Nelson v. Employment Sec. Dept.

• Decision Date: 22 April 1982
• Docket Number: No. 4202-III-2,4202-III-2
• Citation: 31 Wn.App. 621,644 P.2d 145
• Parties: Eleanor M. NELSON, Respondent, v. EMPLOYMENT SECURITY DEPARTMENT of the State of Washington, Appellant.
• Court: Washington Court of Appeals

Page 621

31 Wn.App. 621

644 P.2d 145

Eleanor M. NELSON, Respondent, v. EMPLOYMENT SECURITY DEPARTMENT of the State of Washington, Appellant.

No. 4202-III-2.

Court of Appeals of Washington, Division 3,

Panel One.

April 22, 1982.

Rehearing Denied May 12, 1982.

Review Granted July 20, 1982.

Kenneth O. Eikenberry, Atty. Gen., John M. Sells, Asst. Atty. Gen., Olympia, for appellant.

Robert H. Lamp, Witherspoon, Kelley, Davenport & Toole, Spokane, for defendant Cowles Publishing.

Norman R. McNulty, Jr., Spokane Legal Services, Spokane, for respondent.

MUNSON, Judge.

The Employment Security Department appeals a decision of the Superior Court awarding unemployment compensation benefits to Eleanor Nelson. We reverse.

The facts are undisputed. Ms. Nelson was employed for 3 years as a cashier by the Cowles Publishing Company (Cowles) in a position where she was paid $163 per week. On June 26, 1979, she notified her supervisor she had recently been arrested for shoplifting. The record does not indicate if she was advised this might result in her termination. She went to court unrepresented, and after observing those who preceded her before the bench, she entered a plea of guilty and received a fine, suspended jail sentence and a short deferred sentence. She returned to Cowles and advised her supervisor of her plea of guilty. Shortly thereafter, she was discharged. The basis for the discharge was the employer's concern about her trustworthiness in handling cash and because the conviction would have affected Ms. Nelson's relationship with the other employees, making her job impossible. Although one of several small items in the criminal court section of the newspaper identified Ms. Nelson as having pleaded guilty, nothing else occurred to cause her notoriety. There was nothing in her attire during her appearance before the court or at the time of the incident itself identifying her employer. The shoplifting incident occurred off her employer's premises after working hours.

The issue is not whether Ms. Nelson's guilty plea justified her discharge but whether it constituted misconduct sufficiently connected with her work to justify denial of unemployment compensation benefits. RCW 50.20.060 states:

An individual shall be disqualified from benefits beginning with the first day of the calendar week in which he or she has been discharged or suspended for misconduct connected with his or her work and thereafter until he or she has obtained work and earned wages of not less than the suspended weekly benefit amount in each of five calendar weeks.

(Italics ours.) Ms. Nelson was initially denied benefits; in a determination notice, the Department representative stated:

Although your actions were not directly related to your work, an employer has the right to expect certain conduct of his employees while they are not on the job. If an employee engages in acts off the job which create a direct, adverse reflection on the employer, misconduct connected with work may be found if the effect on the employer is great enough.

Ms. Nelson appealed to the Employment Security Department Appeal Tribunal, which held in part 2. ... The mere fact that an employer has deemed it expedient, desirable, or necessary to discharge an employee does not conclusively prove that the actions or inactions of the employee which led to the discharge constituted willful or wanton misconduct. Misconduct must be established by the preponderance of the evidence and the party alleging the existence of misconduct has the duty of establishing same.

3. Applying the above to the case at hand, the Tribunal first notes that whatever misconduct the claimant may have engaged in was not misconduct connected with her work. In no manner was the interested employer implicated in or by claimant's behavior. There is nothing in the record to indicate that claimant was guilty of any willful or wanton disregard of her employer's best interests. The situation more properly appears to be one wherein claimant's behavior reflects upon her employability, but not on her employer. Separation on such account is for a nondisqualifying reason.

Cowles then appealed to the Commissioner of the Employment Security Department, who denied benefits and set aside the decision of the Appeal Tribunal. The Commissioner's decision stated in part:

However, contrary to the Appeal Tribunal's Conclusion No. 3, the Commissioner has decided in a strikingly similar case involving a bank teller, that the individual was discharged for misconduct. Summarized the Commissioner:

".... it seems obvious that if the bank cannot have complete confidence and trust in the claimant, it cannot entrust her with the job of teller since that job involves handling funds not belonging to her. Her admission of attempted theft must have a direct effect on the degree of confidence and trust the bank can place in her, and in these circumstances can only result in relieving the claimant of her duties. Attempted theft is 'misconduct,' and on the facts shown is directly "connected with the work. " In re Tegethoff, Comm.Dec. 1122 (1974)

The undersigned concludes from the foregoing that the claimant herein was discharged for misconduct connected with the work, and is subject to the disqualification ...

In re Tegethoff, Comm'r Dec. 1122 (1974) involved a bank teller who stole an 89 cent item from a department store. The Commissioner in Tegethoff appears to hold, as a matter of law, no one convicted of a crime may be allowed to hold a job which involves handling money. We cannot accept this as an absolute. However, we do agree that if properly advanced, the problem of trust by the employer might justify withholding benefits, as we discuss below.

On appeal to the Superior Court, the court concluded:

In this case the record makes it clear that the act of shoplifting, as established by the plea of guilty, was not connected with the petitioner's work. Therefore, the denial of benefits by the Commissioner in his decision reversing the Appeal Tribunal was clearly erroneous and was an error of law.

Before reaching the primary issue, we must determine the appropriate standard of review. The State urges that it is the "clearly erroneous" or "arbitrary and capricious" standard. However, we agree with Ms. Nelson that it is the "error of law" standard because, as noted in Daily Herald Co. v. Department of Empl. Sec., 91 Wash.2d 559, 561, 588 P.2d 1157 (1979):

A mixed question of law and fact exists in " '(c)ases where there is dispute both as to the propriety of the inferences drawn by the agency from the raw facts and as to the meaning of the statutory term ...' " Leschi Improvement Council v. State Highway Comm'n, 84 Wash.2d 271, 283, 525 P.2d 774 (1974).

Here the facts are undisputed. The dispute rests with the interpretation of the words, "misconduct connected with his or her work ...", RCW 50.20.060, and the application of the undisputed raw facts to the law. Accordingly, we shall review the record de novo to determine whether the Commissioner properly denied benefits.

The key term "misconduct" has been defined in Willard v. Employment Sec. Dep't, 10 Wash.App. 437, 444, 517 P.2d 973 (1974), quoting Boynton Cab Co. v. Neubeck, 237 Wis. 249, 259, 296 N.W. 636, 640 (1941), as (T)he intended meaning of the term "misconduct," ... is limited to conduct 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. 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.

Both Boynton and Willard involved misconduct during working hours, on the job premises. Here we are concerned with off-duty, off-premises misconduct. So the precise issue is: if there was misconduct, was the "misconduct connected with ... her work ..." If so, Ms. Nelson will be denied unemployment compensation benefits.

The basic purpose of the Unemployment Compensation Act is to alleviate the harms of unemployment caused by no fault of the employee. Willard v. Employment Sec. Dep't, supra. Thus, the emphasis in determining whether misconduct has occurred is on the volitional element of the conduct, i.e., whether the employee acted knowing his conduct might result in dismissal. As stated in Boynton Cab Co. v. Neubeck, supra at 296 N.W. 640:

If mere mistakes, errors in judgment or in the exercise of discretion, minor and but casual or unintentional carelessness or negligence, and similar minor peccadilloes must be considered to be within the term "misconduct," and no such element as wantonness, culpability or wilfulness with wrongful intent or evil...