Smith v. Employment Security Dept.

• Citation: 226 P.3d 263,155 Wn. App. 24
• Decision Date: 09 March 2010
• Docket Number: No. 37492-7-II.,37492-7-II.
• Court: Court of Appeals of Washington
• Parties: David N. SMITH, Appellant, v. EMPLOYMENT SECURITY DEPARTMENT, Respondent.

226 P.3d 263

155 Wn. App. 24

David N. SMITH, Appellant, v. EMPLOYMENT SECURITY DEPARTMENT, Respondent.

No. 37492-7-II.

Court of Appeals of Washington, Division 2.

March 9, 2010.

Clayton Ernest Longacre, Longacre Law Inc, Port Orchard, WA, for Appellant.

Jennifer Steele, Attorney General's Office, Pedro I.V. Bernal, Attorney General of WA-Div of Lic and Ad, Seattle, WA, Jacquelyn Moore Aufderheide, Kitsap Co Pros Office, Port Orchard, WA, for Respondent.

QUINN-BRINTNALL, J.

¶ 1 David Smith seeks judicial review of a decision by the Commissioner of the Employment Security Department (ESD) denying his application for unemployment benefits because of his disqualifying misconduct. The Commissioner found that Smith committed misconduct by secretly recording his conversations with co-workers and members of the public without their knowledge or consent in violation of Kitsap County policy and state law. Additionally, the Commissioner found that Smith committed misconduct by removing unauthorized software from his county-owned laptop computer after his supervisor instructed him to return the laptop without deleting anything on it. Because substantial evidence supports the Commissioner's decision that Smith committed disqualifying misconduct and the Commissioner correctly applied the law, we deny Smith's petition and affirm the agency order denying him unemployment benefits.

FACTS

¶ 2 Smith worked for the Kitsap County Department of Public Works from May 1990 until his termination on April 19, 2006. At the time of Smith's termination, he was working as the Senior Program Manager for the Transportation Traffic Division. Smith began secretly recording conversations with co-workers and members of the public in the fall of 2001 until November 2004. Smith asserts that he began making these recordings because he feared retaliatory harassment by his supervisors for his refusal to file a false affidavit on behalf of the county and for supporting an employee in her sexual harassment claim. Smith also claimed that one of his supervisors threatened him with physical harm. He did not report these alleged threats to the police.

¶ 3 Smith made his recordings on an unsophisticated digital voice recorder. Smith would place the recorder in his pocket and leave it on "until the time ran out," at which point he would "either shut it off and start over, or if there was something [recorded] that [he] thought was interesting[,] take it home and download it onto [his county-owned] computer." Administrative Record (AR) at 144. Smith's recording system did not allow him to target any specific conversations and resulted in his surreptitious recording of random conversations with various individuals, including co-workers and members of the public. Smith did not limit his recordings to conversations that took place in his office. He surreptitiously recorded conversations that occurred in county-owned vehicles, local businesses, and inside Kitsap County residents' homes.

¶ 4 On February 9, 2004, Smith filed an administrative whistleblower complaint with Jacquelyn Aufderheide, Civil Deputy Prosecutor for Public Works. On February 11, 2004, Smith notified Aufderheide that he had recordings containing incriminating statements by his supervisors.

¶ 5 In March 2006, Smith filed an Equal Employment Opportunity Commission (EEOC) complaint that alleged he faced retaliation for supporting a female subordinate's sexual harassment claims. The county terminated Smith's employment five weeks after he filed the EEOC complaint.

¶ 6 On or about March 10, 2005, the Director of Public Works, Randy Casteel, instructed Smith to turn over his laptop to the county and to refrain from deleting anything on it because it was being subpoenaed by the prosecutor's office. The parties dispute the specifics of Casteel's instruction. ESD claims that Casteel told Smith not to remove "anything" from the computer; Smith claims that Casteel only told him not to remove any "files" from the computer. Smith did not immediately turn over the computer, which was located at his home. Before turning over the laptop, Smith removed an unauthorized program he had previously installed that allowed him to download and store his audio recordings. Smith claims that he removed the program because he owned it and he feared that the county would not return the computer to him. He did not inform his supervisor that he had removed the program.

Procedural Facts

¶ 7 On April 28, 2006, following his termination, Smith applied for unemployment benefits with ESD. On May 20, 2006, ESD approved Smith's application for benefits, finding that Smith did not engage in disqualifying misconduct. The county requested a hearing to contest ESD's determination and a hearing was held on September 19, 2006, before an administrative law judge (ALJ).

¶ 8 At the hearing, Smith testified that he was not aware of any county policy against recording without consent. Several witnesses also testified that they were not aware of a county policy prohibiting employees from secretly recording others without their consent. At the administrative hearing, Casteel conceded that the county did not have a specific policy that prohibited employees from recording others without their knowledge or consent but he testified that instructors covered the topic at a training seminar. Casteel testified that the training seminar covered the topic of recording conversations in a role-play exercise, after which trainers discussed the statutory requirement of obtaining consent before recording. Casteel also testified that Smith's personnel records show that he attended one of these training seminars, but Casteel admitted that he did not have personal knowledge of whether Smith was present for that portion of the training.

¶ 9 The ALJ affirmed ESD's decision, finding that Smith did not commit disqualifying misconduct and that he was eligible for unemployment benefits. The county filed a petition for review of the ALJ's determination with the ESD Commissioner. The Commissioner adopted the ALJ's findings of fact in part, made additional findings, and ultimately rejected the ALJ's decision, determining that Smith engaged in disqualifying misconduct. The Kitsap County Superior Court affirmed the Commissioner's order. Smith timely appeals.

ANALYSIS

Standard of Review

¶ 10 The Washington Administrative Procedure Act (APA), ch. 34.05 RCW, governs judicial review of a final decision by the ESD Commissioner. Verizon Nw., Inc. v. Employment Sec. Dep't, 164 Wash.2d 909, 915, 194 P.3d 255 (2008). We sit in the same position as the superior court and apply the APA standards directly to the administrative record. Verizon, 164 Wash.2d at 915, 194 P.3d 255. We review the decision of the Commissioner, not the underlying decision of the ALJ. Verizon, 164 Wash.2d at 915, 194 P.3d 255 (citing Tapper v. Employment Sec. Dep't, 122 Wash.2d 397, 405-06, 858 P.2d 494 (1993)).

¶ 11 We consider a Commissioner's decision to be prima facie correct and the "burden of demonstrating the invalidity of agency action is on the party asserting invalidity," here Smith. RCW 34.05.570(1)(a); Anderson v. Employment Sec. Dep't, 135 Wash.App. 887, 893, 146 P.3d 475 (2006). We may reverse the Commissioner's decision if the Commissioner based his decision on an error of law, if substantial evidence does not support the decision, or if the decision was arbitrary or capricious. RCW 34.05.570(3)(d), (e), (i).

¶ 12 We review questions of law de novo, giving substantial weight to the agency's interpretation of the statutes it administers. Everett Concrete Prods., Inc. v. Dep't of Labor & Indus., 109 Wash.2d 819, 823, 748 P.2d 1112 (1988). We review the Commissioner's findings of fact for substantial evidence in light of the whole record. RCW 34.05.570(3)(e); Lee's Drywall Co., Inc. v. Dep't of Labor & Indus., 141 Wash.App. 859, 864, 173 P.3d 934 (2007). Substantial evidence is evidence that would persuade a fair-minded person of the truth or correctness of the matter. King County v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 142 Wash.2d 543, 553, 14 P.3d 133 (2000). Whether an employee's behavior constitutes misconduct, warranting termination, is a mixed question of law and fact. Tapper, 122 Wash.2d at 402-03, 858 P.2d 494.

Failure to Assign Error to Findings of Fact

¶ 13 As an initial matter, we note that Smith assigned error to only one finding of fact, which he now concedes was correct. Additionally, Smith assigns error to the superior court's conclusions rather than the administrative agency's conclusions. Generally, we treat unchallenged findings of fact as verities on appeal and limit review to determining whether the findings support the conclusions. Fuller v. Employment Sec. Dep't, 52 Wash.App. 603, 605, 762 P.2d 367 (1988). But RAP 1.2(a) permits liberal interpretation of these rules and allows appellate review in spite of technical violations where proper assignment of error is lacking but the nature of the challenge is clear and the challenged findings are set forth in the party's brief. Fuller, 52 Wash.App. at 605, 762 P.2d 367 (citing Green River Cmty. Coll. Dist. 10 v. Higher Educ. Pers. Bd., 107 Wash.2d 427, 431, 730 P.2d 653 (1986)).

¶ 14 Here, we exercise our discretion to address Smith's challenges to the Commissioner's findings of fact because the nature of Smith's challenge is clear and because he discusses his contentions with specific findings of fact in the argument portion of his brief. See Daughtry v. Jet Aeration Co., 91 Wash.2d 704, 709-10, 592 P.2d 631 (1979) (Despite failure to strictly comply with RAP 10.3, appellate courts may consider merits of the challenge where the nature of the challenge is perfectly clear and the challenged finding is set forth in the appellate brief.); Hitchcock v. Dep't of Ret. Sys., 39 Wash.App. 67, 72 n. 3, 692 P.2d 834 (1984) (failure to designate a specific finding of fact as error in an appeal from agency...