Opinion
C.A. No. 01A-11-007-JRJ.
Date Submitted: March 25, 2002.
Date Decided: May 13, 2002.
Appeal of the Unemployment Insurance Appeal Board's Decision Granting Claimant Unemployment Benefits. Decision AFFIRMED.
Victor Battaglia, Jr., Esquire, Biggs and Battaglia, Wilmington, Delaware, for Appellant.
Lorri A. Peterson, Newark, Delaware, Pro Se.
Stephani Ballard, Esquire, Department of Justice, Wilmington, Delaware, for Appellee U.I.A.B.
MEMORANDUM OPINION
INTRODUCTION
Before the Court is an appeal by the employer, Turkey's Inc., d/b/a/ Capriotti's (hereinafter referred to as "Employer") from a decision of the Unemployment Insurance Appeal Board (hereinafter referred to as "the Board") granting unemployment benefits to its former employee, Lorri A. Peterson (hereinafter referred to as "Claimant"). For the reasons set forth below, the decision of the Board is AFFIRMED.
The Court takes judicial notice of the fact that Employer is designated as a "sandwich shop" in the telephone directory and has stores in seventeen locations. The stores are primarily located in Delaware but are also located in Maryland and Pennsylvania.
I. FACTUAL AND PROCEDURAL BACKGROUND
Claimant filed a claim for unemployment compensation with the Delaware Department of Labor on July 8, 2001. Earlier on that date, upon her arrival to work at Employer's place of business, she was terminated from her position. According to Claimant, when she arrived to work at 11:00 A.M., the owner of the store, Kathy Morgan, approached her in the parking lot, asked Claimant for her key to the building, and told her not to go to the Department of Labor because she was getting a disciplinary report. Claimant proceeded to go to the Delaware Department of Labor and completed an application for unemployment benefits. She filed a Fact Finding Statement and included her version of the events that lead to her termination. Employer's Newark store owner, Kathy Morgan, filed her own statement of facts, and alleged that Claimant went into a branch store where she was not employed, walked behind the counter, made a sandwich for herself, and left without paying despite being asked to leave and pay for the items. Ms. Morgan also stated that later in the evening on July 3, 2001, Claimant went to the home of the co-worker, who told her to leave and pay for her food, physically assaulted the co-worker and was arrested for the assault.
After the Claims Deputy heard evidence from the Claimant and the Employer, she found the following facts:
The claimant filed for benefits indicating she was "let go." The employer indicated she was "terminated for stealing from the company and willful misconduct." Fact finding was done with both parties. The claimant does not dispute the claim she took merchandise without paying for it. In a discharge case, the burden of proof is with the employer to prove the claimant was discharged with just cause. Just cause for discharge refers to a willful or wanton act in violation of either the employer's interest or of the employee's duties or of the employee's expected standard of conduct. The employer has met this burden and the claimant is disqualified for the receipt of benefits.
Record and Transcript received from the Board, Notice of Determination, p. 4.
Claimant filed a timely appeal from the decision of the Claims Deputy and a hearing was scheduled on August 28, 2001 by the Appeals Referee, Theresa Matthews (hereinafter referred to as "Referee"). In attendance at the hearing were the Claimant, her mother, Sherri Shultz, and the Referee. The Employer was notified of the meeting but did not attend. Testimony was taken from Claimant who admitted to taking a cheese steak without paying for it but stated this was a common occurrence at the Newark store. Claimant stated the manager and assistant manager knew that she took the merchandise but made no comment. A co-worker also witnessed the incident and was upset about Claimant's conduct. The owner of the store, Ms. Morgan, was away on vacation when this occurred but was apprised of the incident upon her return by the co-worker who witnessed it. According to Claimant, it was not unusual for employees to take food without paying for it. She claimed that three weeks before she was terminated, another employee was having a party and took three party trays without paying for them.
The Referee reversed the decision of the Claims Deputy. Her decision provides, in pertinent part, as follows:
In a discharge case, the employer must show by a preponderance of the evidence that the claimant was discharged for just cause in connection with her work. Just cause exists where the claimant commits a willful or wanton act or engages in a willful or wanton pattern of conduct in violation of the employer's interest, her duties to the employer or her expected standard of conduct. Employees are hired to perform duties as required to the best of their ability and to follow rules and regulations established by the employer in order to promote the business interests of the employer. Certainly, violation of employer policy by not paying for food represents a reckless indifference to the duties of the job and could rise to the level of willful or wanton misconduct. However, the allegations of such behavior must be supported by the required weight of evidence. Since the employer chose not to attend the hearing, the only evidence to be considered here is that presented by the claimant.
According to that evidence, the claimant agreed to work in another employer store two weeks before her discharge. On July 3, she was off and decided to visit the store in Newark where she previously worked. While there, she made a sandwich in full view of the manager and assistant manager. She did not pay for it because it was common practice in that store not to. Just weeks before, an employee had taken three party trays for an event she was having and did not pay for them. The claimant may certainly have used poor judgment when she did not pay for her sandwich, especially when another employee was so upset about it. However, there is simply insufficient evidence in this case of any willful or wanton misconduct on the claimant's part.
Record and Transcript received from the UIAB, Decision of the Referee, p. 11.
A timely appeal of the Referee's decision was filed by Ms. Morgan on behalf of Employer to the Unemployment Insurance Appeal Board. A hearing was held and a decision rendered on October 10, 2001. In attendance were Claimant, David Morgan on behalf of Employer, President of the Board, Roy Newlin, Board Members Patricia Bailey and Robert Samuel, Deputy Attorney General and Counsel to the Board Stephani J. Ballard and Helen McClure, Secretary to the Board. In addition to the evidence adduced by the Appeals Referee, the Board also considered the testimony of David Morgan, present on behalf of the Employer.
Mr. Morgan testified that, pursuant to the employee manual, employees are only entitled to a free meal while on duty. When not on duty, employees must pay for their food. Mr. Morgan further provided that a theft report was filed with the police on the evening that Claimant took the food from the Newark store without paying for it. He also stated that it was a violation of the Board of Health regulations for Claimant to be making food behind the counter while not on duty. Managers are aware that employees cannot take food without payment. Claimant also testified and essentially repeated the same facts as were previously put forth at the hearing before the Appeals Referee. She acknowledged that she was aware of the Employer's policy with respect to meals but stated that other employees took food without paying. She also indicated that she was fired without being shown a write-up.
The Board affirmed the decision of the Referee and found that there was insufficient evidence of willful or wanton conduct by the Claimant because other employees took food without payment at various times. The Board noted that several employees, and possibly a manager, observed Claimant enter the store, go behind the counter and make herself a sandwich and made no efforts to stop her before confronting her for payment on the way out. This fact, in combination with Claimant's testimony that employees at the other store had a practice of making sandwiches for themselves without paying for them, led the Board to conclude that Employer had not provided sufficient evidence that Claimant's actions regarding the sandwich were willful or wanton. The Board affirmed the decision of the Appeals Referee and held that the Claimant was discharged from her work without just cause in connection with her work and was, thus, eligible for unemployment benefits. Employer's newly retained attorney submitted a letter to the Board requesting a rehearing of the case, alleging that Employer had been unable to secure the appearance of certain witnesses at the previous hearing and had additional documentation regarding the issues. The Board took Employer's request under advisement but denied the motion because Employer was given notice of the hearings and had an obligation to provide all of the evidence it wanted to adduce at the time of those hearings. The Board found that the Employer provided no evidence of a specific hardship that would render it unable to seek legal counsel or provide the necessary evidence at the time of the Board's hearing. The Board also noted that Employer chose not to attend the Appeal Referee's hearing prior to the Board hearing that would have afforded an additional opportunity for Employer to present its evidence. This appeal followed.
II. Legal Analysis
The function of this Court on an appeal from a decision of the Unemployment Insurance Appeal Board is to determine whether the Board's decision is supported by substantial evidence and is free from legal error. Substantial evidence is such relevant evidence that a reasonable person might accept as adequate to support a conclusion. Unemployment is for the benefit of persons who are unemployed through no fault of their own and are sincerely cooperating to end their unemployment. In order to qualify for unemployment benefits, an individual must be unemployed and meet the eligibility requirements set forth in Del. C. ANN. tit. 19 Del. C. § 3314. Pursuant to Del. C. ANN. tit. 19 Del. C. § 3315(2), a person is disqualified from benefits "[f]or the week in which the individual was discharged from the individual's work for just cause in connection with the individual's work . . . ." Consistent with the underlying public policy, the Unemployment Compensation Act is liberally construed in favor of the employee. The employer has the burden of proof that claimant was discharged for just cause, even though the claimant has the burden of establishing his right to unemployment compensation. The comparative degree of proof by which a case must be established before an administrative tribunal is a preponderance of evidence. It is not the function of this Court to weigh evidence, determine questions of credibility, or make its own factual findings. The Court will only reverse a decision of the Appeal Board if its findings are not supported by substantial evidence, or where the Appeal Board has made a legal mistake.
Unemployment Insurance Appeal Board v. Duncan, 337 A.2d 308, 309 (Del. 1975).
Oceanport Ind. v. Wilmington Stevedores, 636 A.2d 892, 899 (Del. 1994).
Johnston v. Chrysler Corp., 178 A.2d 459 (Del. 1962).
Snead v. Unemployment Ins. Appeal Bd., 486 A.2d 676 (Del. 1984).
Evans v. Com. Unemployment Compensation Bd. Of Review., 484 A.2d 822 (Pa. Comwlth. 1984).
Petty v. Univ. of Delaware, 450 A.2d 392 (Del. 1982).
Lawson v. Chrysler Corp., 199 A.2d 749 (Del.Super. 1964).
Johnson v. Chrysler Corp., 213 A.2d 64, 66 (Del. 1965).
Delgado v. Unemployment Insurance Appeal Board, 295 A.2d 585 (Del.Super. 1972).
Employer raises five arguments on appeal. The Court will address each claim seriatim. First, Employer claims that the Board failed to consider relevant evidence in determining whether Employer satisfied the "just cause" standard for termination. According to Employer, the Board ignored the fact that Claimant reviewed and acknowledged the Employee Manual which outlined the terms of purchasing food products from her employer and that she was afforded two opportunities to remit payment for the food she had taken but declined to make restitution.
Employer correctly identifies the standard by which an employee's termination is reviewed. An employee who is discharged for "just cause" is disqualified from receiving unemployment insurance benefits. "Just cause" generally exists if an employee commits a "willful or wanton act . . . in violation of the employer's interest, the employee's duties, or the employee's expected standard of conduct." If an employer consistently tolerates willful or wanton misconduct, however, the employer may not be justified in firing employees without first warning them that their conduct is no longer acceptable. It is generally accepted that where a decision to terminate an employee is based on fault or misconduct, the burden of proof rests with the employer to establish the fault or misconduct.
Del. C. ANN. tit. 19 Del. C. § 3315(2).
Avon Products, Inc. v. Wilson, 513 A.2d 1315, 1317 (Del. 1986).
Ortiz v. Unemployment Insurance Appeal Board, 317 A.2d 100 (Del. 1974).
Webb v. Interstate Battery, 1991 WL 53366 (Del.Super.).
In this case, the record reflects that the Board heard testimony from David Morgan on behalf of Employer. Mr. Morgan testified to the existence of an employee manual that set forth the policy on food for employees. Pursuant to that policy, employees were entitled to a free meal while on duty but were required to pay for food when not working. Mr. Morgan also stated that when Claimant entered the Newark store and made herself a sandwich without paying, she was instructed to leave the premises and pay for the food by a co-worker, not a manager, on duty at the time. Claimant testified that it was common practice for employees to help themselves to food without paying notwithstanding the regulations in the employee manual. According to Claimant, on an earlier occasion, another employee took three party trays for personal use without paying for them. After hearing this evidence, the Board found that although the Claimant took food from Employer without paying for it while she was off-duty, this conduct occurred in the presence of the store manager who did nothing to prevent it. Further, the Board found that other employees engaged in this conduct without incident. These facts led the Board to conclude that the Employer provided insufficient evidence that Claimant's actions with respect to the sandwich were willful or wanton. This Court agrees. Although Employer may have had an official policy prohibiting employees from taking food products when they were not working, the Board heard ample evidence that was not disputed by Employer that other employees also took sandwiches from the store without paying for them. In Claimant's case, food was taken in full view of the manager on duty but the manager in charge took no steps to intervene. Given these facts, it cannot be said that the Board failed to consider relevant evidence from the Employer. It is clear that the Board did consider Employer's testimony but found that the Claimant's conduct did not rise to the level of willful or wanton conduct necessary to establish that Claimant was discharged for just cause.
Employer's second argument is that the Board's decision was arbitrary and capricious because it was unreasonable for the Board to accept that Claimant thought it was appropriate to enter the Newark store while she was off-duty, make a sandwich for herself and leave without paying. The standard by which the Board must decide whether to award Claimant unemployment benefits is not whether is was appropriate for Claimant to take merchandise from Employer without paying for it, but rather, whether Claimant's conduct was willful and wanton. Wanton behavior is heedless, malicious or reckless; actual intent to cause harm is not required. Willful behavior involves actual, specific or evil intent. In this case, the Board heard testimony regarding one instance in which Claimant took food from Employer without paying for it. This occurred in full view of the on-duty manager without comment or reprimand from that individual. This was a common practice at the Newark location and there was no evidence adduced that Claimant had been previously warned not to engage in this conduct. Under these facts, it cannot be said that Claimant acted in a willful or wanton manner.
Boughton v. Division of Unemployment Insurance, 300 A.2d 25, 26 (Del.Super. 1972).
Id.
Employer's third argument states that the Board misapplied the law to the facts of this case. According to Employer, the Board was required to determine whether Claimant was discharged for just cause or misconduct. Employer argues that because Claimant knowingly violated the terms of employment memorialized in the employee manual by committing theft of Employer's property, she was discharged for just cause. Again, the Board heard undisputed testimony from Claimant that established it was a common practice at the Newark store for employees to take food without paying for it and that another employee recently took party trays from that location without remitting payment. The fact that this conduct was tolerated is further bolstered by the fact that Claimant's actions were completed in full view of the store manager who did nothing to prevent them. While this Court does not condone Claimant's conduct, under the facts of this case, it cannot be said that it constitutes willful or wanton behavior as previously defined.
Employer's fourth and fifth arguments are that the Board abused its discretion by denying its request for a rehearing to expand the record and by violating its right to due process. Due process constitutes an opportunity to be heard in one's own defense. The formality and procedural requisites can vary according to the nature of the case. Under the facts of this case, it cannot be said that Employer was deprived of its right to due process. Employer was notified of Claimant's application for unemployment benefits and her initial appeal when she was denied the benefits. Employer was provided with notice of the hearings and its right to subpoena witnesses and retain counsel if so desired. Employer chose not appear at the hearing held by the Appeals Referee but did attend the Board hearing wherein the Board took and considered the evidence provided by both Claimant and Employer. These facts support a finding that Employer was given several opportunities to be heard and provide a disinterested tribunal with its version of the events that transpired. Thus, although the outcome was unfavorable for Employer, its due process rights to a fair and impartial hearing were upheld.
Morris v. Southern Metals Processing Company, 530 A.2d 673 (Del. 1987).
Id. (citations omitted).
The denial of a request for rehearing is within the discretion of the Board. Because the Court finds that Employer was accorded adequate due process, this discretion was not abused.
See Morris v. Southern Metals Processing Company, 530 A.2d 673 (Del. 1987).
III. Conclusion
The Court finds that there is substantial evidence to support the Board's findings and the Board did not err as a matter of law. Accordingly, the decision of the Unemployment Insurance Appeals Board granting Claimant unemployment benefits is AFFIRMED.IT IS SO ORDERED.