Peak v. Com., Unemployment Compensation Bd. of Review

• Decision Date: 12 December 1985
• Citation: 501 A.2d 1383,509 Pa. 267
• Parties: Walter PEAK, Jr., Appellant, v. COMMONWEALTH of Pennsylvania, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Appellee. 45 W.D. 1984.
• Court: Pennsylvania Supreme Court

Page 1383

501 A.2d 1383

509 Pa. 267

Walter PEAK, Jr., Appellant, v. COMMONWEALTH of Pennsylvania, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Appellee.

45 W.D. 1984.

Supreme Court of Pennsylvania.

Argued March 6, 1985.

Decided Dec. 12, 1985.

John Stember, Frank J. Piatek, Neighborhood Legal Services, Pittsburgh, for appellant.

Richard L. Cole, Jr., Dept. of Labor & Industry, Unemployment Compensation Bd., Chief Counsel, Charles G. Hasson, Acting Deputy Chief Counsel, Richard F. Faux, Associate Counsel, Barry M. Hartman, Chief Counsel, Harrisburg, for appellee.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ.

OPINION OF THE COURT

HUTCHINSON, Justice.

This is an unemployment compensation claimant's appeal by allowance of a Commonwealth Court decision affirming the Unemployment Compensation Board's denial of benefits. Reversing a referee's decision for appellant, Commonwealth Court and the Board held appellant's employer had met its burden of showing willful misconduct under Section 402(e) of our Unemployment Compensation Law, Act of December 5, 1936, Second Ex. Session, P.L. (1937) 2897, as amended, 43 P.S. § 802(e), which precludes benefits.

Appellant contends the referee's award of benefits was based on resolution of a question of credibility in his favor and that Mr. Justice Larsen's opinion ¹ in Treon v Unemployment Compensation Board of Review, 499 Pa. 455, 453 A.2d 960 (1982), requires appellee Board to defer to its referees' credibility determinations in resolving questions of primary fact or at least to explain why it refused to adopt them. Appellant generalizes this contention by arguing that a factual finding by an administrative agency is not supported by substantial evidence on the whole record if that finding of fact depends on evidence discredited by the referee who conducted the hearing. He contends an administrative decision based on such a finding is arbitrary governmental action in violation of due process.

We reject these arguments and affirm Commonwealth Court. Treon involved the Board's rejection of a referee's finding based on uncontradicted evidence. Here, the evidence of appellant's misconduct was conflicting. Appellant's more general argument disguises an attack on the settled interpretation of Section 504 of the Act, as amended by the Act of December 5, 1974, P.L. 771, § 10, 43 P.S. § 824 (Supp.1985), which we have consistently held makes the Board the ultimate finder of fact with power to substitute its judgment for that of its referees on disputed facts. Without a legislative change in this section of the law, we are not inclined to disturb its settled meaning. ² Appellant's related due process argument resolves itself into the proposition that the legislature can constitutionally entrust an administrative power to find facts resolving conflicting evidence on grounds of credibility only to the board or official who conducts the hearing at which the record is made, a proposition we cannot endorse.

We accept the statement of facts in appellant's brief, which follows:

Walter Peak [appellant] worked as a warehouseman for I. Samuels and Sons in New Castle, Pennsylvania, from 1980 until August, 1982, when he was discharged for allegedly violating an employer rule. The [appellant] filed an application for Unemployment Benefits which was denied by the local office of Employment Services (OES) under Section 402(e) of the Unemployment Compensation Law (Act). Mr. Peak filed an appeal and a hearing was held before Referee Paul Sneed at which the employer, [appellant] and several witnesses testified.

Most of the facts in this case are not in dispute. The employer permitted Peak a one hour lunch break which [appellant] could take at his discretion. (NT p. 10) In November or December, 1981, Peak and Russell Hedland, a co-worker went to lunch together leaving an inexperienced employee at the warehouse. (NT p. 27) After learning of this, the employer instructed Peak and Hedland not to leave the warehouse unless there was an experienced employee available to watch it. (NT pp. 28, 35) Four months later, on March 17, 1982, Peak and Hedland again went to lunch together. (NT p. 26) However, this time an experienced warehouseman, Mr. Malizia, and a new employee remained on duty. (NT p. 18) Unbeknownst to [appellant], Malizia had health problems and, according to the employer, had been given permission by the employer to go home at any time, though he did not leave on March 17, 1982. (NT p. 20) When the employer learned that Peak and Hedland had gone to lunch together, he fired both of them. (NT p. 12)

Only a single fact was in dispute before the Referee: the nature of the employer's rule about lunch. The [appellant] and Hedland testified that Samuels had only prohibited them from leaving the warehouse together when there were no experienced employees on duty. (NT pp. 28, 35) Since Malizia, who the employer concedes is an experienced employee, was at work on the day in question Peak and Hedland believed they were free to go to lunch together. The employer, on the other hand, contends that he told Peak and Hedland many times that when one went out to lunch, the other must remained behind. (NT p. 8) The employer testified that he feared that Malizia's health problems might cause him to leave work and, if Peak or Hedland were not present, there would be no employees capable of managing the warehouse. (NT p. 22)

Appellant's Brief at 3-4 (footnotes omitted).

On these facts, the referee found:

There was a conflict in testimony between [Hedland] and employer concerning whether the employer had specifically instructed [Hedland] not to take his lunch break at the same time as Mr. Peak or whether he had merely instructed [Hedland] not to leave the warehouse uncovered during the lunch hour. The Referee finds that [Hedland's] interpretation of the employer's instruction was reasonable....

Referee's Decision at 2.

The Board reversed, finding:

Claimant was discharged for violating a direct order from his employer that he should not take a lunch break at the same time as another employe....

Unemployment Compensation Board of Review Decision at 2.

In Treon, we held that the Board acted arbitrarily and capriciously in ignoring a referee's finding that a bricklayer failed to accept his employer's offer of work for the duration of a construction project because the work was an excessive commuting distance from his home. The Board accepted three of the referee's findings but ignored his finding that distance from home and travel expense compared with the rate of pay and the duration and uncertainty of steady employment motivated the claimant to refuse the job he was offered. Nevertheless, both the Board and the referee determined that these reasons were not causes of a necessitous and compelling nature. We reversed, holding that, in the absence of proof that construction workers customarily moved about on such jobs, the uncertainty of steady work coupled with the expenses of traveling and staying within a reasonable commuting distance of the job site, were "cause[s] of a necessitous and compelling nature" which justified that claimant's refusal under the language of that section of the Act. 43 P.S. § 802(b) (Supp.1985).

In Treon, the evidence that claimant refused the temporary job he was offered, because of the expense and dislocation involved in working at such a distance from his home, was uncontradicted. On review, we held that the Board ignored this uncontradicted evidence and reached a conclusion that was not only unsupported by evidence on the whole record, but was also inconsistent with the statute.

Although the weight to be given the evidence and the credibility to be afforded the witnesses are within the province of the Board as finder of fact, ... such a body is not free to ignore the overwhelming evidence in favor of a contrary result not supported by the evidence.

Borello v. Commonwealth, Unemployment Compensation Board of Review, 490 Pa. 607, 618-19, 417 A.2d 205, 211 (1980) (emphasis added; citations omitted).

Treon is readily distinguishable from this case with its conflicting evidence. The Board's resolution of the conflicting evidence on this record compelled its result. Treon involved the additional issue of whether distance and expense of travel justify refusal of a job offer. That conclusion involved a determination of whether the work offered was "suitable work" under Section 4(t) of the Act, as amended, 43 P.S. § 753(t). We determined that work of uncertain duration far removed from home was, unsuitable absent evidence that such relocation was customary in the industry. Here, if the employer's testimony that he repeatedly told this claimant not to take lunch at the same time as one of his co-employees is believed, the conclusion, that he engaged in willful misconduct when he and the co-employee did go to lunch together, follows as a matter of course.

Thus, Treon, does not control the facts of this case and appellant's first argument fails.

Nevertheless, appellant claims, even if the Board remains free to reverse its referee's credibility determinations when the evidence is conflicting, its decision here cannot stand because Treon also requires the Board to set forth its reasons for doing so whenever it departs from a referee's findings of fact. To the extent Treon does impose such a requirement, its purpose is to ensure an adequate basis for judicial review. On this record, the Board's reason for reversing the referee is plain enough. Unlike the referee, it chose to believe the employer, not the employee. It disagreed with the referee's factual resolution of conflicting evidence, a power it has under Section 504 of the statute, as amended, 43 P.S. § 824 (Supp.1985).

We are not inclined to require a busy agency, whose swift disposition of the many cases before it is vital to the subsistence of our fellow citizens who suffer...