Opinion
No. 2232 C.D. 2012
10-17-2013
Colleen D. Gindlesperger, Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE LEADBETTER
Colleen D. Gindlesperger (Claimant) petitions for review of the order of the Unemployment Compensation Board of Review (Board) that affirmed the referee's decision denying her unemployment benefits under Section 402(e) of the Unemployment Compensation Law (Law). Claimant argues that the Board improperly based its decision on Employer's exhibit which was not admitted into evidence and that the Board's decision is not supported by substantial evidence. Because the record demonstrates otherwise, we affirm.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(e). Section 402(e) provides in pertinent part that an employee shall be ineligible for compensation for any week "[i]n which his unemployment is due to his discharge or temporary suspension from work for willful misconduct connected with his work
Claimant was employed by Franklin Johnstown Federal Credit Union (Employer) as Chief Executive Officer (CEO) from September 1999 until she was discharged on May 18, 2012. The UC Service Center determined that she was ineligible for unemployment benefits under Section 402(e) of the Law. At a hearing held on appeal before the referee, Employer presented the testimony of five witnesses and numerous exhibits, which revealed the following events leading to Claimant's discharge.
Claimant was initially suspended for gross misconduct on April 27, 2012, pending review by Employer's board of directors.
Claimant's alleged misconduct included having an inappropriate relationship with Employer's Collections Manager, Dominick Glavach, giving preferential treatment to her family, Glavach and his family, spending considerable amount of time away from office, and delaying divestments. Referee's Finding of Fact No. 3. The referee addressed only the alleged preferential treatment, concluding that Claimant's other alleged conduct did not constitute willful misconduct.
As CEO, Claimant was responsible for implementing and enforcing policies and procedures established by Employer's board of directors. Under Employer's lending policy, a loan may be approved only when a loan applicant's debt-to-income ratio does not exceed 45%. In calculating the ratio, an entire amount of payment on a mortgage jointly held by the applicant and his or her spouse must be included. In addition, a new credit report must be obtained for every loan application, unless a credit report in Employer's file is less than six months old. Claimant was assigned to review employees' credit history in their loan applications because of concerns that other employees should not be privy to coworkers' wages and salaries. All loan documentation and data must be entered into Employer's computer system.
Employer also established the Standards of Conduct for its employees, which provided in relevant part:
d. Conflict of Interest
Credit Union policy is to award business solely on the basis of merit and open competition. Employees must therefore engage in no activities and have no relationships that might impair their independence of judgment. ... No employee should directly or indirectly engage in conduct, which is disruptive or damaging to the Credit Union.Standards of Conduct, Section 4.d (Employer's Exhibit E-11); Certified Record (C.R.) Item No. 14.
In an e-mail sent to her son-in-law in January 2011, Claimant provided him with information on a 2004 Mitsubishi Endeavor repossessed by Employer. Claimant informed him that Employer advertised the value of the vehicle to be $14,000 for sealed bids. She further informed him of the vehicle's condition and stated that the vehicle's rear end would be replaced by the manufacturer. She also told him that she would have Employer's Collections Manager, Dominick Glavach, find out the prices that Harrisburg Auto Auction expected to receive for the vehicle at auction. Under Employer's practice, Employer advertises repossessed vehicles on an "as-is" condition for sealed bids and does not provide information regarding any recent repair work. Referee's Finding of Fact No. 13. If a highest bid is less than the amount expected by Harrisburg Auto Auction to receive at auction, Employer does not accept the bid and takes the vehicle to Harrisburg Auto Auction for auction. Claimant's son-in-law was the successful bidder for the vehicle after bidding approximately $10,000. For an unexplained reason, Employer did not maintain documents related to the bids on the vehicle.
In August 2011, Claimant gave her daughter's loan application to Chief Funding Officer, Christine Terrizzi. Her credit report showed that her debt-to-income ratio was 81.5% but 22% when the monthly payment on the mortgage jointly held by her and her husband was excluded. Claimant told Terrizzi to approve the loan application, stating that her daughter's husband, not her daughter, made the mortgage payment. Terrizzi testified that the loan application of Claimant's daughter was approved although she was ineligible for a loan because her debt-to-income ratio exceeded 45%.
Subsequently in April 2012, Claimant approved a loan application submitted by Employer's Collections Manager, Glavach, and his wife without obtaining a new credit report when his credit report on file was two years old. Claimant also failed to enter Glavach's credit score and other loan documentation into the computer system, as required by Employer's policy. Previously in August 2007, Claimant instructed Chief Funding Officer, Terrizzi, to approve refinancing of a car loan taken jointly by Glavach and his son at a lower interest rate available to employees. Glavach's son had been delinquent in paying the car loan just before the refinancing, and Glavach was concerned that the loan delinquency would adversely affect his credit rating. After the refinancing, the car loan was placed in his son's name only. Terrizzi kept her memo (Exhibit E-5) detailing Glavach's loan application transactions in the file to "cover [her]self." Notes of Testimony (N.T.) at 15; C.R. Item No. 14.
The referee concluded that Claimant's actions constituted willful misconduct and that she was ineligible for benefits under Section 402(e) of the Law. The referee found that Claimant provided preferential treatment to her family members, Glavach and his son and attempted to interfere with their loan applications, in violation of Employer's policy prohibiting a conflict of interest. The Board adopted and affirmed the referee's decision.
An employer denying a claimant's eligibility for benefits under Section 402(e) of the Law has the burden of establishing that the claimant engaged in willful misconduct. Patla v. Unemployment Comp. Bd. of Review, 962 A.2d 724, 727 (Pa. Cmwlth. 2008). The term "willful misconduct" has been defined as: (1) the wanton and willful disregard of the employer's interests; (2) the deliberate violation of rules; (3) the disregard of standards of behavior which an employer can rightfully expect of its employee; or (4) negligence which manifests culpability, wrongful intent, evil design, or intentional and substantial disregard for the employer's interests or the employee's duties and obligations. Glatfelter Barber Shop v. Unemployment Comp. Bd. of Review, 957 A.2d 786, 792 (Pa. Cmwlth. 2008). When alleged willful misconduct is based on a violation of the employer's policy, the employer must prove the existence and reasonableness of the policy, the claimant's awareness of the policy and the claimant's violation of the policy. Adams v. Unemployment Comp. Bd. of Review, 56 A.3d 76, 79 (Pa. Cmwlth. 2012). Whether the claimant's conduct rose to the level of willful misconduct is a question of law subject to this Court's plenary review. Dep't of Corr. v. Unemployment Comp. Bd. of Review, 943 A.2d 1011, 1016 (Pa. Cmwlth. 2008).
Claimant argues that the Board's conclusion that she was discharged for willful misconduct is not supported by substantial evidence because the Board relied on Exhibit E-12 (Employer's Fraud Policy revised on May 15, 2012), which was not admitted into evidence. The revised Fraud Policy stated, inter alia, that "[g]ranting or requesting preferential treatment for anyone" is considered to be "fraudulent or dishonest." Claimant's counsel objected to the admission of Exhibit E-12 on the basis that it was revised after Claimant's April 27, 2012 suspension. The referee sustained the objection and did not admit Exhibit E-12 into evidence. According to Claimant, no other evidence in the record supports the Board's conclusion.
The information provided by Employer to the UC Service Center included a copy of the earlier version of Employer's Fraud Policy, listing eight acts that are considered to be fraudulent or dishonest, which included "[g]ranting or requesting preferential treatment for ANYONE." C.R. Item No. 3 (emphasis in original).
Contrary to Claimant's assertion, the referee did not consider Exhibit E-12 in reaching his conclusion that Claimant's actions constituted willful misconduct. The referee did not refer to either Employer's Fraud Policy or Exhibit E-12 in his decision. Rather, the other overwhelming evidence admitted into evidence and accepted by the referee and the Board established that Claimant provided preferential treatment to her family, Glavach and his son in clear violation of Employer's lending policy and Standards of Conduct prohibiting a conflict of interest.
In an unemployment compensation case, the Board is the ultimate fact-finder and is empowered to make credibility determinations. Elser v. Unemployment Comp. Bd. of Review, 967 A.2d 1064, 1069-70 n.8 (Pa. Cmwlth. 2009). In determining whether the Board's decision is supported by substantial evidence, this Court must examine the evidence in the light most favorable to the prevailing party, Employer in this case, giving that party the benefit of any inferences that can logically and reasonably drawn from the evidence. Middletown Twp. v. Unemployment Comp. Bd. of Review, 40 A.3d 217, 223 (Pa. Cmwlth. 2012).
Claimant does not dispute that as CEO, she was responsible for enforcing Employer's policies and was aware of Employer's lending policy and Standards of Conduct prohibiting a conflict of interest. Nor does she challenge the reasonableness of those policies. She intervened in the determination of her daughter's eligibility for a loan by suggesting that the mortgage payment should not be included in the debt-to-income ratio, contrary to the requirement under the lending policy. In addition, Claimant approved the loan application of Glavach and his wife without obtaining a more recent credit report and approved the refinancing of the car loan held by Glavach and his son when the loan had been delinquent. In addition, Claimant provided her son-in-law with the information on the repossessed vehicle, which was unavailable to others bidding on the vehicle. Her actions constituted violations of Employer's lending policy and Standards of Conduct, exhibited disregarded of the standards of behavior which Employer could rightfully expect of its employees, and were inimical to Employer's interest.
Claimant asserts that the information provided to her son-in-law was "public information," not "privileged information." Claimant's Brief at 14-15. The record established, however, that such information was not available to others. As the referee found: "[T]he employer only provides ... one value in [its] advertisements and not a minimum bid that [it] would be willing to accept on said vehicle to bar ... transport to auction. Nor does the employer have an established practice of negotiating with the highest bidder for a higher bid to preclude transport [of the vehicle] to auction to preserve or insure [it] receives the highest amount possible on a repossessed vehicle ...." Referee's Decision at 4. Claimant further asserts that her actions did not rise to the level of willful misconduct because she obtained no pecuniary benefits and did not act with "wrongful intention" and because her daughter was not delinquent on the approved loan. Claimant's Brief at 14. Whether she acted for her own financial gain or whether her daughter was delinquent on the approved loan is irrelevant in determining whether her actions violated Employer's policies. --------
Because the record supports the Board's conclusion that Claimant was discharged for willful misconduct and was ineligible for benefits under Section 402(e) of the Law, the Board's order is affirmed.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge ORDER
AND NOW, this 17th day of October 2013, the order of the Unemployment Compensation Board of Review in the above-captioned matter is AFFIRMED.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge