Desiree Bailey v. Kentucky Unemployent Insurance Commission, 2022 CA 000606

Bailey worked full-time at GE until its 2017 closure and had worked part-time for The Honey Baked Ham Company (HBH) since 1993.
After GE closed, Bailey claimed Kentucky unemployment benefits and, biweekly (July–Dec 2017), answered “No” to whether she performed any work or received any income during the claimed weeks.
In January 2019 the Division investigated; Bailey admitted she had received wages from HBH but said she believed reporting applied only to GE wages.
The Division issued a determination disqualifying Bailey for the weeks at issue, imposing a 52‑week penalty period, and assessing $10,977 in overpayments/penalties.
At the referee hearing Bailey testified, was the only witness, sought leave to correct answers and offered to repay excess benefits; the referee admitted the Division’s determination into evidence and affirmed.
The Commission and Fayette Circuit Court affirmed the referee; Bailey appealed alleging hearing unfairness and lack of substantial evidence for a knowing misrepresentation finding.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the referee’s sua sponte admission of the Division’s written determination violated Bailey’s right to an impartial hearing and confrontation	Referee showed bias/denied confrontation by introducing the Division determination without foundational testimony	Division and Commission: the determination was properly part of the record and Bailey had notice and opportunity to rebut	Court: No reversible error — determination was already part of the record under regulation and Bailey had advance notice to prepare; claim fails
Whether substantial evidence supports finding Bailey knowingly made false statements to obtain benefits (disqualification under KRS 341.370(2))	Bailey: she made an innocent, reasonable mistake (believed reporting applied only to GE wages); no direct evidence of intent to deceive	Commission: question was clear and Bailey’s explanation was not credible; credibility may be resolved by the Commission and knowing intent may be inferred from circumstantial evidence	Court: Affirmed — substantial evidence supports that Bailey’s claimed mistake was not credible and the only reasonable inference supports knowing misrepresentation

Kentucky Unemployment Insurance Commission v. Watts, 407 S.W.3d 569 (Ky. App. 2013) (employer’s failure to contest claim does not entitle worker to benefits as a matter of law)
Alford v. Kentucky Unemployment Ins. Comm’n, 568 S.W.3d 367 (Ky. App. 2018) (claimant bears burden to prove entitlement to benefits)
Downey v. Kentucky Unemployment Ins. Comm’n, 479 S.W.3d 85 (Ky. App. 2015) (standard of review — defer to Commission where substantial evidence supports findings)
Thompson v. Kentucky Unemployment Ins. Comm’n, 85 S.W.3d 621 (Ky. App. 2002) (appellate courts may not reweigh witness credibility or substitute their inferences)
Love v. Commonwealth, 55 S.W.3d 816 (Ky. 2001) (intent/knowledge may be shown by circumstantial evidence)
Kentucky Occupational Safety & Health Review Comm’n v. Estill County Fiscal Court, 503 S.W.3d 924 (Ky. 2016) (statutory terms are given plain and ordinary meaning)
Brown Hotel Co. v. Edwards, 365 S.W.2d 299 (Ky. 1962) (allocation of burdens in administrative benefit claims)