DISTRICT OF COL. v. DEPT. OF EMPLOY. SVCS., 94-AA-1197.

• Decision Date: 18 June 1998
• Docket Number: No. 94-AA-1197.,94-AA-1197.
• Citation: 713 A.2d 933
• Parties: DISTRICT OF COLUMBIA, Petitioner, v. DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.
• Court: D.C. Court of Appeals

713 A.2d 933

DISTRICT OF COLUMBIA, Petitioner, v. DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.

No. 94-AA-1197.

District of Columbia Court of Appeals.

Argued September 18, 1997.

Decided June 18, 1998.

Sheila Kaplan, Assistant Corporation Counsel, with whom Garland Pinkston, Jr., Acting Corporation Counsel at the time the brief was filed, Charles L. Reischel, Deputy Corporation Counsel, and Sonia A. Bacchus, Assistant Corporation Counsel, were on the brief, for petitioner.

Michael A. Milwee, Washington, DC, for respondent.

Before WAGNER, Chief Judge, and TERRY and STEADMAN, Associate Judges.

TERRY, Associate Judge:

The District of Columbia seeks review of a decision by the Department of Employment Services (DOES) awarding unemployment compensation benefits to Loretta Smith, a former District employee who was fired for misconduct. We find a fundamental flaw in the Department's ruling, and accordingly we reverse its order and remand the case for further proceedings.

I

Loretta Smith was employed as a teacher in the District of Columbia Public Schools (DCPS). On May 12, 1992, the Superior Court issued a "stay-away" order against Ms. Smith in a case involving matters unrelated to her job. On August 18, 1992, the Superior Court found her guilty of contempt for violating the stay-away order, the violation having occurred on July 2. She was released on bond pending sentencing, but on October 9, 1992, she was again found guilty of violating the stay-away order. On October 16 Ms. Smith was sentenced to six months in jail.¹

Eleven days later, on October 27, the District sent a letter to Ms. Smith at the jail stating that her employment would be terminated on November 12, 1992. The discharge was based on D.C.Code § 1-617.1(d)(22) (1992), which allows termination of a District of Columbia employee after conviction of a misdemeanor "when the conviction is based on conduct that would affect adversely the employee's or the agency's ability to perform effectively." The letter stated that "the Administration has concluded that it would be contrary to the best interests of the School System to continue your employment."²

Several weeks later Ms. Smith filed for unemployment compensation benefits. Her claim was initially denied on the ground that she had been discharged from her job for "gross misconduct occurring in her most recent work." See D.C.Code § 46-111(b) (1996). Ms. Smith appealed, and a hearing was held before an appeals examiner, who found:

There has been no showing by the employer that claimant's conviction affected her ability to perform. Employer has been unable to show that some misconduct occurred during the course of claimant's most recent work. The employer has been unable to show an act of willful or wanton disregard of employer interests or an intentional and substantial disregard of the employer's interest or of employee's duties and obligations to the employer.

Claimant was involved in an action away from the employer and not connected with her work.

On the basis of these findings, the examiner concluded that "claimant was terminated; however, no misconduct under the D.C. Act has been proven."

The District took an administrative appeal to the Office of Appeals and Review (OAR), which held that the examiner's ruling was supported by "reliable, probative, and substantial evidence." It ruled that under Green v. District Unemployment Compensation Board, 346 A.2d 252, 256 (D.C.1975), and Jones v. District Unemployment Compensation Board, 395 A.2d 392, 395 (D.C.1978), a finding of misconduct must be based on the reasons given by the employer for the discharge. The OAR read the examiner's decision as finding that "employer failed to show that the conduct for which claimant was convicted adversely affected claimant's ability... to perform effectively" and "also failed to show that Ms. Smith's conduct was a willful violation of employer's rule." Holding that the examiner's findings were supported by substantial evidence, the OAR affirmed her ruling. The District now asks us to review the OAR's decision, contending that it "erred in finding that Loretta Smith's discharge was not based on misconduct within the meaning of D.C.Code § 46-111(b)."

II

This court has repeatedly held that the District of Columbia Administrative Procedure Act requires agency decisions to meet a three-part test: "(1) the decision must state findings of fact on each material, contested factual issue; (2) those findings must be based on substantial evidence; and (3) the conclusions of law must follow rationally from the findings." Perkins v. District of Columbia Dep't of Employment Services, 482 A.2d 401, 402 (D.C.1984) (citations omitted); see D.C.Code § 1-1509(e) (1992). "If the agency `fails to make a finding on a material, contested issue of fact, this court cannot fill the gap by making its own determination from the record, but must remand the case for findings on that issue.'" Mack v. District of Columbia Dep't of Employment Services, 651 A.2d 804, 806 (D.C.1994) (quoting Colton v. District of Columbia Dep't of Employment Services, 484 A.2d 550, 552 (D.C.1984)). "A reiteration of the evidence is not a finding of fact." Newsweek Magazine v. District of Columbia Comm'n on Human Rights, 376 A.2d 777, 784 (D.C.1977), cert. denied, 434 U.S. 1014, 98 S.Ct. 729, 54 L.Ed.2d 758 (1978).

In this case the OAR granted benefits to Ms. Smith on the ground that the appeals examiner had found that the District had not shown a rule violation.³ The OAR plainly misread the examiner's decision. The examiner did not state that Ms. Smith was fired for violating an "employer's rule"; in fact, her decision does not even mention a "rule" that might apply to this case. Rather, the examiner found that DCPS had failed to prove that Ms. Smith's conviction occurred during her most recent work, see D.C.Code § 46-111(b), and also had failed to prove "an act of willful or wanton disregard of employer interests or an intentional and substantial disregard of the employer's interest or of employee's duties and obligations to the employer." Because the OAR misread the examiner's ruling,⁴ the OAR's decision, which is the final order of the Department, cannot be sustained.

Although the OAR stated in its Final Decision that DCPS had failed to show that Ms. Smith violated an employer's rule, it did not identify which rule she was alleged to have violated or on what evidence it relied to conclude that there was no rule violation. The OAR appears to assume that D.C.Code § 1-617.1(d), which lists twenty-two types of "cause" for which an employee of the District of Columbia (including the DCPS) may be discharged, is a personnel rule. Common sense tells us that it plainly is not. Section 1-617.1(d) is not a collection of rules governing employees' behavior in the workplace; it merely identifies twenty-two instances in which the District may fire an employee for cause. See District of Columbia Dep't of Corrections v. Teamsters Local 246, 554 A.2d 319, 322-325 (D.C.1989). It is part of a much larger statute, the District of Columbia Comprehensive Merit Personnel Act, a thorough and exhaustive piece of legislation which serves as "a comprehensive merit system of personnel management for the government of the District of Columbia...." D.C.Code § 1-601.1(1) (1992). The fact that it was enacted by our legislature, the Council of the District of Columbia, does not make it an "employer's rule" as that term is used in the regulations. The OAR's (and the appeals examiner's) discussion of whether Ms. Smith violated an "employer's rule" is thus essentially irrelevant. She was not charged with violating any such rule, nor was DCPS required to prove such a violation in order to sustain her discharge. Rather, she was fired because she had been convicted of a criminal offense which made her unsuitable for continued employment as a teacher in the public schools.

On remand, DOES should bear in mind that it is bound by the original notice of termination in deciding whether an employee was fired for misconduct. See Green, supra, 346 A.2d at 256; Smithsonian Institution v. District of Columbia Dep't of Employment Services, 514 A.2d 1191, 1193-1194 (D.C. 1986); Jones, supra, 395 A.2d at 395. The notice of termination, supra note 2, plainly stated that Ms. Smith was fired pursuant to D.C.Code § 1-617.1(d)(22), which states that "conviction of a misdemeanor, when the conviction is based on conduct that would affect adversely the employee's or the agency's ability to perform effectively," is "cause" for removal from employment. The notice also pointed out that Ms. Smith had shown "a flagrant disregard for the law and concluded that it would be contrary to the best interests of the School System ... to continue to employ, as a teacher and role model for impressionable youth," a person such as Ms. Smith who had flouted the law by violating a court order. The OAR, sidetracked by its misconception that Ms. Smith was alleged to have violated an employer's rule, failed to address adequately the stated reasons for Ms. Smith's discharge.

III

Since a remand is necessary, we deem it appropriate to address certain issues that are likely to arise on remand.

First, we must determine which statute and which regulations apply to this case—a difficult task, given the frequency with which the Unemployment Compensation Act has been amended over the years. D.C.Code § 46-111(b), as it now exists (i.e., in the 1996 version of the Code), draws a distinction between "gross misconduct" and "misconduct other than gross misconduct" which affects the duration of the period during which a discharged employee is disqualified from receiving benefits.⁵ This distinction first appeared in emergency legislation enacted at the end of 1992 and applies to claims for benefits "for weeks commencing after January 3, 1993."⁶ Since Ms. Smith filed her claim on January 5, 1993, the statute suggests that there may be a...