M.R. Smith v. UCBR

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Margaret R. Smith, :
Petitioner :
:
v. :
:
Unemployment Compensation :
Board of Review, : No. 785 C.D. 2018
Respondent : Submitted: March 12, 2019
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: April 3, 2019
Margaret R. Smith (Claimant) petitions for review of the May 16, 2018
order of the Unemployment Compensation Board of Review (Board) affirming the
decision of the referee to deny Claimant unemployment compensation benefits under
section 402(e) of the Unemployment Compensation Law (Law),1 which provides
that a claimant shall be ineligible for benefits in any week in which her
unemployment is due to willful misconduct connected with her work. Upon review,
we affirm.
Claimant was employed as a full-time registered nurse with Grane
Hospice Care (Employer) from August 2017 until November 27, 2017. Referee’s
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §
802(e).
Findings of Fact (F.F.) 1. Employer has a policy that prohibits employees from
divulging protected health information of patients. F.F. 2. Employer also has a
policy that emails containing protected health information sent to external email
addresses must be encrypted. F.F.3. Employer advised Claimant of these policies.
F.F. 4.
Claimant’s supervisor resigned at approximately the end of October
2017. F.F. 5. On November 10, 2017, Claimant sent a non-encrypted email
containing protected health information of patients to her former supervisor. F.F.6.
On November 13, 2017, Employer suspended Claimant pending an investigation
regarding protected health information. F.F. 7. Employer sent Claimant an email
requesting information about the email sent to her former supervisor. F.F. 8. That
email also advised Claimant that it was necessary to encrypt email if it contains
protected health information. Id. Claimant replied to Employer’s email and stated,
“thanks for your encrypt instruction.” F.F. 9. Approximately 80 minutes after
thanking Employer for the encrypt instruction, Claimant sent an unencrypted email
containing protected health information to her own external email address. F.F. 10.
On November 27, 2017, Employer terminated Claimant for violating patients’ right
to privacy by sending unencrypted emails containing protected health information
to external email addresses. See F.F. 11 & Referee’s Decision at 3.
Claimant subsequently applied for unemployment compensation
benefits, and the Scranton unemployment compensation service center found
Claimant ineligible under Section 402(e) of the Law. See Referee’s Decision at 1.
Claimant appealed to a referee, who held a hearing at which Claimant and Employer
both appeared with Counsel. See Certified Record (C.R.) Item No. 12, 3/26/18
Transcript of Testimony (T.T.) at 1-2. Claimant testified and also presented the
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testimony of her former supervisor. See T.T. at 1. Employer presented the testimony
of its Director of Operations. T.T. at 2.
During the hearing, Claimant’s counsel attempted to cross-examine
Employer’s witness about a pay dispute between Claimant and Employer and
proffered, in response to Employer’s counsel’s objection, that the pay dispute was
relevant because “the whole HIPPA thing rose out of” Claimant questioning her pay
checks and was “trumped up[.]” T.T. at 13-14. The referee sustained the objection
and did not allow any additional questions regarding the pay dispute. T.T. at 14 &
18.
After the hearing, the referee issued his decision in which he concluded
that Employer established that Claimant violated a known policy by sending
unencrypted emails containing protected health information to external email
addresses and that Claimant failed to demonstrate good cause for her actions.
Referee’s Decision at 3. The referee concluded that Claimant was trained on
Employer’s policies regarding the privacy of patients and the protection of personal
health information. Id. at 2. The referee further concluded that Claimant was aware
of the requirements to encrypt emails containing personal health information when
the email is being sent to an external email address. Id. at 2-3. The referee noted,
however, that “virtually immediately after acknowledging the encryption
requirement, the [C]laimant failed to follow the requirement.” Id. at 3. The referee
also noted that Claimant testified that she was informed by someone she thought was
an attorney in Employer’s corporate compliance department to send the protected
health information to her own external email; however, the referee did not credit this
testimony. Id. at 2. The referee found Claimant’s suggestion that “a ‘compliance
employee’, who was purportedly an attorney, advised the [C]laimant to violate
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multiple employer policies to be implausible.” Id. at 3. Accordingly, the Referee
denied Claimant unemployment compensation benefits due to willful misconduct.
Id.
Claimant appealed to the Board, which affirmed. Board’s Decision at
2. The Board adopted the referee’s findings and conclusions and further clarified
the decision. Id. at 1. The Board explained that Claimant sent the same non-
encrypted email containing protected health information on two occasions — first
to her former supervisor’s home email address and later to her own external email
address. Id. The Board stated that the referee expressly rejected Claimant’s
explanation regarding the second incident. Id. Regarding the first incident, the
Board rejected Claimant’s explanation that she was unaware that her supervisor had
left and mistakenly sent the email to the supervisor’s home email address. Id. The
Board also rejected Claimant’s argument that the referee improperly excluded
testimony about her complaints that she was underpaid for her work. Id. The Board
stated that although Claimant proffered that “this whole thing was trumped up” as a
result of Claimant questioning her paychecks and asserting that she was underpaid,
Claimant admitted to her conduct. Id. The Board determined that the critical issue
was whether Claimant had good cause for her actions and that any dispute regarding
the amounts of Claimant’s paychecks was not immediately relevant to the issue of
good cause. Id. Consequently, the Board determined that the referee did not abuse
his discretion when he did not allow testimony regarding the paycheck dispute.
Claimant then petitioned this Court for review of the Board’s order. 2
2
This Court’s review is limited to a determination of whether substantial evidence
supported necessary findings of fact, whether errors of law were committed, or whether
constitutional rights were violated. Johns v. Unemployment Comp. Bd. of Review, 87 A.3d 1006,
1009 n.2 (Pa. Cmwlth. 2014). Further, where, as here, the petitioner does not dispute the findings
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Before this Court, Claimant argues that the Board erred in finding that
the referee properly excluded evidence regarding her ongoing pay dispute with
Employer and the effect of that dispute on Claimant’s actions that led to her
termination. Claimant’s Brief at 4 & 15. Claimant also argues that the Board erred
in affirming the referee’s determination that Employer established willful
misconduct and that Claimant did not present good cause for her actions under the
circumstances. Id. at 4-5 & 15. Claimant argues that the Board failed to consider
the circumstances as a whole and failed to recognize the timing of events, i.e.,
Claimant’s ongoing pay dispute with Employer, followed by Employer’s groundless
accusations, setting a “HIPPA violation trap” for Claimant, all of which establish
that Claimant did not engage in willful misconduct. See id. at 4 & 8-9.
The question of whether an employee’s actions constitute willful
misconduct is a question of law subject to review by this Court. Reading Area Water
Auth. v. Unemployment Comp. Bd. of Review, 137 A.3d 658, 661 (Pa. Cmwlth.
2016). For purposes of determining a discharged employee’s eligibility for
unemployment compensation, the employer bears the burden of proving that the
employee engaged in willful misconduct connected with his work. See Section
402(e) of the Law, 43 P.S. § 802(e); Adams v. Unemployment Comp. Bd. of Review,
56 A.3d 76, 78-79 (Pa. Cmwlth. 2012). This Court has defined willful misconduct
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
of fact, they are conclusive on appeal. Gibson v. Unemployment Comp. Bd. of Review, 760 A.2d
492 (Pa. Cmwlth. 2000).
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showing an intentional disregard of the employer’s
interests or the employee’s duties and obligations.
Waverly Heights, Ltd. v. Unemployment Comp. Bd. of Review, 173 A.3d 1224, 1228
(Pa. Cmwlth. 2017) (quoting Johns v. Unemployment Comp. Bd. of Review, 87 A.3d
1006, 1009 (Pa. Cmwlth. 2014)). Once the employer establishes a prima facie case
of willful misconduct, the burden shifts to the claimant to prove good cause for his
actions. Downey v. Unemployment Comp. Bd. of Review, 913 A.2d 351, 353 (Pa.
Cmwlth. 2006).
“Where an employer seeks to deny UC benefits based on a work-rule
violation, the employer must prove the existence of a work rule, the reasonableness
of the rule and the employee’s violation of the rule.” Waverly Heights, 173 A.3d at
1228 (internal citation omitted). An inadvertent or negligent violation of an
employer’s rule may not constitute willful misconduct. Chester Cmty. Charter
School v. Unemployment Comp. Bd. of Review, 138 A.3d 50, 55 (Pa. Cmwlth. 2016).
“Thus, a determination of what amounts to willful misconduct requires a
consideration of all of the circumstances, including the reasons for the employee’s
noncompliance with the employer’s directives.” Eshbach v. Unemployment Comp.
Bd. of Review, 855 A.2d 943, 947-48 (Pa. Cmwlth. 2004) (internal quotation marks
and citation omitted). Where the employee’s action is justifiable or reasonable under
the circumstances, it cannot be considered willful misconduct. Id. at 948. As the
prevailing party below, Employer is entitled to the benefit of all reasonable
inferences drawn from the evidence on review. See Ductmate Industries, Inc. v.
Unemployment Comp. Bd. of Review, 949 A.2d 338, 342 (Pa. Cmwlth. 2008).
Here, Employer has work rules prohibiting the release of patients’
protected health information and requiring the encryption of any emails containing
6
protected health information. F.F. 2-3. Claimant was aware of these policies. F.F.
4; see Claimant Questionnaire ¶¶ 6 & 9. Claimant sent unencrypted emails to her
former supervisor and herself, thereby violating Employer’s rules. See F.F. 6 & 10-
11. Indeed, Claimant admitted that sending the email to her former supervisor was
a violation of the rule. C.R. Item No. 2, Claimant Questionnaire ¶ 8.
Nonetheless, although Claimant does not dispute sending the emails,
Claimant argues that not all privacy breaches are HIPPA violations. Claimant
maintains that Employer’s own investigation showed that the email Claimant sent to
herself was deleted and not shown to anyone else and that Claimant signed a
statement to that effect. Claimant’s Brief at 26. Claimant also states that her former
supervisor testified that she deleted the email without opening it. Id. Claimant
argues that the fact that the supervisor would not sign a statement indicating such,
thereby requiring Employer to notify affected parties of the possible breach of their
privacy, was beyond Claimant’s control and does not establish that she committed
willful misconduct. Id. at 27-28.
However, Employer’s policy required that emails containing protected
health information be encrypted when sent to external email addresses. F.F. 3.
Employer’s witness explained that the sending of the unencrypted email alone was
a violation, because the email could be intercepted. T.T. at 13; see T.T. at 17 & 19.
It was the sending of unencrypted emails that was the violation. Accordingly,
Employer established that Claimant violated its rule.
Nonetheless, Claimant argues that she did not commit willful
misconduct because the violations were unintentional and that the Board erred in
failing to consider the circumstances as a whole, which established that she had good
cause. Claimant’s Brief at 15, 19 & 21. In particular, Claimant maintains that the
7
Board erred in affirming the referee’s decision to prohibit Claimant from presenting
evidence regarding a pay dispute with Employer, which Claimant maintains was the
real reason for her termination. See id. at 15. Claimant states that from the time she
was hired in August of 2017 until she was suspended on November 10, 2017,
Employer underpaid Claimant. Id. at 8. Claimant asserts that just as the wage
payment issue “was coming to a head,” Employer emailed Claimant a list of patients
and accused Claimant of making medical errors on those patients’ charts. Id. at 8.
Claimant maintains that Employer’s actions were an attempt to catch Claimant in a
“HIPPA violation trap.” Id. Claimant asserts that Employer sent her “a false or
inapplicable list of alleged medical errors, the only purpose thereof was to seek to
unsettle [Claimant] and cause her to take unwise actions.” Id. at 10. Claimant states
that she only recognized one of the 23 names on the list and contends that she
attempted to investigate the list by forwarding the list to her supervisor; however,
her cell phone contained both her supervisor’s personal and work email addresses,
and she mistakenly sent the list to the personal email address due to the stress of the
situation. Id. at 8-9 & 17. Claimant states that Employer’s “first ‘HIPPA violation
trap’ had snagged [her].” Id. at 9. Claimant maintains that Employer then advised
her to consult with Employer’s corporate compliance department, which she did
“several hours later,” and claims that she was advised by an attorney to email the list
to herself. Id. Claimant contends that this amounted to “a second ‘HIPPA violation
trap.’” Id. Claimant argues that although she had been advised of the need to encrypt
the files, “the stress of being accused of a privacy violation caused [Claimant] to
inadvertently violate Employer’s rules.” Id.
Initially, we note that Claimant never testified at the hearing that the
“stress” of the events caused her to violate the rules. See T.T. at 22-25. Instead,
8
with respect to the first violation, Claimant testified that she did not know her former
supervisor had left the company and that she sent the email to her former
supervisor’s personal email address by mistake, as her phone contained both the
work email and personal email and she was in a hurry. T.T. at 22-23. With respect
to the second violation, Claimant testified that an attorney in Employer’s corporate
compliance department instructed her to send the email to herself. T.T. at 23-25.
However, the Board did not find either of these explanations to be credible. The
Board is the ultimate factfinder and arbiter of credibility; its credibility
determinations are not subject to re-evaluation by this Court. Waverly Heights, 173
A.3d at 1227. Nonetheless, while Claimant recognizes the Board discredited her
testimony that corporate compliance counsel told her to email the information to
herself, Claimant argues that she believed she had been instructed to do so.
Claimant’s Brief at 22. Consequently, Claimant maintains that she had a good faith
basis to do so and, therefore, had good cause to violate Employer’s rules. Id. The
Board noted, however, that “virtually immediately after acknowledging the
encryption requirement, the [C]laimant failed to follow the requirement[]” and found
Claimant’s suggestion that Employer’s attorney advised her to do so to be
“implausible.” Referee’s Decision at 3; see Board’s Decision at 1. Giving
Employer, the prevailing party, the benefit of all reasonable inferences drawn from
the evidence as we must, see Ductmate, 949 A.2d at 342, it is clear that the Board
rejected Claimant’s assertion that she had a good faith basis for her belief. See
Board’s Decision at 1. Because Claimant’s explanations for her actions were not
found credible, the Board did not err in concluding that Claimant lacked good cause.
Lastly, we address Claimant’s argument that the referee should have
allowed Claimant to present evidence regarding her pay dispute with Employer,
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which Claimant asserts led to Employer sending her the list of alleged patient errors
and ultimately setting a “HIPPA violation trap.” Claimant’s Brief at 8-9 & 16-21.
In unemployment compensation proceedings, the referee has “wide
latitude” regarding the admission of evidence. Creason v. Unemployment Comp.
Bd. of Review, 554 A.2d 177, 179 (Pa. Cmwlth. 1989). “A referee is not free to
disregard rules of evidence and if evidence is not relevant[,] the referee may exclude
it.” Id. Relevant evidence is evidence having any tendency to make a fact that is of
consequence to the determination of the action more or less probable. Pa.R.E. 401.
Here, despite Claimant’s proffer regarding the pay dispute, the referee
stated it was not relevant because the issue was about Claimant’s separation due to
sending unencrypted emails. See T.T. at 14 & 18. As the Board noted, Claimant
admitted to the conduct, and the critical issue was whether Claimant had good cause
for her actions. Board’s Decision at 1. Moreover, the referee’s ruling means he
determined that the existence of a pay dispute does not provide probative evidence
to support good cause for violating the rule at issue. Implicit in this determination
is that the referee, as affirmed by the Board, credited Employer’s reason for
terminating Claimant. Again, we may not overturn credibility determinations. See
Waverly Heights, 173 A.3d at 1227. Therefore, the testimony regarding the pay
dispute was not relevant to the issue before the referee. Consequently, the Board did
not err in concluding that the referee did not abuse his discretion by not allowing the
testimony.
Accordingly, for the foregoing reasons, we affirm.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Margaret R. Smith, :
Petitioner :
:
v. :
:
Unemployment Compensation :
Board of Review, : No. 785 C.D. 2018
Respondent :
ORDER
AND NOW, this 3rd day of April, 2019, the May 16, 2018 order of the
Unemployment Compensation Board of Review is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge