Hodge v. U.S. Sec. Assocs., Inc., Docket No. 311387.

Decision Date15 July 2014
Docket NumberDocket No. 311387.
Citation855 N.W.2d 513,306 Mich.App. 139
PartiesHODGE v. US SECURITY ASSOCIATES, INC.
CourtCourt of Appeal of Michigan — District of US

Michigan Unemployment Insurance Project (by Steve Gray ), for Carnice Hodge.

Howard & Howard Attorneys PLLC, Detroit (by Brian A. Kreucher and Alex G. Cavanaugh), for U.S. Security Associates, Inc.

Before: O'CONNELL, P.J., and WILDER and METER, JJ.

Opinion

WILDER, J.

Respondent U.S. Security Associates, Inc., appeals by leave granted1 a circuit court order reversing the decision by the Michigan Compensation Appellate Commission (MCAC) that claimant was disqualified from unemployment insurance benefits under MCL 421.29(1)(b). On appeal, respondent argues that the circuit court applied the incorrect standard when reviewing the agency's decision and that claimant should be disqualified from benefits for violating respondent's rules. We affirm.

I

Claimant worked for respondent as a security guard from September 21, 2008, to February 9, 2011, when respondent mailed her a notice of termination of employment for violating company rules and regulations on January 27, 2011.

Before the incident leading to her termination, on November 11, 2008, claimant signed an acknowledgement of respondent's “Security Officer's Guide,” which provided, in relevant part, that the [u]nauthorized use of client facilities or equipment, including copiers, fax machines, computers, the internet, forklifts and vehicles” may result in immediate termination.

While working at the Detroit Metropolitan Wayne County Airport in Concourse B, claimant was approached by an airline passenger seeking departure information. Claimant looked for that information on the computer near her post. Shortly after this incident, claimant received a call from the command center, and was informed that someone had anonymously complained about her use of the computer. Respondent drafted a disciplinary report, which claimant signed.

Then, respondent told claimant she would be reassigned. But later, respondent reevaluated the incident and instead terminated claimant's employment in the February 9 letter.

Claimant filed a claim for unemployment benefits, and a notice of determination denying her claim was issued on March 10, 2011. The notice provided:

You were terminated from U.S. Security on 1/28/11 for accessing the client's computer system which is a violation of company policy. You were aware of the policy.
It is found that you were fired for a deliberate disregard of your employer(s) interest. You are disqualified for benefits under [MESA, MCL 421.29(1)(b) ].

Claimant filed an appeal of this notice of determination, and a hearing was conducted on July 13, 2011, by Administrative Law Judge Lawrence Hollens (ALJ). Claimant and respondent's employment specialist, Aramis Brown, appeared at the hearing without counsel.

Brown first testified that claimant was terminated for accessing the client's computer for flight information, which violated respondent's rules and regulations. The ALJ asked claimant the following series of questions:

ALJ: They say you used a client computer.
Claimant: Yes.
ALJ: Is that true?
Claimant: Yes, it is.
ALJ: Why would you do that?
Claimant: I used the client computer to help a passenger out. I—
ALJ: Was that your job?
Claimant: To help the passengers, yes.
ALJ: And so you're saying as part of your job, you would normally access the computer?

* * *

Claimant: Yes, I do.
ALJ: That would be normal for you to do?
Claimant: No.
ALJ: So why did you do something abnormal, if you see my problem?
Claimant: I did it to assist a passenger. That was the closest thing—
ALJ: Is there anything in the policy that says it's okay to violate these rules so long as you're assisting a passenger?
Claimant: No.

* * *

ALJ: And you admit it was in flight information.
Claimant: It was—yes, flight information.

Claimant further testified that she did not believe it was “a problem” to check on the departures and arrivals to help a passenger, and indicated that she had done so before this incident. The passenger could have found the same information on public boards, but the nearest board was down the hall.

The ALJ affirmed the agency's determination to deny unemployment benefits. In his reasoning and conclusions, the ALJ sets forth the following facts not in dispute:

Both parties agree that there was a policy that indicated employees of [respondent] could not access or use the client's equipment.
The Claimant was aware of that policy, but had disregarded it on some occasions in the past.
The Claimant never received any instruction from management or any approval of her accessing flight data information on the client's computer.
The Claimant acknowledged the use on January 27, 2011....

The ALJ also found that claimant accessed the computer to assist a passenger with flight arrivals and departures. The ALJ ruled that the employer met its burden of proof in establishing that claimant was discharged for reasons “which would constitute behavior beneath the standard the Employer had reason to expect of its employee.”

Claimant appealed the ALJ's decision, arguing that her conduct did not rise to the level of disqualifying misconduct. The MCAC issued a decision affirming the ALJ's decision and ruled that the decision was in conformity with the facts as developed at the hearing and the ALJ properly applied the law to the facts.

Claimant then filed an appeal in the circuit court, arguing that her conduct did not rise to the level of disqualifying misconduct given that she was not acting against her employer's best interests and her behavior could be considered no more than an error in judgment. Respondent replied that claimant acknowledged that she violated a known rule that prohibited security officers from using the computer, and that the earlier decisions were supported by competent, material, and substantial evidence on the whole record. Following a hearing, the circuit court reversed the MCAC's decision, stating:

Misconduct is limited to conduct evincing such willful or wanton disregard of an employee—employer's interest and is found in deliberate violations or disregards of standards of behavior which the employer has the right to expect of his employee. Or the carelessness or negligence in such a degree or occurrence as to manifest equal culpability.
Wrongful intent or evil design or to show an intentional and substantial disregard to the employer's interest or of the employee's duties and obligations to the employer.
On the other hand, mere insufficiency, unsatisfactory conduct, failure in good performance as a result of inability or incapacity, inadvertence or ordinary negligence in isolated incidents or good faith errors in judgment or discretion are also not to be deemed misconduct within the meaning of the statute.
I mean, that's what we have here. There's a woman ... [c]onflicted with ... two policy situations. You know, am I going to help somebody, some customer for the benefit of the company or I'm going to look in this computer and [sic] I'm told not to do? You sacrifice and she loses her job.
[Counsel for Respondent ]: If I may respond to that, I would be happy to offer a sentence or two.
The Court: No. That's good enough. I've heard enough. So I'm going to reverse the decision. I'm going to—I think this is a—it fits under the latter of negligence as opposed to intentional negligence.[ 2 ]

The circuit court then entered an order reversing the MCAC [f]or the reasons stated on the record.” Respondent's application for leave to appeal followed and was granted by this Court.

II
A

The Michigan Employment Security Act (MESA) governs unemployment benefits. The purpose of the act is to “provide benefits for periods of unemployment ... [to] persons unemployed through no fault of their own [.] MCL 421.2(1). Under the MESA, [a]n individual is disqualified from receiving unemployment benefits if he or she ... [w]as ... discharged for misconduct connected with the individual's work....” MCL 421.29(1)(b). The employer bears the burden of proving misconduct. Korzowski v. Pollack Indus., 213 Mich.App. 223, 229, 539 N.W.2d 741 (1995).

In Carter v. Employment Security Comm., 364 Mich. 538, 541, 111 N.W.2d 817 (1961), the Michigan Supreme Court adopted the following definition of “misconduct” (which was cited by the circuit court below):

[C]onduct evincing such wilful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or 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 his employer.” [Id. (citation omitted).]

The Supreme Court's description of conduct that is not misconduct was also cited by the circuit court below:

“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.” [Id. ]
Const. 1963, art. 6, § 28 provides, in pertinent part:
All final decisions, findings, rulings and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights or licenses, shall be subject to direct review by the courts as provided by law. This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record. [Emphasis added.]

Similarly, MCL 421.38(1) provides:

The circuit court ... may review...

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