Oxley v. Medicine Rock Specialties, Inc.

• Decision Date: 24 November 2003
• Docket Number: No. 29446.,29446.
• Citation: 139 Idaho 476,80 P.3d 1077
• Parties: Anna OXLEY, Claimant, v. MEDICINE ROCK SPECIALTIES, INC., Employer-Appellant, and State of Idaho, Department of Labor, Respondent.
• Court: Idaho Supreme Court

80 P.3d 1077

139 Idaho 476

Anna OXLEY, Claimant, v. MEDICINE ROCK SPECIALTIES, INC., Employer-Appellant, and State of Idaho, Department of Labor, Respondent.

No. 29446.

Supreme Court of Idaho, Pocatello, September 2003 Term.

November 24, 2003.

J. Michael Wheiler, Idaho Falls, for appellant.

Hon. Lawrence G. Wasden, Attorney General, Boise, for respondent.

TROUT, Chief Justice.

I. FACTUAL AND PROCEDURAL BACKGROUND

Medicine Rock Specialties, Inc., (Medicine Rock) is a small gift manufacturing business in Mackay, Idaho. The business manufactures nightlights and decorative items out of cut and painted rock. Claimant Anna Oxley (Oxley) began work at Medicine Rock in September 1999. In August 2001, Len Mazon (Mazon) purchased the business and retained Oxley as an employee. At that time, only Oxley could run the pad printer, which made her continued employment vital. Mazon, new to manufacturing, relied on Oxley to train him.

Shortly after purchasing Medicine Rock, Mazon experienced difficulties with Oxley. According to Mazon, one employee quit, citing prolonged verbal abuse from Oxley. Another employee threatened to quit, but Mazon persuaded the employee to stay. A third employee complained Oxley yelled at coworkers and treated them as though they were stupid. Mrs. Mazon found Oxley's behavior controlling and demeaning. Employees constantly complained Oxley behaved in a negative and caustic manner. Oxley frequently disparaged Mazon's business decisions in the community and encouraged one employee to find another job. Oxley also demanded a raise, implying she would otherwise quit.

Oxley denies she disparaged Mazon in the community, that she implied she would quit without a raise, that she ridiculed and yelled at other employees, or that she encouraged an employee to find another job. Oxley maintains she worked alone on the pad printer, but trained employees as Mazon requested.

Despite the complaints, Mazon did not meet formally with Oxley to discuss her behavior because of his busy work schedule and out of fear she would quit, leaving Medicine Rock without a trained employee. Mazon only made casual comments about being kind and following the golden rule. However, Mazon asserts he desired to terminate Oxley's employment but chose to wait until another trained employee became available.

Employees frequently purchased products from Medicine Rock by earmarking inventory and then paying later. The employees noted payments in an inventory ledger. In January and February of 2002, Mazon was told by two employees that Oxley had earmarked inventory and removed the items without paying. According to the employees, Oxley took the items for her sister, commenting the items were "employee benefits" for which she did not have to pay. The employees claim they never saw the products returned to inventory.

Mazon did not investigate the accusations until May 2002. Mazon checked the inventory ledger and discovered no entries indicating Oxley paid for any items. On May 20, 2002, Mazon formally confronted Oxley with the theft accusations, which Oxley denied but offered no explanation and claimed she felt insulted. Later, Oxley claimed that she had taken some items to Jackpot, Nevada, without telling Mazon, to show a buyer. Oxley insists she returned the items and they were subsequently shipped out.

From June 3 through June 5, 2002, Oxley failed to log her production as required. Oxley maintained that Mrs. Mazon did not prepare a log calendar, but also claimed she logged her production on a memo pad and did not give anyone the log because Mrs. Mazon did not require or request her to do so.

On June 6, 2002, Mazon asked Oxley to apply polymer rather than operate the pad printer, her usual task, so a new employee could practice running the pad printer. Oxley refused the assignment. Mazon then asked Oxley to take over touch up painting; both tasks which Mazon believed Oxley had previously performed. Oxley told Mazon her hands shook too badly to perform touch up painting, although she had never mentioned this problem before.¹ Mazon then asked Oxley to paint binding agent on rocks. Mazon claims Oxley accepted the task and performed without a shaking hand, but did a poor job.

At the close of business, Mazon met formally with Oxley. Oxley demanded that Mazon give her the next day, Friday, June 7, off. Mazon gave Oxley the day off and told Oxley he expected her to work Monday, June 10, and Tuesday, June 11. Mazon also approved Oxley's requested vacation time from June 12 through July 2. Oxley agreed she would work June 10 and June 11. Mazon then advised Oxley that her behavior during the shift was unacceptable, that she must perform assigned tasks, and that running the pad printer was not her only duty and she must perform a variety of tasks. Mazon asked Oxley to sign a memo agreeing he had informed her of her duties and advised her of an acceptable level of behavior. According to Mazon, Oxley loudly announced she would not sign and left the office. Oxley claims she felt insulted and demeaned and claims Mazon read the memo aloud in such a manner that another employee overheard.

The following day, June 7, Oxley went to a physician and obtained a note releasing her from work. The doctor did not indicate a specific medical condition, but Oxley wrote on the release that her eyes burned due to the previous day's work. Oxley did not mention to anyone her eyes burned on June 6.

Oxley did not report for work on June 10. Instead, she faxed Mazon a copy of the doctor's note at three o'clock in the afternoon. The same afternoon, Mazon sent Oxley a second written warning about her unacceptable job performance the previous week. Mazon listed the same instances of misconduct he discussed with Oxley on June 6. The letter did not mention Oxley's failure to come to work. Oxley left town on vacation June 11.

During Oxley's vacation, Mazon completed his investigation into the theft allegations by obtaining a statement from the accusing employees, and concluded Oxley had stolen inventory. Mazon decided to discharge Oxley and sent her a termination letter on June 20, 2002. The letter noted the same instances of misconduct as the June 6 and June 10 notifications and, in addition, Mazon cited stealing inventory as a reason for discharge. Oxley received the June 10 warning and the termination letter when she returned from vacation in July.

Oxley applied for unemployment benefits July 12, 2002. On July 30, 2002, the Idaho Department of Labor (IDL) granted Oxley unemployment benefits. Medicine Rock filed a protest and an Appeals Examiner scheduled a hearing. At the hearing both parties called witnesses and presented evidence. The Examiner concluded Mazon terminated Oxley for "other than employment related misconduct," making Oxley eligible for unemployment benefits under Idaho Code § 72-1366(5).

Medicine Rock appealed the Examiner's decision to the Industrial Commission (Commission). The Commission reviewed the record de novo and issued a Decision and Order affirming the Examiner's decision. Medicine Rock moved for reconsideration and the Commission denied the motion. Medicine Rock appeals.

II. STANDARD OF REVIEW

When this Court reviews a Commission decision, it exercises free review over questions of law, but reviews questions of fact only to determine whether substantial and competent evidence supports the Commission's findings. Hughen v. Highland Estates, 137 Idaho 349, 350, 48 P.3d 1238, 1240 (2002) (citing Ogden v. Thompson, 128 Idaho 87, 88, 910 P.2d 759, 760 (1996)). Substantial and competent evidence is "relevant evidence which a reasonable mind might accept to support a conclusion." Folks v. Moscow School Dist. No. 281, 129 Idaho 833, 836, 933 P.2d 642, 645 (1997) (citing Laundry v. Franciscan Health Care Ctr., 125 Idaho 279, 282, 869 P.2d 1374, 1377 (1994)); Boise Orthopedic Clinic v. Idaho State Ins. Fund, 128 Idaho 161, 164, 911 P.2d 754, 757 (1996). The Commission's conclusions regarding the credibility and weight of evidence will not be disturbed unless the conclusions are clearly erroneous. Zapata v. J.R. Simplot Co., 132 Idaho 513, 515, 975 P.2d 1178, 1180 (1999). Finally, in reviewing a decision of the Commission, this Court "views all the facts and inferences in the light most favorable to the party who prevailed before the Commission." Boley v. State, 130 Idaho 278, 280, 939 P.2d 854, 856 (1997) (citing Smith v. J.B. Parson Co., 127 Idaho 937, 908 P.2d 1244 (1996)).

III. DISCUSSION

While Medicine Rock identifies four issues on appeal, the principal issue is whether the Commission erred in determining that Oxley qualified for unemployment benefits because Medicine Rock discharged Oxley for reasons other than employment related misconduct.

Under Idaho Code § 72-1366(5), a claimant is eligible for unemployment benefits if "the claimant's unemployment is not due to the fact that ... he was discharged for misconduct in connection with his employment." The issue is not whether the employer had reasonable grounds for discharge, but whether the reasons constitute employment related misconduct. Beaty v. City of Idaho Falls, 110 Idaho 891, 719 P.2d 1151 (1986). This Court has identified three types of conduct which would fit within the definition of "misconduct" as used in I.C. § 72-1366(5): 1) a willful, intentional disregard of the employer's interest; 2) a deliberate violation of the employer's rules; or 3) a disregard of standards of behavior which the employer has a right to expect of his employees. Campbell v. Bonneville County Brd. of Comm'rs, 126 Idaho 222, 225, 880 P.2d 252, 255 (1994) (citing Puckett v. Idaho Department of Corrections, 107 Idaho 1022, 695 P.2d 407 (1985)). The tests for all three types of misconduct are factual determinations. Campbell, 126 Idaho at 225, 880 P.2d at 255.

A. Standards of behavior

Under a "standards of behavior" analysis, Medicine Rock must demonstrate that: 1) Oxley's conduct fell below the...