GARY HOLMES, III VS. BOARD OF REVIEW (BOARD OF REVIEW, DEPARTMENT OF LABOR) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1420-15T1
GARY HOLMES, III,
Appellant,
v.
BOARD OF REVIEW and
AUTOZONERS, LLC,
Respondents.
____________________________________
Submitted February 7, 2017 – Decided March 21, 2017
Before Judges Fisher and Leone.
On appeal from the Board of Review, Department
of Labor, Docket No. DKT00060289.
Gary Holmes, III, appellant pro se.
Christopher S. Porrino, Attorney General,
attorney for respondent Board of Review,
(Melissa Dutton Schaffer, Assistant Attorney
General, of counsel; Tasha Bradt, Deputy
Attorney General, on the brief).
Respondent AutoZoners, LLC has not filed a
brief.
PER CURIAM
Claimant Gary Holmes III (Holmes) appeals the September 21,
2015 decision by the Board of Review (Board) affirming the denial
of unemployment benefits after his termination for severe
misconduct. We affirm.
I.
The following facts are derived from testimony heard by the
Appeal Tribunal (Tribunal). Beginning in February 2012, Holmes
was employed as a full-time parts manager at an AutoZone retail
store.1 He held this position until May 14, 2015, when he was
terminated for unauthorized removal or consumption of company
property without payment. Specifically, Holmes was discharged for
taking ten bottles of water over a period of approximately three
years, resulting in a loss of $16.90 for the retail store.
Holmes filed a claim for unemployment benefits. The Deputy
Director of Unemployment and Disability Insurance ("Deputy")
determined Holmes was disqualified from receiving unemployment
benefits on the grounds that he was terminated as a result of
"severe misconduct connected with the work." Holmes appealed to
the Tribunal, which held a telephonic hearing on July 13, 2015.
1
"AutoZone" is an auto parts retail chain. Holmes's employer was
AutoZoners, LLC, a wholly owned subsidiary of AutoZone Stores,
Inc. responsible for leasing employees to AutoZone retail stores.
We refer to both entities as "AutoZone." Diaz v. AutoZoners, LLC,
484 S.W.3d 64, 71 (Mo. Ct. App. 2015).
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At the hearing, AutoZone's Regional Loss Manager, Sean
Finegan, testified as follows. He and the District Manager
presiding over Holmes's store discovered Holmes's misconduct
during an unrelated loss prevention investigation after a returned
battery went missing. During the course of the investigation,
Finegan and the District Manager interviewed all the employees
working in the store that day. During his interview, Holmes
admitted to taking the ten bottles of water without paying for
them. Holmes was discharged shortly after the interview.
Finegan also testified Holmes knew stealing the bottles of
water was a violation of company policy. The company handbook
bars the "unauthorized possession or removal of . . . AutoZone's
property include[ing] but not limited to merchandise." The
handbook stated that "AutoZone has zero tolerance for any dishonest
activity." As an employee of AutoZone, Holmes was required to
acknowledge each year that he received and read the handbook.
Holmes testified at the hearing before the Tribunal. Holmes
confirmed he read and acknowledged AutoZone's company policy in
the handbook regarding theft of company merchandise. Holmes
conceded he signed a statement provided to him after his interview,
which explicitly stated that "[o]ver the three years of" employment
with AutoZone "I took ten bottles of water without paying for it."
Holmes initially testified that he admitted to taking the ten
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bottles of water, but that he merely forgot to pay for them when
he took them. Holmes later testified he "never took bottles of
water without authorization."
On July 13, 2015, the Tribunal affirmed the Deputy's denial
of unemployment benefits. Holmes appealed to the Board of Review.
The Board agreed with the Tribunal's findings of fact and opinion,
and affirmed. Holmes appeals.
II.
We must hew to our "limited" standard of review. Brady v.
Bd. of Review, 152 N.J. 197, 210 (1997). "'[I]n reviewing the
factual findings made in an unemployment compensation proceeding,
the test is not whether an appellate court would come to the same
conclusion if the original determination was its to make, but
rather whether the factfinder could reasonably so conclude upon
the proofs.'" Ibid. (citation committed). "If the Board's factual
findings are supported 'by sufficient credible evidence, courts
are obliged to accept them.'" Ibid. Therefore, our review "is
limited to determining whether the agency acted arbitrarily,
capriciously, or unreasonably." Lourdes Med. Ctr. of Burlington
Cnty. v. Bd. of Review, 197 N.J. 339, 360 (2009).
Prior to 2010, the Unemployment Compensation Law, N.J.S.A.
43:21-1 to -24.30, included only two levels of misconduct which
could disqualify an individual from unemployment benefits:
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misconduct and gross misconduct. N.J.S.A. 43:21-5(b) (2007); see
Silver v. Bd. of Review, 430 N.J. Super. 44, 48 (App. Div. 2013)
(tracing the evolution of the statute). Misconduct results in an
eight-week disqualification from unemployment benefits. N.J.S.A.
43:21-5(b). Gross misconduct requires "an act punishable as a
crime" and results in complete disqualification for benefits.
Silver, supra, 430 N.J. Super. at 48.
N.J.S.A. 43:21-5(b) was amended in 2010 to include an
intermediate level of misconduct, termed "severe misconduct."
Disqualification from benefits for severe misconduct remains in
effect until the individual becomes reemployed, works at least
four weeks, and reaches a certain earnings amount. N.J.S.A. 43:21-
5(b) (2010). The statute does not comprehensibly define severe
misconduct, but does provide examples of what may constitute severe
misconduct.
[R]epeated violations of an employer's rule
or policy, repeated lateness or absences after
a written warning by an employer,
falsification of records, . . . misuse of
benefits, misuse of sick time, abuse of leave,
theft of company property, . . . theft of time,
or where the behavior is malicious and
deliberate but is not considered gross
misconduct as defined in this section.
[N.J.S.A. 43:21-5(b) (emphasis added).]
In Silver, supra, we noted that the existing regulations,
promulgated before the 2010 statutory amendment, provided: "For
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an act to constitute misconduct, it must be improper, intentional,
connected with one's work, malicious, and within the individual's
control, and is either a deliberate violation of the employer's
rules or a disregard of standards of behavior which the employer
has the right to expect of an employee." 430 N.J. Super. at 52-
53 (quoting N.J.A.C. 12:17-10.2(a)(2003)). We held "[i]t would
make no sense to allow for conduct with a lower level of
culpability (such as mere inadvertence or negligence) to qualify
as severe misconduct[.]" Id. at 55. Thus, we construed the two
examples of severe misconduct quoted above as requiring acts done
"intentionally, deliberately, and with malice." Ibid. However,
the Silver court made clear "repetitive violation . . . may justify
a reasonable inference that the employee's disregard was
deliberate and in that sense, malicious." Id. at 57.
The regulations were amended by 47 N.J.R. 1009(a), effective
May 18, 2015. In response to Silver, this amendment repealed and
replaced N.J.A.C. 12:17-10.2 (2003); defined "severe misconduct"
as "an act which (1) constitutes 'simple misconduct,' as that term
is defined in this section; (2) is both deliberate and malicious;
and (3) is not 'gross misconduct,'" N.J.A.C. 12:17-2.1; and
incorporated the statutory examples of severe misconduct, ibid.
See 46 N.J.R. 1796(a); 47 N.J.R. 1009(a). The Board cites the new
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regulations, which became effective just four days after Holmes's
termination.
We need not decide whether the 2003 or 2015 regulations govern
here, because the evidence supported the Board's finding that
Holmes's conduct fell within the statutory examples of severe
misconduct, and was intentional, deliberate, and malicious.
III.
Here, the Tribunal properly found "the claimant was
discharged for theft in the amount of $16.90" and that "[h]e
admitted to his action" of causing a loss to AutoZone when he took
ten bottles of water without paying for them over three years.
The evidence also showed Holmes was aware of AutoZone's policy
manual, which detailed the company's prohibitions against the
unauthorized possession or removal of company merchandise, and its
zero tolerance policy.
Holmes argues he was wrongfully accused of stealing a missing
battery, and deceived into confessing he stole the bottles of
water. However, Holmes was free to leave the interview at any
time, and he instead voluntarily agreed to make a statement and
knowingly signed a written statement. The Tribunal could properly
credit his statement and find that his taking without paying was
intentional. We give "'due regard to the opportunity of the one
who heard the witnesses to judge [] their credibility.'" Makutoff
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v. Bd. of Review, 427 N.J. Super. 218, 223 (App. Div. 2012)
(citation omitted).
Thus, Holmes admitted to both "theft of company property" and
"repeated violations" of AutoZone's company policy, both examples
of severe misconduct in N.J.S.A. 43:21-5(b). Additionally, his
"repetitive violation[s] . . . justif[ied] a reasonable inference
that his disregard of company policies was deliberate and in that
sense malicious." Silver, supra, 430 N.J. Super. at 55, 57.
Therefore, Holmes's actions rose to the level of severe misconduct
under Silver, N.J.S.A. 43:21-5(b), and the various regulations.
The Board's decision was supported by sufficient credible evidence
in the record.
We recognize that a theft of ten water bottles, worth $16.90,
over three years, is hardly grand larceny. If Holmes's theft had
been criminally prosecuted, it would be a disorderly persons
offense. N.J.S.A. 2C:20-2(b)(4). Moreover, under the de minimis
exception in N.J.S.A. 2C:2-11(b), assignment judges are afforded
the discretion to dismiss a criminal prosecution if they find the
defendant's conduct "[d]id not actually cause or threaten the harm
or evil sought to be prevented by the law defining the offense or
did so only to an extent too trivial to warrant the condemnation
of conviction[.]" Such an exception has been applied in some
criminal theft cases. See State v. Smith, 195 N.J. Super. 468
8 A-1420-15T1
(Law Div. 1984) (applying the de minimis exception where a student
stole three pieces of gum valued at fifteen cents per piece).
However, N.J.S.A. 2C:2-11 expressly applies only in a criminal
"prosecution." Ibid. It "does not apply to persons charged with
juvenile delinquency," let alone to civil matters such as this.
State v. I.B., 227 N.J. Super. 362, 367 (App. Div. 1988).
N.J.S.A. 43:21-5(b) has no de minimis exception, and we
decline to create one. Further, even in the criminal context we
have cautioned that "attempts to define triviality by a monetary
amount are fraught with potential dangers." State v. Evans, 340
N.J. Super. 244, 252 (App. Div. 2001) (finding shoplifting of a
$12.90 hair bow was not de minimus). Ruling that an item is of
such a low value to be per se trivial "would send the wrong
message" which "could be seen as an authorization to shoplift
below that amount." Ibid. "For merchants it would be a potential
nightmare." Ibid. To create a de minimis exception for Holmes
could similarly encourage employee theft of low-value items over
extended periods of time. Moreover, as a parts manager, Holmes
is not someone who should have a casual attitude about theft of
company property.
In affirming the Tribunal's decision, the Board noted Holmes
admitted both verbally and in writing that he stole the water
bottles. Additionally, the Board noted Holmes "was given a full
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and impartial hearing and a complete opportunity to offer any and
all evidence." We cannot say the Board acted arbitrarily,
capriciously, or unreasonably.
Affirm.
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