steel case also speaks about that as well.
In this case, again,
the court has an uncontested finding
that no one from Fallon received an
no evidence in the record-
Justice Kafker: But by the way,
is that mean no one,
meaning corporate wide or no one who's
a direct care worker got?
Justice Kafker: Again what this record shows.
When we look at
this record, is it gonna show that
nobody at Fallon got a religious exemption?
-: Thank you, your Honor.
The finding of fact that I am referring to
is number paragraph 13 on page 19 of the record appendix.
"No employees who worked for the employer
were granted a religious exemption
to the pandemic COVID-19 workforce response policy."
We do not know who those employers were.
Justice Georges: Yeah, but we actually, we do,
because again, if you go into the record,
you just made a reference
that there's no reason that was given.
And that's not entirely accurate
because the representatives
of Fallon testified that the reason why
what she proposed for an accommodation didn't work
for people that were involved with direct care.
And I think there was actually a specific mention
that say it was somebody that worked for Fallon
in HR or some corporate other designation that
that person might be able to,
but in the specific thing that she did with direct care,
that that was the determiner.
So the fact that it wouldn't be a surprise
that you wouldn't find people
that were doing direct care that wouldn't get it.
-: Your Honor is probably referring
to the testimony of the HR business partner
on page 65 of the record appendix where she says
that everybody who was working on site with
direct care of patients.
And therefore, their exemptions were denied.
However, if the course looks a little bit further,
and I'm talking about pages 66 and 67
of the record appendix.
There, that same HR business partner also says
is from different, from other sites,
different from where Ms. Jefferson was working on.
They have applied for the religious exemption.
There was a process site-
Justice Kafker: " Sites."
Again, I haven't read the record the way you have,
but sites suggests people who go treat
the elderly and those who need assisted care,
that seems to support Justice George's talking
about direct care workers.
They're not talking about people
at corporate headquarters in the C-suite.
They're talking about people who are going to sites, right?
-: Your Honor, that is an excellent question
which Fallon had every opportunity
to present the court with the evidence
or with the evidence in which they failed to do.
They could have said 17,
let's say, 17 people requested a religious exemption.
All 17 of them were working directly with the patients
and therefore we were not-
-: [Justice Wendlandt] What was the policy?
Did the policy apply to anybody who didn't
have direct contact with patients?
-: The vaccine requirement is considered
a consideration of employment for staff patients
that provide direct contact or having physical-
-: Oh, it's not surprising that the only people applying
for the exemption were the people who the policy applied to.
-: Your Honor, I would say the application of the policy,
that the interpretation of the statute regarding
the knowing violation, in this case,
that Fallon is urging up on the court to accept,
would still be unreasonable.
Imagine that there is a person under Fallon policy applying
for a medical exam,
contested undisputed severe logic reaction
to one of the components of the vaccine.
And Fallon says,
"I cannot accommodate you because of the nature of your job,
and we cannot give you any other job
within our organization."
And that person gets discharged
because of that, under Fallon,
according to the logic that the Fallon urges on this court,
that person will not be eligible for unemployment benefits.
Because-
Justice Georges: That goes back to Justice Kafka's point
that there's this divide.
You can be discharged and separated
but that's an entirely different question
about whether or not you should be entitled to benefits.
-: That is correct, Your Honor.
And I think this point that this result
would be completely incongruent
with the overall legislative goal of Chapter 151-A,
in which this court repeatedly said
that this has to be interpreted in favor
of the employees because the goal is to provide them
with financial assistance
in some of their most difficult times.
And in this case, Your Honor,
given the fact that there are some indicia
of unreasonableness in the way that the policy is written
and- Justice Kafker: Can I ask,
was any guidance given by the UI,
I don't know what the agency's called anymore,
or the AGs office on this particular problem,
anything from that the AG was telling people,
people who were, I mean, 'cause the state
is telling everyone to vaccinate.
Everyone in direct care to vaccinate.
They know people are gonna be laid off of.
Was guidance issued by the Attorney General's office
or the Department of Unemployment Insurance
on how to deal -: I'm not aware
with this conflict?
-: Issued by the attorney general's office, Your Honor,
the memorandum that my brother keeps relying on,
one, it's not part of the record,
it was not presented before the reviewing examiner
who wasn't bound by it in any way
because it applies only to initial adjudicators.
And certainly, the district court judge
in this court are not bound by that memorandum as well.
But I will say that that memorandum clearly envisions
the new process and the existence of a real,
and not just illusory religious exemption.
Because in the part,
in the last part of the memorandum,
it says, where an employer interview
or some other reasonable process
has found that an employee's profess religious belief
either is not sincerely held
or doesn't prevent the employee from getting vaccinated,
an adjudicator should not attempt
to overturn that decision.
Justice Kafker: Those are easy questions.
The hard question really held religious belief.
She's essentially the same as the person who will die
from the vaccine.
You know, I can't do this.
It's, you know, so with the AG, again,
this is all weak.
Department of Unemployment Assistance
interoffice memorandum.
That's the only thing that's out there on this.
-: I believe so, Your Honor,
I'm not aware of any guidance issued by the attorney.
-: Now, so before your time runs out,
one of the things I asked your opposing counsel,
I wanna ask you the same thing.
If the record, because I know that you're more confident
on what the findings in what Judge LoConto
did and said than I am.
But if the record includes something more
that we can look to, do you agree that we could affirm
what was done here on reasons other than what appears
in the decision of the hearing officer
or in what Judge LoConto said?
-: Yes, your Honor.
Because the operative statute here
that enables this lawsuits,
it's section 42 of 151-A specifically refers
to section 14 of Chapter 30-A,
and that Administrative Procedure Act statute says
that on judicial review,
the review is based on the entire record.
So as long as it is in the administrative record,
which it is both the policy, the reasoning,
and all the exhibits that were submitted,
the court can't confirm on any grounds.
Justice Kafker: Thank you.
-: Unless the court has further questions,
I will rest on my brief.