Opinion
No. A05-872.
Filed January 24, 2006.
Appeal from the Minnesota Department of Employment and Economic Development, File No. 18182 04.
Richard I. Diamond, Jesse H. Kibort, Richard I. Diamond, P.A., (for relator).
Brake Tru, Inc., (respondent).
Lee B. Nelson, Linda A. Holmes, Department of Employment and Economic Development, (for respondent Commissioner).
Considered and decided by Halbrooks, Presiding Judge; Klaphake, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Relator challenges the decision of the senior unemployment review judge that relator is disqualified from receiving unemployment benefits because he was discharged for employment misconduct. We affirm.
FACTS
Relator Dennis Campbell is part owner of the Strategic Business Group (SBG) management consulting company. In 2001, SBG contracted with respondent Brake Tru to provide consulting services. Campbell also agreed to become vice president of sales and marketing for Brake Tru. Patrick Grinde, Campbell's SBG business partner, was hired as Brake Tru's president.
On November 3, 2003, Campbell, acting in his role as secretary of the board, signed a promissory note committing Brake Tru to a debt of $44,200 to SBG. The debt was in consideration for office and storage space provided by Campbell and Grinde while working for Brake Tru out of their homes. Grinde also signed the note. Campbell and Grinde then signed a security agreement attaching Brake Tru's assets as collateral for the note. Campbell did not have approval from Brake Tru's board to execute these agreements. After the full board learned of the promissory note, the decision was made on February 2, 2004, to terminate Campbell's employment.
Campbell applied for unemployment benefits from the Department of Employment and Economic Development (department). The department's adjudicator determined that Campbell was not discharged for employment misconduct and, therefore, was qualified to receive unemployment benefits. Brake Tru appealed the department's determination to an unemployment law judge (ULJ), arguing that Campbell had engaged in self-serving conduct that was adverse to Brake Tru's interests. The ULJ concluded that Campbell was discharged for employment misconduct, and Campbell appealed to a senior unemployment review judge (SURJ). The SURJ upheld the disqualification, finding that Brake Tru's board had discharged Campbell for employment misconduct. This certiorari appeal followed.
DECISION
Campbell argues that the SURJ erred in determining that his creation of a secured debt from his employer to his own consulting business constitutes employment misconduct. Generally, whether an employee is discharged for employment misconduct is a mixed question of fact and law. Schmidgall v. FilmTec Corp., 644 N.W.2d 801, 804 (Minn. 2002). Whether an employee committed a particular act is a question of fact, which we review for reasonable support in the record. Scheunemann v. Radisson S. Hotel, 562 N.W.2d 32, 34 (Minn.App. 1997). Ordinarily, the record includes a transcript of the proceedings before the ULJ, which the department is responsible for providing free of charge to an appealing relator. Minn. Stat. § 268.105, subd. 7(c) (Supp. 2003). Campbell did not request a transcript from the department, indicating in his notice of appeal that a transcript was not necessary. Even after the department notified Campbell that, in the absence of a request, a transcript would not be provided, Campbell did not request one. As a result, Campbell waived his right to a transcript for appellate review.
When a relator fails to request or provide a transcript, our review is limited to consideration of whether the SURJ's findings of fact support the legal conclusion of employment misconduct. See Duluth Herald News Tribune v. Plymouth Optical Co., 286 Minn. 495, 498, 176 N.W.2d 552, 555 (1970). Whether an employee's actions constitute employment misconduct is a question of law, which we review de novo. Ress v. Abbott Nw. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).
An employee who is discharged because of employment misconduct is disqualified from receiving unemployment benefits. Minn. Stat. § 268.095, subd. 4 (Supp. 2003). Employment misconduct is defined as "any intentional, negligent, or indifferent conduct, on the job or off the job (1) that evinces a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee, or (2) that demonstrates a substantial lack of concern for the employment." Minn. Stat § 268.095, subd. 6 (Supp. 2003).
The SURJ concluded that Campbell was discharged for employment misconduct because of the debt he created on behalf of his employer to reimburse his own consulting business for office and storage space. The SURJ found that the Board had not approved reimbursement for office and storage space and that none of the agreements between Brake Tru and SBG contained any reference to reimbursement for this purpose. The SURJ found that, by signing the promissory note and the security agreement attaching all of Brake Tru's assets in favor of his own company, Campbell "intentionally commit[ted] acts that put his own interests ahead of the company's interests, and that these acts were significantly adverse to Brake Tru."
Brake Tru had a right to expect that, as a corporate officer, Campbell would not put his own business interests above those of Brake Tru. See generally Minn. Loan Trust Co. v. Peteler Car Co., 132 Minn. 277, 286, 156 N.W. 255, 258 (1916) ("[T]he relation of directors to their corporation is essentially a fiduciary one, and upon sound principles of public policy they are, as a general rule, prohibited from dealing with the property of the corporation for their own benefit. . . ." (quoting Taylor v. Mitchell, 80 Minn. 492, 496, 83 N.W. 418, 420 (1900))); Viiliainen v. Am. Finnish Workers Soc'y, 236 Minn. 412, 418, 53 N.W.2d 112, 116 (1952) ("It is illegal for any officer or director of a corporation to impair his duty of undivided loyalty to the corporation by exercising his official duties for the benefit of any individual or group other than the corporation itself.") Although Campbell asserted that the promissory note he signed was intended to benefit Brake Tru, the SURJ found no evidence to support that assertion.
Campbell argues that, because he did not engage in many activities that have been classified as employment misconduct, he was not discharged for employment misconduct. For example, Campbell argues that he did not engage in a pattern of misconduct, was not dishonest, and never refused to follow board directions. That Campbell did not engage in this type of misconduct has no bearing on whether his actions constitute employment misconduct. Our analysis focuses on whether Campbell committed intentional conduct that violated a standard of behavior that Brake Tru had a right to expect when, without board authorization, he signed a promissory note attaching all of Brake Tru's assets as security for a debt owed to his own consulting business. Our review of the limited record before us establishes that the SURJ's findings of fact support the conclusion that Campbell was discharged for employment misconduct and is, therefore, disqualified from receiving unemployment benefits.