Carrie L. Zupko, Relator v. St. Francis Campus Credit Union, Department of Employment and Economic Development ( 2015 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A14-1561
Carrie L. Zupko,
Relator,
vs.
St. Francis Campus Credit Union,
Respondent,
Department of Employment and Economic Development,
Respondent.
Filed March 2, 2015
Affirmed
Bjorkman, Judge
Department of Employment and Economic Development
File No. 32229742-5
Carrie L. Zupko, Flensburg, Minnesota (pro se relator)
St. Francis Campus Credit Union, National Credit Union Administration, Elizabeth
Martin, Austin, Texas (respondent)
Lee B. Nelson, Minnesota Department of Employment and Economic Development,
St. Paul, Minnesota (for respondent Department of Employment and Economic
Development)
Considered and decided by Hudson, Presiding Judge; Bjorkman, Judge; and
Reyes, Judge.
UNPUBLISHED OPINION
BJORKMAN, Judge
Relator challenges the decision of the unemployment-law judge (ULJ) that she
was discharged because of employment misconduct, arguing that the false representations
she made at her supervisor’s request were part of a single incident and a good-faith error
in judgment. We affirm.
FACTS
Relator Carrie Zupko worked for respondent St. Francis Campus Credit Union as
an office operations manager. In early January 2014, examiners from the National Credit
Union Administration (NCUA) were on-site to examine St. Francis’s financial records.
The NCUA examiners requested a computer file from Zupko’s supervisor. The
supervisor in turn asked Zupko to call the NCUA, pretend to be from the accounting
software company that maintained St. Francis’s financial records, and state that there was
a problem with the file in question, making it unavailable until the following week.
Zupko did as her supervisor requested.
On January 23, Zupko’s supervisor asked Zupko to reverse a loan transaction on
the supervisor’s son’s account. The supervisor did not provide Zupko with any
documentation for the reversal. While such documentation was normally required,
Zupko assumed her supervisor “would take care of the paperwork” and performed the
reversal without it.
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Two days later, Zupko learned that the NCUA was investigating her supervisor for
fraud. She informed the NCUA about the early January phone call. Zupko was
discharged on January 29.
Zupko applied to respondent Minnesota Department of Employment and
Economic Development (DEED) for unemployment benefits. DEED initially determined
that Zupko is eligible for benefits, and St. Francis appealed. At the evidentiary hearing,
Zupko acknowledged that she had called the NCUA and “pretended to be someone from
an accounting software company.” Zupko explained that she did not want to do it but did
not know what would happen to her if she did not follow her supervisor’s instructions.
She also acknowledged that she altered a loan. The ULJ determined that Zupko
committed employment misconduct and therefore is ineligible for benefits. Zupko sought
reconsideration, and the ULJ affirmed. Zupko brings this certiorari appeal.
DECISION
An employee who is discharged for employment misconduct is ineligible for
unemployment benefits. Minn. Stat. § 268.095, subd. 4(1) (2014). Whether an employee
committed employment misconduct is a mixed question of law and fact. Stagg v. Vintage
Place Inc., 796 N.W.2d 312, 315 (Minn. 2011). Whether an employee committed a
particular act is an issue of fact, which we review for substantial evidence, but whether
the act constitutes employment misconduct is a legal question, which we review de novo.
Id.
Employment misconduct is any “intentional, negligent, or indifferent conduct, on
the job or off the job that displays clearly: (1) a serious violation of the standards of
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behavior the employer has the right to reasonably expect of the employee; or (2) a
substantial lack of concern for the employment.” Minn. Stat. § 268.095, subd. 6(a)
(2014). Mere “good faith errors in judgment” are not employment misconduct. Id., subd.
6(b)(6) (2014). If the conduct in question was limited to a single incident, “that is an
important fact that must be considered in deciding whether the conduct rises to the level
of employment misconduct.” Id., subd. 6(d) (2014).
Zupko does not dispute that she gave false information to the NCUA but argues
that it was a single good-faith error in judgment that a reasonable employee would have
made under the circumstances. We disagree.
First, the record indicates that Zupko’s false statement to the NCUA was not an
isolated incident. The ULJ found that Zupko also complied with her supervisor’s request
to alter a loan despite knowing that she did not have the documentation required to do
so.1 While the ULJ did not conclude that altering the loan was itself employment
misconduct, that act defeats Zupko’s argument that her fraudulent phone call to the
NCUA was a single incident of dishonesty.
Second, the nature of Zupko’s conduct is inconsistent with the notion of a good-
faith error in judgment. An employee owes a duty of loyalty to her employer. Marn v.
Fairview Pharmacy Servs. LLC, 756 N.W.2d 117, 121 (Minn. App. 2008), review denied
(Minn. Dec. 16, 2008). And an employer has the right to rely on the employee’s
1
Zupko argues that she did not know the loan in question was fraudulent. The ULJ did
not find that Zupko was aware of the fraudulent nature of the loan, only that Zupko failed
to comply with standard documentation policy. The record substantially supports that
finding.
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integrity. Frank v. Heartland Auto. Servs., Inc., 743 N.W.2d 626, 630-31 (Minn. App.
2008). “Dishonesty that is connected with employment may constitute misconduct.”
Icenhower v. Total Auto. Inc., 845 N.W.2d 849, 856 (Minn. App. 2014) (quotation
omitted), review denied (Minn. July 15, 2014).
Zupko knowingly and intentionally made a false statement to a federal agency in
connection with an examination of her employer’s financial records. Her conduct was an
extremely serious violation of St. Francis’s reasonable expectations. Zupko’s intentional
dishonesty is not a good-faith error in judgment. Cf. Unbank Co. v. Dolphin Temp. Help
Servs., Inc., 485 N.W.2d 332, 333 (Minn. App. 1992) (explaining that determination of
good faith is an issue of “honesty of intent”), review denied (Minn. July 15, 1992).
Zupko asserts that she acted in good faith because she lied at the behest of her
supervisor. We agree that Zupko’s supervisor placed her in a difficult situation. But
Zupko owed a duty of loyalty to St. Francis, not her supervisor. She could have asked
questions or informed someone of her supervisor’s request. See Marn, 756 N.W.2d at
121-22 (holding that employee’s conduct undermining employer’s interests, rather than
reporting workplace concerns to appropriate entities, was misconduct). Instead, she
chose to lie to the NCUA.
Zupko also contends that her false statement was “immaterial” because her
supervisor had already “bankrupted [St. Francis] through fraud.” We are not persuaded.
The degree of actual damage caused by Zupko’s fraudulent phone call has little or no
bearing on whether that conduct was employment misconduct. See Skarhus v. Davanni’s
Inc., 721 N.W.2d 340, 344 (Minn. App. 2006) (opting to examine employee’s conduct
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“in the context of her job responsibilities” rather than the significance of the adverse
impact on the employer).
On this record, we conclude that Zupko committed employment misconduct and
is, therefore, ineligible for unemployment benefits.
Affirmed.
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