Department of Labor, Licensing and Regulation v. Muddiman, 1310

• Court: Court of Special Appeals of Maryland
• Writing for the Court: DAVIS
• Citation: 708 A.2d 47,120 Md.App. 725
• Parties: DEPARTMENT OF LABOR, LICENSING AND REGULATION v. Tammy L. MUDDIMAN. ,
• Docket Number: No. 1310,1310
• Decision Date: 01 September 1997

Page 725

120 Md.App. 725 708 A.2d 47 DEPARTMENT OF LABOR, LICENSING AND REGULATION
v.
Tammy L. MUDDIMAN. No. 1310, Sept. Term, 1997. Court of Special Appeals of Maryland. April 7, 1998.

[708 A.2d 49]

Page 728

Matthew W. Boyle, Staff Atty. (J. Joseph Curran, Jr., Atty. Gen. and Lynn M. Weiskittel, Asst. Atty. Gen., on the brief), Baltimore, for appellant.

No brief or appearance by appellee's counsel.

Argued before WENNER, DAVIS and BYRNES, JJ.

DAVIS, Judge.

The Department of Labor, Licensing and Regulation (DLLR) appeals from the judgment of the Circuit Court for Harford County reversing the decision of the Board of Appeals (Board) of the DLLR. The Board's decision disqualified appellee Tammy L. Muddiman from receipt of unemployment insurance benefits based on its determination that appellee

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was discharged from employment for gross misconduct, as defined by MD.CODE (1991 Repl.Vol. & 1997 Cum.Supp.), Labor & Employment (L.E.) § 8-1002.

Appellee worked for American Studios, Inc. (employer) as a portrait studio manager. After several warnings, she was terminated for repeated violations of the employer's policies. In June 1996, appellee applied for unemployment compensation benefits. A DLLR claims specialist found that she had been discharged for violation of her employer's policy, but found insufficient evidence of misconduct. The employer appealed the findings of the claims specialist. A hearing was held on July 17, 1996; appellee failed to appear. The hearing examiner reversed the finding of the claims specialist, concluding that appellee had been discharged for gross misconduct as defined in L.E. § 8-1002(a)(1)(ii)--"repeated violations of employment rules that prove a regular and wanton disregard of the employee's obligations." Appellee appealed to the Board. Upon review of the record, the Board also concluded that appellee had been discharged for gross misconduct, pursuant to L.E. § 8-1002(a)(1)(ii), and affirmed the decision of the hearing examiner.

Appellee appealed to the Circuit Court for Harford County, which reversed the decision of the Board, based on a finding that appellee had engaged in simple misconduct rather than gross misconduct. In its memorandum opinion, the court concluded that the Board erred as a matter of law in finding gross misconduct because "there ha[d] not been a showing that [appellee's] actions were done with a gross indifference to the interests of the employer as required by the statute"--the standard of gross misconduct as defined in L.E. § 8-1002(a)(1)(i). The Board moved the lower court to alter or amend its judgment in consideration of § 8-1002(a)(1)(ii ), under which appellee was disqualified. In its motion, the Board noted that the standard relied on by the trial court--"gross indifference to the interests of the employer"--is a [708 A.2d 50] requirement only of L.E. § 8-1002(a)(1)(i ), and the case law

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relied on by the lower court addressed only that subsection. ¹ The circuit court denied the motion to alter or amend and wrote a letter, dated July 10, 1997, to counsel explaining:

I agree with you that the cases cited by me in my Opinion do in fact address a different section of the Labor and Employment Article. Specifically, the cases seem to address Section 8-1002(a)(1)(i) and not Section 8-1002(a)(1)(ii). Both of these sections, however, involve gross misconduct and since there are no reported cases ² on subsection (a)(1)(ii), I believe it is appropriate to use these cases to reason by analogy in interpreting that portion of the Code.

The Board appealed to this Court raising, for our review, the following question which we restate for clarity:

Did the circuit court err in finding that appellee engaged in simple misconduct rather than gross misconduct when appellee was discharged for repeatedly violating the employer's rules despite warnings of possible termination?

We shall answer the question in the affirmative and reverse the judgment of the circuit court.

FACTS ³

From November 1994 to June 8, 1996, appellee was employed as a portrait studio manager by American Studios, Inc. The employer discharged her for repeatedly violating its cash handling policy, as well as for violating its scheduling policy.

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According to the cash handling policy, appellee, as the studio manager, was required to purchase a money order at the end of each day with the day's cash receipts. She was directed to place each day's money order in a cash report envelope. On the outside of each day's envelope, her instructions were to record the amount of cash collected and the type of money order purchased. The envelope and the money orders it contained were to remain in the store until the end of the week, at which time they were to be mailed to corporate headquarters.

On December 15, 1995, appellee was issued a written notice/warning ⁴ for her failure to purchase money orders with the studio's cash receipts. This warning was prompted by the employer's discovery of cash shortages in appellee's reports to the employer's corporate office. Employer advised appellee that she "must make sure that all money orders are placed in the cash envelope daily and kept in the studio." Additionally, she was warned that another violation of the procedure could result in additional disciplinary action, including termination.

On January 31, 1996, appellee received another written notice/warning. This notice stemmed from, among other performance issues, her failure to follow the employer's policy for altering employee's work schedules, including her own, without seeking the required authorization from the district manager. In this "counseling statement" she was warned that "[f]ailure to comply w[ith] any American Studios policies could result in demotion and [/]or termination."

On June 1, 1996, appellee's district manager visited her store and found that appellee had failed to purchase a money order with the cash received on May 11, 1996, thereby violating the cash handling policy again. Appellee claimed that she had purchased the money order and mailed it separately from the cash report. Notwithstanding this defense, she admitted that she had not purchased the money order until May 13,

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1996, a [708 A.2d 51] violation of the policy requiring that a money order be purchased at the close of business each day. The employer never received a money order for the cash receipts of May 11, 1996. Appellee could not produce a receipt for the money order. She did not record the amount of the receipts on the envelope as required by her employer's policy. The employer issued another warning to appellee for failure to abide by the cash handling policy and she was again warned that further policy violations could result in termination.

On June 3, 1996, appellee was again responsible for purchasing a money order. When a representative of the employer visited the studio on June 8, 1996, however, the representative discovered that there were cash receipts of $62.68 for June 3, but there was no money order in the cash report envelope and no record that a money order had been purchased that day. In response to questioning, appellee claimed that she had purchased a money order but failed to put it in the envelope as required. Instead, she explained that she took it home. Based on this violation and the previous policy infractions, the employer discharged appellee on June 8, 1996.

DISCUSSION

Standard of Review

This is an appeal of the lower court's judicial review of an administrative determination. When exercising such judicial review, a circuit court may:

(1) remand the case for further proceedings;

(2) affirm the final decision; or

(3) reverse or modify the decision if any substantial right of the petitioner may have been prejudiced because a finding, conclusion, or decision:

(i) is unconstitutional;

(ii) exceeds the statutory authority or jurisdiction of the final decision maker;

(iii)results from an unlawful procedure;

(iv) is affected by any other error of law;

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(v) is unsupported by competent, material, and substantial evidence in light of the entire record as submitted; or

(vi) is arbitrary or capricious.

MD.CODE (1995 Repl.Vol.), State Gov't (S.G.), § 10-222(h). "A court's role is limited to determining if there is substantial evidence in the record as a whole to support the agency's findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law." United Parcel Serv. Inc. v. People's Counsel, 336 Md. 569, 577, 650 A.2d 226 (1994). ⁵

Because this is an appeal from a circuit court's review of an agency's final decision, our role in this appeal " 'is precisely the same as that of the circuit court.' " Dept. of Human Resources v. Thompson, 103 Md.App. 175, 188, 652 A.2d 1183 (1995) (quoting Dept. of Health & Mental Hygiene v. Shrieves, 100 Md.App. 283, 303-04, 641 A.2d 899 (1994)). Accordingly, we have the same recourse given to the circuit court by S.G. § 10-222(h).

A reviewing court may not make...