PA LCB v. UCBR ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Pennsylvania Liquor Control Board, :
:
Petitioner :
:
v. : No. 520 C.D. 2019
: Submitted: December 12, 2019
Unemployment Compensation :
Board of Review, :
:
Respondent :
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: February 5, 2020
The Pennsylvania Liquor Control Board (Employer) petitions for
review of the April 2, 2019 order of the Unemployment Compensation Board of
Review (Board) reversing a referee’s determination and holding that Catherine Eib
(Claimant) is not ineligible for unemployment compensation (UC) benefits under
Section 402(e) of the Unemployment Compensation Law (Law).1 Discerning no
error, we affirm.
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§802(e). This section provides that an employee shall be ineligible for compensation for any week
in which his unemployment is due to his discharge from work for willful misconduct connected
with his work.
Claimant worked for Employer from January 29, 2007, to December
12, 2018, when Employer terminated her employment. Reproduced Record (R.R.)
at 56a-57a. Claimant’s final job title was general manager at Employer’s Fine Wine
and Good Spirits store number 5145 (Store 5145), earning $30.70 per hour. Id. After
her discharge from employment, Claimant applied for UC benefits. The local
service center determined that Claimant was ineligible for UC benefits under Section
402(e) of the Law because she was discharged for willful misconduct. Claimant
appealed, and a referee held a hearing on January 29, 2019.
At the hearing, Ronald Kuhn (Kuhn), Employer’s Administrative
Assistant, testified that Employer has a policy prohibiting employees’ acceptance of
gratuities from licensees. R.R. at 63a. Specifically, the policy states, “Requesting
or receiving gratuities, tips, gifts, or vendor merchandise or displays . . . may be just
cause for immediate discharge.” Id. at 70a.
Kuhn testified that Employer received an anonymous tip that Claimant
was receiving gratuities from two particular licensees in violation of Employer’s
policy. R.R. at 58a. The anonymous tip indicated that gratuities were kept in an
envelope under the computer tower. Id. at 70a. Employer began investigating and
reviewed videotape footage of transactions involving the two licensees. Id. at 59a,
69a. The videotape footage showed that after Claimant conducted a transaction with
a licensee, the licensee left money on the counter, and Claimant placed the gratuity
in an envelope in her cash drawer. Id. at 59a, 61a. When asked by the referee what
Claimant should have done with the unsolicited gratuity, Kuhn stated that Claimant
should have included the money with the store’s daily deposit. Id. at 82a.
Nicole Resto (Resto), Employer’s District Manager, testified that after
reviewing the video footage, she went to Store 5145 on September 25, 2018. R.R.
2
at 69a. While there, she looked under the computer tower and found a white
envelope containing $238.00. Id. at 79a. Employer suspended Claimant on
September 27, 2018, based on the investigation. Id. at 71a. Resto testified that
Employer interviewed all of the employees at Store 5145. Id. The investigation
resulted in two assistant managers and a part-time clerk also being suspended for
accepting gratuities. Id. Resto confirmed that the two assistant managers and the
part-time clerk were reinstated after unpaid suspensions but were moved to different
stores. Id. at 72a-74a. Claimant, however, ultimately was discharged for accepting
gratuities in violation of Employer’s policy and for allowing subordinates to accept
gratuities. Id. at 75a.
Claimant acknowledged that she had received and signed the policy
prohibiting the acceptance of gratuities. R.R. at 63a. Claimant testified that two
licensees gave gratuities despite knowing that Employer did not allow employees to
accept them. Id. at 77a. She explained:
[Claimant:] There’s two licenses that give tips, that - - like
I said, they come in. They aren’t even my licensees. They
come to my store because at the stores they’re assigned to,
they have problems with the managers and the clerks there
and they said they’ve complained over and over again. So
the [one] licensee, I’ve been doing his order since I was a
part time clerk and that’s the licensee in question. He will
come in and he will place the money down and he will not
take it. And I’ve said this to him. We cannot take it. He
doesn’t care. He leaves it there. The other licensee in
question, I believe, gives it to the other guys and forces it
into their apron, is what I’ve been told. But he doesn’t
give me - - he’s never tried to give me anything.
[Referee:] And then what did you do?
[Claimant:] Then I put it into an envelope in the office.
3
***
[Claimant’s Lawyer:] [What] did you tell [the
licensees] about whether you could accept any gratuities?
[Claimant:] I told Kelly . . . over and over again, we are
not allowed to accept tips. We are not allowed. He said
I’ve been in the business for 50 years and I’ve always
given tips and I always will.
[Claimant’s Lawyer:] Did you ever ask any of the
licensees for tips?
[Claimant:] Absolutely not.
R.R. at 77a-78a.
Claimant testified that the common practice since her arrival at Store
5145, and at the locations where she previously worked, was to use the unsolicited
tip money for store supplies. Id. at 78a. Claimant said that when she was promoted
to general manager of Store 5145, an envelope system for handling unsolicited
gratuities was already in place, so she continued to follow that practice. Id. at 78a,
82a. Claimant further testified that when she returned Store 5145’s keys to Resto
during her suspension from employment, Resto told her that the practice of keeping
gratuities was commonplace in Employer’s stores. Id. at 79a. Resto denied such a
conversation occurred. Id. at 77a, 83a.
The referee found that Employer had a rule prohibiting employees from
receiving gratuities and that Claimant was aware of the rule. The referee found that
Claimant had accepted gratuities from a licensee and had allowed subordinate
employees to accept gratuities. The referee found that Claimant “believed that her
actions were appropriate,” (Referee’s Finding of Fact No. 19), but concluded that
Claimant’s failure to ask Employer how to handle the unsolicited gratuities violated
Employer’s rule and fell below the standard of behavior that Employer has a right to
4
expect from its employees. The referee concluded that Claimant was ineligible for
benefits under Section 402(e) of the Law. Claimant appealed to the Board.
The Board found:
2. [Employer] has a policy which states employees should
exercise caution with regard to the acceptance of any gifts
and should not ask for or receive, directly or indirectly,
any commission, remuneration or gift or any other thing
of value directly or indirectly from a licensee.
3. Based upon an anonymous tip, [Employer] investigated
allegations employees at [Claimant’s Store 5145] were
accepting monetary tips.
4. On September 13, 2018, a licensee left five dollars on
the counter after [Claimant] assisted him with his order.
5. [Claimant] previously informed the licensee that she
could not accept tips but he insisted on leaving a tip each
time.
6. [Claimant] placed the five dollars in an envelope stored
in an office at [Store 5145].
7. The envelope containing the tip money existed prior to
[Claimant] becoming the General Manager.
8. [Employer] has a procedure for handling tip money left
at its stores. The procedure is to include the money with
the other store money for deposit in the bank.
9. [Employer] visited [Store 5145] and found the
envelope, which contained $238.
10. Further investigation revealed that two Assistant
Managers and a clerk at [Store 5145] had also accepted
monetary tips.
11. [Claimant] and three other employees were suspended.
The three employees returned to work upon the conclusion
5
of the investigation. [Claimant] was the only employee
that was terminated.
12. [Claimant] was terminated for violating [Employer’s]
gift policy.
Board’s Findings of Fact (F.F.) Nos. 2-12.
The Board found that a “licensee forced a monetary tip after the
[Claimant] repeatedly informed him she could not accept it.” Board 4/2/19 Opinion
at 2. The Board noted there was no evidence that Claimant’s conduct was
contemplated by Employer’s policy. Moreover, the Board found that Kuhn’s
testimony regarding the procedure for dealing with gratuities demonstrated that
Employer expected this exact situation to occur. Employer presented no evidence
that Claimant knew Employer had a policy to include forced tip money in with the
daily bank deposit. Therefore, the Board concluded that Employer failed to prove
that Claimant’s conduct was in violation of Employer’s policy prohibiting
employees from accepting gratuities.2 The Board reversed the referee’s decision and
held that Claimant was not ineligible for benefits due to willful misconduct.
Employer then petitioned this Court for review.
2
The Board further opined that, even if Employer had met its burden of proving willful
misconduct, Claimant showed that she was disparately treated by Employer. On appeal, Employer
asserts that the Board capriciously disregarded relevant evidence showing that Claimant was not
disparately treated; Claimant was a general manager, and the other employees who were
disciplined less severely were her subordinates. The Board concedes that Claimant is not similarly
situated to the other employees who received less severe discipline, which is a required element
for the affirmative defense of disparate treatment. Allen v. Unemployment Compensation Board
of Review, 189 A.3d 1128, 1134 n.4 (Pa. Cmwlth. 2018).
6
On appeal,3 Employer argues that the Board capriciously disregarded
competent and relevant evidence.4 Employer asserts that it proved the existence of
its rule prohibiting employees from receiving tips. Employer argues that Claimant
admitted she was aware of the policy and knowingly violated it. Employer asserts
that the record lacks evidence of any good cause for Claimant’s violation of the rule,
and that Claimant’s deliberate violation of Employer’s policy necessitates a finding
of willful misconduct by Claimant.
The Board argues that Claimant’s actions regarding the unsolicited tip
money do not rise to the level of willful misconduct. The Board asserts that Claimant
did not violate Employer’s prohibition on employee’s soliciting gifts, but rather was
forced to take tip money she had informed the licensee she was unable to accept.
The Board further asserts that even if Claimant violated Employer’s policy, she had
no “consciousness of wrongdoing,” and therefore did not commit willful
misconduct. Board’s brief at 11.5
3
Our scope of review is limited to determining whether constitutional rights have been
violated, whether errors of law were committed, or whether findings of fact are supported by
substantial evidence. Procyson v. Unemployment Compensation Board of Review, 4 A.3d 1124,
1127 n.4 (Pa. Cmwlth. 2010).
4
Capricious disregard occurs when the fact-finder deliberately disregards relevant,
competent evidence. Wise v. Unemployment Compensation Board of Review, 111 A.3d 1256,
1262 (Pa. Cmwlth. 2015). Our Supreme Court has held that review for capricious disregard of
competent evidence is appropriate in every case in which such question is properly before the
Court. Leon E. Wintermyer, Inc. v. Workers’ Compensation Appeal Board (Marlowe), 812 A.2d
478, 487 (Pa. 2002).
5
The Board notes that when an allegation of misconduct is based on the violation of a rule,
the employer must show the existence of a work rule and “also present evidence that the employee
deliberately violated the rule.” Eschbach v. Unemployment Compensation Board of Review, 855
A.2d 943, 947 (Pa. Cmwlth. 2004) (emphasis in original).
7
It is well-settled law that the Board is the ultimate fact-finder in
unemployment compensation proceedings. Peak v. Unemployment Compensation
Board of Review, 501 A.2d 1383, 1385 (Pa. 1985). The Board is empowered to
resolve all conflicts in evidence, assess witness credibility, and weigh the evidence.
Ductmate Industries, Inc. v. Unemployment Compensation Board of Review, 949
A.2d 338, 342 (Pa. Cmwlth. 2008). It is irrelevant whether the record contains
evidence to support findings other than those made by the Board; the critical inquiry
is whether there is evidence to support the findings actually rendered by the Board.
Id. Where substantial evidence supports the Board’s findings, they are binding on
appeal. Henderson v. Unemployment Compensation Board of Review, 77 A.3d 699,
718 (Pa. Cmwlth. 2013).
However, the Board is not free to ignore overwhelming evidence in
favor of a contrary result. First Federal Savings Bank v. Unemployment
Compensation Board of Review, 957 A.2d 811, 815 (Pa. Cmwlth. 2008). The Board
has a responsibility to resolve conflicts in testimony and explain why it has accepted,
or rejected each piece of relevant evidence. Id.
Section 402(e) of the Law provides that a claimant is ineligible for UC
benefits when her unemployment is due to willful misconduct. 43 P.S. §802(e).
Willful misconduct is defined as:
a) wanton or 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 interest or an
employee’s duties or obligations.
8
Moran v. Unemployment Compensation Board of Review, 973 A.2d 1024, 1029 (Pa.
Cmwlth. 2009). The question of whether certain conduct amounts to willful
misconduct is a question of law subject to this Court’s review. Goodwill Industries
v. Unemployment Compensation Board of Review, 634 A.2d 738, 739 (Pa. Cmwlth.
1993). An employer asserting willful misconduct based on the violation of a work
rule carries the initial burden of proving the existence of the rule, the reasonableness
of the rule, the claimant’s awareness of the rule, and the claimant’s violation of the
rule. Moran, 973 A.2d at 1029. Once the employer establishes a prima facie case
of willful misconduct, the burden shifts to the claimant to show good cause for her
violation of the work rule. Oliver v. Unemployment Compensation Board of Review,
5 A.3d 432, 438 (Pa. Cmwlth. 2010).
In this case, the Board found that Claimant’s conduct of receiving an
unsolicited gratuity from a licensee and placing the money in a fund used for store
supplies was not contemplated by Employer’s rule prohibiting employees from
accepting gifts. F.F. No. 2. The Board determined that Employer failed to prove
that Claimant’s conduct violated the gift policy. Rather, the Board found that
Kuhn’s statement regarding the deposit of unwanted tips left by licensees
demonstrated that Employer expected this exact situation to occur.
Employer’s argument that the Board capriciously disregarded evidence
of Claimant’s willful misconduct is unpersuasive. The Board addressed all of the
relevant record evidence in its decision. The Board explained why it rejected
Employer’s argument that Claimant’s conduct violated the policy prohibiting gifts.
Board 4/2/19 Opinion at 3 (“There is no evidence to show that [Claimant’s] conduct
was contemplated by the policy. In fact, [Employer’s] witness testified that it has
an established procedure for dealing with such monetary tips, showing there is an
9
expectation that monetary tips not accepted for personal use may occur.”). The
Board made all necessary findings and clearly articulated its reasoning. Therefore,
the Board’s conclusion that Claimant is not ineligible for benefits does not constitute
a capricious disregard of the evidence. See Wise, 111 A.3d at 1262-63.6
The record supports the Board’s findings and the Board’s findings
support the Board’s conclusion that Claimant’s actions did not amount to willful
misconduct. Our review reveals that the Board did not capriciously disregard
evidence in determining that Claimant is not ineligible for UC benefits under Section
402(e) of the Law.
Accordingly, we affirm the Board’s order.
MICHAEL H. WOJCIK, Judge
6
In its reply brief, Employer asserts that the Board erred in finding that Employer has a
separate policy applicable to handling unsolicited tips. However, Employer failed to raise this
issue in its petition for review and brief, and therefore it is waived. See Pa. R.A.P. 1513(d); Maher
v. Unemployment Compensation Board of Review, 983 A.2d 1264, 1266 (Pa. Cmwlth. 2009). Even
if the issue was not waived, the absence of a directive or guidance in Employer’s policy for
addressing an unsolicited tip further supports the Board’s reasoning that these particular
circumstances were not contemplated or covered by Employer’s gratuity policy.
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Pennsylvania Liquor Control Board, :
:
Petitioner :
:
v. : No. 520 C.D. 2019
:
Unemployment Compensation :
Board of Review, :
:
Respondent :
ORDER
AND NOW, this 5th day of February, 2020, the order of the
Unemployment Compensation Board of Review dated April 2, 2019 is AFFIRMED.
__________________________________
MICHAEL H. WOJCIK, Judge