Henry v. Iowa Dept. of Job Service

• Decision Date: 04 June 1986
• Docket Number: No. 85-1172,85-1172
• Citation: 391 N.W.2d 731
• Parties: Denise M. HENRY, Petitioner-Appellant, v. IOWA DEPARTMENT OF JOB SERVICE, and Stewart's School of Hairstyling & Cosmetology, Respondents-Appellees.
• Court: Iowa Court of Appeals

Page 731

391 N.W.2d 731

Denise M. HENRY, Petitioner-Appellant, v. IOWA DEPARTMENT OF JOB SERVICE, and Stewart's School of Hairstyling & Cosmetology, Respondents-Appellees.

No. 85-1172.

Court of Appeals of Iowa.

June 4, 1986.

Lillian O. Taylor of Legal Services Corp., John F. Clemens, Sioux City, for petitioner-appellant.

Joseph L. Bervid, Walter F. Maley, Blair H. Dewey and David M. Keenan of Iowa Dept. of Job Service, for respondent-appellee Iowa Dept. of Job Service.

Heard by DONIELSON, P.J., and SCHLEGEL, and SACKETT, JJ.

SACKETT, Judge.

Petitioner Denise Henry appeals the district court's affirmance of an Iowa Department of Job Service ruling denying unemployment compensation benefits. Henry contends the district court erred: (1) as a matter of law in concluding that one isolated incident of carelessness was sufficient to find Henry had committed misconduct; and (2) in holding there was substantial evidence in the record to support the agency's finding of misconduct. We agree.

Henry worked as a part-time receptionist for Stewart's School of Hairstyling and Cosmetology from November 8, 1983, until February 6, 1984. She worked the evening shift on weekdays. Henry's duties as receptionist included making appointments, answering the telephone, receiving money and putting away the bulk of the day's cash receipts before leaving the salon. At the time Henry was hired she was not given formal training, written instructions or an employee's manual about job duties and responsibilities. Henry was told by the manager, however, that she would be fired if she was in the salon after working hours.

When Henry was first hired the salon manager showed Henry the procedures for putting away the daily cash receipts at the end of her shift. The procedures involved placing all the money, except that necessary to make change, in an envelope and stapling, signing and placing it in a spot for safekeeping since the salon did not have a safe.

Because of recent shortages in the cash receipts, a new policy of using a locking bank bag was implemented at the salon. On Saturday, February 4, 1984, the first day the new policy was in effect, Henry filled in for the regular receptionist. Henry testified later this was the first time she had worked the Saturday shift. At approximately 4 p.m., the end of Henry's shift, she placed the bulk of the cash receipts in the bank bag. Since some of the hair designers were still working, Henry asked another employee to place the balance of the receipts into the bag, lock it and put it away when she left. The other employee, however, left the bank bag unlocked and lying out rather than putting it away as she had agreed to do.

The following Monday, February 6, 1984, the salon manager discovered the open bank bag containing $1,300 which had a shortage of $50. The salon manager discharged Henry for failing to put away the February 4, 1984, cash receipts. The salon manager testified later that this was the first time Henry had not put away the receipts. The hearing record indicates Henry had not received any other warnings.

Henry filed for unemployment benefits following her termination. A claim's deputy decision dated February 21, 1984, held that Henry had been discharged for carelessness in performing her work and benefits were denied. Henry appealed and a hearing was held on April 11, 1984. The hearing officer affirmed, concluding that Henry's carelessness was of sufficient culpability to support a finding of wanton or willful disregard of the employer's interests. The hearing officer accordingly denied benefits on the ground that Henry's carelessness constituted misconduct within the meaning of Iowa Code § 96.5(2)(a) (1985). The appeal board upheld the hearing officer's decision.

On February 8, 1985, Henry filed a petition for judicial review asserting that the agency decision was affected by error of law and unsupported by substantial evidence. On July 9, 1985, the district court affirmed the final decision of the agency.

I. Scope of Review

Our scope of review in cases arising out of the Iowa Administrative Procedure Act is limited under Iowa Code § 17A.20 to the correction of errors of law. Boyd v. Iowa Department of Job Service, 377 N.W.2d 1, 2 (Iowa App.1985). We review the decision of the district court, also rendered in an appellate capacity, and determine whether the district court applied the law correctly. Endicott v. Iowa Department of Job Service, 367 N.W.2d 300, 302 (Iowa App.1985). To make that determination this court must apply the standards of Iowa Code § 17A.19(8) (1985) to the agency action to determine whether this court's conclusions are the same as those of the district court. Boyd, 377 N.W.2d at 2. Iowa Code § 17A.19(8)(f) (1985) provides in a contested case the court shall grant relief from an agency decision which is not supported by substantial evidence in the record made before the agency when that record is viewed as a whole. Myers v. Iowa Department of Job Service, 373 N.W.2d 507, 509 (Iowa App.1985). In making this determination we are limited to the record made by the hearing officer. Boyd, 377 N.W.2d at 2. We do not make an independent determination concerning the preponderance of the evidence. Budding v. Iowa Department of Job Service, 337 N.W.2d 219, 221 (Iowa App.1983).

Evidence is substantial when a reasonable person would accept it as adequate to reach a conclusion. Gipson v. Iowa Department of Job Service, 315 N.W.2d 834, 837 (Iowa App.1981). The question is not whether the evidence might support a different finding but whether the evidence supports the findings actually made. Boyd, 377 N.W.2d at 2. The fact that two inconsistent conclusions can be drawn from the evidence does not mean that one of those conclusions is unsupported by substantial evidence. Myers, 373 N.W.2d at 509.

II. Misconduct

Iowa Code § 96.5(2) (1985) provides that a claimant is disqualified from unemployment benefits if Job Service finds the individual has been discharged for misconduct in connection with the individual's employment.

The Iowa Administrative Code defines "misconduct" as:

[A] deliberate act or omission by a worker which constitutes a material breach of the duties and obligations arising out of such worker's contract of employment. Misconduct as the term is used in the disqualification provision as being limited to conduct evincing such willful or wanton disregard of an employer's interest as is found in deliberate violation or disregard of standards of behavior which the employer has the right to expect of employees, or in carelessness or negligence of such degree of recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to the employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed misconduct within the meaning of the statute.

370 Iowa Administrative Code § 4.32(1). The Iowa Supreme Court has accepted this definition as accurately reflecting the intent of the legislature. Myers, 373 N.W.2d at 510.

Misconduct must be substantial in order to support a disqualification from unemployment benefits. Newman v. Iowa Department of Job Service, 351 N.W.2d 806, 808 (Iowa App. (1984). The employer has the burden of proving misconduct. Eaton v. Iowa Department of Job Service, 376 N.W.2d 915, 917 (Iowa App.1985). Misconduct serious enough to warrant discharge of an employee is not necessarily serious enough to warrant denial of unemployment benefits. Eaton, 376 N.W.2d at 917. As such, we do not examine the employer's right to discharge Henry. Rather, our sole task is to determine whether Henry is entitled to unemployment benefits. Billingsley v. Iowa Department of Job Service, 338 N.W.2d 538, 540 (Iowa App.1983).

The focus of the administrative code definition of misconduct is on acts or omissions by the petitioner which rise to the level of being deliberate, intentional or culpable. Eaton, 376 N.W.2d at 917. In order to establish misconduct that will disqualify petitioner from benefits, the employer must prove the acts culminating in discharge satisfy the requirements of the administrative code definition. As such, the acts must show:

1. Willful and wanton disregard of an employer's interest as is found in:

A. Deliberate violation of standards of behavior which the employer has the right to expect of employees, or

B. Deliberate disregard of standards of behavior which the employer has the right to expect of employees;

or

2. Carelessness or negligence of such degree of recurrence as to:

A. Manifest equal culpability, wrongful intent or evil design, or

B. Show an intentional and substantial disregard of:

1. The employer's interest, or

2. The employee's duties and obligations to the employer.

370 Iowa Administrative Code § 4.32(1)(emphasis added).

Misconduct which does not rise to the level of culpability sufficient to be deemed misconduct may be due to:

1. Insufficiency

2. Unsatisfactory conduct

3. Failure in good performance as a result of:

a. Inability

b. Incapability

c. Inadvertencies

d. Ordinary negligence in isolated incidences

e. Good faith errors in judgment or discretion.

Id. (emphasis added).

The administrative code makes it clear, therefore, that acts of carelessness or negligence must be sufficiently recurrent and not merely isolated to rise to the level of culpable or intentional misconduct. See Infante v. Iowa Department of Job Service, 364 N.W.2d 262, 265 (Iowa App.1984). The administrative code does provide, however, that past acts and warnings can be used to determine the magnitude of a current act of misconduct. 370 Iowa Administrative Code § 4.32(8)(1985).

In Flesher v. Iowa Department of...