Opinion
No. A05-56.
Filed January 10, 2006.
Appeal from the Department of Employment and Economic Development, File No. 9342 04.
Gregory K. Sloat, (pro se relator)
Accredited Mortgage of Minnesota, (respondent)
Lee B. Nelson, Linda A. Holmes, Department of Employment and Economic Development, (for respondent Commissioner)
Considered and decided by Klaphake, Presiding Judge; Halbrooks, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 Gregory Sloat was employed by respondent Accredited Mortgage of Minnesota (Accredited) from April 2001 until March 12, 2004. Sloat began his employment as a loan processor. He later performed loan officer duties and trained new loan officers. Accredited paid Sloat as an independent contractor rather than as an employee.
During Sloat's employment, Accredited became concerned about Sloat's conduct and work performance. While leading a training session for a new loan officer, Sloat criticized Accredited. Sloat suggested that he and the new loan officer could find more lucrative work at another company. The new loan officer testified that the training Sloat provided was inadequate and did not prepare the loan officer to perform his job.
Accredited also became concerned by the amount of computer network server space that was being used to store Sloat's files. During an investigation, a digital cache of pornographic photos was discovered on Sloat's computer. Accredited also determined that, without authorization, Sloat had accessed files containing confidential customer information that belonged to the general manager. Sloat admitted that he searched the general manager's computer files for information related to Sloat's employment status. Because Sloat suspected that Accredited planned to terminate his employment, he also searched the general manager's computer for damaging information about Accredited's employment practices. Because Sloat's behavior was inconsistent with Accredited's expectations, his employment was terminated.
Sloat applied to the Department of Employment and Economic Development (department) for unemployment benefits. The department determined that Sloat was not disqualified from receiving unemployment benefits. Accredited challenged this determination, arguing that Sloat was an independent contractor, not an employee. In the alternative, Accredited argued that if Sloat were its employee, he nevertheless was disqualified from receiving unemployment benefits because he was terminated for employment misconduct.
Although the department treated the alternative bases for disqualification — employment status as an independent contractor and employment misconduct — as separate appeals, a combined hearing on both issues was held before an unemployment law judge (ULJ). Sloat, a management employee from Accredited, and a computer professional hired by Accredited to investigate Sloat's computer usage testified. In the employment-status appeal, the ULJ determined that Sloat was Accredited's employee, not an independent contractor. In the employment-misconduct appeal, the ULJ determined that Sloat was discharged for employment misconduct because he accessed confidential information from the general manager's computer.
Accredited has not challenged this determination. Thus, for the purposes of this appeal, Sloat was an employee of Accredited.
Sloat appealed the employment-misconduct determination to a senior unemployment law judge (SURJ). The SURJ upheld the determination that Sloat committed employment misconduct by accessing confidential information on his manager's computer. This certiorari appeal followed.
Effective August 1, 2004, the administrative appellate authority changed from the commissioner's representative to a senior unemployment review judge. Minn. Stat. § 268.105, subd. 2 (2004); 2004 Minn. Laws ch. 183, § 71. The SURJ conducts a de novo review of the decisions of the ULJ. Minn. Stat. § 268.105, subd. 2.
DECISION
Sloat contends that the SURJ erred in determining that accessing the computer files constitutes employment misconduct. 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. Scheunemann v. Radisson S. Hotel, 562 N.W.2d 32, 34 (Minn.App. 1997). Whether the particular act constitutes 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).
In an unemployment-benefits certiorari appeal, we examine the decision of the SURJ rather than that of the ULJ. Kalberg v. Park Recreation Bd., 563 N.W.2d 275, 276 (Minn.App. 1997). Decisions of the SURJ are accorded "particular deference." Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995). We view the SURJ's factual findings in the light most favorable to the decision and will not disturb them as long as there is evidence that reasonably tends to sustain those findings. Schmidgall, 644 N.W.2d at 804.
The SURJ based his findings on Sloat's unauthorized duplication of confidential customer information contained in the general manager's computer files. Sloat admits he accessed the confidential information. Although the SURJ made findings of fact regarding Sloat's other conduct — including possessing pornographic materials on Sloat's computer, performing poorly during loan-officer training, and exhibiting a bad attitude — the SURJ based his determination that Sloat committed employment misconduct on Sloat gaining access, without authorization, to confidential customer information on the general manager's computer. Sloat does not challenge this finding, and our review of the record finds sufficient evidence to support it.
Rather than challenging the factual basis for the SURJ's determination, Sloat asserts two procedural errors and contends that the particular act did not constitute employment misconduct. First, Sloat challenges the fairness of Accredited's ability to advance two bases for denying Sloat unemployment benefits, contending that Accredited received multiple opportunities to defend the same claim. But the department must "determine any issue of eligibility raised by an employer." Minn. Stat. § 268.101, subd. 3 (2004). Therefore, addressing multiple bases for ineligibility when alleged by an employer is a requisite part of the process that the department must follow.
Accredited argued that, because Sloat was an independent contractor, he was not eligible to receive unemployment benefits. Thus, as an initial matter, the department was required to determine whether Sloat was an employee. An "employee" is an individual who is considered as such "under the common law of employer-employee and not considered an independent contractor." Minn. Stat. § 268.035, subd. 15(1) (2004). Unemployment benefits may not be awarded to an independent contractor regardless of whether he or she committed employment misconduct. Id.; see also Nicollet Hotel Co. v. Christgau, 230 Minn. 67, 68, 40 N.W.2d 622, 623 (1950) (citing earlier version of statute). After the department determined that Sloat was an employee, Accredited's second contention, employment misconduct, remained to be addressed. Therefore, addressing the issues raised by Accredited in this order is the necessary approach to decision-making in this case.
Next, Sloat contends that it was a prejudicial error to deny him the opportunity to subpoena witnesses for the hearing. Indeed, subpoenas are available for parties to an unemployment hearing. Minn. R. 3310.2914, subp. 1 (2004). "The requesting party must identify the person or documents to be subpoenaed, the subject matter of the evidence requested, and their necessity. A request for a subpoena may be denied if the testimony or documents sought would be irrelevant, immaterial, or unduly cumulative or repetitious." Id.
Before the hearing, Sloat sought to subpoena three witnesses to testify on his behalf. The ULJ denied this subpoena request because Sloat was unable to articulate how the witnesses' testimony would be relevant. At the hearing, Sloat reiterated his request to subpoena witnesses, generally claiming that they would rebut statements by Accredited's representatives. The ULJ advised Sloat that he could renew his request for the subpoenas if the witnesses could rebut specific testimony that arose during the hearing. Sloat did not renew his motion during the hearing. In his appeal letter to the SURJ, Sloat included letters from two of the proposed witnesses. Although the letters are supportive of Sloat's assertion that Accredited's computer security was lax, they do not address Sloat's unauthorized act of copying a confidential file.
Thus, the denial of the subpoenas was not prejudicial. The ULJ is responsible for conducting the hearing in a manner that protects the parties' right to a fair hearing and for ensuring that relevant facts are clearly and fully developed. Minn. R. 3310.2921 (2004). The record establishes that the ULJ fulfilled this responsibility. Accordingly, we conclude that the ULJ did not err in denying Sloat's request for subpoenas.
Finally, Sloat challenges the determination that gaining unauthorized access to the computer files constitutes employment misconduct. An employee who is discharged for employment misconduct is disqualified from receiving unemployment benefits. Minn. Stat. § 268.095, subd. 4(1) (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).
By accessing confidential computer files related to Accredited's employment practices and its customers, Sloat violated a standard of behavior that Accredited could reasonably expect from it employees. Id.; Jostens, Inc. v. Nat'l Computer Sys., Inc., 318 N.W.2d 691, 701 (Minn. 1982) (misappropriating confidential information violates employee's duty to the employer); cf. Aries Info. Sys., Inc. v. Pac. Mgmt. Sys. Corp., 366 N.W.2d 366, 369 (Minn.App. 1985) ("A duty of employer/employee confidentiality can arise at common law if the employee is given notice of what material is to be kept confidential."), review denied (Minn. June 27, 1985). Sloat acknowledges that he did not have authorization to access these computer files. Sloat asserts that he investigated his employment status in case he was fired and needed to file for unemployment benefits. Notwithstanding this motive, accessing confidential computer files without authorization constitutes employment misconduct because Accredited has a right to expect that its employees will not breach its security and business interests. By accessing the confidential computer files for the purpose of investigating the employer, Sloat engaged in conduct that evinces a serious violation of standards that Accredited could reasonably expect of Sloat.
Sloat contends that he violated no law or company policy. But this assertion is not determinative of whether he committed employment misconduct. Minn. Stat. § 268.095, subd. 6. Accredited has a right to expect that its employees or independent contractors will not, without authorization, obtain access to and copy confidential information on the computer system, regardless of whether an explicit policy or law prohibits such conduct.
The SURJ correctly determined that Sloat committed employment misconduct. He is, therefore, disqualified from receiving unemployment benefits.