Bunnell v. Employment Div.

• Decision Date: 24 August 1987
• Docket Number: AB-218
• Citation: 304 Or. 11,741 P.2d 887
• Parties: Paula J. BUNNELL, Petitioner on review, v. EMPLOYMENT DIVISION, Respondent on review. EAB 86-; CA A39247; SC S33922.
• Court: Oregon Supreme Court

Page 887

741 P.2d 887

304 Or. 11

Paula J. BUNNELL, Petitioner on review, v. EMPLOYMENT DIVISION, Respondent on review.

EAB 86-AB-218; CA A39247; SC S33922.

Supreme Court of Oregon,

In Banc.

Argued and Submitted July 8, 1987.

Decided Aug. 24, 1987.

Suanne Lovendahl, Oregon Legal Services Corp., Roseburg, argued the cause and filed the petition for petitioner on review.

Jerome Lidz, Asst. Atty. Gen., Salem, argued the cause for respondent on review. With him on the response to the petition for review were Dave Frohnmayer, Atty. Gen., and Virginia L. Linder, Sol. Gen., Salem.

JONES, Justice.

Claimant petitioned this court to review a decision of the Court of Appeals, 84 Or.App. 428, 734 P.2d 14 (1987), sitting in banc, which affirmed without opinion, by an equally divided court, an order of the Employment Appeals Board (EAB) denying her claim for unemployment compensation benefits. The issue is whether the EAB correctly interpreted the language of an administrative rule.

The EAB adopted the factual findings and decision of the Employment Division hearings referee. The referee's findings of fact are set forth below:

"(1) Claimant worked as a retail sales person in the employer's department store from March 29, 1984 through October 17, 1985. (2) Claimant was off work due to an on-the-job injury for a period of time and returned to work on or about September 18, 1985. (3) At the time the claimant returned to work, the employer did not assign the claimant to the exact position which the claimant had held prior to the injury, but the claimant was assigned to a supervisory position with approximately the same level of authority as the claimant had held prior to her injury. (4) The claimant was dissatisfied when she was not able to return to the position she held prior to her injury and that dissatisfaction caused a degree of friction between the claimant and the store manager during the period after the claimant returned to work. (5) On the evening of October 16, the assistant manager, who was in charge of the employer's store at that time, approached the claimant and told her that he wanted the claimant to make sure that certain shelves were in a neat and orderly condition before the employes left the store that evening. (6) When the claimant completed the initial shelf organizing duties which the assistant manager had assigned to her, the assistant manager approached the claimant and asked her to go to another area of the store to perform similar shelf organizing duties. (7) The claimant initially refused the supervisor's request because the claimant felt that she had other duties which needed to be performed. (8) When the supervisor insisted that the claimant perform the duties he had assigned her, the claimant became abusive and told the supervisor that she had 'had enough of this shit' and also stated that she had had enough 'of this damn store.' (9) The claimant made the remarks indicated above in an extremely loud tone which could be heard by other employes in the store. (10) After the claimant made her remarks, the assistant manager left the area and the claimant eventually performed the duties which the manager had assigned. (11) The assistant manager reported the claimant's outburst to the manager on October 17. (12) On October 17, the claimant was discharged for her insubordination toward the assistant manager on the previous evening."

ORS 657.176 establishes the grounds and procedures for disqualifying employes from the opportunity to receive unemployment insurance benefits. Subsection (2)(a) of that statute states that an individual is disqualified if the individual "has been discharged for misconduct connected with work." Pursuant to ORS 657.610(1), the Assistant Director of Employment promulgated administrative rule OAR 471-30-038(3), which defines such misconduct as follows:

"[M]isconduct is a wilful violation of the standards of behavior which an employer has the right to expect of an employe. An act that amounts to a wilful disregard of an employer's interests * * * is misconduct. Isolated instances of poor judgment, good faith errors, unavoidable accidents, absences due to illness or other physical or mental disabilities, or mere inefficiency resulting from lack of job skills or experience are not misconduct for the purposes of denying benefits under ORS 657.176."

In 1979, the assistant director promulgated this rule in an apparent attempt to capsulize the Court of Appeals' holdings as to what would constitute misconduct under ORS 657.176(2)(a). Judge Tanzer, dissenting in Lundy v. Employment Div., 34 Or.App. 265, 269-70, 578 P.2d 476 (1978), summed up those Court of Appeals cases as follows:

"A preliminary distinction must be made. Unsatisfactory conduct for which an employe may properly be discharged is not necessarily misconduct warranting disqualification from unemployment compensation. See, Giese v. Employment Div., 27 Or.App. 929, 933, 557 P.2d 1354 (1976) rev. den. (1977); Geraths v. Employment Division, 24 Or.App. 201, 544 P.2d 1066 (1976); T. Broden, Law of Social Security and Unemployment Insurance, § 12.01 (1962). While an employer may discharge an employe for any reason, or for a whim, the discharge is not for misconduct under ORS 657.176(2)(a) unless the employe's improper conduct is in disregard of and injurious to the employer's legitimate interests. Thus, this case deals not with cause for termination, but with cause for restricting unemployment compensation.

"An isolated instance of poor judgment or a single, nondeliberate violation of an employer's rules is not misconduct requiring disqualification from compensation. Dietz v. Smith, 28 Or.App. 871, 875, 561 P.2d 1032 (1977); Babcock v. Employment Div., 25 Or.App. 661, 665, 550 P.2d 1233 (1976). On the other hand, isolated acts may constitute misconduct where they involve deliberate violation or disregard of standards of behavior which the employer has a right to expect of its employes. Erickson v. Employment Div., 29 Or.App. 893, 896, 565 P.2d 1101 (1977); Romanosky v. Employment Div., 21 Or.App. 785, 788, 536 P.2d 1277 (1975)."

The assistant director apparently pulled separate sentences from those Court of Appeals opinions together in formulating the administrative rule without stating clearly whether every wilful violation of the standard of behavior which an employer has the right to expect is misconduct or whether an isolated act can be an isolated instance of poor judgment even though wilful.

The referee...