Utah Paiute Tribal Hous. Auth. Inc. v. Dep't of Workforce Servs.

• Decision Date: 21 November 2019
• Docket Number: No. 20190164-CA,20190164-CA
• Citation: 454 P.3d 865
• Parties: UTAH PAIUTE TRIBAL HOUSING AUTHORITY INC., Petitioner, v. DEPARTMENT OF WORKFORCE SERVICES, WORKFORCE APPEALS BOARD, Respondent.
• Court: Utah Court of Appeals

454 P.3d 865

UTAH PAIUTE TRIBAL HOUSING AUTHORITY INC., Petitioner,

v.DEPARTMENT OF WORKFORCE SERVICES, WORKFORCE APPEALS BOARD, Respondent.

No. 20190164-CA

Court of Appeals of Utah.

Filed November 21, 2019

James W. Jensen, Cedar City, Attorney for Petitioner

Amanda B. McPeck, Attorney for Respondent

Judge Diana Hagen authored this Opinion, in which Judges Gregory K. Orme and David N. Mortensen concurred.

Opinion

HAGEN, Judge:

¶1 Utah Paiute Tribal Housing Authority Inc. (the Housing Authority) seeks judicial review of a Workforce Appeals Board (the Board) decision that a former employee (the Employee) was terminated without just cause and is thus entitled to unemployment benefits. Because the Board's findings and conclusions are supported by substantial evidence, we decline to disturb the Board's decision.

BACKGROUND¹

¶2 This case concerns the dismissal of the Employee from her employment with the Housing Authority, a Utah corporation that assists members of the Paiute Indian Tribe of Utah in obtaining affordable housing.² During the course of her employment, the Employee reported to the Housing Authority's executive director. The executive director, in turn, reported to the Board of Commissioners (the Commissioners), an organization comprised of representatives from the different bands of the Paiute Indian Tribe. Although the Paiute Indian Tribe has its own tribal council (the Tribal Council) that authorizes the Housing Authority's funding, the Tribal Council does not fall directly within the Housing Authority's chain of command.

¶3 About one year into her employment with the Housing Authority, the Employee began to suspect that the executive director was misusing Housing Authority funds. She believed that the Commissioners were reflexively supportive of the executive director and would not take complaints about him seriously. The Employee also testified that other individuals had previously complained to the Tribal Council about the executive director's spending, but the Tribal Council had indicated that "it was powerless to do anything without proof of wrongdoing."

¶4 The Employee began collecting documents that she believed supported her suspicions that the executive director was misusing funds. She obtained a copy of a per diem check from the Housing Authority made out to the executive director. She also acquired a copy of the executive director's travel arrangements and corporate credit card statement, intending to use the documents to show that the executive director had inflated the amount of his per diem check and misused Housing Authority funds on hotels and rental cars.

¶5 The Employee reported her suspicions to the Tribal Council and provided the supporting documents. As a result, the Tribal Council cancelled a scheduled meeting with the Commissioners and provided the Commissioners with copies of the documents. The Commissioners responded by alerting the executive director of the allegations made by the Employee. The executive director then terminated the Employee for violating the Housing Authority's non-disclosure policy, which the Employee had previously agreed to, by revealing confidential information.

¶6 Following her termination, the Employee made a claim for unemployment benefits. The Utah Department of Workforce Services denied her claim, finding that the Employee was discharged for "just cause." The Employee appealed to an administrative law judge (the ALJ), and the ALJ upheld the original decision. The Employee appealed the ALJ's decision to the Board, which found that the Employee was terminated without just cause. The Board accordingly reversed the determination of the ALJ and held that the Employee was entitled to unemployment benefits. The Housing Authority now seeks judicial review of the Board's decision.

ISSUE AND STANDARD OF REVIEW

¶7 The Housing Authority challenges the sufficiency of the evidence to support the Board's determination that the Employee was terminated without just cause. This court "will uphold the Board's decision if its factual findings and determinations are supported by substantial evidence when viewed in light of the whole record." Needle Inc. v. Department of Workforce Services , 2016 UT App 85, ¶ 6, 372 P.3d 696 (cleaned up). "Substantial evidence is that quantum and quality of relevant evidence that is adequate to convince a reasonable mind to support a conclusion and is more than a mere scintilla but something less than the weight of the evidence." Id. (cleaned up). Additionally, this court defers to "the Board's credibility determinations and its resolution of conflicts in the evidence." Id.

ANALYSIS

¶8 "An employee is ineligible for unemployment insurance benefits if the Board concludes that the employee was discharged for just cause." Davis v. Department of Workforce Services , 2015 UT App 93, ¶ 8, 348 P.3d 352 ; see also Utah Code Ann. § 35A-4-405(2)(a) (LexisNexis 2015). "To establish ‘just cause,’ three elements must be present: culpability, knowledge, and control." Autoliv ASP, Inc. v. Department of Workforce Services , 2001 UT App 198, ¶ 17, 29 P.3d 7 ; see also Utah Admin. Code R994-405-202. Here, the Board concluded that the Housing Authority failed to show all three elements—including culpability. Because "the employer must satisfy all three requirements to avoid paying unemployment compensation on the ground the employee was fired for just cause," and because the employer has failed to establish culpability, we need not consider the "knowledge" and "control" elements. See Provo City v. Department of Workforce Services , 2012 UT App 228, ¶ 13 n.6, 286 P.3d 936 (citing Utah Admin. Code R994-405-202 ).

¶9 To establish culpability, "[t]he conduct causing the discharge must be so serious that continuing the employment relationship would jeopardize the employer's rightful interest." Utah Admin. Code R994-405-202(1). However, "[i]f the conduct was an isolated incident of poor judgment and there was no expectation it would be continued or repeated, potential harm may not be shown." Id. "The claimant's prior work record is an important factor" in this determination because "[a]n employer might not be able to demonstrate that a single violation, even though harmful, would be repeated by a long-term employee with an established pattern of complying with the employer's rules." Id.

¶10 The Board's determination that the Employee's conduct did not pose a serious risk to the Housing Authority's rightful interests is supported by substantial evidence. While the Housing Authority has an interest in maintaining the confidentiality of its financial records, this is not a typical breach of confidentiality case. Rather, the Employee, rightly or wrongly, suspected fraud, and the reporting of such suspicions is not adverse to an employer's rightful interests, but is very much consistent with them. Further, it was reasonable for the Employee to believe that the Tribal Council was an appropriate entity to report her suspicions to. After all,...