Opinion
No. 2278 C.D. 2013
03-10-2015
David Stacy, Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY PRESIDENT JUDGE PELLEGRINI
David Stacy (Claimant) petitions for review of an order of the Unemployment Compensation Board of Review (Board) finding him ineligible for unemployment compensation benefits under Section 402(e) of the Unemployment Compensation Law (Law) because his termination was due to willful misconduct. For the following reasons, we vacate the Board's decision and remand for further proceedings.
Unemployment Compensation Law, Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §§ 751-914. Section 402(e) provides, in pertinent part:
An employe shall be ineligible for compensation for any week—43 P.S. §802(e).
* * *
(e) In which his unemployment is due to his discharge or temporary suspension from work for willful misconduct connected with his work, irrespective of whether or not such work is "employment" as defined in this act...
I.
Since 2012, Claimant was employed as a full-time, senior assistant manager for F.Y.E. (Employer), an entertainment-media store. Employer participates in a "buyback" program by which customer's trade in used media for cash or store credit so long as Employer's computer system recognizes the item's value as being at least one dollar ($1.00). When the automated system indicates that a customer's product is worth only one cent ($0.01), an employee is not permitted to repurchase the item because Employer already has a full inventory of the item or the item is unlikely to resell.
In May 2013, a customer approached Claimant to trade in a DVD but Claimant advised that the DVD could not be accepted. After the customer informed Claimant that he could keep the DVD because the customer no longer wanted it, Claimant placed the DVD on the back counter to be discarded. Later, a sales associate asked if she could have the DVD and Claimant gave it to her without cost. Subsequently, Claimant was terminated.
II.
Claimant filed an application for benefits with the Unemployment Compensation Service Center (Service Center) which determined that Claimant was ineligible for unemployment compensation benefits under Section 402(e) of the Law, 43 P.S. §802(e), because he violated Employer's rule that employees may not give away products to sales associates without authorization, and as a senior assistant manager, Claimant was or should have been aware of the rule.
Claimant appealed, contending that there existed "no clearly expressed policy against the exchange of non-inventory items between employees." (Certified Record [C.R.], Claimant's Pet. for Appeal from Determination.) Before the Referee, Employer presented the testimony of Stormy Phillippi, the store manager who terminated Claimant's employment. She testified that on the day in issue, she detected the DVD in the sales associate's bag during an end-of-shift bag check and the sales associate stated that Claimant gave her the DVD. Ms. Phillippi explained that when she questioned Claimant about the incident, he informed her that the cash-back value of the DVD was one cent.
Later that night, Ms. Phillippi received a telephone call from another employee who voiced concern regarding Claimant's buy-back procedures. She then contacted the district manager and advised that she would follow up with loss prevention. Loss prevention then conducted an investigation which showed that the trade-in value of the subject DVD was one dollar rather than one cent. She further explained that "if [the DVD] showed up as $1 it wouldn't have been a penny buy. So it would not have been something that wouldn't have been in the inventory.... When scanned, it would have been a $1 and the customer would have received a $1." (C.R., Transcript of Testimony at 5.) With regard to the calculation of the buy-back value, Ms. Phillippi stated, "It's on the computer. We scan it and the amount comes on the screen." (Id. at 6.)
Ms. Phillippi explained that Claimant was relieved of his duties based on the outcome of loss prevention's investigation and referenced a statement signed by Claimant, providing as follows:
My name is David T. Stacy. I am the Senior Assistant at 1014 (Mall at Robinson). I have been employed here for over a year.(C.R., Employer's Separation Information.)
I have discussed giving unpurchased buybacks to part-time employees on two occasions with Jim Hisco[k] [the manager of loss prevention]. To the best of my memory, they were items the buyback customers did not want because they were either too scratched for us to sell or they were only valued at a penny.
This statement is true to the best of my knowledge. I have made this statement of my own free will without any threats or promises given to me.
She further stated that even if the DVD were a penny buy, Employer's policy is "not to give anything away." (C.R., Transcript of Testimony at 7.) She conceded that she did not know how Claimant would be aware of such a policy but stated that as an assistant manager, Claimant had a duty to know of and enforce the policy. Employer also introduced into evidence its operating procedure for associate purchases and returns.
The policy discusses who may approve and transact employer purchases and returns as well as the employee discount applicable to various purchases, exclusions and returns. The policy does not specifically address the buyback program and neither authorizes nor prohibits the exchange of non-inventory items among employees.
In support of his claim, Claimant testified that he was unaware of a policy prohibiting him from giving another employee rejected buyback items, explaining that he did not receive an employee handbook when he was hired, did not receive a copy of Employer's buyback policy until the day of his termination, and did not receive proper training. He maintained that the DVD he scanned "did in fact come up as a penny, if not it was scratched, but I'm 100% sure that it came up as a penny." (Id. at 8.)
Employer's buyback policy has not been made part of the record.
He further testified:
And from what I recall from working there, movies had their own separate barcodes from like different companies. Like Walmart would sell a different barcode with that same title or you know Target would sell a different copy. So some of the barcodes would either not come up in the system or they would come up as a penny and another barcode with the same title would come up as $1. So I never looked up the title to see if there was another barcode to give the customer more money. It was simply, I scanned it. If it didn't come up as something we could take, I would not accept it. With [the subject DVD] I had set that in the back to be
discarded with a few other DVD[s] that the customer had given away to us.(Id.) Explaining that the DVD was not in inventory, Claimant testified that he gave it to a sales associate who asked if she could have it because Claimant considered the DVD waste rather than Employer's property.
Based on the testimony and evidence presented at the hearing, the Referee found it unnecessary to determine whether Claimant violated an Employer work rule because Claimant's actions were "sufficiently serious as to be disqualifying whether or not a policy precluding the conduct exists," explaining that Claimant introduced no evidence or testimony demonstrating that he had authority to provide Employer's property to another person at no cost. (Referee's Decision/Order at 2.) The Referee's decision did not include a credibility determination as to whether the value of the DVD was one cent based as Claimant testified or one dollar as Ms. Phillippi testified, based on loss prevention's investigation.
Claimant appealed to the Board, which adopted and incorporated the Referee's decision, determining that "[C]laimant should have known that once he accepted the video, it became the property of the [E]mployer" and that "[t]aking the property of the [E]mployer is behavior below the standards that an [E]mployer has a right to expect, regardless of the value of the item." (Board's Decision at 1.) This appeal followed.
Our review is limited to determining whether the Board's findings of fact are supported by substantial evidence in the record, whether errors of law were committed, whether agency procedure was violated, or whether constitutional rights were violated. Gillins v. Unemployment Compensation Board of Review, 633 A.2d 1150, 1153 (Pa. 1993). We have defined "substantial evidence" as such "relevant evidence that a reasonable mind might consider adequate to support a conclusion." Palladino v. Unemployment Compensation Board of Review, 81 A.3d 1096, 1100 n.3 (Pa. Cmwlth. 2013).
III.
Claimant contends that there is no substantial evidence to support the Board's finding that he acted with willful misconduct by allowing another employee to take the DVD regardless of its value.
"Willful misconduct" has been judicially defined as:
an act of wanton or willful disregard of the employer's interest, a deliberate violation of the employer's rules, a disregard of standards of behavior which the employer has a right to expect of an employee, or negligence indicating an intentional disregard of the employer's interest or of the employee's duties and obligations to the employer.
Of course, if an employee takes an employer's property, it is a misappropriation of property and constitutes willful misconduct, even if the property has minimal value. For example, in Wright v. Unemployment Compensation Board of Review, 465 A.2d 1075 (Pa. Cmwlth. 1983), an employee admitted to stealing trash bags and toilet paper from her employer in violation of an employer-imposed rule prohibiting theft. Id. at 1076. On appeal, this Court rejected the employee's argument that her infraction was de minimis, explaining that regardless of the value of the goods stolen, the employee's action constituted the unjustified taking of another's property and, therefore, her dismissal was warranted as per her employer's rule. Id. at 1077. Although Wright was decided pursuant to an employer rule, it is clear that employee theft "of the employer's property" constitutes grounds for dismissal even in the absence of such a rule. See Department of Navy, Naval Air Warfare Center, Aircraft Division Warminster v. Unemployment Compensation Board of Review, 632 A.2d 622, 631 (Pa. Cmwlth. 1993).
However, Wright does not address the issue before us, i.e., whether an employee is guilty of willful misconduct when he or she gives away property which the employer has instructed be rejected and discarded and which is of no value to an employer. In Gibson v. Unemployment Compensation Board of Review, 760 A.2d 492 (Pa. Cmwlth. 2000), we upheld termination of an employee who removed a floppy disk drive from a desktop computer that was on a trash truck on an employer's premises, but we did so pursuant to the employer's specific rule prohibiting the unauthorized removal of company property, including scrap or refuse. Id. at 493-94.
Here, however, the Board did not decide the case pursuant to an Employer work rule, but rather, ruled that Claimant's dismissal was warranted because he disregarded standards of behavior which Employer had a right to expect by giving away property no matter what the value. We find most analogous to this case O'Keefe v. Unemployment Compensation Board of Review, 333 A.2d 815, 818 (Pa. Cmwlth. 1975), where an employee was terminated after he consumed his employer's stale pastries which had been removed from the sales area and which were going to be returned to the employer for incidental use. Id. at 817. On appeal, we noted that "willful misconduct is a matter of degree" and found that the employee did not engage in wrongful conduct by consuming unsalable pastries when he and his co-workers did not know that doing so was a violation of company policy. Id. at 818.
In this case, Ms. Phillippi testified that she did not know how Claimant would know of Employer's policy not to give away anything in the store, including a DVD for which no Employer money had been spent and which was taken in as a convenience to the customer. Because the Board only found that Claimant violated the general standard that Employer should rightfully expect when he gave away the DVD, a non-inventory product, and did not find that it was a policy that such an item could not be given away, the Board erred in finding Claimant ineligible for benefits on that basis.
The issue then becomes whether the DVD had a value of one cent or one dollar. Claimant testified that he was precluded from accepting the DVD on Employer's behalf because its indicated value was only one cent and, as per protocol, he rejected the product on behalf of Employer, maintaining it only out of convenience to the customer so that it could be discarded. Assuming that Claimant's testimony is credible, the facts in the instant case are even more favorable to Claimant than those in O'Keefe because, here, Claimant did not misappropriate Employer's unsellable property, but rather, gave away property the Employer actually rejected on the basis that it was unfit for sale. In the absence of a policy regarding this matter, Claimant's behavior cannot be said to have risen to the requisite level of willful misconduct.
Conversely, if Employer's testimony that the DVD had a buyback value of one dollar is credited, then Claimant was under a duty to repurchase the video on behalf of Employer, thereby rendering the video part of Employer's inventory. If Claimant had such a duty but failed to satisfy it, instead misappropriating property rightfully belonging to Employer, his termination is justified for the reasons discussed above.
However, neither the Board nor Referee made a determination as to whose testimony was credible in this regard. Because this case turns upon issues of credibility and evidentiary weight, which are within the sole discretion of the fact-finder and of which the record is devoid, further fact-finding is necessary. See Eduardo v. Unemployment Compensation Board of Review, 434 A.2d 215, 217 (Pa. Cmwlth. 1981). Accordingly, we remand this matter to the Board for further proceedings consistent with this opinion.
/s/_________
DAN PELLEGRINI, President Judge ORDER
AND NOW, this 10th day of March, 2015, the order of the Unemployment Compensation Board of Review dated December 6, 2013, at No. B-558951, is vacated and this matter is remanded for further proceedings consistent with this opinion.
Jurisdiction relinquished.
/s/_________
DAN PELLEGRINI, President Judge
Rossi v. Unemployment Compensation Board of Review, 676 A.2d 194, 197 (Pa. 1996) (emphasis added). An employer bears the burden of proving willful misconduct. Walsh v. Unemployment Compensation Board of Review, 943 A.2d 363, 368-69 (Pa. Cmwlth. 2008). Where an employee's conduct is justifiable or reasonable under the circumstances, it does not constitute willful misconduct. Id. To engage in willful misconduct, an employee must demonstrate a "serious disregard of his responsibilities to his employer, in a manner that is in some real sense detrimental to his employer's interests. The question is primarily a matter of degree, and the inquiry must be framed in terms of whether the employe[e]'s acts rise to the level of willful misconduct." O'Keefe v. Unemployment Compensation Board of Review, 333 A.2d 815, 818 (Pa. Cmwlth. 1975). It is well-settled law that misappropriation of an employer's property, regardless of value, constitutes grounds for dismissal. See Wright v. Unemployment Compensation Board of Review, 465 A.2d 1075, 1077 (Pa. Cmwlth. 1983).