CIRCUIT COURT ORDER/OPINION Stephine Gwin , Circuit Court Clerk

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Date : ---'-i J____j+-'JY~--' 2 0 1 0

R. Doug as Da lgga , Dlrector MES - Board of Review

STATE OF MICHIGAN

THIRTIETH JUDICL~ CIRCUIT COURT FOR ING~~ COUNTY

TIFFANY L. DECESS ,

Claimant-Appellant, DOCKET NO . 10-664-AE

- vs -

CENTRA~ STATE COMMUNITY SERVICE,

Employer-Appellee ,

and

MICHIGAN DEPARTMENT .OF ENERGY, LABOR AND ECONOMIC GROWTH, UNEMPLOYMENT INSURANCE AGENCY,

Agency-Appellee. _____________________________ /

OPINION

This is an appeal from the Unemployment Insurance

Agency (UIA) in· the Department of Energy, Labor and EcoP-omic Growth

and a final decision of the Employment Security Board of Review in

a benefits case. The OIA initially determined that Tiffany L.

DeCess (Claimant) was disqualified for unemployment compensation

benefits because her discharge from employment wi th Centr al State

Community Service was for misconduct on the job . The agency's

redetermin~tion reversed po5ition and found Cla~~ant qualified for

the benefits . The employer then appealed by requesting a contested·

hearing before an administrative law judge (~~J) .

After an administrative hearing, the ALJ reversed the

agency's redetermination. The ALJ ruled that there was no basis

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for granting benefits b eca use of claimed misconduct that led to

Cl aimant's involuntary discharge from employwent. The Board of

Review (Board) affirmed the ALJ, saying that tis decision conformed

with the facts developed at the hearing and properly applied the

law to those facts. The Board lat e r deni ed Claimant's motion for

reconsideration or rehearing . Claimant now challenges the Board's

decision as contrary to law and as unsupported by the ev~dence,

praying that the Court reverse the. Board and order payment of

unemployment benef~ts .

Claimant was employed b y Central Sta te Community

Service as a direct care giver to six developmentally disabled

residents at the Waverly Road adult foster care home in Lansing

from December 6, 200 6, until she was i nvoluntarily d i scharged on

November 3 , 2008 . The r eason given by the employer for firing

Claimant was that she had allegedly " left a consumer [resident]

unattended for a period of thr e e to five mi nutes i n a running van,

which [sic] the consumer was not in her sight and she was ins ide

the horne . " (Recor d, 16) Claimant asserts that her behavior during

that incident does not constitute disqualifying misconduct . The

Court agrees.

A reviewing court may r everse the UIA only if its

decision is not authorized by law or is not supported by competent,

material and substantial evidence on the whole record. Tomei v

General Motors Corp, 194 Mich App 180, 183-18 4; 486 NW2d 100

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(1992) . Similarly, a hearing referee's decision wil l not be

disturbed on a?peal unless it is contrary to law or unsupported by

substa!ltial evidence . Seligman & Associates, Inc v Michigan

Employment Security Comm, 164 Mich App 507, 512; 417 NW2d 480

(1987). Identical principles apply, of cot.:.rse, to appellate

review of Board decisions . Korzowski v Pollack Industries, 213

Mich App 223, 228; 539 NW2d 741 (1995). Those standards are

manda~ed by Corist 1963, art 6, § 28. In addition, section 38(1) of

the Employment Security Act (the Act), MCL 421 . 38(1), codifies the

consti tutiona.l standards for . the specific purpose of judicial

review of the Board's decisions.

Disqualifications for benefits are delineated in

section 29 of the Act, MCL 421.29, which provides in part:

"(1) Except as provided in subsection (5), an individual is disqualified from receiving benefits if he or she :

* * * "(b) Was suspended or discharged for

misconduct:Connected with the individual's work or f or intoxication while at work." (Emphasis added.)

This section requires the OIA to disqualify from receiving b enefits

anyone whose discharge was due to "misconduct connected with the

individual's work." See Korzowski, supra at 229 . The agency's

determination of that issue hinges on the meani ng given to work-

related misconduct, which i s not defined in the Act .

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The term has been defined, however, in a nwnber of

Michigan cases, foremost of which is Carter v Employment Security

Comm, 364 Mich 538, 541; 111 NW2d 817 (1961). Quoting a leading

Wisconsin decision with approval, the Michigan Su?reme Court

recited and expressly adopted "the classic def.:.nition of mis-

conduct":

"'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 disr·egard of standards of behavior which t he employer has the right to expect of his employee, or in careless.o1ess 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 obl igations to his employ­er. '"

See, e . g ., VanderLaan v Mulder, 178 Mich App 172, 175; 443 NW2d

491 (1989), and Broyles v Aeroquip Corp, 176 Mich App 175, 177 -178 ;

438 NW2d 888 (1989) .

As discussed further below, the Board, l ike the ALJ,

erred by failing to apply Carter/ s "carelessness o:: negligence"

principle to Claimant's conduct . Carter requires, as noted above,

"carelessness or negligence of such degree or recurrence as to

manifest equal culpability, wrongful intent or evil design, or to

show an i ntentional a nd substantial disregard of the employer's

interest s." The words "equal culpability" presu.rnably must be read

in l ight of the prior language in Carter, such as "wilful or wanton

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disregard" and "deliberate violations or disregard of standards .u

The Cc.rter opinion is clear that a measure cf culpability going

beyond mere negligent or inadvertent behavior is re~ired.

Indeed, the Carter Cour t, at 541 , specifically e.xc"epted

crdi~ary negligence a:ong with some other undesirable behavior:

"'[M]ere i~efficiency, unsatisfactory conduct, failure in good pe_rforrnance as the resul t of inability or incapacity, ~nadvertencies or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion are :::1ot to be deemed "misconduct" within the meaning of the statute . '"

See also Hagenbuch v Plainwell Paper Co, Inc, 153 Mich App 834,

837 - 838 ; 396 NW2d 556 (1986) ; Razmus v Kirkhof Transformer, 137

Mich App 311, 315- 317; 357 NW2d 683 (1984); Washington v Amway

Grand Plaza, 135 Mid;. App 652, 659; 354 NW2d 299 (1984). It

follows that the UIA cannot reasonably find work-related miscon-

duct where there is no record evidence that the claimant was guilty

of anything more than inadvertence or ordinary negligence .

In light of the above quotations from Carter, the Court

reviews the findings and conclusions of the ALJ at page 3 (Record,

80) of his September 29, 2009, decision :

"The employer must demonstrate misconduct by a preponderance of the evidence. The sole difference between the testimony is whether the claimant maintained a position where she could watch the actions of the resident . could see sne could Leaving a

~he claimant testified that she the van. She did not say t hat see the actions of the resident . resident with severe de-relop-

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mental disabilities in a vehicle -that is running seems like an ir.vitation to disaster r but it is not the pro-vidence [sic] of this forum to establish protocol for the transport of the developmentally disabled. Here however, the issue argued by the parties is whether the resident is being watched, not whether the resident could be watched by looking at the van. The employer repeatedly stated that it is the residents who require observation. There remained three other workers in the home. It was not logical t o leave a resident in the running van when thr ee other workers we·re available to accompany the other residents to the van. Thi s behavior may not fal l into the category of a willful and wanton [sic) act in disregard of the employer's interest, but it does equate to a carelessness or negli­gence to such a degree as to warrant a decision that such carelessness does amount to a disregard of her employer's interest . Once placed in a running vehicle, that resident should not have been left alone ." (Emphasis added . )

The agency record clearly doe s not support the ALJ's

assertion in the first underscored sentence quoted above that

Claimant did not testify ''that she could see the actions of the

resident" in the van . To the contrary, Claimant did so testify

four t i mes. (Record, 53 , 63-65) Claimant's testimony that the

r esident was never out of her eyesight is net disputed in the

record. The employer presented no evidence whatever that Claimant

could not have been able to see the resident sitting in_the van .

Indeed, the employer's sole witness admitted that from her vantage

point in the garage she was unable to see where Claimant was and

thus did not know 'f" )._ the van: and the resident were out of

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Claima~t ' s eyesight. (Record, 40, 42) That is plainly not

evidence of statutory misconduct . In addition, Claimant gave

uncontradicted testimony that t~e practices she followed on the day

cf the incident were those she had been trained by the employer to

use and had witnessed other care givers and horne superviso~s use

throughout her employment. (Record, 54-55, 59- 60) On this record,

the employer utterly failed to prove any misconduct, be it

deliberate or negligent .

It is highly doubtful that Claimant's behavior can

reasonably justify discharge from employment . However, it surely

cannot constitute s t atutory misconduct under section 29(1) (b) of

the Act . Even if it could be seen as wisconduct withL~ the meaning

of that provision, Carter, supra, requires that the violation be

significantly more than negligent or inadvertent. How, then, can

the agency conclude that Claimant committed statutory misconduct?

Nothing in the hearing transcript o r the rest ·of the agency record

s upports the determination that Claimant had acted with careless­

ness amounting to "a disregard of her employer's interest" by

deliberately and intentionally failing to keep the resident seated

in the van within her line of vision. In short, there was no

evidence that she wil fully, wantonly or intentionally failed to

comply or avoided compliance with the terms of the employer's work

rule.

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In examining the events that ~ed to Claimant's

termination of employment, this Court ca~ find no instance tha t

falls within the Carter def inition of "misconduct." Even if

considered a grave lapse from expected behavior, this conduct does

not manifest the required undertaking, design or " scienter . " Nor,

contrary to the ALJ's decision, does it evidence an intenti onal and

substantial disregard of the employer's interests or the employee's

duties. That conduct, as described here on the agency record, ca~

hardly be characterized as "wilful or wanton."

Appellees apparentl y fail to recognize that in benefi~s

cases where employee misconduct is alleged, the burden of proof i s

on the employer to show that the claimant was in fact discharged

for statutory misconduct. Korzowski , supra; Tuck v Ashcraft's

Marketr Inc, 152 Mich App 579, 588; 394 NW2d 426 (1 986); Bowns v

Port Huron, 146 Mich App 69, 75; 379 NW2d 469 (1985), lv den 424

Mi ch 8 9 9 ( 19 8 6) . Thus, it was incumbent upon t he employer to

establish by a preponderance of the evidence that Claimant

deliberately broke an important work rule by failing to mainta in

continuous observation of the disabled resident in the van. Cf

Diepenhorst v General Electric Co, 29 Mich App 651 , 653; 185 NW2d

637 (1971). No such showing has been made here . The Eoard' s

decision is not authorized by law .

This conclusion is consistent with a reviewing court's

duty to construe the disqualifying provisions of section 29 ( 1) ·

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narrowly so as to promote the remedial policy of the Act.

Korzowski, supra at 228-229; Washington, suJ:-ra at 658. That

policy, as stated in section 2 of the Act, MCL 421.2, is to provide

income to discharged employees in order to ameliorate the

disastrous effects of involuntary unemployment on workers and ~heir

families . Thus, conduct that may justify discharge from employment

does not necessarily constitute statutory rr~sconduct sufficient to

disqualify a claimant for unemployment benefits. Washington, supra

at 659. That is patently the case here. The Board must be

reversed and ordered to provide the benefits to which Claimant is

entitled .

Furthermore, even if Claimant's failu~e to live up to

the terms of the employer's work rule could be sho~n wilful, wanton

and deliberate, which it was not, that too would not necessarily

constitute statutory misconduct. According to Ra z.nws, supra at

316, " The violation of an employer's rules or a provision of the .

collective-bargaining agreement is not 1 per se, misconduct within

the meaning of the statute. Linski v Employment Security_Comm, 358

Mich 239; 99 NW2d 582 (1959); Jones v Employment Security_Comm, 4

Mich App 300; 144 NW2d 795 (1966} ." As pointed out in Hagenbuch,

supra , "wrongdoings which may justify termination of employment

under a contract do not necessarily qualify as 'misconduct' for

purposes of the act," and that is so for cogent policy reasons:

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"The MESC and [the] circuit court should not be put in the position of evaluating and construing specific te~.s of collective bargaining agreements and other empl oyment contracts to determine misconduct for the purposes of eligibi lity for unemployment compensation. Just as terms of labor agreements may provide for discharge for misbehavior less severe than that required under the law of misconduct, other agreements might be more lenient than the act. Accordingly, a c l aimant's behavior must be evaluated independently from the terms of his employment contract. Failure to review claims in such an objec­tive manner would lead to the inevitable result that claimants dismissed from [sic] different employers for similar wrong­doings would be accorded different treat ­ment under the act . " (Emphasis added.)

Based on this rationale, the Court must conclude that the agency

erred in determining that Claimant is disqualified for benefits

solely because she breached the employer's work rule.

The ar.alysis in Linski, supra at 245, also applies wit h

equal force here. The agency contends that Claimant's conduct was

wrong because it was not in accordance with the employer's work

rule. There, as here, ~'The record discloses this to be true. Jl...nd

the record also shows that the contract penalty of discharge has

been applied . " Id. Thus, like -the Linski Court, this Court "can

find no warrant for adding to the contract penalty for breach still

another penalty [denial of unemployment benefits] not square ly

spelled out in the statute." Id.

Indeed, the Board's decision and the ALJ's position

here run afoul of longstanding precedent, as expressed by Justice

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Talbot Smith concGrring in Reed v Employment Security Comm, 364

Mich 395 , 398; 110 NW2d 907 {1961):

~once again we ire confronted with an attempt to use the employment security act as a little labor relations act. The effort here, as in previous cases, is to use unemployment compensation as a disci ­plinary tool, to penalize an employee who breaks a company r ule not only by firing him from his job, but by pursuing him to his horne and removing both him and his family from the benef its of unemployment compensation . The theory involves the idea that it is not enough that the employee be discharged for breaking a company rule. It goes further: It seeks to impose a pe!lal ty over a::1d beyond the firing . We hold here, as we have held heretofore, · that such was not the legisla­tive intent."

In Reed, the claimant's failure t o pay debts led to four writs of

garnishment, for which he was discharged from employment . The lead

opinion authored by Chief Justice Det~~ers held that such was not

statutory misconduct even though the consequences might in some

manner affect the claimant's employer . Id . a t 397 . Similarly,

Claimant's alleged failure on one occasion to abide by an important

work rule was not disqualifying misconduct where the agency record

is bereft of even a scintilla of evidence that she deliberately and

wilfully broke the rule. The Board's decision is contrary to law

and unsupported by the evidence.

In sum, the agency r ecord does not reveal a rational

basis for the Board's c onclusions . The Court det ermines that the

Board's decision is not authorized b:· law and is not supported by

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competent, material and s~bstantial evidence . on the whole record.

The Board could not reasonably decide on these facts that Claimant

had committed statutcry misconduct by f ailing to maintai n

continuous observational vigila~ce over the di sabled res ident in

the van. Thus, the Board could not properly de:1y Claiman"':' s

application for unemployment compensation benefi ts.

An order consistent with this opinion may enter upon

its proper presentation.

R:SVERSED.

JAMES R. GIDDINGS 7 Circuit Judge

DATED: 7

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