State, Emp't. Sec. Div. v. Murphy

132 Nev., Advance Opinion IS
IN THE SUPREME COURT OF THE STATE OF NEVADA
THE STATE OF NEVADA No. 65681
EMPLOYMENT SECURITY DIVISION;
RENEE OLSON, IN HER CAPACITY AS
ADMINISTRATOR OF THE
EMPLOYMENT SECURITY DIVISION;
AND KATIE JOHNSON, IN HER
FILED
CAPACITY AS CHAIRPERSON OF THE MAR 3 1 2016
EMPLOYMENT SECURITY DIVISION K LINDEMAN
BOARD OF REVIEW,
BY ialatil
Appellants, CHIEF DEP ERn
vs.
CALVIN STEVEN MURPHY,
Respondent.
Appeal from a district court order granting a petition for
judicial review in an unemployment benefits matter. Eighth Judicial
District Court, Clark County; Kenneth C. Cory, Judge.
Reversed.
Joseph L. Ward, Jr., Senior Legal Counsel, State of Nevada Employment
Security Division, Carson City,
for Appellants.
Nevada Legal Services, Inc., and Ron Sung and I. Kristine Bergstrom, Las
Vegas,
for Respondent.
BEFORE THE COURT EN BANC.
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OPINION
By the Court, HARDESTY, J.:
In this appeal, we are asked to consider whether an employee
who is terminated because he or she misses work due to incarceration has
committed disqualifying misconduct pursuant to NRS 612.385 and is thus
not entitled to unemployment benefits. Based on the plain language of the
statute and narrowly construing State, Employment Security Department
v. Evans, 111 Nev. 1118, 901 P.2d 156 (1995), we conclude that an
employee who is terminated as a result of missing work due to
incarceration, and who is subsequently convicted of a crime, is not eligible
for unemployment benefits.
FACTS AND PROCEDURAL HISTORY
Respondent Calvin Murphy was employed by Greystone Park
Apartments. He was arrested for possession of stolen property and could
not afford his $40,000 bail. He eventually pleaded guilty and was
incarcerated for approximately one year. Murphy was fired by Greystone
because of his unexcused absences caused by his incarceration. Appellant
Nevada Employment Security Division's (ESD) claims adjudicator, the
appeals referee, and the ESD Board of Review all determined that Murphy
committed disqualifying misconduct pursuant to NRS 612.385 and was
therefore not entitled to unemployment benefits. Specifically, the appeals
referee found that Murphy admitted to the criminal conduct that caused
his incarceration, and the Board of Review adopted that finding.
Murphy petitioned the district court for judicial review, and
the court reversed the ESD Board of Review's decision. The district court
reasoned that the only misconduct connected with work was Murphy's
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absenteeism, which was insufficient as a matter of law to deny benefits.
We disagree and thus reverse.
DISCUSSION
Standard of review
Like the district court, we review an administrative
unemployment compensation decision "to ascertain whether the Board
acted arbitrarily or capriciously, thereby abusing its discretion." Clark
Cty. Sch. Dist. v. Bundley, 122 Nev. 1440, 1444, 148 P.3d 750, 754 (2006).
"[T]he Board acts as an independent trier of fact," and its factual findings
are conclusive when supported by substantial evidence. Id. (internal
quotations omitted). "Substantial evidence is that which a reasonable
mind could find adequate to support a conclusion." Kolnik v. Nev. Emp't
Sec. Dep't, 112 Nev. 11, 16, 908 P.2d 726, 729 (1996). Additionally, "fact-
based legal conclusions with regard to. . . unemployment compensation
[issues] are entitled to deference." Bundley, 122 Nev. at 1445, 148 P.3d at
754. However, purely legal questions, including issues of statutory
construction, are reviewed de novo. Id.; see also Sonia F. v. Eighth
Judicial Dist. Court, 125 Nev. 495, 499, 215 P.3d 705, 707 (2009).
Murphy's absenteeism due to his incarceration was disqualifying
misconduct
Unemployment compensation in Nevada is designed to ease
the economic burden on those who are "unemployed through no fault of
their own." Anderson v. State, Emp't Sec. Div., 130 Nev., Adv. Op. 32, 324
P.3d 362, 368 (2014) (internal quotations omitted); see also A.B. 93, 38th
Leg. (Nev. 1937) (Nevada's original bill enacting the unemployment
insurance statute). A person is not disqualified from receiving
unemployment benefits simply because he or she is terminated:
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Disqualifying misconduct occurs when an
employee deliberately and unjustifiably violates or
disregards h[is] employer's reasonable policy or
standard, or otherwise acts in such a careless or
negligent manner as to show a substantial
disregard of the employer's interests or the
employee's duties and obligations to [his]
employer. As we have previously suggested,
because disqualifying misconduct must involve an
element of wrongfulness, an employee's
termination, even if based on misconduct, does not
necessarily require disqualification under the
unemployment compensation law.
Bundley, 122 Nev. at 1445-46, 148 P.3d at 754-55 (internal footnotes and
quotations omitted).
Three statutes can disqualify former employees from receiving
unemployment benefits.' The pertinent statute here is NRS 612.385, and
it provides that "[a] person is ineligible for benefits. . if he or she was
discharged. . . for misconduct connected with the person's work."
Here, Murphy's employment was terminated because he failed
to show up at work due to his incarceration. We were presented with a
similar issue in Evans and held that the terminated employee was eligible
for unemployment benefits. 111 Nev. at 1119, 901 P.2d at 156. In so
holding, we determined that because the employee's unavailability to
"work was due to her pretrial incarceration which was predicated on her
inability to obtain bail, not her criminal conduct," id., the employee's
absence was neither deliberate nor voluntary, and we noted that the
"Two of those statutes are not germane to this appeal: NRS 612.380
applies when an employee voluntarily leaves without good cause or to seek
other employment, and NRS 612.383 applies when an employee is
discharged for crimes committed in connection with employment.
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employee had dutifully notified the employer of the situation. Id. at 1119,
901 P.2d at 156-57.
Murphy urges this court to read Evans broadly and create a
bright-line rule that no disqualifying misconduct occurs when an employee
cannot attend work due to incarceration and the employee dutifully
notifies the employer. We decline to do so and conclude that Evans must
be narrowed and clarified to align with NRS 612.385's plain language 2
2 Ifwe were to read Evans broadly, as Murphy proposes, Nevada may
become the only state that widely grants incarcerated claimants
unemployment benefits, regardless of fault or conviction. For example,
New Jersey has determined that incarceration, regardless of fault, results
in disqualification from benefits. See Fennell v. Bd. of Review, 688 A.2d
113, 116 (N.J. Super. Ct. App. Div. 1997) (finding that "[n]o matter how
sympathetic the facts," a claimant who lost his job because of incarceration
is disqualified from benefits under a voluntary leaving statute). Other
states have decided that claimants are disqualified when at fault or
culpable for their incarceration under either a misconduct or voluntary
quitting statute. See, e.g., Weavers v. Daniels, 613 S.W.2d 108, 110 (Ark.
Ct. App. 1981) (finding that a failure to attend work due to fault-based
incarceration is disqualifying misconduct); Hillsborough Cty., Dep't of
Emergency Med. Servs. v. Unemp't Appeals Comm'n, 433 So. 2d 24, 25
(Fla. Dist. Ct. App. 1983) (same); Carter v. Caldwell, 261 S.E.2d 431, 432
(Ga. Ct. App. 1979) (same); Grimble v. Brown, 171 So. 2d 653, 656 (La.
1965) (same); Smith v. Am. Indian Chem. Dependency Diversion Project,
343 N.W.2d 43, 45 (Minn. Ct. App. 1984) (same); Stanton v. Mo. Div. of
Emp't Sec., 799 S.W.2d 202, 205 (Mo. Ct. App. 1990) (same); Weems v.
Unemp't Comp. Bd. of Review, 952 A.2d 697, 699 (Pa. Commw. Ct. 2008)
(same); see also Bivens v. Allen, 628 So. 2d 765, 767 (Ala. Civ. App. 1993)
(determining that a failure to attend work due to incarceration amounts to
a voluntary leaving); Sherman I Bertram, Inc. v. Cal. Dep't of Emp't, 21
Cal. Rptr. 130, 133 (Dist. Ct. App. 1962) (same). In addition, Kentucky
and Michigan have statutes that specifically disqualify persons at fault for
their incarceration from receiving unemployment benefits. Ky. Rev, Stat.
Ann. § 341.370(6) (LexisNexis 2011); Mich. Comp. Laws § 421.29(1)(f)
(2013).
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NRS 612.385's plain language
When unambiguous, this court gives effect to a statute's plain
meaning. Sonia F., 125 Nev. at 499, 215 P.3d at 707. Pursuant to NRS
612.385, a person who is discharged "for misconduct connected with the
person's work" is ineligible for unemployment compensation.
"Misconduct" is defined as "unlawful, dishonest, or improper behavior."
Misconduct, Black's Law Dictionary (10th ed. 2014); see also Bundley, 122
Nev. at 1445-46, 148 P.3d at 754-55 (determining that misconduct
requires deliberate or careless action in "disregard of the employer's
interests" such that there is "an element of wrongfulness" (internal
quotations omitted)). Clearly, an employee who has been incarcerated
because of criminal conduct is being penalized for unlawful and improper
behavior, and in committing that behavior, the employee has carelessly
disregarded the employer's interest in having an available workforce. See
Bundley, 122 Nev. at 1445-46, 148 P.3d at 754-55. "Connected" is defined
as "W oined; united by junction .. . [or] by dependence or relation."
Connected, Black's Law Dictionary (6th ed. 1990). The misconduct here is
connected with work because an employee's unauthorized absence affects
an employer's ability to efficiently operate its business. See Bundley, 122
Nev. at 1450, 148 P.3d at 757. In effect, the employee who commits a
crime has chosen to become unavailable for work. Based on a plain
reading of NRS 612.385, an employee who is terminated as a result of
missing work due to incarceration after being convicted of a crime is not
eligible for unemployment benefits.
We believe that our holding in Evans can be construed to align
with NRS 612.385's plain meaning. Though not entirely clear, based on
the facts as stated in the majority opinion, it appears that Evans applied
for unemployment benefits before being adjudicated on the crimes
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charged. See 111 Nev. at 1119, 901 P.2d at 156 ("Evans failure to be
available for work was due to her pretrial incarceration[,] which was
predicated on her inability to obtain bail, not her criminal conduct.").
Although the cases were not cited in Evans, it appears this court intended
Nevada jurisprudence to align with other jurisdictions that recognize
claimants' limited right to receive unemployment benefits when their
incarceration was caused by indigence or criminal charges that were
subsequently dropped. See, e.g., Kaylor v. Dep't of Human Res., 108 Cal.
Rptr. 267, 268-69, 271 (Ct. App. 1973) (holding that a claimant jailed
because of an inability to pay a traffic fine was not disqualified from
unemployment benefits); Holmes v. Review Bd. of Ind. Emp't Sec. Div., 451
N.E.2d 83, 88 (Ind. Ct. App. 1983) (holding that a claimant was not
disqualified from unemployment benefits because of pretrial incarceration
where charges were later dismissed). Admittedly, the Evans dissent calls
the majority's application into question, see 111 Nev. at 1119-20, 901 P.2d
at 157 (Steffen, C.J., and Young, J., dissenting), but we believe the
opinion's general proposition to be sound. Thus, we take this opportunity
to clarify and narrow Evans' holding. If an employee seeks benefits
because of incarceration caused by an inability to afford bail or pay a fine,
and the employee dutifully notifies the employer, there is no disqualifying
misconduct. However, when an employee is convicted of a crime, it is the
employee's criminal behavior that prevents him or her from returning to
work, and the employee is disqualified from receiving unemployment
benefits.
The district court erred
The district court misstated the law in its order. The district
court proclaimed that employee absenteeism is insufficient as a matter of
law to deny unemployment benefits. Implicitly, the district court
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concluded that absenteeism because of incarceration is not sufficiently
connected with employment to implicate NRS 612.385. In Bundley, this
court determined that employers have the initial burden of showing
misconduct, but a clear pattern of unauthorized absences from work
creates a presumption of disqualifying misconduct. 122 Nev. at 1450, 148
P.3d at 757. Once a pattern of unauthorized absenteeism has been
established, the burden shifts to the employee to rebut the presumption.
Id. When the misconduct alleged is an employee's absenteeism caused by
incarceration, we conclude that the employee can only rebut the
presumption by demonstrating the incarceration is not caused by criminal
conduct, but rather by indigence or unsupported charges.
Murphy argues that he dutifully notified Greystone about
missing work. The district court did not address the issue of dutiful
notification in its order. However, the district court did not err by failing
to do so. This argument is irrelevant in light of Murphy pleading guilty to
the criminal charges. The dutiful notification requirement is only relevant
when the employee is either not subsequently convicted on the criminal
charges or demonstrates that indigence caused the incarceration.
However, we conclude that the district court erred in
overturning the ESD's decision. Although Murphy stated that he could
not afford bail, his absence from work was directly caused by hisS criminal
conduct—he pleaded guilty to the charges against him. Therefore, he is
disqualified from receiving benefits under NRS 612.385.
CONCLUSION
For the foregoing reasons, we conclude that the ESD's decision
was not arbitrary or capricious and was supported by substantial
evidence. Murphy pleaded guilty to the criminal charges against him and
was incarcerated for a year. He was absent from work as a result of his
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criminal conduct. The ESD properly concluded that Murphy's situation
was distinguishable from Evans on the basis of criminal conduct or an
"element of wrongfulness." Bundley, 122 Nev. at 1446, 148 P.3d at 755.
Accordingly, we conclude that the district court abused its discretion in
granting Murphy's petition. We reverse the district court's order granting
the petition for judicial review.
FLA th-a-t-t-A
Hardesty
We concur:
C.J.
Parraguirre
Douglas
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