Tuesday, August 28, 2012

Relationship Issues

Mohamed v. Fletcher Allen Health Care, 2012 VT 64

It could once be said that what you do on your own time is your business—at least for purposes of unemployment eligibility.  Today’s case, however, seeks to challenge this conventional wisdom and raise the stakes for employees caught with their pants down at an off-campus event.

Plaintiff worked for the environmental services department at Fletcher Allen Health Care (FAHC) for about four years.  He was responsible for cleaning certain work areas, and his responsibilities required daily contact with patients and staff. 

In 2010, Plaintiff pled guilty to two counts of lewdness stemming from an over-the-clothes-groping incident, which did not happen during work hours or on FAHC property.  Claimant’s parole officer told FAHC about the criminal convictions, and Plaintiff got the proverbial boot.

Plaintiff applied for unemployment benefits and a claims adjudicator found him eligible.  FAHC appealed that decision and an Hearing Officer modified the adjuster’s findings, concluding that Plaintiff’s conduct impacted FAHC’s ability to continue to employ Plaintiff and that a period of disqualification was appropriate.  Still unsatisfied, FAHC appealed the Hearing Officer’s decision to the Vermont Employment Security Board (Board), arguing that Plaintiff’s convictions constituted “gross misconduct connected” with his work.

Now, before we get too far ahead of ourselves, let’s briefly cover unemployment eligibility as it applies to this case.  In Plaintiff’s circumstances, an employee can be disqualified for unemployment benefits on three bases: (1) if an employee is fired for “misconduct connected with his or her work,” this triggers a disqualification period; (2) if an employee is fired “because of the consequences which flow from his or her conviction of a felony or misdemeanor,” this also triggers a disqualification period; or (3) an employee is completely disqualified, however, when discharged for “gross misconduct connected with his or her work.”  FAHC wanted the prize behind door number 3 of total disqualification.

Though there was some procedural back and forth based on a notice issue, the Board eventually affirmed the Hearing Officer’s decision and found that Plaintiff’s discharge for off-duty criminal conduct did not constitute gross misconduct connected with his work.  Undeterred, FAHC appealed, arguing that the Legislature’s recent amendments to the Unemployment Compensation Act require the Board to disqualify claimants from receiving unemployment compensation benefits when an employer can no longer retain them as a result of off-duty criminal conduct. 

Claimant had moved to dismiss the SCOV appeal as moot because FAHC was no longer on the hook for his unemployment claims.  In order for courts to render a decision, there has to be some legally cognizable interest at stake.  Otherwise, the case is moot, and must be dismissed.  But while at this point, neither party has any money on the ponies, there is an exception to mootness for cases capable of repetition, yet evading review.  The SCOV finds that given the short-term nature of unemployment benefits, this case falls into that category and charges ahead. 

The standard of review is deferential to the Board.  “An administrative agency’s conclusions of law will be upheld on appeal if they are fairly and reasonably supported by findings of fact, and absent a clear showing to the contrary, any decisions it makes within its expertise are presumed correct, valid and reasonable.” 
FAHC emphasizes the Legislature’s recently added definition of gross misconduct.  While that definition is reproduced in its entirety in the opinion, we don’t do that here.  What we will say is that the legislature included some examples of what might constitute gross misconduct, when “directly related to the employee’s work performance” and the example part of the definition includes, among other things, several mentions of criminal-type behavior.  The SCOV reasons that the recent amendment does not create a blanket discharge-with-impunity provision whenever an employee is convicted of a crime, but only when the criminal behavior is directly related to work performance.  This is why you should always read a statute in its entirety before you hone in on the discrete subparts—or phrases.  FAHC seems to be doing the legal equivalent of election-season quoting—ignoring a qualifier that doesn’t serve its argument.

FAHC argues the purpose of the amendments was to save the State money, and therefore, it stands to reason that the complete disqualification “gross misconduct” provision is broader in scope that before the amendment.  And though the SCOV acknowledges that FAHC may have a point regarding the overall purpose, there must still be a connection with the employee’s work.  In fact, the SCOV reasons that the Legislature intended the opposite of FAHC’s argument, noting that the Legislature used the phrase “directly related” in describing the connection required to work performance.  Accordingly, the SCOV finds that Plaintiff’s conduct was not related to his work, and FAHC loses this point.    

FAHC also argues that even if the connection is required, the Hearing Officer’s decision and the Board’s affirmation held Plaintiff liable for simple misconduct.  Accordingly, FAHC claims that the decision is internally inconsistent—finding a relationship adequate for simple misconduct, yet not for gross misconduct, when both require the same relationship to work.  Paraphrased, the SCOV says, “Hmm . . . that may be true, and maybe the Hearing Officer and the Board made a mistake there, but that isn’t something FAHC can use to overturn the decision.  Claimant didn’t appeal and that’s the part of the decision that’s adverse to him.”

Finally, FAHC argues that it had to fire Plaintiff because of his convictions and the place and nature of his work.  Again, the SCOV notes that this may be true, but that it doesn’t necessarily disqualify Plaintiff from receiving unemployment benefits.  In other words, cause for termination and cause to disqualify from unemployment benefits are two different questions, governed by different law.  Accordingly, the SCOV affirms the Board’s and Hearing Officer’s decisions.

Chief Justice Reiber dissents on the basis that the majority’s decision seems to create a bright-line rule that off-duty, off-premise activity can never rise to “gross misconduct” for purposes of unemployment benefits disqualification.  Accordingly, the Chief Justice would reverse and remand for further findings and analysis of when off-duty, off-premise activity is “directly related” to work performance.  But the Chief stands alone on this point, which makes it either a footnote to future challenges or the foundation to future employers structuring their arguments below.  

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