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CIRCUIT COURT ORDER/OPINION Stephine Gwin, Circuit Court CLERK
Please enter and distribute along with Board of Review Decisions/Orders and Referee Decision/Orders .
0 Board Merrber and assigned attorney to case
D other:
Potential Digest case
d-~ ( 1) ~) Section of the Act
Date : _ ___ )--L-#-j-L} _6 __ , 2007
PC REP _ _ _
R. Douglas Daligga, Director MES - Board of Review
Prepared by Stephine Gwin
STATE OF MICHI~
THIRTIETH JUDICIAL CIRCUIT COURT FOR INGHAM COUNTY
SHAWONNA WASHINGTON,
Claimant-Appellant,
MICHIGAN TRAINING UNIT, DEPARTMENT OF CORRECTIONS;
Employer.-Appellee,
and
UNEMPLOYMENT INSURANCE AGENCY, DEPARTMENT OF LABOR AND ECONOMIC GROWTH ,
Agency-Appellee. _____________________________ !
DOCKET NO. 06-869-AE
OPIN ION
This is an appeal from the Department of Labor and
Economic Growth and a final decision of the Unemployment Insurance
Agency's Board of Review in a benefits case. The Unemployment
Insurance Agency {UIA) initially determined that Shawonna Washington
(Claimant) was disqualified for unemployment compensation benefits
because of work-related misconduct while in the employ of the
Michigan Training Unit (MTU) of the Department of Corrections . The
agency's redetermination was to the same effect. After an
aQminis t rative hearing, the hearing referee affirmed the agency's
redetermination. The referee determined that there was no basis
for granting benefits because of misconduct that led to Claimant's
i"nvoluntary discharge from employment with the M1'0. 'l'he Board of
Review {Board) affirmed the referee in a split decision . Claimant
now challenges the Board's decision as contnu:y to L:1w and as
Mil f ·v l · t.uu J u·\lvn llt
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unsupported by the evidence, praying that the Court reverse the
Board and order payment of unemployment benefits.
Claimant was employed by the MTU from July 27, 1997,
until she was fired on September 9, 2005 . She had been required by
her employer to subscribe to a "last chance agreementu on February
7, 2005. (Record, 57) After that, there were three events t hat
the MTU apparently thought to have violated the agreement: absence
for illness that was supported by a physician's note, preauthorized
absence to attend an out-of-state funeral, and absence for
inability to drive 31 miles to work due to lack of money for gas.
Claimant asserts that none of these, whether taken individually or
as a whole, constitutes disqualifying misconduct . The Court
agrees.
A reviewing court may reverse the UIA only if its
decision is not authorized by law or is not supported by competent,
material and substantial evidence on t he whole record. Tomei v
General Motors Corp, 194 Mich App 180, 183-184; 486 NW2d 100
(1992). Similarly, the hearing referee's de.cision will not be
disturbed on appeal unless it is contrary to law or unsupported by
substantial evidence. Selig1nan & Associates, Inc v Michigan
Employment Security Comm, 164 Mich App 507, 512; 417 NW2d 480
(1987)' Identical principles apply, of course, to appellate
review of Board decisions. Korzowski v Pollack Industries, 213
Mich App 223, 228; 539 NW2d 741 (1995). Those standards are
mandated by Const 1963, art 6, § 28 . In addition, section 38(1) of
the· Employment Security Act (the Act), MCL 421.38 (l), codifies the
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constitutional 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) 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 for intoxication while at work." (Emphasis added .)
This section requires the UIA to disqualify from receiving benefits
anyone whose discharge was due to "misconduct connected with the
individual's work. ' 1 See Korzowski, supra at 229. The agency' s ..
determination of that issue hinges on the meaning given to work-
rel ated misconduct, which is not defined in the Act.
The term has, however., been defined in a number 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 Supreme Court
recited and expressly adopted " the classic definition of mis-
conduct":
"'The term "rnisconduct 11 * * * is limited to conduct evincing such wilful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee,. or in carelessness 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 employ-
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ee's duties and obligations to his employer • f II
See, e.g., Vander La.an v Mulder, 178 Mich App 17.2, 175; 443 NW2d
491 (1989), and Broyles v Aer:oquip Corp, 176 Mich App 17S, 177-178;
438 NW2d 888 (1989).
As discussed further below, the Board, like the hearing
referee, erred by failing to apply Carter's "carelessness or.
negligence" principle to Claimant 's conduct . Carter requires, as
noted above, "carelessness or negligence of such degree or recur-
renee as to manifest equal culpability, wrongful intent or evil
design, or to show an intentional and substantial disregard of the
employer's interests." The words "equal culpability" presumably
must be read in light of the prior language in Carter, such as
"wilful or wanton disregard" and "deliberate violations or
disregard of standards." The Carter opinion is clear that a
measure o·f culpability going beyond mere negligent or inadvertent
behavior is required.
Indeed, the Carter Court, at 54 1 , specifically e~cepted
ordinary negligence along with some other ~ndesirable behavior :
"'[M)ere inefficiency, unsat isfactory conduct, failure in good performance as the r esult of inab i lity or incapacity, inadvertencies or ordinary negligence in isolated instances, or good-faith er~ors in judgment or discretion are not to be deemed "misconduct" within the meaning of the statute.'"
See. aJ.so Hagenbuch v Plainwell Paper Co; Inc, 153 Mich App 834,
837-838i 396 NW2d 556 (1986 ) ; Razmus v Kirkhof Transfonner, 137
Mich App 311 , 315-317; 357 NW2d 683 (1984); Washington v Amw~y
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Grand Plaza, 135 Mich 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 guil t y
of a~ything more than inadvertence or ordinary negligence.
In l ight of the above quotations from Carter, the Court
reviews the findings of the Board at page 2 (Record, 64) of its
June 28, 2006, decision:
»the competent, credible and material evidence introduced by the employer dur i ng the January 5, 200 6 [, ] Referee hearing established that (,) d.espite having been repeatedly counseled and placed under a last chance agreement[,] the claimant continued to exhibit a pattern of unexcused absence. When questioned about the matter, the. claimant acknow.ledged having been absent on the dates at issue . However, the claimant asserted one of the absences, to attend a funeral, had been preauthorized. While that may have been t he case, · we ·note claimant failed to provide the employer with timely documentation upon her return. Clearly, the claimant ' s failure to comply with the employer's attendance policy deviated from the standard of behavior that (the] employer had a reasonable right to expect and evidenced a willful disregard for the employer ' s interest . Accordingly, the Ref-eree's decision should be affirmed . " (Braketed material added.)
Now, no t hing in the agency record supports the Board's
conclusion that Claimant's neglect to provide the MTU with "timely
documentation" (an obi tuary) upon her retur n from a funeral in
upstate New York constituted a "failure to comply with the
employer's attendance policy. " And it surely did not violate the
"last chance agreement." Further, it is clear from the Board's
decision and the record that Claimant was discharged from employ-
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ment not for any violation of the "last chance agreementu but for
a supposed "pattern of unexcused absence." Indeed, the employer's
witness at the hearing below testified that Claimant had been
discharged "[f)or tim~ and attendance." (Record, 11) The record
reveals, however, that the MTU utterly failed to prove any
"pattern" of time and attendance problems; it succeeded in proving,
r ather, only one "unexcused absence,u for the workday that Claimant
missed when. she· discovered she had no money with which to buy fuel
for her car so that she could drive to work in Ionia from her home
in Lansing. That , without more, is plainly not evidence of
statutory misconduct.
It may be true that .such behavior can .justify discharge.
from employment. However, as explained below, it surely cannot
constitute statutory misconduct under section 29 (1) (b) of the Act .
Even if it could be seen as misconduct wi thin the meaning of that·
provision, Carter, supra, requires that the violation be signifi-
cantly more than negligent or inadvertent.
In examining the events that led to Claimant's
termination, however, this Court can find no instance that falls
within the carter definition of "misconduct." Appellees' argument
in support of such a finding presumes elements lacking in t his
case. Even when considered as a grave lapse from expected
behavior, this conduct does not manifest the required undertaking,
design or "scienter . " Nor does it evidence an intentional and
substantial disregard of the employer's interests or the employee's
duties .
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Mar.31. 2007 8:~bAM
For instance, according to Claimant's uncontradicted
testimony at the hearing, she knew her job was in jeopardy and made
her best effort to comply with attendance requirements. Although
she had read the last chance agreement, she had some difficulty
understanding it and did not want to sign something she did not
understand. (Record, 29-30) She signed the agreement anyway,
despite feeling pressured to do so. (Record, 30-31) Of the three
post-agreement attendance infractions alleged by the MTU, o~ly one
could possibly qualify as a technical violation. How., then, can
the agency conclude that she committed statutory misconduct?
Nothing i n the hearing transcript or the rest of the agency record
supports the .determination that Claimant had acted with "wilful
disregard of [her] employer ' s interestn by deliber ately and
intentionally failing on one isolated occasion to have enough money
or gas to drive her car to work.
That is why this Court must agree with the dissent from
the Board's final decision of June 28, 2006 (Record, 65) :
"In the instant matter, the employer asserts that despite having been repeatedly counseled and placed on last chance claimant continued to exhibit a pattern of poor attendance . If that were the case, the cla i mant might be disqualified for benefits under the misconduct provisio.n. However, the employer failed to introduce evidence regarding the alleged attendance violations that prompted the last.chance agreement. The only competent evidence concerned the cl aimant ' s final absence . That incident was caused by a circumstance beyond the claimant ' s control . Therefore, it cannot form the basis for a finding of misconduct."
Most important, though , the dissent should have stressed that there
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M a r . 31 . 2 0 0 7 8 : 56 AM
was no evidence that Claimant wilfully or intentionally failed to
comply or avoided compliance with the terms of . th~ employer's
attendance policy. Rather, Claimant's uncontradicted testimony
asserted that she mad~ a good faith effort to comply in order to
maintain her employment.
Counsel for the agency relies on Giddens v Employment
Security Comm, 4 Mich App 52 6, 53 5; 14 5 NW2d 2 94 ( 1966) , for the·
proposition that a finding of statutory misconduct m?y be derived
from a series of infractions, no one of which alone rises to the
level of disqualifying misconduct. The Giddens court termed this
"a ' last straw' doctrine in which the final infraction, though
unrelated to previous infractions, is of such a. nature that -it
demonstrates conclusively the employee's utter disregard for the
employer's interests." Such principle cannot apply here, however,
since Claimant's last infraction does not p.rov ide conclusive
demonstration of any disregard for the MTU' .s interests. Cf
Christophersen v City of Menominee, 1.37 Mich App 776, 780-781; 359
NW2d 563 (1984). Moreover, the claimant in Giddens had accumu
lated a lengthy record of absences without reasonable cause,
whereas no such history is established here. In short, the Board's
decision is not supported by competent, mat~rial and substantial
evidence on the whole record.
Appellees apparently fail to see that in benefits cases
where employee misconduct is alleged, the burden of proof is on the
employer to show that the claimant was 1n fact dj.scha r.ged for
statutory misconduct. Korzowski, supra; Tuck v Ashcraft's Market/
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Inc, ~5~ Mich App 579, 588; 394 NW2d 426 (1986) ; Bowns v Port
Huron, 146 Mich App 69, 75; 379 NW2d 469 (1985), lv den 424 Mich
899 (1986). Thus, it was incumbent upon the MTU to establish b~ . .
. a prepond~rance of the evidence that Claimant deliberately broke
some important aspect of the employer's attendance policy by
failing to reserve enough funds to refuel her car. Cf D.iepenhoEst
v General Electr.ic. Co, 29 Mich App 651, 653; 185 NW2d 637 (1971) .
The most ·that wa.s established is that Claimant was unable to
understand what was expected of her, committed a good-faith error
in judgment or was inadvertently remiss, and thus was to that
extent negligent. Under Cartel', supra, this is not misconduct
within the purview of section 29 (1) (b). The Board' 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)
narrowly so as to promote the remedial policy of the Act.
l<orzowski, supra at 228-229; Washington, supra at 658. That
policy, as stated in section 2 of the Act, MCL 421.2, is to provide
income to discharged employees in ·order t o ameliorate the
disastrous effects of involuntary unemployment on workers and their
families. Thus, conduct that may justify discharge from employment·
does not necessarily constitute statut.ory misconduct sufficient to
disqualify a claimant for unemployment benefits . Washington, supr.a
at 659 .
Quoting this proposition from the Washington opinion,
the Court of Appeals recently ruled that in denying benefits for
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Mar .3 1. 2007 8: 56AM
excessive absences, the lower tribunals "failed to appreciate that
absences for good cause, however persistent, c·annot cons t itute
misconduct for purposes of denying unemployment benefits." Carol
Ann Riccardi v Oakland General Health Systems, et al., unpublished
opinion per curiam of the C9urt of Appeals, doc"ket 256164, issued
January 10, 2006, slip op, p 3 . The Riccardi court held, "Because
appellant has put forward good reasons for the great majority of
her absences, and because no tribunal below issued any findings to
the contrary, the administrative law judge, the Board of Review,
and the circuit court ~rred in concluding that appellant's absences
constituted misconduct for purposes of disqualifying her for
unemployment -benefits." This -holding is drawn -direct.ly from the .
principle expressed in Washington, supra at 658: "As a matter of
law, tardiness or absences resulting from events beyond the
employee's control or which are otherwise with good cause cannot be
considered conduct in wilful or wanton disregard of the employer's
interests . Carter, supra." 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 technical failure to
live up to the terms of the last chance agreement could be shown
wilful, wanton and deliberate, which it was not, that too would not
necessarily constitute statutory misconduct . According to Razmus,
supra at 316, "The violation of an employer's rules or a provision
of the collective-bargaining agreement is not, per se, misconduct
within the meaning of the statute. Linski v E'mployment Security
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Conun, 358 Mich 239i 99 NW2d 582 (1959); Jones v Employment Security
Conun, 4 Mich App 300; 144 NW2d 795 (1966} ." As pointed out in
HageJJbuch, supra, "wrongdoings which may justify termination o£
employment under a contract do not necessarily qualify as
'misconduct' for purposes of t he act,~ and that is so for cogent
policy reasons:
"The MESC and [the) circuit court should not be put in the position of evaluating and construing specific terms of collective bargaining agreements and other employment contracts ·to determine misconduct for the purposes of e ligibility 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 woul d lead to · the· inevitable result that claimants dismissed from (sic] different employers for similar wrongdoings would be accorded different treatment under the act." (Emphasis added . }
Based on this rationale, the Court must conclude that counsel for
t .he agency errs by arguing that Claimant is disqualified for
benefits solely because she breached the last chance agreement .
Mc;>.reover, even if Claimant's failure to comply strictly
with the last chance agreement did constitute misconduct in some
sense, it still would not be statutory misconduct because, as a
matter of law, it was not "connected with" her work . As in Jones,
supra at 305 , so too here, the agency should have applied the
distinction between "a rule of selection and one of conduct," which
was spelled out by the Michigan Supreme Court in Reed v Employment
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Security Comm, 364 Mich 395, 398i 110 NW2d 907 (1961) . A rul e of
selection does not govern an employee's work-related conduct but,
ra ther, sets fotth a condition of continued employment. Id.
Discharge of an offending employee for breach of such a rule would
not implicate "misconduct connected with the individual's work" as
contemplated by the statute . Id.
The analysis in Lin ski, sup:ra at 2 4 5 , applies with
equal force here. Counsel for the agency contends that Claimant's
conduct was wrong because it was not in accordance with an
agreement or contract. There, as here, "The record discloses this
to be true. And the record also shows tha.'t the contract penalty of
discharge has been applied.~~ Id. Thus, l ike t he Linski Court,
this Court "can find no warrant f or adding to the contract penalty
for breach still another penalty [denia l of unemployment benefits]
not squarely spelled out in the statute." Id.
Indeed, the Board's decision and the agency's position
here run afoul of longstanding precedent, as expressed by Justice
Talbot Smith concurring in Reed, supra at 398:
"Once again we are 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 disciplinary . tool, to penalize an employee who breaks a company ru le not only by firing him from ~i~ job, but by pursuing him to his home and removtng both him and his family from the benefits of unemployment compensation. The t heory 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 penalty over and beyond the firing . We hold here, as we have held
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he~etofore, that such was not the legislative intent . "
In Reed, the claimant's failure to pay debts led to four writs of
garnishment, for which he was discharged from employment. The lElad
opinion authored by Chief Justice Dethmers held: "If plaj.nt .i.ff' s
going into debt and faiJ.[ing) to pay were to be deemed misconduct,
i t was in no wise connected with his work, even though the conse-
quences might in some manner affect his employer ." I d. at 397.
Similarly, Claimant ' s alleged failure to abide by the l ast chance
agreement was not work-related but, rather , was only a condition of
continued employment and thus could not constitute statutory
misconduct. Once again the Board_' s decision is contrary to law .
In sum, the agency record cto·es not reveal a rationa l
basis for the agency's conclusions . The Court det~rmines that the
Board's decision is not authorized by law and is not supported by
competent, material and substantial evidence on t he whole record .
The Board could not reasonably decide on these facts that Claimant
had committed statutory misconduct either by fail i ng to document
attendance at a funeral or by breaching a condit ion of the last
chance agreement . Thus, the Board could not properly deny
Claimant's application for unemployment compensation benefits.
An order consistent with ~~~pinio~~may enter upon
presentation. · / .~;"/'/ i ts proper
REVERSED .
. ..
DATED :
J~MES.R. GIDDINGS
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