JUSTICE - MALL, LLC, Employer-Appellant v. JAMIE BOLAND, Employee-Respondent, and DIVISION OF EMPLOYMENT SECURITY , 508 S.W.3d 153 ( 2016 )

JUSTICE – MALL, LLC, )
)
Employer-Appellant, )
)
v. ) No. SD34250
)
JAMIE BOLAND, ) Filed: Oct. 11, 2016
)
Employee-Respondent, )
)
and )
)
DIVISION OF EMPLOYMENT )
SECURITY, )
)
Respondent. )
APPEAL FROM THE LABOR AND
INDUSTRIAL RELATIONS COMMISSION
REVERSED AND REMANDED WITH INSTRUCTIONS
Justice – Mall, LLC (“Employer”) appeals the decision of the Labor and Industrial
Relations Commission (“the Commission”) that Jamie Boland (“Employee”) was not
disqualified from receiving unemployment compensation benefits as a result of being
discharged for misconduct. See sections 288.030.1(23) and 288.050.2.1 In a single point
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RSMo Non-cum. Supp. 2014. Section 288.030.1(23) defines “[m]isconduct” for purposes of unemployment
compensation as:
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relied on, Employer contends “the Commission acted without or in excess of its powers
under [section] 288.210, in that the Appeals Tribunal did not provide Employer a reasonable
opportunity for a fair hearing before rendering its decision when the Appeals Tribunal
refused to allow Employer to call rebuttal witnesses to contradict and impeach [Employee]’s
testimony.” Finding merit in this claim, we reverse the order of the Commission and
remand the matter to allow Employer to present its excluded rebuttal witnesses.
Applicable Principles of Review and Governing Law
We review this matter to determine whether the Commission “acted without or in
excess of its powers[.]”2 Section 288.210(1).3
[C]onduct or failure to act in a manner that is connected with work, regardless of whether
such conduct or failure to act occurs at the workplace or during work hours, which shall
include:
(a) Conduct or a failure to act demonstrating knowing disregard of the employer’s
interest or a knowing violation of the standards which the employer expects of his or
her employee;
(b) Conduct or a failure to act demonstrating carelessness or negligence in such degree or
recurrence as to manifest culpability, wrongful intent, or a knowing disregard of the
employer’s interest or of the employee’s duties and obligations to the employer;
(c) A violation of an employer’s no-call, no-show policy; chronic absenteeism or
tardiness in violation of a known policy of the employer; or two or more unapproved
absences following a written reprimand or warning relating to an unapproved absence
unless such absences are protected by law;
(d) A knowing violation of a state standard or regulation by an employee of an employer
licensed or certified by the state, which would cause the employer to be sanctioned or
have its license or certification suspended or revoked; or
(e) A violation of an employer’s rule, unless the employee can demonstrate that:
a. He or she did not know, and could not reasonably know, of the rule’s requirements;
b. The rule is not lawful; or
c. The rule is not fairly or consistently enforced[.]
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When, as here, the Commission adopts findings of the Appeals Tribunal, we also review those findings. See
Hubbell Mech. Supp. Co. v. Lindley, 351 S.W.3d 799, 807 (Mo. App. S.D. 2011).
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RSMo 2000.
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In an administrative proceeding, due process is provided by affording parties
the opportunity to be heard in a meaningful manner. The parties must have
knowledge of the claims of his or her opponent, have a full opportunity to be
heard, and to defend, enforce and protect his or her rights.
Weinbaum v. Chick, 223 S.W.3d 911, 913 (Mo. App. S.D. 2007) (citation and quotation
omitted). The Commission exceeds its authority when it affirms an Appeals Tribunal
determination based upon a record that reveals a party “was not provided a reasonable
opportunity for a fair hearing[.]” Id. at 914.
Section 288.190.2 requires the Appeals Tribunal to conduct hearings “in accordance
with regulations prescribed by the division for determining the rights of the parties[.]”
Those regulations provide “each party . . . the right to call and examine witnesses, . . . to
impeach any witness, . . . and to rebut the evidence against him/her[.]” Title 8 C.S.R. 10-
5.015(10)(B)(2). “Evidence is admissible if it is not irrelevant, immaterial, privileged or
unduly repetitious[,]” 8 C.S.R. 10-5.015(10)(B)(4), and disallowing relevant testimony may
constitute the denial of a fair hearing. Cf. Weinbaum, 223 S.W.3d at 914 (disallowing
testimony of proposed witness who had been suggested by another witness to possess
relevant information denied the proponent “a full opportunity to be heard on the matter”).
The employer bears the burden to prove misconduct by a preponderance of the
evidence. Wooden v. Div. of Emp’t Sec., 364 S.W.3d 750, 753 (Mo. App. W.D. 2012).
Whether particular conduct constitutes misconduct is a question of law on which we owe no
deference to the Commission. Id.
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The Evidentiary Hearing4
Because the second deputy involved in Employee’s claim had found in favor of
Employer on the issue of misconduct, Employer presented its evidence first. Included in a
“packet of documents” provided to the parties by the Division of Employment Security (“the
Division”) and admitted into evidence was a list of behaviors submitted by Employer
alleging, among other things, that Employee “[p]ermitted harassment of co-workers[.]” It
also included this statement made by Employee to the initial deputy: “Co-workers may have
called [another worker wearing a neck brace] crippled. I’m not sure. Nothing was
mentioned to me about professionalism.” Employer’s evidence included exhibits and
testimony by an operations manager, Keith Clavin, and Anntionette Veal, a coworker
managed by Employee. Employer’s counsel informed the Appeals Tribunal at the outset of
the hearing that Employer would have “no other witnesses[.]”
Mr. Clavin testified that, through a series of promotions, Employee had become an
assistant store manager and then a store manager on a probationary basis in July or August
2013. In February 2014, Employee signed a document (“the receipt”) that acknowledged
she had received “the Company’s Employee Handbook” (“the handbook”). The receipt also
stated that Employee understood that she was expected to read the handbook and that the
policies in it applied to her. The receipt and the handbook were admitted into evidence.
Mr. Clavin testified that Employee was discharged on April 7, 2015 by an “overall
store manager[,]” Kathy Cootwood. A form entitled “NOTICE OF SEPARATION” was
admitted into evidence at the hearing, and Mr. Clavin testified that this form (“the discharge
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Employer protested Employee’s claim for unemployment compensation, and a deputy initially determined
that Employee was not disqualified for receiving benefits based on Employer’s claim of misconduct. A
different deputy reconsidered that decision and determined that Employee was disqualified for benefits due to
misconduct connected with her work. It was Employee’s appeal of that decision that led to the evidentiary
hearing before the Appeals Tribunal.
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form”) was signed by both Ms. Cootwood and Employee. The discharge form included the
circled word, “Termination[,]” along with the designation “Eligible for Rehire: Yes No”
with the “No” circled. The discharge form had an area titled: “Reason for Separation
(include specific details)[.]” On the blank lines provided thereafter, the single word
“Performance” was handwritten.
Employee, who appeared pro se, provided testimony in response to questions posed
by the Appeals Tribunal referee, and she offered two exhibits that were received into
evidence. Employee then provided the following testimony when cross-examined by
Employer’s counsel. Employee said that she “never violated any company policies[,]” and
“whatever [she] did was to the . . . best of [her] personal ability[.]” Employee’s recollection
was that she was told her services were no longer needed because Employer had restructured
its operations. Employee recalled signing the discharge form, but she stated that when she
signed the form it did not indicate that she was being terminated because of performance
issues, and it was not marked to indicate that she was ineligible for rehiring.
Just prior to stating that he had completed his cross-examination of Employee,
Employer’s counsel stated that he would be calling Ms. Cootwood and Laura Williamson as
witnesses to testify (by telephone) about how the discharge form appeared at the time it was
signed by Employee. The referee observed that Employer had not identified either woman
as a witness at the beginning of the hearing. Employer’s counsel replied that he did not
know that Employee was going to testify inconsistently with the discharge form, and his
additional witnesses would impeach Employee’s testimony by testifying that the discharge
form “was completely filled out refuting [Employee’s] testimony[.]” The referee ruled that
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Employer’s additional witnesses would not be allowed to testify because Employer had not
followed the proper procedure of announcing them when the hearing began.
At the conclusion of Employee’s presentation of evidence, Employer’s counsel
announced Ms. Williamson and Ms. Cootwood as witnesses to testify “by telephone” right
then “to refute the testimony of [Employee] with respect to [the discharge form] and what
was completed or not completed when she signed it[.]” Employer’s counsel made an offer
of proof as to what he expected that testimony to be, but the referee again refused to hear
their testimony.
In its subsequent decision against Employer, the Appeals Tribunal found that
“[s]ince there was conflicting evidence presented, the issue of credibility is before the
[Appeals] Tribunal.” It then found “that [Employee’s] testimony is more credible than the
testimony of [E]mployer’s witnesses.” The decision explained details of the evidence that
led the Appeals Tribunal to find Employee “persuasive[,]” and it concluded:
On the whole record the competent and substantial evidence shows
that [Employee] was discharged due to restructuring. Employer did show
that [Employee] had some performance issues, but [E]mployer did not prove
that [Employee] was discharged for performance. Even if [E]mployer had
discharged her for performance, the issues presented did not rise to a policy
violation or to insubordination.
Employer appealed the decision of the Appeals Tribunal to the Commission.
The Commission adopted and incorporated those portions of the Appeals Tribunal’s
decision “not inconsistent with” its decision that Employee had not been discharged for
misconduct. Specifically, the Commission agreed with the Appeals Tribunal’s finding that
Employee’s “testimony was more credible than that of [E]mployer’s witnesses.” In doing
so, however, the Commission explicitly found that “the referee erred by not allowing
[E]mployer to call Ms. Coopwood [sic] to rebut [Employee’s] unexpected testimony that the
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[discharge form] she signed did not indicate the reason was for ‘performance’ and did not
indicate she was not eligible for rehire.” Despite that finding of error, the Commission
“ultimately agree[d] with the result reached by the Appeals Tribunal” because it was “unable
to discern evidence of anything more than possible poor job performance, the same reason
cited by [E]mployer in the [discharge form] entered into evidence.”
Analysis
Employer contends it was denied “a reasonable opportunity for a fair hearing” when
the Appeals Tribunal refused to hear testimony from “rebuttal witnesses to contradict and
impeach [Employee’s] testimony” and the ruling “was extremely prejudicial because
credibility was a central issue in this matter.” Employer maintains that testimony from its
“proposed rebuttal witnesses would have provided additional factual evidence regarding the
content of the [discharge form] as well as contradicting and impeaching [Employee’s]
testimony” such that it “could have altered the credibility determinations made by both the
Appeals Tribunal and the Commission.”
Even though “[t]he regulations give the referee considerable discretion in examining
witnesses and controlling the procedures to be used during the hearing[,]” Miller v. Bank of
the West, 264 S.W.3d 673, 678 (Mo. App. W.D. 2008), and the technical rules of evidence
do not apply, fundamental principles of evidence are nonetheless applicable in
administrative hearings. See Stone v. Mo. Dept. of Health & Senior Servs., 350 S.W.3d 14,
21 (Mo. banc 2011). In the trial context, “[i]t is established law that ‘[a]ny competent
testimony that tends to explain, counteract, repel or disprove evidence offered by [one party]
may be offered in rebuttal.’” Howard v. City of Kansas City, 332 S.W.3d 772, 785 (Mo.
banc 2011) (quoting State v. Gardner, 8 S.W.3d 66, 72 (Mo. banc 1999)). “Rebuttal
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evidence is evidence that attempts to ‘disprove or contradict’ the evidence to which it is
contrasted.” Id. at 785 n.14. “As a general proposition, the credibility of witnesses is
always a relevant issue in a lawsuit.” Mitchell v. Kardesch, 313 S.W.3d 667, 675 (Mo. banc
2010) (quotation omitted). The regulation governing unemployment compensation hearings
underscores the principles of impeachment and rebuttal by specifically permitting a party to
“impeach any witness” and “rebut the evidence against” the party. 8 C.S.R. 10-
5.015(10)(B)(2). Generally, “[t]he exclusion of proper evidence is presumed prejudicial
unless otherwise shown.” Aliff v. Cody, 26 S.W.3d 309, 321 (Mo. App. W.D. 2000).
The Division conceded at oral argument that the Appeals Tribunal erred in denying
Employer the opportunity for rebuttal, but it argues that the error “is immaterial” because the
discharge form simply documented poor job performance. In its brief, the Division argued
that there was no indication that the proposed witnesses “would have provided evidence that
[Employee] was discharged for misconduct[.]”
The Division’s position is flawed because it fails to account for the fact that poor job
performance is not necessarily excluded as a source of misconduct.5 The question is
whether the employee acted or failed to act in a statutorily-defined manner in connection
with her work so as to commit misconduct. See sections 288.030.1(23) and 288.050.2.
Conduct that is generally labeled by an employer as poor job performance in a particular
case may constitute, for example, an employee’s “knowing violation of the standards which
the employer expects of his or her employee”; “a knowing disregard of the employer’s
interest”; or a violation of an employer’s rule when the employee does not demonstrate:
5
In contending “that poor work performance is generally not misconduct[,]” the Commission relies on Hoover
v. Cmty. Blood Ctr., 153 S.W.3d 9, 14 (Mo. App. W.D. 2005). However, the statutory definition of
misconduct was significantly amended after the decision in Hoover was issued and before Employee was fired.
See L.2014, S.B. No. 510, § A, eff. Aug. 28, 2014.
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a. He or she did not know, and could not reasonably know, of the rule’s
requirements;
b. The rule is not lawful; or
c. The rule is not fairly or consistently enforced[.]
Section 288.030.1(23)(a), (b), and (e). In any event, no such determination is necessary here
because Employer correctly asserts that the Commission acted without or in excess of its
powers by issuing its decision before considering Employer’s relevant rebuttal evidence.
Employer’s point is granted, the order of the Commission is reversed, and the case is
remanded to allow Employer’s witnesses Cootwood and Williamson the opportunity to
testify.
DON E. BURRELL, J. – OPINION AUTHOR
JEFFREY W. BATES, P.J. – CONCURS
MARY W. SHEFFIELD, C.J. – CONCURS
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