Opinion
No. A06-2123.
Filed September 11, 2007.
Appeal from Department of Employment and Economic Development, File No. 1043106.
Cindy J. Woods, (pro se relator).
Federated Retail Holdings, Inc., c/o TALX UCM Services, Inc., (respondent)
Lee B. Nelson, Linda A. Holmes, Department of Employment and Economic Development, E (for respondent department)
Considered and decided by Halbrooks, Presiding Judge; Randall, Judge; and Dietzen, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
Relator Cindy J. Woods challenges the unemployment law judge's (ULJ) decision that relator was disqualified from receiving unemployment benefits because she was discharged for employment misconduct. We affirm.
FACTS
Relator Cindy J. Woods was employed by Marshall Fields, now operating as respondent Federated Retail Holdings, Inc., from September 1, 1980, until July 7, 2006. Woods worked full-time as the marketplace manager at respondent's department store located in Burnsville. The marketplace section of the store served food and offered catering services to customers.
Respondent's employee handbook contains a policy expectation that prohibits employees from "tak[ing] part in any business activity or other action that directly competes with or damages the company or its reputation." In addition, the policy states that "[f]ailure to meet company expectations can result in corrective action up to and including termination." Woods signed an acknowledgement of receipt of the handbook on May 2, 2002. Respondent also issued a booklet to employees entitled "Policy on Business Conduct." The cover letter accompanying the booklet summarily described the policies detailed in the booklet, stating, in part:
You have a conflict of interest if considerations of personal gain or benefit, or gain or benefit to a third party, may influence your judgment and discretion. All of your business decisions for [respondent] should reflect your independent judgment and discretion, not influenced by any considerations other than what you honestly believe to be in the best interest of [respondent].
Woods signed an acknowledgement on March 2, 2005, stating that she "read the policies contained in the Policy on Business Conduct booklet" and "agree[d] to comply with them and ha[s] complied with them." Her signature also represented that she "underst[oo]d that if [she] violate[d] any of the policies contained in the booklet, [she was] subject to disciplinary action up to and including termination."
In June 2006, a customer asked Woods for catering ideas for the customer's daughter's graduation party. Woods discussed some ideas with the customer and gave the customer her home telephone number. The customer subsequently contacted Woods and asked her to personally prepare the food for the upcoming party, and Woods agreed.
On June 24, 2006, Woods prepared the food ordered by the customer in the store's kitchen and using the store's equipment. Woods had another employee, who was also on the clock, help her in preparing the food order. Woods used the store's food containers to pack the food for delivery. In addition, Woods used food products ordered at cost through the store's vendors, and she later reimbursed the store for the price of those products. The catering services that Woods provided to the customer were also offered by the store to its customers.
A couple of days later, the customer returned the empty food containers to the store. Angela Rasmusen, the kitchen supervisor, testified that when she asked the customer whether she had already paid for the catering services, the customer informed her that she had paid Woods directly. Because Rasmusen was concerned about the situation, she notified management.
When questioned by Elyse Heeg, Human Resources Manager of the Food Division, Woods admitted that she had used the store's vendors to purchase the food supplies at cost, used the store's resources and equipment to make the food and the store's containers to deliver the food, and accepted personal payment for the catering services. Respondent subsequently terminated Woods's employment, stating that Woods had violated store policy by privately catering for a potential store customer. Specifically, Heeg testified that Woods was terminated
[b]ased on a conversation I had with her in which she disclosed that she had made a purchase of food from one of our vendors for her personal gain, where she prepared this food in our facilities for her personal use, and then that she also used Marshall Field's resources to transport this food, and she also prepared this during her working shift. Based on that information, I separated her employment.
Woods filed for unemployment benefits. A department adjudicator determined that Woods was discharged for employment misconduct and, therefore, was disqualified from receiving unemployment benefits. Woods appealed to a ULJ. After a hearing, the ULJ similarly determined that Woods "was discharged for employment misconduct and [wa]s disqualified from receiving unemployment benefits." Woods filed a request for reconsideration, and the ULJ affirmed his decision.
This certiorari appeal follows.
DECISION
This court may affirm the ULJ's decision, remand it for further proceedings, or reverse or modify it
if the substantial rights of the petitioner may have been prejudiced because the findings, inferences, conclusion or decision are:
(1) in violation of constitutional provisions;
(2) in excess of the statutory authority or jurisdiction of the department;
(3) made upon unlawful procedure;
(4) affected by other error of law;
(5) unsupported by substantial evidence in view of the entire record as submitted; or
(6) arbitrary or capricious.
Minn. Stat. § 268.105, subd. 7(d) (2006).
"Whether an employee engaged in conduct that disqualifies the employee from unemployment benefits is a mixed question of fact and law." Schmidgall v. FilmTec Corp., 644 N.W.2d 801, 804 (Minn. 2002). The issue of whether an employee committed a particular act is a question of fact. Scheunemann v. Radisson S. Hotel, 562 N.W.2d 32, 34 (Minn.App. 1997). But "[w]hether a particular act constitutes disqualifying misconduct is a question of law, which this court reviews de novo." Schmidgall, 644 N.W.2d at 804; see also Ress v. Abbott Nw. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989) (stating that whether an employee's acts constitute misconduct is a question of law upon which reviewing courts remain free to exercise their independent judgment). Here, Woods admitted to using the store's resources to privately cater a party for a customer she had met while working at the store. Accordingly, this court only must determine whether Woods's actions constitute employment misconduct.
Under Minn. Stat. § 268.095, subd. 4 (Supp. 2005), a discharged employee is disqualified from receiving unemployment benefits if the employee "was discharged because of employment misconduct."
Employment misconduct means any intentional, negligent, or indifferent conduct, on the job or off the job (1) that displays clearly a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee, or (2) that displays clearly a substantial lack of concern for the employment.
Inefficiency, inadvertence, simple unsatisfactory conduct, a single incident that does not have a significant adverse impact on the employer, conduct an average reasonable employee would have engaged in under the circumstances, poor performance because of inability or incapacity, good faith errors in judgment if judgment was required, or absence because of illness or injury with proper notice to the employer, are not employment misconduct.
Minn. Stat. § 268.095, subd. 6(a) (2004). "[T]he statutory definition of misconduct in effect at the date of discharge [i]s controlling" in the determination of whether a discharge was due to misconduct. Brown v. Nat'l Am. Univ., 686 N.W.2d 329, 332 (Minn.App. 2004), review denied (Minn. Nov. 16, 2004).
"As a general rule, refusing to abide by an employer's reasonable policies and requests amounts to disqualifying misconduct." Schmidgall, 644 N.W.2d at 804. Here, Woods admitted that she privately catered an event for a potential customer of her employer. Woods purchased food from the store's vendor at cost, prepared the food using the store's facilities and equipment, and delivered the order using the store's containers. Woods also accepted personal payment for the services she provided. Therefore, we conclude that Woods violated her employer's policy, which stated that employees were prohibited from "tak[ing] part in any business activity or other action that directly competes with or damages the company or its reputation."
In addition, Minnesota courts have articulated that employees owe their employers a duty of loyalty, which generally prohibits employees "from soliciting the employer's customers for [themselves], or from otherwise competing with [their] employer, while [they are] employed." Rehab. Specialists, Inc. v. Koering, 404 N.W.2d 301, 304 (Minn.App. 1987).
Woods contends that she had no knowledge that respondent had a policy that prevented employees from competing with the store and that had she known, she would not have accepted the catering work for the customer. But the record indicates that Woods either was or should have been familiar with respondent's policies. Woods signed an acknowledgement of receipt of respondent's handbook, which articulated its policies and expectations. In addition, Woods signed an acknowledgement stating that she "read the policies contained in the Policy on Business Conduct booklet," and "agree[d] to comply with them and ha[s] complied with them."
Woods also argues that several other employees have similarly competed with the store and that she was unfairly singled out for termination by respondent. But whether other employees violated respondent's rules is irrelevant, as the primary issue is whether Woods's violation of respondent's rules constituted misconduct. See Sivertson v. Sims Sec., Inc., 390 N.W.2d 868, 871 (Minn.App. 1986), review denied (Minn. Aug. 20, 1986) (stating "[w]hether or not other employees violated those same rules and were disciplined or discharged is not relevant here"); Dean v. Allied Aviation Fueling Co., 381 N.W.2d 80, 83 (Minn.App. 1986) (stating "[v]iolation of an employer's rules by other employees is not a valid defense to a claim of misconduct").
Finally, Woods contends that while she may have deserved a warning for her actions, she did not deserve to have her employment terminated. But there is no authority for the proposition that a warning is required in all instances of misconduct. Instead, under the statute, when the employee's conduct has a significant adverse impact, even a single incident can constitute misconduct under the statute. Minn. Stat. § 268.095, subd. 6(a); see also Schmidgall, 644 N.W.2d at 806 (stating in case law that "[a] single incident can constitute misconduct when an employee deliberately chooses a course of conduct that is adverse to the employer"); Ress, 448 N.W.2d at 524 (stating in case law that a single incident of deliberate conduct may constitute misconduct).
Because Woods was terminated after she directly competed with her employer by privately catering an event for a potential customer of her employer in violation of her employer's reasonable employment policies, we conclude that the ULJ did not err when he determined that Woods was discharged for employment misconduct and is therefore disqualified from receiving unemployment benefits.