Hulse v. Job Service North Dakota

• Decision Date: 24 November 1992
• Docket Number: No. 920161,920161
• Citation: 492 N.W.2d 604
• Parties: Barry HULSE, Petitioner and Appellant, v. JOB SERVICE NORTH DAKOTA, Respondent and Appellee, and Dakota Boys Ranch Assn., Respondent. Civ.
• Court: North Dakota Supreme Court

Page 604

492 N.W.2d 604

Barry HULSE, Petitioner and Appellant, v. JOB SERVICE NORTH DAKOTA, Respondent and Appellee and Dakota Boys Ranch Assn., Respondent.

Civ. No. 920161.

Supreme Court of North Dakota.

Nov. 24, 1992.

Richard R. LeMay of Legal Assistance of North Dakota, Minot, for petitioner and appellant.

Douglas A. Bahr, Asst. Atty. Gen., Bismarck, for respondent and appellee.

LEVINE, Justice.

Barry Hulse appeals from a district court judgment affirming Job Service's decision denying him unemployment compensation benefits. We hold that his sotto voce utterance of an expletive did not constitute benefit-disqualifying "misconduct" and, therefore, reverse and remand.

Hulse was employed for approximately two-and-a-half years as a child care worker for Dakota Boys Ranch Association (Boys Ranch). On September 1, 1991, Hulse spent his day off working the shift of a cook who was on vacation. The shift went beyond schedule and Hulse, anxious to finish so that he could leave, was delayed because many of the evening's chores remained to be completed by the Boys Ranch residents. Hulse became irritated upon discovering that one of the residents, Smith [a pseudonym], was not cooperating with the other residents who were working in the dining room. Frustrated, Hulse went to the dining room, expressed to Smith his dissatisfaction with Smith's refusal to participate with the others and instructed Smith to cooperate.

While returning to the kitchen, Hulse, still upset with Smith, muttered to himself, "What a waste of human sperm!" Though audible, Hulse mumbled the remark under his breath and out of earshot of Smith, intending that it be heard by no one. Unexpectedly, however, Hulse's statement was overheard by another resident who was in the kitchen, which was around the corner from the area where Hulse had made the remark.

The resident, uncertain about whether he had correctly heard the remark and guessing it had been made in reference to Smith, pressed Hulse for a clarification. Hulse confirmed the resident's suspicions, confessing what he had said and about whom. Unfortunately, the resident then told Smith, who became very upset. After being told of Smith's anger, Hulse approached him to apologize. The apology was not well received. Smith had to be physically restrained from striking Hulse. Smith later reported the incident to a supervisor and also filed a complaint against Hulse.

As a result of the incident, Boys Ranch placed Hulse on a two-week, paid suspension effective September 5, 1991. A Boys Ranch official ultimately advised Hulse that he had the option of resigning by September 18, 1991, or being terminated. Hulse chose to resign.

Hulse applied for job insurance benefits with Job Service. A claims deputy held that Hulse was not entitled to benefits because he was discharged for reasons constituting misconduct under NDCC Sec. 52-06-02. Hulse appealed and a hearing was held before a Job Service appeals referee. The referee reversed the determination of the claims deputy, concluding that Hulse's remark "was an isolated case of negligence and may not be deemed as misconduct."

Boys Ranch then appealed to the Executive Director of Job Service. The Director reversed the referee's decision, concluding on review of the record that:

"The Dakota Boy's [sic ] Ranch Association is a licensed child care facility. In this setting, the employer has a right to expect their workers to exhibit a behavior which would not be detrimental to the emotions of children in the facility who are in their care.

"[Hulse] admits that he made the remark about [Smith]. Although [he] was given an opportunity to resign, it was brought about because of an act of misconduct by clearly violating [Boys Ranch] personnel policy standards." ¹

Having exhausted his administrative remedies, Hulse appealed to the district court. The district court summarily affirmed Job Service's final decision denying benefits.

Hulse now appeals to this court, arguing that the facts and circumstances of this case do not support a finding that his isolated statement constitutes benefit-disqualifying misconduct under NDCC Sec. 52-06-02. Job Service, asserting otherwise, claims applicable case law requires that we affirm the denial of unemployment compensation benefits. For the reasons explained below, we agree with Hulse.

"[W]hen an administrative agency decision is appealed to this court from a district court, we review the final decision of the agency and not that of the district court." Hins v. Lucas Western, 484 N.W.2d 491, 494 (N.D.1992). Section 28-32-19, NDCC, governs the scope of our review of administrative agency decisions. The determination of whether a person's behavior constitutes misconduct is a mixed question of fact and law. Hins, 484 N.W.2d at 495; Marion v. Job Service North Dakota, 470 N.W.2d 609, 611-12 (N.D.1991). Our review of a mixed question of fact and law involves a determination of whether the evidence supports the agency's findings of fact and, in turn, whether those findings of fact sustain the agency's conclusion regarding misconduct. Marion, supra; Medcenter One, Inc. v. Job Service North Dakota, 410 N.W.2d 521, 524 (N.D.1987). If confronted with disputed facts, we defer to the agency's factual conclusions and consider only whether a reasoning mind could have reasonably determined that the factual conclusions were proved by a preponderance of the evidence. Marion, supra. But, where, as here, the agency's conclusion of law regarding misconduct is based on undisputed facts and contradictory inferences cannot reasonably be drawn from the undisputed facts, we review that conclusion anew. Id. Thus, we review the agency's legal conclusion anew, and the dispositive issue is whether Hulse's remark constitutes disqualifying misconduct as a matter of law.

NDCC Sec. 52-06-02(2) declares that a person who has been discharged for misconduct in connection with that person's latest employment is disqualified from receiving unemployment compensation benefits. The term "misconduct" is not statutorily defined, but we have maintained for nearly a decade that misconduct, for purposes of NDCC Sec. 52-06-02(2), is:

"[C]onduct evincing such willful 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. 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." Perske v. Job Service North Dakota, 336 N.W.2d 146, 148-49 (N.D.1983) [quoting Boynton Cab Co. v. Neubeck, 237 Wis. 249, 296 N.W. 636 (1941) ].

Subsection two, with its common law definition of misconduct, is, like each of the other benefit-disqualifying provisions of NDCC Sec. 52-06-02, an exception to this state's remedial unemployment compensation laws. Cf. Newland v. Job Service North Dakota, 460 N.W.2d 118, 121 (N.D.1990). See also Dalton Brick & Tile Co. v. Huiet, 102 Ga.App. 221, 115 S.E.2d 748, 750 (1960) ["[P]rovisions ... providing for disqualification of benefits constitute a list of exceptions to the general grant of such benefits."]. Because benefit-disqualifying provisions are exceptions, courts generally construe them narrowly or strictly. See Warmington v. Employment Security Dept., 12 Wash.App. 364, 529 P.2d 1142, 1144 (1974); Johnson v. Ford Motor Co., 289 Minn. 388, 184 N.W.2d 786, 791 (1971); Adelsman v. Northwest Airlines, Inc., 267 Minn. 116, 125 N.W.2d 444, 449 (1963) [quoting Nordling v. Ford Motor Co., 231 Minn. 68, 76, 42 N.W.2d 576, 581 (1950) ]; Pickman v. Weltmer, 191 Kan. 543, 382 P.2d 298, 304 (1963); Huiet, supra; Cf. Rocky Mountain Oil & Gas Ass'n v. Conrad, 405 N.W.2d 279, 283 (N.D.1987); Minn. Life & Health Ins. Guaranty Ass'n v. Dept. of Commerce, 400 N.W.2d 769, 773 (Minn.App.1987); In re Oakgrove, 371 N.W.2d 69, 71 (Minn.App.1985); 3 N. Singer, Sutherland Statutory Construction, Sec. 60.01 (5th Ed.1992) ["[E]xceptions to remedial legislation are strictly construed."].

However, exceptions must also be construed sensibly because we are required to interpret provisions of the North Dakota Century Code with a view to effecting their objectives. NDCC Sec. 1-02-01; Sutherland Stat.Constr. Sec. 60.01. In the context of our unemployment compensation laws, we must effectuate dual objectives. The primary objective, declared at NDCC Sec. 52-01-05, ² is to "soften the harsh impact of involuntary unemployment." Newland, 460 N.W.2d at 121. We achieve that objective by liberally construing the beneficent provisions of our unemployment compensation laws in favor of the employee. Id.

The primary objective is tempered by a competing objective, declared at section 52-06-02, of protecting employers "from quits that have nothing to do with the employer or the employment," and from dismissals based upon employee "misconduct." Id. Thus, while "the Legislature, in enunciating a public policy to provide unemployment compensation, intended to strike a balance between the rights" of the employee and the rights of the employer, that balance should "favor [ ] the employee." Id. We achieve that goal by narrowly, but reasonably, construing the disqualifying provisions of section 52-06-02. All that really means is that an employee should be disqualified for misconduct only when the facts and circumstances of a case "come within the clear meaning of the words used in the provisions" of section 52-06-02, Pickman, 382 P.2d at 304, and,...