W. Schiavo, III v. UCBR ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
William Schiavo, III, :
Petitioner :
:
v. : No. 1880 C.D. 2016
: Submitted: March 31, 2017
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY PRESIDENT JUDGE LEAVITT FILED: September 1, 2017
William Schiavo (Claimant) has petitioned for review of an
adjudication of the Unemployment Compensation Board of Review (Board)
holding that Claimant was ineligible for unemployment compensation benefits
under Section 402(e) of the Unemployment Compensation Law (Law),1 43 P.S.
§802(e). The Board affirmed the Referee’s decision that Claimant committed
disqualifying willful misconduct by falsifying employee time records. For the
reasons that follow, we affirm the order of the Board.
Claimant worked for FedEx Freight, Inc. (Employer) as a manager of
operations in Croydon, Pennsylvania. Employees use the so-called Kronos system
to report their hours of work. They also complete Kronos Edit Forms to correct
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802(e).
Section 402(e) states, in pertinent part, that “[a]n employe shall be ineligible for compensation
for any week … [i]n which his unemployment is due to his discharge or temporary suspension
from work for willful misconduct connected with his work[.]” 43 P.S. §802(e).
any inaccuracies in their hours recorded in the system before the record is
submitted to payroll. On April 8, 2016, Claimant completed a Kronos Edit Form
for one of his subordinate employees, Martin Robert. Employer conducted an
investigation, and on May 3, 2016, discharged Claimant for falsifying the form.
On May 6, 2016, Claimant applied for unemployment compensation
benefits, but the Unemployment Compensation Service Center denied Claimant
benefits under Section 402(e) of the Law. Reproduced Record at 1a (R.R. __).
Claimant appealed, and a hearing was held before a Referee on August 15, 2016.
Both Employer and Claimant presented evidence.
Dmitry Shvartsband, Employer’s Employee Relations Specialist
Advisor, testified on behalf of Employer. Shvartsband testified that Claimant filled
out a Kronos Edit Form for two employees, Christopher Hughes and Martin
Robert, on April 6 and April 8, 2016, respectively. Specifically, Shvartsband
testified that Claimant completed the Kronos Edit Forms to show that the two
employees had taken meal breaks, when in fact they had not.
[Referee]: [] So well you can just explain how it came to your
attention that there was some problem of this nature.
[Shvartsband]: On April 20th one of the dockworkers, Martin
Robert, advised one of the supervisors in regards that he wasn’t
– he did not have the ability to take his meal break while
working on April 8th, 2016 and he left work at 22:00.
[Referee]: And so the Claimant did something related to that
you allege, or?
[Shvartsband]: The Claimant falsified Kronos [E]dit [F]orms.
[Referee]: To show what?
[Shvartsband]: To show that the meal break was taken.
[Referee]: All right. So what about the other date?
2
[Shvartsband]: And the other date of [April 6] a[n] individual
by Christopher Hughes did not take a meal break as well and
the Kronos [E]dit [F]orm states that meal break was taken and
different hours were entered into the Kronos time keep system.
[Referee]: All right. So was the Claimant the supervisor for
these individuals?
[Shvartsband]: Yes.
Notes of Testimony (N.T.) 7; R.R. 15a.
Shvartsband testified that employees must fill out their own Kronos
Edit Forms, which includes their signed acknowledgement that the recorded times
are accurate. Shvartsband acknowledged that a supervisor may complete a Kronos
Edit Form for a subordinate employee if the employee later confirms its accuracy.
Shvartsband testified that Claimant admitted to him that he had filled out Kronos
Edit Forms for both Robert and Hughes and that he had forged Robert’s signature
on the form. N.T. 7-8; R.R. 15a-16a.
Employer also offered into evidence the Kronos Edit Form that
Claimant completed on behalf of Robert. Certified Record, Item No. 14, Employer
Exhibit 1. The form states that on Friday April 8, 2016, Robert worked from 1:35
p.m. to 10:30 p.m., which included a meal break from 6:30 p.m. to 7:00 p.m. In
the portion to be completed by a manager, the form shows Claimant’s name and
signature. In the portion to be completed by the employee, the name Martin
Robert appears twice, once in print form and once in signature form. Shvartsband
testified that the entire Kronos Edit Form, including both the part filled out by
Claimant and the part purportedly filled out by Martin, were done in the same
handwriting, i.e., Claimant’s handwriting.
Claimant testified about the Kronos Edit Form used by Employer, and
his role in handling the Kronos time-keeping system.
3
[Claimant’s Attorney]: Can you explain what Kronos is?
[Claimant]: Kronos is our timekeeping system. A Kronos
[E]dit [F]orm is used on a daily basis for many reasons,
employees forget to punch in, there’s a problem with their
computer. The Kronos is a computer, it’s not a manual time
clock system so there’s often issues with it. Employees forget
to scan in, clock out, take lunches. A lot of times it was
verified with the employee and then the employee ultimately is
presented with the form to look over and then they [sic] sign off
on it.
N.T. 15-16; R.R. 23a-24a.
Claimant explained that in April 2016, another supervisor was on
vacation, and in his absence, Claimant assisted the afternoon/evening supervisor,
Kevin Tinney, with administrative matters, which included handling Kronos Edit
Forms. Claimant testified that on Friday April 8, 2016, a subordinate, Martin
Robert, forgot to punch out at the end of his shift. The Kronos system also showed
that Robert had not punched in and out for a meal break. Robert was not scheduled
to report back to work until the following Monday, April 11, at 1:00 p.m. Because
payroll is calculated Mondays at 10:00 a.m., Claimant called Robert and asked for
his correct hours so that Claimant could enter the accurate times in the Kronos
computer system in order to ensure that Robert was paid for the hours he actually
worked. Claimant testified that while he was on the phone, he jotted down
Robert’s hours on a Kronos Edit Form and entered the hours into the computer,
which was “normal practice.” N.T. 20; R.R. 28a. Claimant testified regarding his
conversation with Robert about his meal break as follows:
[Claimant]: So I called [Robert] on the phone, I said hey bud,
you’re missing a punch. He gave me the times; I wrote them
down on the form in my office. And then he started saying
about [Kevin Tinney] not wanting, giving him a lunch and he
started on a rant of being upset about different things. So I said
4
to him okay bud, I’ll put this in, we’ll make sure you get paid
and then we’ll talk about your other issues on Monday. Make
sure you come and see me on Monday. He said okay boss,
thanks have a good weekend.
N.T. 18; R.R. 26a.
Claimant testified that he advised Robert that when he arrived for
work on Monday, he would need to sign the Kronos Edit Form acknowledging that
the hours reported on the form were correct. The form would then be submitted to
payroll to verify that the hours previously logged in the computer were correct.
Claimant further testified as follows:
[Claimant’s Attorney]: Okay. So with regards to the Kronos
form that you filled out was it ever your intention to have that
form submitted?
[Claimant]: Never. Never my intention.
[Claimant’s Attorney]: What was your intention with that
form?
[Claimant]: That form was simply a reminder to me. After the
message to Martin [Robert] and the phone call I was basically
writing the information. It was going to be on my desk. It was
a reminder. I had an in-bin and it was there on the in-bin was
the last I can remember for him to come in and sign it.
N.T. 20; R.R. 28a. Claimant testified that he often filled out a Kronos Edit Form
“as a reminder;” he “would make these notations in [his] office, fill out the forms,
leave them in [his] desk” and later catch up with the employee. N.T. 17; R.R. 25a.
Claimant admitted that he filled out the Kronos Edit Form for Robert
and printed Robert’s name on the form. However, he denied writing Robert’s
signature on the form. Claimant also testified that he did not submit Robert’s form
to payroll; he surmised that another supervisor who had access to his office had
submitted the form to payroll.
5
Claimant next testified about Christopher Hughes’ Kronos Edit Form:
[Claimant’s Attorney]: Can you tell me what exactly happened
with [Christopher Hughes’] form?
[Claimant]: Chris, I believe his form, his hours were incorrect.
According to the audit report and conferring with [Kevin
Tinney] who was his direct report I asked [Tinney] … did he
actually work these hours? He said well, I was going to have
him take a lunch because Martin was filling in for his
supervisor so I’m not sure but I’ll take care of it Bill. So I think
that these are the times. I had originally other times put in and I
whited them out and put in correct times based on what
[Tinney’s] response was to me. But the bottom line [is] he was
going to present this to the employee. Ultimately the employee
would review it and sign it.
[Claimant’s Attorney]: And did the form come back to you
signed?
[Claimant]: No, it never came back to me. [Tinney] handled it
from that point forward.
N.T. 24; R.R. 32a.
Claimant testified that Shvartsband visited his facility and questioned
him generally about the Kronos system and Kronos Edit Forms. Shvartsband was
an infrequent visitor to the Croydon center and Claimant did not infer that he was
under investigation by Shvartsband’s questions.
[Claimant’s Attorney]: At any point in time when
[Shvartsband] was asking you questions were you ever
informed that you were being investigated for falsification of
records?
[Claimant]: Never.
[Claimant’s Attorney]: Okay. And during the time period
where [Shvartsband] was asking you questions did he ever
actually show you Mr. Robert’s form?
6
[Claimant]: He never directly showed it to me. He opened the
file casually so I would see it.
[Claimant’s Attorney]: Okay. And what did you say if
anything in response?
[Claimant]: Well he showed me Chris’s, Chris Hughes, which
is a normal edit form that was handled by [Tinney]. And then
Zach Peiffer who was normal, it was a normal edit for that was
handled by [Tinney]. And then he opened Martin’s form,
folder like this. I immediately spotted the form, I said how is
that in there why is that in the form? And [Shvartsband] closed
the file and said don’t worry about that and pushed it off to the
side.
[Claimant’s Attorney]: Okay. Were any other questions asked
at that point about Mr. Robert’s forms?
[Claimant]: No.
N.T. 23; R.R. 31a.
Employer did not call Robert to rebut Claimant’s testimony.
Likewise, Claimant did not call Robert to corroborate his testimony.
The Referee found Claimant ineligible for benefits under Section
402(e) of the Law. Specifically, the Referee made the following findings of fact:
1. For the purpose of this appeal the [C]laimant was last
employed as a full-time manager of operations with [Employer]
from June 16, 2008 until May 3, 2016, his last day of work, at a
final rate of pay of $3,097 biweekly.
2. In April 2016, the [C]laimant falsified a [K]ronos [E]dit
[F]orm regarding an employee’s time worked and breaks taken
on April 8, 2016.
3. During April 2016, the [E]mployer conducted an
investigation regarding employee time information.
4. During the investigation, the [C]laimant admitted that he had
signed his name to an employee’s form.
7
5. On May 3, 2016, after completing an investigation, the
[E]mployer terminated the [C]laimant’s services in part for
falsification of a [K]ronos [E]dit [F]orm dated April 8, 2016.
Referee Decision, 8/17/2016, Findings of Fact Nos. 1-5, at 1-2; R.R. 39a-40a.2
The Referee credited Shvartsband’s testimony over Claimant’s testimony:
In this case, the [E]mployer’s [W]itness testified that the
[C]laimant admitted to signing an employee’s name to a
document dated April 8, 2016 known as a [K]ronos [E]dit
[F]orm. The referee finds the testimony of the [E]mployer’s
[W]itness credible and resolves all conflicts in the testimony in
favor of the [E]mployer.
The [C]laimant denied that he signed an employee’s name to a
[K]ronos [E]dit [F]orm. The [C]laimant further denied that he
admitted to doing so during an investigation. The referee is
unable to accept the [C]laimant’s testimony as credible. The
competent evidence in the record reveals the [C]laimant
falsified a time record of an employee. Such conduct
constitutes a disregard of the standards of behavior an employer
has a right to expect of an employee. Therefore, the [C]laimant
is ineligible for benefits under Section 402(e) of the [Law].
Referee Decision, 8/17/2016, at 2; R.R. 40a. Claimant appealed to the Board.
The Board affirmed the Referee. In doing so, the Board adopted the
Referee’s findings, conclusions, and credibility determinations. The Board
modified Findings of Fact No. 2 and 4 as follows:
[2.] In April 2016, the [C]laimant falsified a coworker’s
Kronos [E]dit [F]orm by fraudulently logging that the coworker
took a break and by forging the coworkers’ signature.
***
2
The Referee made findings of fact that Claimant falsified and forged Robert’s Kronos Edit
Form. The Referee did not make any findings regarding the alleged falsification of Hughes’
Kronos Edit Form.
8
[4.] During the investigation, the [C]laimant admitted to
falsifying the coworker’s Kronos [E]dit [F]orm.
Board Adjudication, 10/21/2016, at 1. Claimant petitioned for this Court’s review.
On appeal,3 Claimant argues that two of the Board’s findings of fact
are not supported by substantial evidence and that Employer did not satisfy its
burden of proving that Claimant engaged in willful misconduct.
In his first issue, Claimant challenges the Board’s Findings of Fact
Nos. 2 and 4. He contends that those findings are not supported by substantial
evidence, which is “relevant evidence upon which a reasonable mind could base a
conclusion.” Stage Road Poultry Catchers v. Department of Labor and Industry,
Office of Unemployment Compensation, Tax Services, 34 A.3d 876, 885 (Pa.
Cmwlth. 2011). In reviewing a substantial evidence argument, this Court must
examine the evidence in the light most favorable to the prevailing party and give
that party the benefit of any inferences that can be logically and reasonably drawn
from the evidence. Id. “Findings made by the Board are conclusive and binding
on appeal if the record, when examined as a whole, contains substantial evidence
to support those findings.” Ross v. Unemployment Compensation Board of
Review, 861 A.2d 1019, 1022 (Pa. Cmwlth. 2004) (quoting Kelly v. Unemployment
Compensation Board of Review, 776 A.2d 331, 336 (Pa. Cmwlth. 2001)).
Finding of Fact No. 2 states that Claimant “falsified a coworker’s
Kronos [E]dit [F]orm by fraudulently logging that the coworker took a break and
by forging the coworkers’ signature.” Board Adjudication, 10/21/2016, at 1.
3
Our scope of review of the Board’s decision is to determine whether errors of law were
committed, constitutional rights were violated, and necessary findings of fact are supported by
substantial evidence. 2 Pa. C.S. §704; Oyetayo v. Unemployment Compensation Board of
Review, 110 A.3d 1117, 1121 n.2 (Pa. Cmwlth. 2015).
9
Claimant argues that this finding is not supported by substantial evidence because
he testified that he completed the form only as a reminder to himself of Robert’s
correct hours. Further, Claimant specifically told Robert that he had to sign the
form. Mistakenly, the form was submitted to payroll by an unknown third party
before Robert could sign it. Claimant also argues that there was no falsification of
hours because he completed the form only after he spoke with Robert, who advised
Claimant of his punch-in and punch-out times.
Claimant also contends that the Board’s Finding of Fact No. 4 that
“[d]uring the investigation, the [C]laimant admitted to falsifying the coworker’s
Kronos [E]dit [F]orm” is not supported by substantial evidence. Board
Adjudication, 10/21/2016, at 1. He asserts that his testimony established that he
was never asked about Robert’s Kronos Edit Form during the alleged investigation.
Indeed, when Claimant saw Robert’s form in Shvartsband’s file, he immediately
asked how it got there; the form was only a reminder to himself and should not
have been submitted to payroll. Claimant argues that this was the extent of his
discussion with Shvartsband pertaining to Robert’s Kronos Edit Form. He never
admitted to forging Robert’s signature or submitting the document to payroll.
We reject the argument that the findings of fact challenged by
Claimant are not supported by substantial evidence. Shvartsband testified that
Claimant admitted that he filled out Robert’s Kronos Edit Form and signed
Robert’s signature. The Board credited Shvartsband’s testimony over Claimant’s
contradictory testimony. Claimant’s real challenge is to the Board’s credibility
determination, but “questions of credibility and the resolution of evidentiary
conflicts are within the sound discretion of the Board, and are not subject to re-
evaluation on judicial review.” Peak v. Unemployment Compensation Board of
10
Review, 501 A.2d 1383, 1388 (Pa. 1985) (quoting Miller v. Unemployment
Compensation Board of Review, 405 A.2d 1034, 1036 (Pa. Cmwlth. 1979)).
Accordingly, we are constrained to conclude that Claimant’s argument in this
regard lacks merit.
Claimant next argues that Employer did not satisfy its burden of
proving that Claimant engaged in willful misconduct. Specifically, Claimant
contends that the Board erred in finding that he “consciously disregarded”
Employer’s interest because he did not intend that Robert’s Kronos Edit Form be
submitted to payroll. Because Claimant did not consciously disregard Employer’s
interest or intend to mislead Employer, his actions did not rise to the level of
willful misconduct.
Section 402(e) of the Law disqualifies a claimant from receiving
unemployment compensation benefits if “his unemployment is due to his discharge
or temporary suspension from work for willful misconduct connected with his
work[.]” 43 P.S. §802(e). Willful misconduct is not defined in the Law, but has
been explained by this Court as the:
(a) wanton and willful disregard for an employer’s interests,
(b) deliberate violation of an employer’s rules, (c) disregard for
standards of behavior which an employer can rightfully expect
of an employee, or (d) negligence indicating an intentional
disregard of the employer’s interests or an employee’s duties
and obligations.
Ross, 861 A.2d at 1022 (quoting Caterpillar, Inc. v. Unemployment Compensation
Board of Review, 703 A.2d 452, 456 (Pa. 1997)). The employer has the burden of
proving that a claimant was discharged for willful misconduct. Id. Notably, a
claimant’s falsification of his employer’s records constitutes a disregard for the
standards of behavior an employer has the right to expect of its employees. See
11
Henninger v. Unemployment Compensation Board of Review, 468 A.2d 1191 (Pa.
Cmwlth. 1983) (finding claimant engaged in willful misconduct by falsifying
overtime hours for himself and his subordinates).
Claimant’s assertion that he lacked the requisite mens rea to commit
willful misconduct is premised solely on his own testimony, but that testimony was
not credited by the Board. Claimant is mistaken that the Board needed to
demonstrate that he had an intent to deceive or mislead Employer. Where “there is
a conscious indifference to the perpetration of a wrong, or a reckless disregard of
the employee’s duty to his employer [a claimant] can be discharged for willful
misconduct and will be denied benefits.” Lee v. Temple University (Personnel),
363 A.2d 890, 891 (Pa. Cmwlth. 1976) (quoting Philadelphia Transportation
Company v. Unemployment Compensation Board of Review, 141 A.2d 410, 413
(Pa. Super. 1958)). Our decision in Lee is particularly instructive because it
applied this principle where a claimant was discharged for logging incorrect hours
for a subordinate without intending to defraud her employer.
In Lee, the claimant worked as a housekeeping supervisor, who
admitted that she had marked time cards to show that an employee under her
supervision had either reported to or departed from work when in fact the
employee had not done so. The claimant believed this was an acceptable practice
if an employee notified her that he or she would have to report late or depart early
from work for a good reason. When the employer learned of the claimant’s
practice, it discharged her. On appeal, this Court rejected the claimant’s argument
that she did not commit willful misconduct because she was merely exercising her
supervisory discretion to change time records. We held that the claimant’s
“conduct in making changes on employee time cards amounted to a disregard of
12
the standard of behavior which the employer had a right to expect of her, and this
was willful misconduct….” Lee, 363 A.2d at 892.
Further, in Schooley v. Unemployment Compensation Board of
Review, 402 A.2d 1109 (Pa. Cmwlth. 1979), the claimant was discharged for
punching in the time cards of two of her coworkers. Although the coworkers’
hours were recorded correctly, we held that the claimant had engaged in willful
misconduct:
It may well seem that claimant’s conduct was no more than a
friendly and considerate favor to her coworkers without any
harm or prejudice to her employer, yet such conduct amounted
to a disregard of behavior which an employer has a right to
expect of an employee.
Id. at 1110.
In sum, intent to mislead is not required for a claimant to commit
willful misconduct under Section 402(e) of the Law. Here, the Board found that
Claimant transcribed incorrect information regarding a subordinate employee’s
hours and forged the employee’s signature on that document. These factual
findings support the Board’s legal conclusion that Claimant engaged in willful
misconduct under Section 402(e).4
4
Claimant alleges that Employer did not meet its burden of showing that Claimant violated an
established work rule. It is true that when a charge of willful misconduct is based on the
violation of a work rule, the employer must prove the existence of the rule, the reasonableness of
the rule, and the fact of its violation. Ellis v. Unemployment Compensation Board of Review, 59
A.3d 1159, 1162 (Pa. Cmwlth. 2013). However, Employer did not discharge Claimant pursuant
to violation of a work rule. Claimant was discharged because he disregarded a standard of
behavior an employer has the right to expect of its employee. It is well-settled that “the
existence of a specific rule is not necessary where the employer has a right to expect a certain
standard of behavior, that standard is obvious to the employee, and the employee’s conduct is so
(Footnote continued on the next page . . .)
13
For the reasons stated above, we affirm the order of the Board.
_____________________________________
MARY HANNAH LEAVITT, President Judge
(continued . . .)
inimical to the employer’s interest that discharge is a natural result.” Id. Accordingly,
Claimant’s final argument fails.
14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
William Schiavo, III, :
Petitioner :
:
v. : No. 1880 C.D. 2016
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 1st day of September, 2017, the order of the
Unemployment Compensation Board of Review dated October 21, 2016, in the
above-captioned matter is AFFIRMED.
______________________________________
MARY HANNAH LEAVITT, President Judge