Opinion
No. 107 C.D. 2013
10-17-2013
Smart Park Inc., Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY SENIOR JUDGE COLINS
Smart Park Inc. (Employer) petitions for review of the Unemployment Compensation Board of Review's (Board) December 28, 2012, order granting unemployment compensation benefits to Christine E. Wall (Claimant). The Board concluded that Claimant was not ineligible to receive benefits under Section 402(e) of the Unemployment Compensation Law (Law) because her inadequate work performance and alleged insubordination did not amount to willful misconduct. For the reasons that follow, we affirm.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(e). Section 402(e) of the Law provides that an employee shall be ineligible for compensation for any week in which his or her unemployment is due to discharge for willful misconduct connected to his or her work. 43 P.S. § 802(e).
Claimant filed a claim for unemployment compensation benefits on July 1, 2012, stating that she was discharged for an unsatisfactory work performance and that her work performance was unsatisfactory due to mistakes. (Record Item (R. Item) 2, Internet Initial Claim.) The Department of Labor and Industry (Department) issued a determination on July 27, 2012, finding Claimant ineligible for benefits under the Law because Claimant did not establish that she had good cause for her unsatisfactory work performance. (R. Item 4, Notice of Determination.) Claimant appealed the Department's determination to an unemployment compensation Referee, and a hearing was held on September 26, 2012. (R. Item 8, Hearing Transcript (H.T.).)
Before the Referee, Claimant testified and a witness for Employer, Robert Ewing, Employer's General Manager, testified. (Id.) In addition to the testimony, a number of exhibits, including three warning notices and a summary of Claimant's disciplinary issues while with Employer, were moved into the record without objection. (R. Item 8, H.T. at 2, Exhibits (Ex.) 7, 8, 10, 11.) On September 27, 2012, the Referee issued a decision and order denying Claimant unemployment compensation benefits due to willful misconduct. (R. Item 9, Referee's Decision and Order.) Claimant appealed to the Board.
On December 28, 2012, the Board issued a decision and order reversing the Referee and granting Claimant unemployment compensation benefits. (R. Item 12, Board's Decision and Order.) In reaching its conclusion that Claimant had not committed willful misconduct, the Board made the following findings of fact:
1. [Claimant] was employed by [E]mployer as an Auditor/Controller at a rate of $47,500 annually that began October 5, 2010, and last worked on June 29, 2012.
2. On June 6, 2011, [Claimant] was issued an oral warning because of tardiness. She accrued 22 incidents of lateness all of which occurred between January 1, 2011, and September 9, 2011.
3. [Claimant] was late on two occasions during this time because of dentures.
4. [Claimant] also had cancer in 2008 and had medical appointments for those times.[]
5. In response to [Claimant] coming in late [Claimant] who was salaried would simply work later.
6. [Employer] operated business 24 hours a day.
7. In August 2011 [Claimant] was first diagnosed with pancreatic cancer.
8. [Claimant] started receiving chemotherapy in November 2011 and arranged for intermittent [Family Medical Leave Act].
9. [Claimant] agreed that mornings were difficult for her.
10. On December 29, 2011, [Claimant] was issued a written warning for undermining office personnel when she made certain remarks to which [Employer] took offense.
11. On January 3, 2012, [Claimant] was issued a written warning because it was found that bills were paid late or duplicated, not posted correctly, bank statements and financials not completed timely, failure to itemize bills and follow directions when she failed to leave work as instructed on December 22, 2011.
12. On May 14, 2012, [Claimant] was issued a written warning for poor performance for failure to fulfill her duties regarding the Eagles contract and misrepresenting herself to outside contractors.(R. Item 12, Board's Decision and Order, Findings of Fact (F.F.) ¶¶1-14.) In its discussion of whether Claimant's conduct amounted to willful misconduct, the Board stated:
13. [Employer] understood that [Claimant] mocked the owner about how she was supposed to answer the telephone on June 29, 2012.
14. [Employer] discharged [C]laimant for the last incident and poor work performance.
[Employer] is credible that [Claimant] was frequently late for work. While [Claimant] asserted medical reasons on some occasions, it is clear that [Claimant] simply came in later and worked later as needed. However, after 2011, [Claimant] credibly established that her late arrivals were due to medical condition and treatment for cancer. This does not rise to the level of willful misconduct. [Employer] established that [Claimant's] work performance was not adequate. However, the Board upon review of the evidence can find no willful misconduct in [Claimant's] work performance while she was undergoing chemotherapy. Regarding the final incident, [Employer] failed to establish that [Claimant] engaged in these actions with first hand testimony or evidence.(R. Item 12, Board's Decision and Order, Discussion at 3.) The Board went on to conclude that although it did not dispute Employer's right to discharge an inadequate employee, Claimant's actions did not amount to willful misconduct under Section 402(e) of the Law.
As Employer correctly points out in its brief, this finding has no bearing on the case before us; Claimant did not work for Employer in 2008.
Our scope of review is limited to determining whether there has been a violation of constitutional rights, whether errors of law have been committed, and whether necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S. § 704; Frazier v. Unemployment Compensation Board of Review, 833 A.2d 1181, 1183 n.4 (Pa. Cmwlth. 2003). In reviewing the Board's conclusions, we are guided by the remedial, humanitarian objectives of the Law and the concomitant need for liberal construction to achieve its goals; our task is not to review the employer's judgment or exercise of its right to discharge an employee. LeGare v. Unemployment Compensation Board of Review, 498 Pa. 72, 76, 444 A.2d 1151, 1153 (1982); Frumento v. Unemployment Compensation Board of Review, 466 Pa. 81, 85, 351 A.2d 631, 633 (1976). The question of whether a claimant is ineligible for unemployment compensation due to willful misconduct is a question of law subject to this Court's plenary review. Roberts v. Unemployment Compensation Board of Review, 977 A.2d 12, 16 (Pa. Cmwlth. 2009). The Board is the ultimate finder of fact empowered to resolve conflicts in the evidence, to determine the weight of evidence, and to determine the credibility of witnesses; when the record, taken as a whole, contains substantial evidence to support the Board's findings, the Board's findings are conclusive on appeal. Peak v. Unemployment Compensation Board of Review, 509 Pa. 267, 501 A.2d 1383 (1985). Substantial evidence is such relevant evidence which a reasonable mind would accept as adequate to support a conclusion. Guthrie v. Unemployment Compensation Board of Review, 738 A.2d 518, 521 (Pa. Cmwlth. 1999).
In analyzing whether a claimant is ineligible to receive unemployment compensation due to willful misconduct, we employ a burden shifting scheme. Initially, the burden is on the employer to demonstrate willful misconduct. Caterpillar, Inc. v. Unemployment Compensation Board of Review, 550 Pa. 115, 703 A.2d 452 (1997). Willful misconduct is not defined in the text of the Law, but has instead been defined through judicial interpretation to consist of: (1) a wanton and willful disregard of employer's interests; (2) a deliberate violation of the employer's rules; (3) a disregard of the standards of behavior that an employer rightfully can expect from its employees; or (4) negligence that manifests culpability, wrongful intent, or evil design, or an intentional and substantial disregard of the employer's interests or the employee's duties and obligations. Oliver v. Unemployment Compensation Board of Review, 5 A.3d 432, 438 (Pa. Cmwlth. 2010).
If an employer meets its burden and establishes that a claimant has committed willful misconduct, the burden shifts to the claimant to establish that good cause existed for the proven conduct. Caterpillar, 550 Pa. at 124, 703 A.2d at 457; Oliver, 5 A.3d at 438. A claimant has good cause when the actions taken were reasonable or justifiable under the circumstances. LeGare, 498 Pa. at 77, 444 A.2d at 1153; Ellis v. Unemployment Compensation Board of review, 59 A.3d 1159, 1164 (Pa. Cwmlth. 2013). If a claimant demonstrates good cause, a claimant cannot be found ineligible for unemployment benefits due to willful misconduct. Caterpillar, 550 Pa. at 124, 703 A.2d at 457; Ellis, 59 A.3d at 1164; Oliver, 5 A.3d at 438.
Employer identified and maintained throughout the course of these proceedings two bases for Claimant's termination from employment: (1) insubordination; and (2) inadequate work performance. (R. Item 3, Employer Questionnaire; R. Item 12, Board's Decision and Order, F.F. ¶14.) Where a claimant is discharged from employment for multiple reasons, only a single reason need amount to willful misconduct for a claimant to be ineligible for unemployment benefits under the Law. Anderson v. Unemployment Compensation Board of Review, 485 A.2d 900 (Pa. Cmwlth. 1985). Before this Court, Employer argues that the Board erred in concluding that Employer failed to carry its burden of demonstrating that Claimant committed insubordination, and the Board erred in concluding that Claimant had good cause for her substantial disregard of Employer's interests and her duties and obligations in the performance of her work.
Before the Referee, Employer presented the testimony of its General Manager, who testified that on June 29, 2012, Employer's Office Manager informed him that she observed Claimant mocking the Owner regarding how employees had been instructed to answer the phones. (R. Item 8, H.T. at 4.) In its findings of fact, the Board stated: "[Employer] understood that [Claimant] mocked the owner about how she was supposed to answer the telephone on June 29, 2012." (R. Item 12, Board's Decision and Order, F.F. ¶13.) In its discussion, the Board concluded that Employer failed to carry its burden to establish Claimant's mocking as willful misconduct, because Employer did not present first hand evidence of Claimant's insubordinate conduct. (R. Item 12, Board's Decision and Order, Discussion at 3.) Employer argues that because Claimant failed to challenge the General Manager's testimony, the testimony was sufficient to prove that Claimant had been insubordinate, relying on the guidelines set forth in Walker v. Unemployment Compensation Board of Review, 367 A.2d 366 (Pa. Cmwlth. 1976), for the admissibility of hearsay evidence under the relaxed evidentiary rules applicable in the administrative setting.
Employer's reliance on Walker is misplaced. In Walker, this Court set forth the following guidelines for the use of hearsay to support findings of fact in unemployment compensation cases: (1) hearsay evidence, properly objected to, is not competent evidence to support a finding of the Board; (2) hearsay evidence, admitted without objection, will be given its natural and probative effect and may support a finding of the Board, if it is corroborated by any competent evidence in the record, but a finding of fact based solely on hearsay will not stand. 367 A.2d at 370. The Walker rule speaks to the admissibility of hearsay evidence, but it is not determinative of the weight afforded to hearsay evidence. The hearsay evidence presented by Employer's General Manager was not objected to and was corroborated by Employer's business records in the form of the summary of Claimant's disciplinary offenses, admitted without objection into the hearing record as Exhibit 11. The lack of an objection and the existence of corroboration in the record do not require the Board to conclude that hearsay evidence is sufficient to satisfy Employer's burden; the Walker rule establishes that the Board "may" rely on such evidence to support a finding of fact, not that it "shall."
The Board found that Employer's hearsay evidence made clear what Employer believed at the time of discharging Claimant, not that what Employer believed was clearly established as fact, and based on this finding the Board concluded that Employer failed to carry its burden of proving that Claimant was insubordinate. This Court does not have de novo review of unemployment compensation matters, and thus we may not look at the record anew in order to decide what weight should be given to the evidence; such weighing of the evidence is the province of the Board and we have neither the authority nor the inclination to accept Employer's invitation to invade it. The Board did not err in concluding that Employer failed to establish that Claimant committed insubordination.
On similar grounds, we must reject Employer's contention that the Board erred in concluding that Claimant's inadequate work performance provided sufficient grounds to deny her unemployment compensation benefits.
There is no dispute that Claimant was an inadequate employee. While an unsatisfactory job performance is certainly a reasonable basis upon which to terminate employment, our inquiry does not concern the wisdom of an employer's actions, but whether a claimant's conduct was willful. As a result, we have refused to equate negligence or incompetence, inexperience, or inability with willful misconduct. Scott v. Unemployment Compensation Board of Review, 36 A.3d 643, 648 (Pa. Cmwlth. 2012). In order for a claimant's inadequate performance to amount to willful misconduct, a failure to work up to his or her full, proven ability must be shown, because such a failure demonstrates an intentional disregard of the employer's interests or the claimant's obligations and duties. Myers v. Unemployment Compensation Board of Review, 533 Pa. 373, 625 A.2d 622 (1993); Rung v. Unemployment Compensation Board of Review, 689 A.2d 999, 1001-1002 (Pa. Cmwlth. 1997); Fidelity Electric Co. v. Unemployment Compensation Board of Review, 399 A.2d 1183, 1184 (Pa. Cmwlth. 1979). Willful misconduct due to a failure to work up to one's full proven ability may be especially evident where a claimant has received multiple warnings concerning poor work performance. Scott, 36 A.3d at 648.
The record here is replete with evidence of Claimant's inadequate performance. At the hearing before the Referee, Employer submitted into the record three written warnings Claimant received from Employer over the course of her employment regarding her behavior and her unsatisfactory work performance. (R. Item 8, H.T. at 2, Exhibit 7 Warning Notice 5/14/2012, Exhibit 8 Warning Notice 1/3/2012, Exhibit 10 Warning Notice 12/29/2010.) Employer also submitted into the record a detailed summary of errors and inaccuracies in Claimant's work, some of which caused Employer's small company a great deal of expense. (R. Item 8, H.T. at 2, 11, Exhibit 11.)
Employer's General Manager testified to both the problems with Claimant's work and the discussions he had with Claimant concerning the need for improvement. (R. Item 8, H.T. at 3-15 and at 7, 10, 14.) For example, Employer's General Manager testified that on May 10, 2012, he had a meeting with Claimant wherein he discussed late payments and mistakes and the need for Claimant to timely inform Employer of problems that arose in relation to Claimant's work. (R. Item 8, H.T. at 10.) The General Manager testified that the same day as his meeting with Claimant, Employer erroneously received a large check from the Internal Revenue Service due to Claimant's mistake, and Claimant failed to inform Employer or resolve the mistake in a timely fashion. (R. Item 8, H.T. at 10.) A similar incident had taken place in December 2011, when Employer had strained to make payroll due to incorrect information regarding Employer's tax filings. (R. Item 8, H.T. at 11.)
Employer argues that the record it created before the Referee contained the evidence necessary to carry its burden. We agree that Employer established and provided evidentiary support for a convincing narrative of Claimant's failure to work up to her proven ability. The Board found the testimony of Employer's witness to be credible. However, the Board also found Claimant's testimony credible.
Claimant's testimony establishes a convincing narrative of unintentional poor performance and circumstances amounting to good cause for her conduct. Claimant testified that in August of 2011, Employer's Controller left and Claimant assumed the Controller's responsibilities in addition to her own. (R. Item 8, H.T. at 16.) Claimant testified that she was not offered training or a detailed explanation of her new responsibilities. (R. Item 8, H.T. at 16, 21-22.) In August 2011 Claimant was diagnosed with pancreatic cancer and in November 2011 Claimant began receiving chemotherapy. (R. Item 8, H.T. at 17.) As a result of the chemotherapy, Claimant testified that she began taking intermittent family medical leave. (R. Item 8, H.T. at 17-18.) Although Claimant's intermittent leave was with Employer's approval, Claimant's job duties did not lessen, she was prohibited from working at home, and due to the twenty-four hour nature of Employer's business Claimant was instructed not to come in early or stay late. (R. Item 8, H.T. at 17-18, 22.) Claimant specifically testified that she performed to the best of her ability while working for Employer. (R. Item 8, H.T. at 18.)
Faced with Employer and Claimant's two competing narratives, both supported by credible evidence in the record, the Board concluded that the inadequate performance cited by Employer did not amount to willful misconduct, because Claimant's poor performance occurred while she was undergoing chemotherapy treatment for pancreatic cancer. In order to reverse the Board's conclusion as Employer requests, this Court would have to reweigh the evidence found by the Board. See, e.g., Miller v. Unemployment Compensation Board of Review, 405 A.2d 1034 (Pa. Cmwlth. 1979). Employer is correct that it has submitted substantial credible evidence in support of its argument that Claimant's conduct fell within the definition of willful misconduct, but Claimant has also submitted substantial credible evidence in support of her contention that her actions were not intentional. A claimant only becomes ineligible under the Law due to willful misconduct where an employer has carried its burden of proving willful misconduct and a claimant has failed to carry his or her burden of demonstrating good cause. The Board's opinion and the record demonstrate that both Employer and Claimant met the necessary burden, therefore under the Law Claimant is eligible to receive unemployment compensation benefits.
In Miller this Court stated:
Therefore we cannot hold as a matter of law that the Board was in error in finding that the claimant performed to the best of her ability. The evidence presented at the hearing was conflicting; it is not this court's function to balance that evidence. Questions of credibility and the resolution of evidentiary conflicts are within the sound discretion of the Board, and are not subject to re-evaluation on judicial review.
The Board is affirmed.
/s/ _________
JAMES GARDNER COLINS, Senior Judge ORDER
AND NOW, this 17th day of October, 2013, the Order of the Unemployment Compensation Board of Review in the above-captioned matter is hereby AFFIRMED.
/s/ _________
JAMES GARDNER COLINS, Senior Judge
405 A.2d at 1036. This principle remains true today and it applies with equal force to the case before us today.