Igo v. Acts Retirement Life Communities ( 2021 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
JAMES IGO, )
)
Claimant Below – )
Appellant, )
)
v. ) C.A. No. N20A-03-001 ALR
)
ACTS RETIREMENT LIFE )
COMMUNITIES and )
THE UNEMPLOYMENT )
INSURANCE APPEALS BOARD, )
)
Employer Below – )
Appellees. )
Submitted: November 17, 2020
Decided: January 5, 2021
On Appeal from the Unemployment Insurance Appeals Board
REVERSED and REMANDED
MEMORANDUM OPINION
Michele D. Allen, Esquire, Emily A. Biffen, Esquire, Allen & Associates,
Wilmington, Delaware, Attorneys for Claimant Below – Appellant
Anthony N. Delcollo, Esquire, Offit Kurman, P.A., Wilmington, Delaware, Attorney
for Employer Below – Appellee
Rocanelli, J.
This is an appeal from a decision of the Unemployment Insurance Appeals
Board (the “Board”) which denied unemployment benefits to Appellant James Igo
(“Igo”) after finding just cause for his termination.
BACKGROUND
Igo was employed by Appellee ACTS Retirement-Life Communities
(“Employer”) as a full-time security guard for six years. Igo’s responsibilities
included monitoring Employer’s property and noting in a daily logbook (“Daily
Logbook”) the areas secured by Igo during his shift.
On August 22, 2019, Igo wrote in the Daily Logbook that he had secured the
doors in the areas he was required to check. The following shift discovered a set of
balcony doors were not secured and noted that the Daily Logbook was inaccurate.
During his next shift, Igo wrote the following note (“Igo’s Logbook Note”) in the
Daily Logbook:
12-8 shift! If you find the balcony door open we would appreciate that you
be considered [sic] enough to appreciate what the 4-12 shift has to do. If
want [sic] to consider snitching on the previous shift, you will find yourself
not very well enjoying [sic] to be with.1
Employer suspended Igo and investigated the incident. Employer concluded
Igo falsified the Daily Logbook by stating he had secured doors which had not been
1
Igo v. ACTS Ret.-Life Communities, Appeal No. 11134810 (Oct. 31, 2019) Emp.’s
Ex. 2. Igo’s Logbook Note is undated; however, neither party questioned whether
Igo’s Logbook Note was for August 23, 2019.
1
secured and for threatening his co-workers. On September 3, 2019, Igo was
terminated for violating Employer’s company policies against falsifying company
records and threatening co-workers (“Misconduct Policy”).
PROCEDURAL HISTORY
Igo filed for unemployment benefits. The Claims Deputy concluded that Igo
had been discharged by Employer for just cause and was therefore ineligible for
unemployment benefits.2 Igo appealed the findings of the Claims Deputy to the
Appeals Referee.3
At the hearing before the Appeals Referee,4 Employer was represented by
counsel while Igo was a self-represented litigant. During Employer’s presentation
to the Appeals Referee, Employer claimed Igo’s Logbook Note was threatening and
that Igo’s actions violated Employer’s Misconduct Policy. Igo sought to introduce
into evidence statements from longtime co-workers regarding Igo’s character to
rebut the Employer’s claim that Igo’s Logbook Note would be perceived as
threatening by co-workers. However, the Appeals Referee declined to consider the
character witness statements proffered by Igo on the grounds that the statements
were impermissible hearsay. Nevertheless, the Appeals Referee reversed the Claim
Deputy’s decision and found that Igo was terminated without just cause because
2
The Claims Deputy issued a decision on October 11, 2019.
3
Igo’s appeal was timely filed on October 16, 2019.
4
The hearing by the Appeals Referee took place on October 31, 2019.
2
Employer failed to meet its burden of proving it had a consistently enforced company
policy against falsifying records and threatening others. Accordingly, the Appeals
Referee found Igo was qualified to receive unemployment benefits. Employer
appealed the decision of the Appeals Referee to the Board.
At the Board hearing, Employer was permitted to introduce hearsay evidence
regarding other employees’ interpretations of Igo’s Logbook Note. In addition, the
Board allowed Employer to expand the record to present its employee handbook
which includes Employer’s Misconduct Policy. On the other hand, the Board
refused to permit Igo, a self-represented litigant, to introduce hearsay evidence.
Specifically, the Board declined to expand the record to consider written statements
by Igo’s longtime co-workers which Igo asserted would support his argument that a
note from him would not be perceived as threatening by his co-workers.
The Board found that the statements made in Igo’s Logbook Note were
threatening. The Board also found Igo falsified company records because Igo noted
in the Daily Logbook that he had secured certain doors during his shift which were
noted as unsecured by the workers on the following shift. The Board concluded Igo
was terminated from employment with just cause because Igo violated Employer’s
Misconduct Policy by falsifying records and threatening co-workers. The Board
also concluded that Igo’s misconduct was so egregious as to warrant immediate
termination without any warning. Igo has appealed the Board decision to this Court.
3
STANDARD OF REVIEW
In considering an appeal from a Board decision, this Court’s role is limited to
determining whether the Board’s conclusions are supported by substantial evidence
and are free from legal error.5 Substantial evidence is “such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.”6 The Court
considers the record in the light most favorable to the party prevailing on the Board’s
appeal.7 This Court does not weigh the evidence, determine questions of credibility,
or make its own factual findings.8 The Court may “reverse, affirm or modify the
award of the Board or remand the cause to the Board for a rehearing.”9
DISCUSSION
A. The record evidence supports the Board’s finding that Employer
had a reasonable company policy against falsifying records and
threatening co-workers and that Igo had been informed of
Employer’s Misconduct Policy.
Delaware’s unemployment statute provides for “the compulsory setting aside
of an unemployment reserve to be used for the benefit of persons unemployed
through no fault of their own.”10 An employee who is discharged for “just cause” is
5
Murphy & Landon, P.A. v. Pernic, 121 A.3d 1215, 1221 (Del. 2015).
6
Id. (citing Oceanport Indus., Inc. v. Willington Stevedores, Inc., 636 A.2d 892, 899
(Del. 1994)).
7
Thompson v. Christiana Care Health Sys., 25 A.3d 778, 782 (Del. 2011).
8
Id.9
19 Del. C. § 2350(b).
10
19 Del. C. § 3301.
4
disqualified from receiving unemployment benefits.11 There is “just cause” if an
employee commits a “willful or wanton act or pattern of conduct in violation of the
employer’s interests, the employee’s duties, or the employee’s expected standard of
conduct.”12 Wanton is defined as “heedless, malicious or reckless,” while willful
implies actual specific or evil intent.13
The employer’s expected standard of conduct is relevant in determining
whether the actions of the employee were sufficient to constitute “just cause” for
dismissal under Section 3314(2) of Title 19 of the Delaware Code.14 Violation of a
reasonable company policy may constitute just cause for discharge if the employee
is aware of the policy and the possible subsequent termination.15 In order to establish
“just cause” for termination in violation of a company policy the employer must
show that a policy existed prohibiting certain conduct and that the employee had
been made aware of the policy.16
Employer did not introduce evidence of its Misconduct Policy in its
presentation to the Appeals Referee. Since Employer did not establish that a
11
19 Del. C. § 3314(2).
12
Avon Prods., Inc. v. Wilson, 513 A.2d 1315, 1317 (Del. 1986).
13
Boughton v. Div. of Unemployment Ins. of Dep’t of Lab., 300 A.2d 25, 26 (Del.
Super. 1972).
14
Weaver v. Emp. Sec. Comm’n, 274 A.2d 446, 447–48 (Del. Super. 1971).
15
Jackson v. Christiana Care, 2008 WL 555918, at *2 (Del. Super. Feb. 29, 2008).
16
Id.5
company policy existed, the Appeals Referee found for Igo. Upon presentation of
the matter to the Board, Employer expanded the record and presented its Misconduct
Policy. Specifically, Employer presented its Misconduct Policy which prohibited
the use of threatening language and falsification of company records.17 The record
evidence contains a copy of the Employer’s handbook with Igo’s signature.18
Moreover, Igo acknowledged receipt of the Misconduct Policy.19 Therefore, the
record evidence supports the Board’s finding that Employer had a reasonable
company policy against misconduct and that Igo was aware of Employer’s
Misconduct Policy.
B. The Board committed legal error by failing to correct the Appeals
Referee’s error of denying Igo, a self-represented litigant, the
opportunity to present hearsay evidence.
Generally, an administrative agency is “not necessarily bound by strict
evidence rules” and has discretion on whether to consider hearsay.20 It is well-settled
in Delaware that hearsay evidence is permissible in administrative hearings, so long
17
Igo v. ACTS Ret.-Life Communities, No. 11134810 (Del. U.I.A.B. Feb. 25, 2020)
Emp.’s Ex. 1.
18
Id.19
Igo v. ACTS Ret.-Life Communities, No. 11134810, at 7 (Del. U.I.A.B. Dec. 11,
2019) (TRANSCRIPT) [hereinafter “UIAB Transcript”]. “Unknown Male: . . . is
that your signature, sir? Mr. Igo: Yes, it is.” Id.20
E. Shore Poultry, Inc. v. Lewis, 2000 WL 703808, at *2 (Del. Super. May 4, 2000).
6
as that evidence is not the sole basis for its decision.21 Administrative boards should
hear all evidence which could conceivably throw light on the controversy.22
Exclusion of relevant material and competent evidence is grounds for reversal if the
refusal is prejudicial.23
Here, the Board concluded Igo was terminated for just cause on the grounds
that Igo used threatening language and falsified company records in violation of the
Misconduct Policy. At the hearing, Employer’s witness stated that two other
employees, not present at the hearing, found Igo’s Logbook Note to be threatening.24
The Employer’s witness stated:
[A]nd it was taken as threat – [I] have the young lady and a young man that
worked on the other shift that took it as a threat. And they were very upset,
afraid [sic] what was the ramification going to be if they do their job.25
21
Husbands v. Del. Dep’t of Educ., 2020 WL 1814045, at *3 (Del. Apr. 7, 2020)
(TABLE) (citing Larkin v. Gettier & Assocs., 1997 WL 717792, at *3 (Del. Super.
Nov. 14, 1997)); see also Geegan v. Unemployment Comp. Comm’n, 76 A.2d 116(Del. Super. 1950).
22
Ellicott v. Stericyle Inc., 2015 WL 311094, at *5 (Del. Super. Jan. 23, 2015).
23
Ridings v. Unemployment Ins. Appeal Bd., 407 A.2d 238, 240 (Del. Super. 1979).
24
The record in this case is confusing. The hearing was held via telephone due to
the COVID-19 pandemic. As a result, some speakers on the transcript are labelled
as “unknown female” and “unknown male” which creates difficulty in understanding
who is testifying.
25
UIAB Transcript, No. 11134810, at 19.
7
The Board relied on Employer’s hearsay evidence in concluding Igo’s Logbook
Note was threatening.26
Because the persons who claimed to feel threatened did not testify as
witnesses at the Board hearing, Igo could not cross-examine the witnesses to
challenge their testimony or attack their credibility. The Board relied on Employer’s
hearsay evidence to conclude that Igo’s Logbook Note was threatening. Although
the Board may admit and consider hearsay evidence, the Board must not base its
decision solely on hearsay.27 The only record evidence to suggest that Igo’s
Logbook Note was threatening, and therefore a violation of Employer’s Misconduct
Policy, were the hearsay statements presented by Employer. Accordingly,
consideration of the hearsay evidence presented by Employer was prejudicial to Igo.
Even though the Board allowed Employer to present hearsay evidence, the
Board declined to consider the relevant hearsay evidence Igo sought to introduce at
the hearing. The Delaware Supreme Court considered the exclusion of relevant
evidence by the Board in Murphy & Landon, Professional Association v. Pernic.28
In that case, the Supreme Court considered whether the Board could adequately
remedy a legal error committed by the Appeals Referee by considering evidence of
26
Igo v. ACTS Ret. Life Communities, No. 11134810, at 2 (Del. U.I.A.B. Feb. 25,
2020).
27
E. Shore Poultry, 2000 WL 703808, at *2.
28
121 A.3d at 1215.
8
employee’s cumulative misconduct at the Board hearing.29 The Court concluded the
Appeals Referee improperly restricted the evidence regarding employee’s
cumulative misconduct, despite the employer’s argument that cumulative incidents
ultimately led to the employee’s termination rather than a single act of misconduct.30
In finding that the Board did not adequately remedy the error committed by the
Appeals Referee, the Court emphasized that rather than correcting the evidentiary
limitation imposed by the Appeals Referee, the Board deferred to the Appeals
Referee’s conclusion that the employee was fired for a single instance of misconduct
without any explanation.31 Moreover, the Court held the Board cannot simply ignore
substantial and relevant evidence without an explanation.32
As was true in Pernic, the Appeals Referee who considered Igo’s request for
benefits impermissibly excluded evidence by rejecting as hearsay evidence proffered
by Igo. Specifically, Igo sought to introduce written statements by co-workers to
prove he did not intend the note to be threatening and that it was not perceived as
threatening. The Appeals Referee declined to consider this evidence. Furthermore,
although the Board allowed the record to be expanded on Employer’s behalf beyond
the presentation to the Appeals Referee, the new evidence considered by the Board
29
Id. at 1222.
30
Id. at 1223.
31
Id.
32
Id. at 1224.
9
was limited to new evidence presented to the Board by Employer. The Board did
not allow Igo to present hearsay evidence rejected by the Appeals Referee, even
though Igo referenced co-worker statements as supporting Igo’s contentions that
Igo’s Logbook Note was not threatening.
The hearsay evidence Igo sought to present was probative of whether Igo’s
Logbook Note was threatening and therefore the failure to consider that evidence
was prejudicial to Igo. The Board did not address whether the Appeals Referee
improperly restricted the evidence presented with respect to Igo’s character. The
failure of the Board to allow Igo to present hearsay evidence was prejudicial to Igo
and constituted legal error.
Employer argues that the failure of the Board to consider Igo’s hearsay
evidence should be attributed to Igo and not to the Board. However, Igo was a self-
represented litigant at the hearing before the Appeals Referee as well as before the
Board. Self-represented litigants may be held to a less stringent standard in
presenting their cases under certain circumstances.33 A self-represented litigant
should be granted more leniency in articulating arguments in support of his or her
claim, affording the litigant an opportunity to be fully and fairly heard.34 Any failure
33
Hayward v. King, 2015 WL 6941599, at *4 (Del. Nov. 9, 2015) (TABLE).
34
Jackson v. Unemployment Ins. Appeal Bd., 1986 WL 11546, at *2 (Del. Super.
Sept. 24, 1986) (stating the Court may give a self-represented litigant leniency to
allow the case to be “fully and fairly heard”).
10
by Igo to formally present hearsay statements does not necessarily reflects Igo’s
choice not to present such evidence. Igo did reference the statements even if he did
not formally request that the statements be admitted into evidence. The Board was
required to address the error by the Appeals Referee.35 Moreover, failure to allow
statements by Igo’s co-workers to be presented by Igo at the Board hearing,
especially where Employer was permitted to present co-worker hearsay statements,
was legal error which requires reversal of the Board’s decision.
C. The Board committed legal error by failing to address whether Igo
was entitled to a final warning.
An employee terminated for just cause is not entitled to unemployment
benefits.36 Under Delaware law, an employer’s obligation to show “just cause” also
includes the burden to show “notice to the employee in the form of a final warning
that further poor behavior or performance may lead to termination”37 An exception
to the final warning rule arises when the willful or wanton misconduct is
“sufficiently serious” such that no prior warning is required. 38 However, even for
35
See Pernic, 121 A.3d at 1224.
36
Kids & Teens Pediatrics of Dover v. O’Brien, 2020 WL 6386646, at *3 (Del. Oct.
30, 2020) (TABLE) (citing Moeller v. Wilm. Sav. Fund Soc’y, 723 A.2d 1177, 1179
(Del. 1999)).
37
MBNA Am. Bank, N.A. v. Capella, 2003 WL 1880127, at *3 (Del. Super. Apr. 15,
2003).
38
Kids & Teens Pediatrics of Dover, 2020 WL 6386646, at *4 (citing Weaver v.
Emp. Sec. Comm’n, 274 A.2d 446, 447 (Del. Super. 1971)).
11
serious misconduct, a warning is required if an employer “consistently tolerates
willful or wanton misconduct.”39 In that circumstance, “the employer may not be
justified in firing employees without first warning them that their conduct no longer
is acceptable.”40
The employer bears the burden of proving by a preponderance of the evidence
that it terminated the employee for just cause.41 Here, that burden of proof for
Employer includes establishing that Employer did not have to warn Igo that his
misconduct would result in his termination. Although the Board concluded that
Igo’s misconduct was so egregious as to warrant immediate termination without any
warning, the legal standard requires a finding that similar conduct had not previously
been tolerated. Decisional law supports this conclusion.42
First, a warning is required for conduct that is not sufficiently serious to
warrant immediate termination. For example, Kids & Teens Pediatrics of Dover v.
O’Brien43 involved an employee who was discharged without warning.44 The
Claims Deputy found employee had been terminated for just cause and was
39
Kids & Teens Pediatrics of Dover, 2020 WL 6386646, at *3 (quoting Moeller,
723 A.2d at 1179).
40
Id. (quoting Moeller, 723 A.2d at 1179).
41
Pernic, 121 A.3d at 1222.
42
Id.
43
2020 WL 6386646, at *1.
44
Id.12
ineligible for unemployment benefits.45 The Appeals Referee determined that
employee was discharged without a warning and was qualified to receive benefits.46
The employer appealed to the Board which found the employer was required to
provide the employee with a final warning because her conduct was not sufficiently
serious to warrant immediate termination.47 Therefore, because the employer did
not provide an unequivocal warning putting the employee “on clear notice that a
repetition or continuation of certain behavior may lead to dismissal,” employee was
discharged without just cause.48 The employer appealed to the Superior Court which
affirmed the Board’s decision.49 The employer appealed to the Delaware Supreme
Court which held that Delaware law requires an employee to receive a final warning
before termination when the employee’s conduct is not sufficiently serious. 50
Otherwise, termination is without just cause.51
Second, even for conduct that is willful and wanton, fundamental fairness
requires an unambiguous warning for conduct that previously had been tolerated.52
45
Id.46
Id.47
Id. at *3.
48
Id. at *1.
49
Id. at *2.
50
Id. at *4.
51
Id. (affirming the Board’s decision that employee was terminated without just
cause because employee did not receive a final warning before termination).
52
Ortiz v. Unemployment Ins. Appeal Bd., 317 A.2d 100, 101 (Del. 1974). See also
Smoke v. Coventry Health Care, 2011 WL 2750711, at *3 (Del. Super. July 13,
2011).
13
In Ortiz v. Coventry Health Care, the Delaware Supreme Court held that a warning
was required before termination for serious misconduct when the employer had
previously tolerated similar misconduct. Ortiz had been caring for his wife who was
seriously ill and Ortiz’s employer had generously tolerated Ortiz’s tardiness and
absenteeism. Eventually, Ortiz’s employer terminated Ortiz because he continued
to be late and absent. The Delaware Supreme Court held that whether Ortiz had
been warned was a critical fact which must be supported by record evidence.53
Therefore, a warning is required to terminate an employee for serious misconduct
that previously had been tolerated.
The Board did not make findings regarding whether Igo was entitled to a
warning before he was fired. The Board’s failure to make findings on whether a
warning was necessary under the circumstances constitutes legal error and is
grounds for reversal of the Board decision.
D. The record does not include substantial evidence to support the
finding that Igo falsified company records.
The Board concluded Igo was terminated for falsification of company records
in violation of Employer’s Misconduct Policy. The Employer claimed that Igo
falsified the Daily Logbook by stating he had secured all doors when the following
shift found a balcony door unsecured. However, substantial evidence does not exist
53
Ortiz, 317 A.2d at 101.
14
in the record to support a finding that Igo falsified the Daily Logbook. For example,
the Employer’s witnesses’ statements contradict one another regarding whether Igo
failed to secure the door or whether it had been opened again after he secured it.
Before the Appeals Referee, Employer’s representatives stated:
[W]e did an investigation and found that [Igo] had falsified the [Daily
Logbook] and signed off that he had secured the door during his rounds.
Once we were made aware of this, we did review statements and did
review the [Daily Logbook] and found that he did falsify company
records and then used threatening language which warrants immediate
termination.54
However, Employer’s other representative stated before the Board:
[The other shift] did not report that Mr. Igo didn’t check the door. They
just reported that when they came onto their shift at midnight, they
found a door unlocked. Simple as that. . . . It was not directed at Mr.
Igo or anyone in particular. They were just stating a fact.55
In addition, Igo testified that persons other than he had access to the premises.56
Therefore, the Board’s conclusion that Igo had falsified records is not
supported by substantial evidence. Accordingly, the Board’s finding that Igo
falsified the Daily Logbook in violation of Employer’s Misconduct Policy does not
withstand appellate review and must be addressed by the Board on remand.
54
Igo v. ACTS Ret.-Life Communities, Appeal No. 11134810, at 9 (Oct. 31, 2019)
(TRANSCRIPT) [hereinafter “Appeals Referee Transcript”]. As stated above, this
portion of the record is confusing with respect to who is speaking.
55
UIAB Transcript, No. 11134810, at 19.
56
Appeals Referee Transcript, No. 11134810, at 26.
15
CONCLUSION
The Board’s decision must be free from legal error. The Board committed
legal error by failing to correct the error by the Appeals Referee which denied Igo,
a self-represented litigant, the opportunity to present hearsay evidence, as well as by
failing to allow Igo to introduce that hearsay evidence at the Board hearing. The
Board committed legal error by failing to address whether Igo was entitled to a final
warning – either because Igo’s conduct was not sufficiently serious as to warrant
termination without a final warning or because Employer had previously tolerated
similar misconduct by Igo or other employees such that a warning was required even
for willful and wanton misconduct. In addition, while the Board’s findings are
entitled to great deference by this Court, the Board’s conclusions must be supported
by substantial evidence and reflect a rational consideration of the record. Although
the record evidence supports the Board’s finding that Employer had a reasonable
company policy against falsifying records and that Igo had been informed of
Employer’s Misconduct Policy, the record does not include substantial evidence to
support the finding that Igo falsified company records.
16
NOW, THEREFORE, this 5th day of January, 2021 the decision of the
Unemployment Insurance Appeals Board is REVERSED and REMANDED for
further proceedings consistent with this opinion.
IT IS SO ORDERED.
Andrea L. Rocanelli
______________________________
The Honorable Andrea L. Rocanelli
17