K. Richards v. UCBR ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Kerry Richards, :
:
Petitioner :
:
v. : No. 2090 C.D. 2016
: Submitted: May 12, 2017
Unemployment Compensation :
Board of Review, :
:
Respondent :
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE DAN PELLEGRINI, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: October 6, 2017
Kerry Richards (Claimant) petitions for review of the December 2,
2016 order of the Unemployment Compensation Board of Review (Board) that
reversed a referee’s decision and held that Claimant is ineligible for unemployment
compensation benefits pursuant to Section 402(e) of the Unemployment
Compensation Law (Law).1 We affirm.
Claimant began working for Penn State University (Employer) on
August 1, 1989. She last worked as the full-time director of the Pesticide Education
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§802(e). Section 402(e) provides that an employee shall be ineligible for compensation for any
week in which her unemployment is due to her discharge from work for willful misconduct
connected with her work.
Program on July 29, 2016, when Employer discharged Claimant for alleged
violations of at least nine of Employer’s policies. Claimant filed a claim for
unemployment compensation benefits, but the local service center found that
Claimant had committed willful misconduct and denied benefits under Section
402(e). Claimant appealed.
A referee held a hearing on October 5, 2016.2 Dr. Dennis Calvin,
Employer’s Associate Dean and Director of Extension and Claimant’s direct
supervisor, testified that in his position, he oversaw outreach programs such as the
Pesticide Education Program. He stated that issues with Claimant first became
apparent when the central finance department discovered an issue with a purchase
and implemented an audit. Dr. Calvin testified that the audit revealed that Claimant
violated several policies and procedures and the results of the audit served as the
basis for Claimant’s termination. Notes of Testimony (N.T.) at 8-10.
Dr. Calvin testified that Claimant failed to follow Employer’s policies
for selecting third party vendors when she hired Chazzbo Media. Chazzbo Media
employed an individual who had retired from Employer’s College of Agricultural
Sciences, and Dr. Calvin stated that Claimant failed to follow proper procedure for
hiring a retired employee when she engaged Chazzbo Media. Dr. Calvin testified
that Claimant also hired an employee who split time between Chazzbo Media and
the Pesticide Education Program such that the employee worked full-time, but
circumvented employment rules that would have required that employee to receive
benefits. N.T. at 10-11.
2
Ruth Fleck, a Human Resources Specialist for Employer, testified to confirm the details
of Claimant’s employment with Employer. N.T. at 7. Erikka Runkle, Employer’s Human
Resources Strategic Partner, and Crystal Switalski, Employer’s Human Resources Manager, also
attended but did not offer testimony.
2
Dr. Calvin testified that an employee under Claimant’s supervision
improperly used an Employer-provided purchase card (P-card) to buy, with
university funds, Louisiana State University (LSU) items as a gift for a departing
intern, who also happened to be Claimant’s stepson. Dr. Calvin stated that the items
were also improperly recorded as a giveaway, which implied that university funds
were used to purchase materials for marketing or public relations purposes relative
to the Pesticide Education Program. He testified that Employer considered the use
of university funds to make personal purchases to be theft. He further stated that the
gift did not constitute a giveaway. N.T. at 11-13.
Dr. Calvin testified that Claimant violated Employer’s policies
governing hiring relatives on several occasions when she employed her husband on
behalf of the program. In these instances, Dr. Calvin stated, Claimant set her
husband’s rate of pay and authorized the payment, which Employer’s policy
prohibited as it posed a conflict of interest. He also stated that Claimant violated
Employer’s policy regarding timecard reporting and accurate record keeping by
having another employee complete a timecard for her husband when proper
procedure required that employees complete and sign their own timecards. N.T. at
13-15.
Dr. Calvin further testified that Claimant violated Employer’s policy
regarding timecard reporting and accurate record keeping on several other occasions.
He stated that Claimant instructed several interns, who worked as hourly wage
employees, to submit an additional eight hours that had not been worked on their
timecards. Dr. Calvin stated that this would also be considered theft. He testified
that Claimant also instructed an employee who worked overtime to take
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compensatory time, which is not permitted by Employer, rather than pay the
employee overtime as required by Employer’s policy. N.T. at 15-17.
Dr. Calvin testified that Claimant violated Employer’s policy regarding
the use of Employer’s facilities by storing granite countertops for her personal use
in a facility that Employer had leased for the Pesticide Education Program. Dr.
Calvin stated that Employer also considered this to be theft. Additionally, Dr. Calvin
testified that Claimant lost her P-card and an Employer-owned laptop and failed to
follow proper procedure to report the lost items to Employer, though the items were
ultimately recovered. N.T. at 17-18.
Allison Brumbaugh, a Financial Auditor for Employer, testified that a
colleague requested that she run some P-Card transaction monitoring reports for the
Pesticide Education Program. She explained that a grant from the Pennsylvania
Department of Agriculture funded the Pesticide Education Program, but that
Employer managed the grant and its policies regarding spending governed P-Card
transactions. She stated that the LSU transaction, totaling over $100, for the
purchase of a jersey was inappropriately described as a giveaway and prompted a
full investigation for violation of Employer’s policies. N.T. at 32, 40-41.
Brumbaugh testified that she spoke with Claimant and that Claimant
admitted that she authorized the LSU purchase and that items were given as a gift to
her stepson when he left his position as a wage employee for the Pesticide Education
Program. Brumbaugh stated that several employees interviewed during the audit
said that they collected personal funds to pay for the items, outside of Employer’s
P-Card or any university fund. She noted that the collected funds were likely used
to pay for a lion statue and a meal, but no collected funds were used to reimburse
Employer for the LSU jersey. N.T. at 32, 38.
4
With regards to Chazzbo Media, Brumbaugh testified that outside
vendors required approval by Employer if purchases were over a certain threshold
amount, which was met in this case. She stated that even if Chazzbo Media was an
approved vendor by the Department of Agriculture, Claimant was still obligated to
have the vendor approved by Employer and failed to do so. Brumbaugh also
explained that this approval would have alerted Employer to the fact that Chazzbo
Media employed one of Employer’s retirees. She stated that the policy requiring
approval to hire retirees covered not just Employer’s departments, but also the hiring
of independent contractors like Chazzbo Media. She explained that hiring a retiree
in this manner, without proper approvals through appropriate channels, could impact
the retiree’s retirement benefits. Though the retired employee was not paid by
Employer, but as an employee of Chazzbo Media, Brumbaugh stated that
Employer’s policy required Claimant to seek approval because she had actual
knowledge that a retired employee was working on the project. N.T. at 33, 39-40.
Additionally, Brumbaugh testified that another employee was
submitting timecards to Employer that reflected the maximum hours that a part-time
employee is authorized to work and that Chazzbo Media was billing the Pesticide
Education Program for any additional hours that employee worked. Brumbaugh
explained that there was a chance that the employee should have been offered
benefits through Employer but the time-splitting arrangement denied the employee
the opportunity. N.T. at 34.
Brumbaugh further testified that the audit identified three instances
where Claimant approved and submitted timecards for her husband’s time. She
stated that the timecards were submitted by Claimant with no evidence that her
husband had authorized or signed the timecard, as required by Employer’s policy as
5
evidence that he actually worked the time. Moreover, Brumbaugh stated that under
Employer’s policy, Claimant would not be permitted to supervise her husband;
however, the three timecards demonstrated no supervisor approval other than
Claimant’s for her husband’s time and rate of pay. N.T. at 34, 42.
Brumbaugh testified that Claimant authorized paid interns to add eight
additional hours to their timecards. She stated that one of the interns confirmed to
Brumbaugh in an interview that they were directed to do so by Claimant.
Brumbaugh admitted that she did not recall asking the interns interviewed whether
they had actually worked the extra hours they were instructed to include on their
timecards. N.T. at 35, 39.
Brumbaugh testified that Claimant did not report that she had lost her
Employer-issued laptop and P-Card in November until she was interviewed during
the audit in January. Brumbaugh stated that Claimant only officially reported the
loss subsequent to the interview. N.T. at 35.
Brumbaugh stated that Claimant had used an Employer vehicle to
transport equipment to North Carolina and that the vehicle was stored in North
Carolina for the duration of the time that the equipment was in use there. She
explained that Claimant failed to follow Employer’s policy that offsite storage of its
vehicles should be approved and confirmed by risk management. Brumbaugh also
testified that the audit revealed that Claimant stored granite countertops for her
personal use in a facility leased by Employer on behalf of the Pesticide Education
Program. N.T. at 36.
Claimant testified that she not only believed that Chazzbo Media’s
status as an approved vendor by the Department of Agriculture would be sufficient
for approval by Employer, but that Chazzbo Media already was an approved vendor
6
because Employer’s College of Health and Human Development had engaged
Chazzbo Media’s services several years earlier. Claimant further stated that she did
not understand there to be any problem with the retiree’s benefits from Employer as
the result of that retiree’s work on Chazzbo Media’s project with the Pesticide
Education Program. Claimant also testified that the other employee who split time
between Chazzbo Media and the Pesticide Education Program was hired prior to the
policy change that created an issue with his employment status. Claimant stated that
she received paperwork regarding the new policy, but no training. N.T. at 42-43.
Claimant testified that she did not authorize the use of a P-Card to
purchase gifts for her stepson when he left employment with the Pesticide Education
Program. She stated that she expected that all gifts would be paid for with funds
collected from employees in the office by the employee who coordinated the
purchases. Claimant explained that she told that employee that she did not want to
be involved in the process other than to contribute her fair share to the gift fund.
Claimant testified that the first time that she became aware of the purchase was in
an interview with Brumbaugh during the audit. N.T. at 44.
Claimant testified that during a November 2014 trip from a pesticide
outreach program in Wilmington, Delaware to a meeting in Kennett Square,
Pennsylvania, the bag that contained her Employer-issued laptop and P-Card fell out
of the U-Haul vehicle she rented. Claimant stated that she called the Kennett Square
police and Kennett Square road master to determine if the bag had been turned in.
Claimant stated that afterwards, she received a phone call from a restricted number
where a man stated that he had the bag and wanted to arrange its return but did not
leave his name or contact information. Claimant testified that she reported the P-
Card as lost to PNC Bank and that the following week her P-Card was identified by
7
Employer as one of several cards that had been compromised and so the P-Card was
reissued. She stated that following the Christmas holiday, she spoke with one of
Employer’s IT professionals who subsequently sent Claimant information on how
to report items as lost. Claimant testified that in June 2015, she received a phone
call from a member of the education program in Wilmington who informed her that
he was the person who found her bag and arranged to return the items. N.T. at 44-
45.
Claimant acknowledged that she authorized interns to claim an
additional eight hours on their timecards. She stated that she reviewed their work
and realized that the scope of work completed could not have been done during the
hours the interns had previously claimed and that she had witnessed times where the
interns had worked through lunch. She explained that, as a result, she instructed
them to add the extra hours to their timecards to more accurately reflect the time the
interns had actually worked. N.T. at 45-46.
Claimant testified that the three instances where timesheets were
submitted for her husband’s time were emergency situations where the work needed
to get done and she perceived it to be the most economical way to accomplish the
task. In one case, she explained that she had an event in North Carolina and had just
returned from medical leave and was not medically permitted to drive a car for the
length of time it would take to complete the trip. She stated that she believed it
would be more economical for her husband to drive the car because Employer would
not have to pay for separate housing in addition to his normal compensation.
Claimant testified that in another instance there was a significant water leak in the
storage facility and her husband knew how to operate the equipment used to remove
the water. Claimant stated that she engaged her husband to move some of the heavier
8
materials and clean up the flooding because the work needed to be done
immediately. Claimant testified that she neither supervised her husband nor set his
wage rate because that had already been determined by Employer when he was hired.
N.T. at 46-47, 51-52.
In regards to storing her granite countertops in Employer’s facilities,
Claimant testified that when she returned from an outreach event, the countertops
were unloaded with items from the event. She stated that the countertops took up
approximately 10 square feet in a 1400 square foot facility and were stored in the
facility for no more than six months. She testified that she did not understand
Employer’s policy against using non-public facilities for family events to include a
prohibition on storing personal items in the facility. N.T. at 47-48.
Claimant admitted that she instructed an employee to take
compensatory time rather than receive overtime payment because it had been the
standard procedure for the Pesticide Education Program established by her
predecessors. She stated that in order to facilitate the Pesticide Education Program’s
participation in the yearly Farm Show, staff were required to work overtime. She
explained that the staff agreed to the arrangement and the employee in question was
the only non-exempt staff member under the Fair Labor Standards Act.3 Claimant
testified that she did not realize that she was violating state and federal laws by
granting a non-exempt employee compensatory time rather than overtime. N.T. at
48-49.
Claimant acknowledged that given Dr. Calvin’s and Brumbaugh’s
explanations, she violated several of Employer’s policies. However, she explained
that she never intentionally or willfully violated Employer’s policy, she merely
3
Act of June 25, 1938, c. 676 §1, 52 Stat. 1060, as amended, 29 U.S.C. §201-219.
Overtime for non-exempt employees is governed by 29 U.S.C. §207(a).
9
misunderstood them. She stated that based on her understanding of Employer’s
policies, she did not believe that any of her actions amounted to theft. Claimant
further elaborated that her understanding of Employer’s policies was partly based on
the examples of her predecessors and colleagues in other departments. Claimant
testified that she did not seek approval for the decisions that she made because she
did not believe approval was necessary. N.T. at 48-55.
The referee determined that although Employer provided competent
and credible testimony establishing that the policies under which Claimant was
discharged did exist and that Claimant knew or should have known about them,
Employer failed to demonstrate that Claimant deliberately violated any of the
policies. As such, the referee determined that Claimant was not ineligible for
unemployment compensation benefits under Section 402(e). Employer appealed to
the Board.
The Board made its own findings, which are summarized as follows.
Claimant was or should have been aware of Employer’s policies. Nevertheless,
Claimant did not follow Employer’s procedures for hiring a retired employee.
Claimant hired a vendor that was not on Employer’s approved list of vendors.
Claimant hired an employee who split time between the vendor’s and Employer’s
payroll such that he worked full time and, as a result, did not receive benefits as a
full-time employee as he was entitled. Claimant requested that a subordinate
purchase LSU gear on her P-Card as a gift for her stepson and listed the gift as a
giveaway, which it was not. Claimant hired her husband as a subordinate employee
in violation of Employer’s procedures. Claimant, rather than her husband, filled out
her husband’s timecard in violation of Employer’s timecard policy. Claimant set her
husband’s rate of pay and authorized his payment in violation of Employer’s
10
policies. Claimant falsified payroll records by instructing her interns to put eight
hours of additional time on their timecards. Claimant instructed an employee to take
compensatory time instead of overtime in violation of Employer’s policy that would
have required the employee to be paid overtime. Claimant stored granite countertops
in Employer’s facility against Employer’s policy. Claimant misplaced Employer’s
laptop and P-Card and did not report those items as missing in a timely manner as
required by Employer’s policy. Claimant stored Employer’s vehicle off-site for a
significant period of time without Employer’s approval. Claimant did not have
adequate justification for her actions. Board Findings of Fact Nos. 1-48.
The Board credited Employer’s testimony and evidence and resolved
the conflicts in testimony and evidence in favor of Employer. The Board determined
that Employer met its burden and that Claimant failed to follow Employer’s policies
as they existed during her employment. The Board concluded that Claimant
committed actions for which discharge was the natural result and violated standards
of behavior without good cause. As a result, the Board reversed the referee’s
decision and held that Claimant was ineligible for unemployment compensation
benefits pursuant to Section 402(e). On appeal to this Court,4 Claimant argues that
the Board erred in determining that she did not have good cause for her actions.
Although not defined in the Law, “willful misconduct is defined by the
courts as: (1) wanton and willful disregard of an employer's interests; (2) deliberate
violation of rules; (3) disregard of the standards of behavior which an employer can
rightfully expect from an employee; or, (4) negligence showing an intentional
4
Our scope of review is limited to determining whether constitutional rights are violated,
whether the adjudication is in accordance with the law and whether necessary findings of fact are
supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S.
§704; Kirkwood v. Unemployment Compensation Board of Review, 525 A.2d 841, 843-44 (Pa.
Cmwlth. 1987).
11
disregard of the employer's interests or the employee's duties and
obligations.” Johns v. Unemployment Compensation Board of Review, 87 A.3d
1006, 1009 (Pa. Cmwlth.), appeal denied, 97 A.3d 746 (Pa. 2014). An employer
bears the burden of proving that a claimant is ineligible for unemployment
compensation due to willful misconduct. Walsh v. Unemployment Compensation
Board of Review, 943 A.2d 363, 368 (Pa. Cmwlth. 2008). Where the allegation of
willful misconduct is based on a violation of the employer’s work rule, the employer
must show the existence of a reasonable work rule and the claimant’s violation of
the rule. Williams v. Unemployment Compensation Board of Review, 926 A.2d 568,
571 (Pa. Cmwlth. 2007). Once the employer meets its burden, the burden shifts to
the claimant to establish good cause for her conduct. Chapman v. Unemployment
Compensation Board of Review, 20 A.3d 603, 607 (Pa. Cmwlth. 2011). A claimant
who has been discharged for multiple reasons is disqualified from receiving benefits
if even one of those reasons amounts to willful misconduct. Anderson v.
Unemployment Compensation Board of Review, 485 A.2d 900, 902 (Pa. Cmwlth.
1985).
It is well settled that the Board is the ultimate factfinder in
unemployment compensation cases, empowered to determine the credibility of
witnesses and resolve conflicts in evidence. Curran v. Unemployment
Compensation Board of Review, 752 A.2d 938, 940 (Pa. Cmwlth. 2000). The
Board’s findings are binding and conclusive on appeal if the record, when examined
as a whole, is supported by substantial evidence. Mathis v. Unemployment
Compensation Board of Review, 64 A.3d 293, 299 (Pa. Cmwlth. 2013). “Substantial
evidence is such relevant evidence as a reasonable mind would accept as adequate
to support a conclusion.” Guthrie v. Unemployment Compensation Board of Review,
12
738 A.2d 518, 521 (Pa. Cmwlth. 1999). Additionally, unchallenged findings are
binding on appeal to this Court. Paolucci v. Unemployment Compensation Board of
Review, 118 A.3d 1233, 1246 (Pa. Cmwlth. 2015). We view the record in the light
most favorable to the party prevailing before the Board and afford that party the
benefit of all reasonable inferences that can be drawn from the evidence to determine
if substantial evidence exists. Serrano v. Unemployment Compensation Board of
Review, 149 A.3d 435, 439 (Pa. Cmwlth. 2016).
Here, the Board credited Employer’s testimony and other evidence
showing that Claimant violated at least nine of Employer’s policies. In her brief,
Claimant merely reiterates the testimony presented before the referee, which the
Board did not credit, as providing evidence of reasonable behavior and good cause.
After careful review of the record, we find substantial evidence to support the
Board’s conclusion that Claimant violated standards of behavior without good cause.
Moreover, Claimant failed to present any evidence of good cause for
hiring an employee who split time between Chazzbo Media and the Pesticide
Education Program such that he worked full time, but was denied the benefits of a
full-time employee. Nor did she present evidence of good cause for storing
Employer’s vehicle off-site for an extended period of time without Employer’s
approval. Claimant did not challenge the Board’s findings in this regard in her
appellate brief and, therefore, they are binding on appeal. These findings are
sufficient to support a determination that Claimant is ineligible for unemployment
compensation benefits under Section 402(e). Anderson.
Accordingly, we affirm the Board’s order.
13
MICHAEL H. WOJCIK, Judge
Judge Cohn Jubelirer did not participate in the decision of this case.
14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Kerry Richards, :
:
Petitioner :
:
v. : No. 2090 C.D. 2016
:
Unemployment Compensation :
Board of Review, :
:
Respondent :
ORDER
AND NOW, this 6th day of October, 2017, the order of the
Unemployment Compensation Board of Review, dated December 2, 2016, is
AFFIRMED.
__________________________________
MICHAEL H. WOJCIK, Judge