Abild v. Gateway 2000, Inc., 19333

• Court: Supreme Court of South Dakota
• Citation: 547 N.W.2d 556,1996 SD 50
• Docket Number: No. 19333,19333
• Parties: Richard ABILD and Kevin Connelly, Claimants, v. GATEWAY 2000, INC., Employer and Appellant. . Considered on Briefs
• Decision Date: 11 March 1996

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547 N.W.2d 556 1996 SD 50 Richard ABILD and Kevin Connelly, Claimants,
v.
GATEWAY 2000, INC., Employer and Appellant. No. 19333. Supreme Court of South Dakota. Considered on Briefs March 11, 1996.
Decided May 8, 1996.

Drew C. Johnson, Assistant Attorney General, South Dakota Department of Labor, Aberdeen, for appellee South Dakota Department of Labor.

Cheryle Wiedmeier of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for employer and appellant.

KONENKAMP, Justice.

¶1 Two employees fired for misuse of the company telephone were awarded unemployment benefits. The employer appeals and we affirm.

Facts

¶2 On July 21, 1994, Richard Abild and Kevin Connelly were discharged from employment as sales representatives for Gateway 2000, Inc. Each filed unemployment claims, but the South Dakota Unemployment Insurance Division denied benefits based on a finding of work-connected misconduct. They appealed. After a consolidated hearing, the Department of Labor found Abild and Connelly eligible for unemployment benefits. ¹ The circuit court affirmed.

¶3 Gateway manufactures and sells computer products. Its computer sales are accomplished primarily over the telephone through sales representatives, such as Abild and Connelly. These salespersons have daily quotas, including making twenty new phone calls, with a total of ninety phone calls per day, maintaining a minimum of 5.5 hours on the telephone, spending seventy-five percent of their time on the phone and maintaining a specified sales volume. Each sales representative meets with a supervisor once a month for a "one-on-one" discussion. At the meeting employees initial a form summarizing their production in the previous month and their goals for the next month. In July 1994, the month Abild and Connelly were discharged, Gateway revised its "one-on-one" forms. The new forms warn employees to

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use correct phone procedure which "includes not calling our 800 number." Gateway contended the old forms its employees initialed also contained this warning. Yet it had purged all its old records, so Gateway was unable to produce any forms initialed by Abild or Connelly, and both denied ever having seen a form with this warning. The employee handbook simply provided that honesty is expected of all employees and employees are not to falsify company records.

¶4 Gateway has a toll-free 800 number for its customers. When put on hold, customers listen to music. Sales representatives have three phone lines at their work stations. In July 1994, Gateway conducted a ten-day audit of its phone lines to learn whether employees were using the phone system to falsify sales records. The investigation revealed that many employees were manipulating telephone calls to improve their statistics: they called for messages using an outside line or dialed the 800 number and placed themselves on hold, thus augmenting their phone quotas. Employees were required to check voice mail messages periodically each day. To check for messages they dialed a four digit inhouse extension number, but by dialing an outside number to access messages, employees improved their statistics. Ten employees were eventually discharged. Abild and Connelly had not misused the voice mail system, but Abild had called the 800 number nine times in three days, totaling 95 minutes of on-line time; Connelly called thirteen times in five days for a total of 93.8 minutes. ²

¶5 Abild and Connelly denied using the telephone to manipulate their statistics. Their reason for calling the 800 number and putting themselves on hold was to listen to music through their headsets during free times or while completing required paperwork. Both were top sales representatives who had no difficulty meeting all their daily expectations of phone calls and required on-line time. Furthermore, no evidence was presented to show they received any additional compensation due to the added on-line time. ³ Gateway believes the employees knew that using the 800 number was not correct phone procedure, that doing so manipulated their on-line statistics, incurred additional telephone charges, and was detrimental to Gateway because lines were unavailable for incoming calls from its customers. To Gateway, these intentional actions establish "misconduct" and the employees should not receive unemployment benefits. Gateway appeals raising the following issues:

I. Whether the Department's factual findings were clearly erroneous.

II. Whether the Department erred in finding the employees did not commit "misconduct" as defined in SDCL 61-6-14.1.

Standard of Review

¶6 We review administrative decisions in the same manner as the circuit court. Factual findings can be overturned only if we find them to be "clearly erroneous" after considering all the evidence. SDCL 1-26-36; Permann v. South Dakota Dept. of Labor, 411 N.W.2d 113, 117 (S.D.1987). Unless we are left with a definite and firm conviction a mistake has been made, the findings must stand. The question is not whether there is substantial evidence contrary to the findings, but whether there is substantial evidence to support them. Conclusions of law are fully reviewable, as are mixed questions

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of fact and law that require the application of a legal standard. Schuck v. John Morrell & Co., 529...