Opinion
NO. 2013-CA-000272-MR
06-20-2014
STANCY CORDER APPELLANT v. KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION; AND HORIZON ADULT HEALTH CARE, LLC APPELLEES
BRIEF FOR APPELLANT: M. Gail Wilson Jamestown, Kentucky BRIEF FOR APPELLEE KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION: Patrick B. Shirley Frankfort, Kentucky BRIEF FOR APPELLEE HORIZON ADULT HEALTH CARE, LLC: Whitney Dunlap III Richmond, Kentucky
NOT TO BE PUBLISHED
OPINION
AFFIRMING
BEFORE: CAPERTON, DIXON, AND VANMETER, JUDGES. VANMETER, JUDGE: Stancy Corder appeals from the Wayne Circuit Court's order affirming a decision of the Kentucky Unemployment Insurance Commission ("KUIC"), which reversed a referee's award of unemployment benefits to Corder. For the following reasons, we affirm.
Corder worked as a full-time driver for Horizon Adult Health Care, LLC ("Horizon") in Monticello, Kentucky from October 2003 until she was discharged on May 19, 2011. Corder was discharged by her supervisor, Kristi Dobbs, for failing to follow instructions regarding contact with a patient's relative who was unauthorized to receive confidential information about the patient, and for soliciting, or allowing her niece to solicit, patients to purchase Avon products in violation of Horizon's employee code of conduct. Corder subsequently filed a claim for unemployment benefits, which she was awarded despite claims of discharge for misconduct by Horizon.
Corder's discharge was also based on a third incident, which the employer considered to be an act of dishonesty by Corder, but the KUIC found that the employer did not meet its burden of proof on this issue, and thus this issue is not raised by Corder on appeal.
Horizon appealed the award of benefits, and a telephonic hearing was held before a referee. The referee determined that Corder was not discharged for misconduct, and upheld the award of benefits. Horizon appealed the referee's decision to the KUIC, which upon review of the hearing's transcript, overturned the referee's decision on the basis that Corder was discharged for wrongdoing as defined in KRS 341.370(6) and thus disqualified from receiving unemployment benefits. Corder requested review of the KUIC's decision by the Wayne Circuit Court, which affirmed. This appeal follows.
Kentucky Revised Statutes.
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Corder argues that she did not disclose confidential patient information to an unauthorized person, was not selling Avon to patients, and that her conduct did not amount to a willful or wanton disregard of her employer's interest. As a result, she claims she was not guilty of any wrongdoing per KRS 341.370(6), and should not be disqualified from collecting unemployment benefits. We disagree.
The Supreme Court has described the judicial standard of review in unemployment cases as follows:
Judicial review of a decision of the Kentucky Unemployment Insurance Commission is governed by the general rule applicable to administrative actions. "If the findings of fact are supported by substantial evidence of probative value, then they must be accepted as binding and it must then be determined whether or not the administrative agency has applied the correct rule of law to the facts so found." Substantial evidence has been defined as evidence which has sufficient probative value to induce conviction in the minds of reasonable people. If there is substantial evidence in the record to support an agency's findings, the findings will be upheld, even though there may be conflicting evidence in the record. An agency's findings are clearly erroneous if arbitrary or unsupported by substantial evidence in the record. If the reviewing court concludes the rule of law was correctly applied to facts supported by substantial evidence, the final order of the agency must be affirmed.Kentucky Unemployment Ins. Comm'n v. Cecil, 381 S.W.3d 238, 245-46 (Ky. 2012) (internal citations omitted).
The standard of review at the KUIC level is substantially less deferential. "The commission may on its own motion affirm, modify, or set aside any decision of a referee on the basis of the evidence previously submitted in such case, or direct the taking of additional evidence, or may permit any of the parties to such decision to initiate further appeals before it." KRS 341.430(1). This court has detailed the KUIC's review process accordingly:
"Except in instances where the commission orders cases removed to it from a referee, all appeals to the commission may be heard upon the records of the division and the evidence and exhibits introduced before the referee." 787 KAR 1:110(2)(2)(a); formerly 903 KAR 5:130(2)(2)(a). Thus, while the Commission generally does not hear evidence directly from witnesses, it has the authority to enter independent findings of fact. 787 KAR 1:110(2)(4)(a). Necessarily, such authority allows the Commission to judge the weight of the evidence and the credibility of witnesses and to disagree with the conclusion reached by the referee.Burch v. Taylor Drug Store, Inc., 965 S.W.2d 830, 834 (Ky. App. 1998), abrograted on other grounds by Cecil, 381 S.W.3d at 247. Thus, the KUIC may enter new findings of fact and owes no deference to the referee's decision, whereas this court must uphold the KUIC's decision if the decision was supported by substantial evidence and reached through a correct application of the law.
KRS 341.370(1)(b) dictates: "A worker shall be disqualified from receiving benefits for the duration of any period of unemployment with respect to which... [h]e has been discharged for misconduct or dishonesty connected with his most recent work[.]" KRS 341.370(6) defines "discharged for misconduct" in relevant part as follows: "knowing violation of a reasonable and uniformly enforced rule of an employer; ... refusing to obey reasonable instructions[.]" "The employer trying to show a disqualification under KRS 341.370 must bear the burden to defeat recovery of the claim." Brown Hotel Co. v. Edwards, 365 S.W.2d 299, 301 (Ky. 1962).
The facts surrounding Corder's termination are somewhat conflicting. Because Horizon deals with patient medical records, it is subject to HIPAA and other regulations concerning patient confidentiality. Therefore, Horizon has an employee code of conduct prohibiting employees from disclosing confidential patient information to anyone other than the patient or someone to whom the patient has given prior written authorization. Violation of this employee code of conduct can result in immediate discharge.
In addition, because Horizon's facility provides care for elderly adults, some of whom may be in poor medical, mental, or emotional health, and are thus vulnerable to overreaching by others, Horizon's employee code of conduct prohibits employees from soliciting patients to buy anything from the employee or any other person. Employees are also prohibited from allowing outsiders to solicit business from patients, and are required to report any such incidents to their supervisor. The code of conduct further contains a specific prohibition against the sale of Avon or Mary Kay products to patients. Corder was well-informed of the employee code of conduct, and was aware of both of the policies discussed above.
In May 2011, Kristi Dobbs, Corder's supervisor, became concerned about the health and living conditions of a patient, W.H., and contacted adult protective services. Adult protective services opened an investigation into the patient's welfare. The patient's adult son, G.H., contacted Corder about the social worker's visit. Corder was aware that W.H. had not authorized Horizon to release any confidential patient information to G.H. The following day, Corder overheard Dobbs discussing the investigation into W.H.'s living conditions. She then informed Dobbs of her conversation with G.H., and Dobbs instructed her that a confidential investigation was ongoing and "next time he calls you, you need to tell him to call me." Two other Horizon employees, Tammy Baker and Peggy Bertram, witnessed this conversation.
A few days later, G.H. again contacted Corder and informed her that W.H. was in the hospital, and he would let Corder know if his mother would need transportation to Horizon's facility. He also advised Corder that he was going to bring W.H. home from the hospital, since G.H. did not want his mother going to a nursing home. Baker testified that Corder told her about this second conversation with G.H., and claims Corder said she told G.H. that putting W.H. in a nursing home was best for her because "her house is not fit to be lived in anyway." Baker reported this conversation to Dobbs. Corder denies telling G.H. that his mother was better off in a nursing home, but admits she did not stop the conversation and advise G.H. to contact Dobbs, or report the phone call to Dobbs. Corder testified that she did not direct G.H. to contact Dobbs or inform Dobbs of the call because the conversation only pertained to transportation for his mother.
The parties dispute whether any confidential information was disclosed to G.H. during the second conversation with Corder. Dobbs, Baker and Bertram contend that under Horizon's employee code of conduct and various patient confidentiality laws, Corder's mere acknowledgment to G.H. that W.H. was a patient at Horizon constitutes a breach of confidentiality. Further, Horizon alleges that commenting on the fitness of a patient's home to an unauthorized individual is a breach of confidentiality. Corder claims the conversations between herself and G.H. were solely related to transportation issues, and she did not disclose any confidential information or advise G.H. to place his mother in a nursing home.
Beginning in late 2010 or early 2011, Corder began bringing Avon booklets into Horizon's facility and making them available to patients. The booklets bore the name Harley, who Dobbs knew to be Corder's niece, and Corder's phone number. Corder's co-workers had purchased Avon products from her or her niece in the past; selling products to co-workers was not prohibited by the employee code of conduct. In May 2011, Dobbs noticed a patient with one of the booklets and saw a booklet in the patients' dining room. Dobbs spoke with two other patients who said they had purchased Avon products from Corder. Corder also facilitated the sale of Avon products to four patients by driving her niece to the patients' homes to deliver products and to obtain payment for those products.
Based on the evidence, we believe the KUIC's conclusion that Horizon met its burden of proof in showing that Corder knowingly violated a rule of her employer is supported by substantial evidence. Corder does not dispute that she aided her niece in selling Avon products to patients, and she was well aware of the rule prohibiting such conduct. Further, "[t]he rule in Kentucky is that if there is substantial evidence in the record to support an agency's findings, the findings will be upheld, even though there may be conflicting evidence in the record." Kentucky Comm'n on Human Rights v. Fraser, 625 S.W.2d 852, 856 (Ky. 1981). While the evidence regarding Corder's second conversation with G.H. and any possible breaches of patient confidentiality is conflicting, the KUIC as fact finder was permitted to decide which evidence it found most credible, and substantial evidence exists to support the KUIC's conclusion that Corder disclosed confidential information. Therefore, the conflicting testimony does not render the KUIC's decision erroneous. In addition, Corder undoubtedly refused to obey a reasonable instruction of her supervisor when she failed to instruct G.H. to contact Dobbs during her second conversation with him, and when she did not report that conversation to Dobbs.
Corder cites Douthitt v. Kentucky Unemployment Ins. Comm'n, 676 S.W.2d 472 (Ky. App. 1984) in an attempt to define "misconduct" as "limited to conduct evincing such wilful or wanton disregard of an employer's interest as found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee[.]" Id. at 474. However, the Kentucky Supreme Court has held that "a willful or wanton, or bad faith, finding, is not an additional requirement when the employee is discharged for conduct specifically identified in KRS 341.370(6)." Cecil, 381 S.W.3d at 247. Accordingly, we need not examine whether Corder's behavior amounted to wanton or willful conduct.
Because the grounds for Corder's termination amount to misconduct under KRS 341.370(6), she was properly disqualified by the KUIC from receiving unemployment benefits pursuant to KRS 341.370(1)(b). Although the record contains conflicting evidence, we find that the KUIC's decision was supported by substantial evidence and proper application of the law, and thus the Wayne Circuit Court properly upheld that decision.
The order of the Wayne Circuit Court is affirmed.
ALL CONCUR. BRIEF FOR APPELLANT: M. Gail Wilson
Jamestown, Kentucky
BRIEF FOR APPELLEE
KENTUCKY UNEMPLOYMENT
INSURANCE COMMISSION:
Patrick B. Shirley
Frankfort, Kentucky
BRIEF FOR APPELLEE
HORIZON ADULT HEALTH
CARE, LLC:
Whitney Dunlap III
Richmond, Kentucky