Bhatia v. Department of Employment Sec.

• Decision Date: 02 June 1992
• Docket Number: No. 910498-CA,910498-CA
• Citation: 834 P.2d 574
• Parties: Jasbir S. BHATIA, Petitioner, v. DEPARTMENT OF EMPLOYMENT SECURITY; and Pizza Hut of Utah, Respondents.
• Court: Utah Court of Appeals

Page 574

834 P.2d 574

Jasbir S. BHATIA, Petitioner, v. DEPARTMENT OF EMPLOYMENT SECURITY; and Pizza Hut of Utah Respondents.

No. 910498-CA.

Court of Appeals of Utah.

June 2, 1992.

David G. Challed, Salt Lake City, for petitioner.

R. Paul Van Dam and Emma R. Thomas, Salt Lake City, for respondent Dept. of Employment Sec.

Before BENCH, BILLINGS and GARFF, JJ.

OPINION

BILLINGS, Associate Presiding Judge:

Petitioner Jasbir S. Bhatia (Bhatia) seeks reversal of a final decision of the Board of Review of the Industrial Commission of Utah (Board) denying him unemployment benefits. We affirm.

FACTS

Pizza Hut of Utah (Pizza Hut) hired Bhatia as a cook on April 2, 1990. On October 24, 1990, Bhatia was scheduled to work the evening shift, from approximately 5:00 p.m. until closing time. Bhatia's duties included cutting breadsticks and pizzas as they came out of the ovens. Due to a special promotion, Pizza Hut was crowded that evening, and the staff was particularly busy.

Bhatia was behind in filling orders. Also, Bhatia had a reputation among the servers for not preparing orders in the sequence in which he received them. In view of this situation, one of the servers occasionally went into the cutting area to cut her own breadsticks to ensure her customers were properly served. Bhatia resented the server's presence in his work area and loudly told her several times to leave.

At approximately 7:30 p.m., Bhatia received a telephone call from another employer, informing Bhatia he had been discharged from a part-time position. Although Bhatia accepted this news calmly and returned to work, he again became irritated with the server.

The restaurant manager, having heard Bhatia's requests, was aware Bhatia was upset with the server. The manager turned from the cash register and asked him "to settle down," reminding him that everyone was under pressure. She advised him that, when the rush was over, they "would all sit down and talk" about the problem. Bhatia responded by throwing his hands in the air and announcing, in a voice loud enough for a customer to hear, "This is bullshit. I am leaving." Bhatia then checked out and left at approximately 8:00 p.m. while the restaurant was crowded and before the end of his shift. When Bhatia did not return to work that evening, the manager decided to terminate his employment.

Although Bhatia contacted Pizza Hut the next day to advise his employer that he wished to continue his employment, he was told he had been discharged. A meeting was scheduled the following day, at which time Bhatia was asked to sign a suspension notice pursuant to Pizza Hut's progressive discipline policy, but he refused. Pizza Hut has instituted a progressive discipline program to improve substandard employee performance which provides for oral and written warnings. Bhatia never received any formal disciplinary warnings prior to his discharge.

The Utah Department of Employment Security granted Bhatia unemployment benefits effective October 21, 1990, and Pizza Hut appealed. On March 12, 1991, a hearing was held before an administrative law judge. The administrative law judge reversed the department's decision, determining Bhatia was terminated for just cause. Bhatia appealed to the Board, which affirmed.

On appeal to this court, Bhatia claims he was not terminated for just cause because: (1) His conduct was an "isolated incident" and, thus, not sufficiently culpable; and (2) he did not have sufficient knowledge of what conduct Pizza Hut expected because its management failed to follow its progressive discipline policy.

STANDARD OF REVIEW

Utah's Employment Security Act is to be "construed liberally in favor of affording benefits." Nielsen v. Department of Employment Sec., 692 P.2d 774, 776 (Utah 1984) (per curiam); accord DeLuca v. Department of Employment Sec., 746 P.2d 276, 278 (Utah App.1987). However, an employee is ineligible for unemployment benefits if the employee was "discharged for just cause" as determined by the Board. Utah Code Ann. § 35-4-5(b)(1) (1988).

Whether an employee was terminated for just cause is a mixed question of law and fact. See Department of the Air Force v. Department of Employment Sec., 786 P.2d 1361, 1363 (Utah App.), cert. denied sub nom. United States v. Industrial, 795 P.2d 1138 (Utah 1990); Johnson v. Department of Employment Sec., 782 P.2d 965, 968 (Utah App.1989). Utah courts have recently altered the traditional characterization of the standard of review for such issues because of the adoption of the Utah Administrative Procedures Act. In Morton International, Inc. v. Auditing Division of the Utah State Tax Commission, 814 P.2d 581 (Utah 1991), the Utah Supreme Court held that, under the UAPA it is only "appropriate to grant [an] agency deference on the basis of an explicit or implicit grant of discretion contained in the governing statute." Id. at 588; accord Tasters, Ltd. v. Department of Employment Sec., 819 P.2d 361, 364 (Utah App.1991). If such an award of discretion exists, the agency's action "should be affirmed if its decision is reasonable and rational." Department of the Air Force v. Swider, 824 P.2d 448, 451 (Utah App.1991); accord Johnson-Bowles Co. v. Division of Sec., 829 P.2d 101, 107 (Utah App.1992); Tasters, 819 P.2d at 365. Otherwise, we apply a correction-of-error standard. See Morton, 814 P.2d at 588; Johnson-Bowles, 829 P.2d at 107.

To ascertain the proper standard of review in this case, we must thus determine if section 35-4-5(b)(1) grants the Board discretion in deciding whether an employee was terminated for just cause. The operative language in section 35-4-5(b)(1) states that unemployment benefits will not be awarded if the employee "was discharged for just cause ... if so found by the commission." In Swider, we concluded that, through this language, "the requisite grant of discretion was made by the Legislature to the Board." Swider, 824 P.2d at 451. ¹ Therefore, we will uphold the Board's decision denying Bhatia unemployment benefits if it is reasonable and rational.

An employee is terminated for just cause if three factors are met: "(1) culpability, (2) knowledge of expected conduct, and (3) control over the offending conduct." Nelson v. Department of Employment Sec., 801 P.2d 158, 161 (Utah App.1990); accord Utah Code Admin.P. R475-5b-102 (1991); Grinnell v. Board of Review, 732 P.2d 113, 114 (Utah 1987) (per curiam). The employer bears the burden of establishing just cause for the discharge, see Utah Code Admin.P. R475-5b-103 (1991); Department of the Air Force, 786 P.2d at 1363, and must satisfy all three conditions to demonstrate an employee is not entitled to unemployment benefits. See Nelson, 801 P.2d at 161; Law Offices of David Paul White & Assocs. v. Board of Review, 778 P.2d 21, 24 (Utah App.1989).

CULPABILITY

Bhatia first claims his conduct was not sufficiently culpable to prevent him from obtaining unemployment benefits because his behavior was an isolated incident of poor judgment in a stressful situation.

Employee "culpability" is the first factor in the test for just cause. Board regulations define culpability as "the seriousness of the conduct or the severity of the offense as it affects continuance of the employment relationship." Utah Code Admin.P. R475-5b-102(1)(a) (1991). Board regulations further state that employers have a "right to expect employees to refrain from acts which are detrimental to the business" or which affect the goodwill of customers, business, efficiency, or discipline. Utah Code Admin.P. R475-5b-107 (1991). ² Culpability may also be established by the employee's insubordination. ³

Whether employee misconduct is simply an "isolated incident of poor judgment," and thus not culpable conduct, is determined by balancing the employee's "[l]ongevity and prior work record" against the seriousness of the offense and how likely it is to be repeated. Utah Code Admin.P. R475-5b-102(1)(a)(1); accord Nelson, 801 P.2d at 161-62.

In Kehl v. Board of Review, 700 P.2d 1129 (Utah 1985), the Utah Supreme Court rejected the contention that a single violation is insufficient to demonstrate employee culpability. In Kehl, a forklift operator, terminated for violating a company safety rule, appealed the Board's denial of unemployment benefits. Relying on the Board regulations, the court affirmed, stating: "[T]he proper emphasis under the culpability requirement should not be upon the number of violations; rather, it should address the problem of whether the discharge was 'necessary to avoid actual or potential harm to the employer's rightful interest.' " Id. at 1134 (quoting Utah Code Admin.P. R475-5b-102(1)(a)) (emphasis added).

In Trotta v. Department of Employment Security, 664 P.2d 1195 (Utah 1983), a construction worker was discharged for deliberately failing to report for work when he knew his employer had a backlog of work. He appealed a denial of unemployment benefits, in part, on the basis that he was not sufficiently culpable. Although the Utah Supreme Court reversed and remanded because the basis for the Board's decision was unclear, the court noted:

A warning is generally required in single absence cases, where an employee usually has no reason to expect that one unexcused absence will lead to his discharge.... No warning, however, need be given when the employee knows, without being warned, that the absence will seriously interrupt the employer's operations.

Id. at 1200.

In its final decision, the Board adopted the findings and conclusions of the administrative law judge who stated:

[T]he record shows that right before the claimant elected to leave his shift without authorization the manager told him to calm down, assuring him that the rush would soon be over, and that they would all meet to discuss the problems that evening at that time. Rather than accepting the direction of the manager, the claimant further aggravated the problem by making an inflammatory remark, using foul language...