Roberts

RENDERED: March 27, 1998; 10:00 a.m.

NOT TO BE PUBLISHED

NO. 97-CA-0083-MR HUNTER DOUGLAS, INC. APPELLANT

APPEAL FROM DAVIESS CIRCUIT COURT V. HONORABLE THOMAS O. CASTLEN, JUDGE

ACTION NO. 96-CI-0263

HELEN M. ROBERTS APPELLEE

OPINION AFFIRMING

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BEFORE: COMBS, GUIDUGLI, and JOHNSON, Judges. COMBS, JUDGE: Hunter Douglas, Inc. (Hunter Douglas) appeals from an order of the Daviess Circuit Court entered on December 11, 1996, holding that Helen M. Roberts (Roberts) was entitled to unemployment compensation benefits. We agree and affirm.

Roberts was hired by Hunter Douglas on March 9, 1987, as a production worker. The employee manual, which Roberts admits she received, provides:

Any act of significant interference with company operations including, but not limited to, sabotage, slow down, work stoppage or-2- vandalism, will result in immediate discharge. "Significant" includes the overall input/effect any act has on company production, equipment or personnel, and is not measured simply by monetary cost. If supporting documentation establishes that the act was not intended to interfere with company operations, but was due to carelessness or negligence, then discipline may be limited to a 3-day suspension and probation with notice that any other violation of any work rules could be cause for termination.

Scrap material and parts are produced during the manufacturing process at Hunter Douglas. Some of the scrap material is capable of being salvaged and reprocessed. If the scrap material is capable of being reprocessed, it is sorted and placed into reprocess boxes located around the plant. However, if the scrap material is contaminated with oil and grease, it cannot be reprocessed and must not be placed in the reprocess boxes. Testimony at the hearing before the Commission established that if contaminated parts are erroneously reprocessed, that mistake will result in a loss of money, time, and 1,100 pounds of material. Roberts admitted that she knew that contaminated parts were not to be placed in the reprocess boxes.

At 8:30 a.m. on March 19, 1995, Roberts picked three 2 x 4 runners off the floor and placed them in a reprocess box. She testified that she did not inspect the runners because she was in a hurry to return to one of the machines she was in charge of operating but that she did not realize the runners had oil on them. She carried the runners approximately twenty-five feet to the reprocess box.

Two other employees saw Roberts put the runners in the reprocess box. As Roberts was walking away from the reprocess box, one of the employees told her that the runners were oily. Roberts said, "I don't care"; she then returned to her machine to make sure it had not backed up. Roberts further testified that she returned fifteen minutes later and removed all parts with oil on them.

The two employees informed a supervisor that Roberts had put contaminated parts in the reprocess box. The supervisor verified that there were oily parts in the reprocess box and then confirmed Roberts's identity. He then reported Roberts's action to his supervisor.

Roberts was asked by a foreman at 9:30 a.m. if she placed oily parts in the reprocess box. Roberts truthfully answered "yes" and explained that she had not realized that the parts were oily, that she was in a hurry to get back to her machine, and that she later removed the parts from the reprocess box. She was sent home at 9:45 a.m. and was later discharged on the same day for violation of company policy.

Roberts applied for unemployment benefits. Hunter Douglas argued that Roberts was not entitled to benefits because she was discharged for misconduct related to her work. The referee held that Roberts was entitled to benefits, and Hunter Douglas appealed.

In an opinion rendered February 21, 1996, the Commission reversed the referee's holding. In ruling that Roberts was not entitled to benefits, the Commission stated:

The referee held that claimant's expression of an "I don't care" attitude and resultant actions revealed negligence but were not sufficient to warrant the most harsh of the employer's discipline, that of discharge before the imposition of a three day suspension. We do not agree. The weight of evidence clearly establishes that claimant was aware of the employer's rules and policies. She understood that placing contaminated materials in a reprocess box would contaminate the employer's product yet deliberately placed contaminated materials which would be used by the employer in manufacturing its product. Such action by the claimant was in violation of the employer's rules and demonstrated a blatant disregard for its business interests. Claimant physically handled the materials, thus from her own observation, knew they were contaminated and would contaminate the employer's product. To make matters worse, after placing the contaminated materials in the bin, claimant was reminded by a co-worker that the materials were "oily" yet responded "I don't care." Considering such a statement, acknowledged by the claimant, one would be hard pressed to rule that her actions were merely ordinary negligence. Claimant knowingly and deliberately violated the employer's rules and by so doing, could have detrimentally affected the employer's product. Her resultant discharge was for reasons which constitute misconduct.

Roberts appealed to the trial court. The trial court found the same facts as cited by the referee and the Commission, but stated:

The Findings of the Kentucky Unemployment Insurance Commission that Ms. Roberts' [sic] actions demonstrated a blatant disregard for the employer's business interest is not supported by the evidence. This Court agrees with Senior Appeals Referee, Mr. David H. Coe, that Ms. Roberts' [sic] actions were not of significant interference or deliberate obstruction or damage to any cause, activity, or effort, such as the situation with sabotage, slow-downs, work stoppages and vandalism. The Court agrees with the referee that Ms. Roberts' [sic] act was one of negligence which warranted discipline but not discharge.

At the time Ms. Roberts placed the scrap parts in the polycarbonate reprocessed box, she was in a hurry to check on her other machine. Within fifteen minutes of being informed by another employee that the parts were oily, Ms. Roberts returned to the polycarbonate reprocess box and removed the parts which she saw were oily. In spite of Ms. Roberts' [sic] response, "I don't care," Ms. Roberts, nevertheless, took corrective action after having been informed by that employee that she had placed the oily parts in the reprocessed box.

The conduct of Ms. Roberts in removing the oily parts from the reprocessed box does not indicate a "knowing violation" but rather inadvertence, lack of attention, or negligence on her part. Therefore, Ms. Roberts was not discharged for misconduct as contemplated under KRS 341.370.

On appeal, Hunter Douglas argues that the trial court exceeded its scope of review by reversing the decision of the Commission without finding that the Commission acted arbitrarily and capriciously. Roberts contends that the question of whether she was entitled to benefits despite her conduct is a matter of law and as such the Commission's decision is subject to review. We agree that although this issue arose in the context of an administrative action, the central issue of the repercussion of negligence versus intent is a matter of law appropriate for judicial review.

Roberts is indeed correct in her assertion that the legal implication of a set of facts is a question of law. Cobb v. King Kwik Minit Market, Inc., Ky., 675 S.W.2d 386, 388 (1984). When the Commission's findings of fact are supported by substantial evidence they are binding on the reviewing court, which must then decide if the correct rule of law was applied to the facts as found. Cobb, 675 S.W.2d at 388. Based on the facts, we find that the trial court was correct in finding that Roberts's conduct was merely negligent.

Roberts admitted that she placed oily parts in the reprocess box. She further admitted that she knew contaminated material was not to be placed in reprocess boxes and that she said "I don't care" when she was told by her co-worker that the parts were oily. Although Roberts eventually removed the parts from the reprocess box, fifteen minutes had lapsed between the time she was told that the parts were oily and the time they were removed.

KRS 341.370(1)(b) provides that a worker is not entitled to unemployment benefits if termination resulted from misconduct connected with work. KRS 341.370 further provides that "discharge for misconduct" includes "knowing violation of a reasonable and uniformly enforced rule of an employer" and "refusing to obey reasonable instruction." KRS 341.370(6). The issue for our review is whether Roberts's conduct falls within these two provision -- when read in conjunction with the Hunter Douglas employee manual; i.e., whether her conduct constituted a "knowing violation" so as to justify her termination. See City of Lancaster v. Trumbo, Ky. App., 660 S.W.2d 954 (1983) (denial of benefits is proper where employee's discharge resulted from intent to disobey reasonable instructions of employer); Kentucky Unemployment Ins. Commission v. King, Ky. App., 657 S.W. 2d 250 (1983) (holding that employee's wilful disregard of reasonable employer policy constitutes misconduct connected with work for purposes of disqualifying employee from receiving benefits).

Roberts cites Shamrock Coal Co., Inv. v. Taylor, Ky. App., 697 S.W.2d 952 (1985), where the employee was discharged after he turned over a bulldozer. In holding that the employee was entitled to benefits, the Court stated that while the employee's conduct may well be a basis for terminating his employment, it falls far short of the type of conduct required under the statute in forfeiting benefits. (citations omitted). There is a total absence of bad faith or any inference of culpability in the form of wilful and wanton conduct." (Emphasis added).

Shamrock, 697 S.W. 2d at 954. In a later case, the Kentucky Supreme Court construed Shamrock as applying only to cases where the conduct of the employee is merely negligent or inadvertent. Kentucky Employment Commission v. Gooslin, Ky., 756 S.W.2d 464, 467 (1988).

In the case at bar, we must construe the statute, the pertinent case law, and the language of the employee manual in conjunction with one another in order to characterize Roberts's conduct. There is no doubt as to the nature of her acts themselves; she made no attempt to conceal the fact of her culpability in placing the contaminated parts in the reprocess box and in shrugging off her fellow employees with her comment, "I don't care." That comment was made to her peers, however -- to whom she owed no duty of accountability, thus not constituting insubordination as would have been the case had it been made to her supervisor.

Significantly, subsequent action on her part negated her comment. She returned to her machine in order to avoid a back up there -- clearly one of her duties. Upon ascertaining that the machine was in order, she soon returned to the reprocess box (within fifteen minutes) to take corrective action to remedy her mistake. We agree with the trial court that her conduct -- while admittedly negligent initially -- did not constitute mischievous, malicious conduct amounting to the deliberate "sabotage" or "vandalism" contained in the employee manual. We agree with the trial court that Roberts's act "was one of negligence which warranted discipline but not discharge."

We therefore affirm the order of the Daviess Circuit Court.

JOHNSON, JUDGE, CONCURS. GUIDUGLI, JUDGE, DISSENTS AND FILES A SEPARATE OPINION. GUIDUGLI, JUDGE, DISSENTING: I respectfully dissent. I believe the trial court erred in finding that Roberts' conduct was merely negligent. Roberts admitted that she placed oily parts in the reprocess box. She further admitted that she knew contaminated material was not to be placed in reprocess boxes and that she said "I don't care" when she was told by her co-worker that the parts were oily. Although Roberts eventually removed the parts from the reprocess box, fifteen minutes had lapsed between the time she was told that the parts were oily and the time they were removed. That delay coupled with her nonchalant attitude negates a finding of mere negligence on her behalf. Roberts intentionally placed the parts in the reprocess box and intentionally left them there after being informed that they were oily.

KRS 341.370(1)(b) provides that a worker is not entitled to unemployment benefits if termination resulted from misconduct connected with work. KRS 341.370 further provides that "discharge for misconduct" includes "knowing violation of a reasonable and uniformly enforced rule of an employer" and "refusing to obey reasonable instruction." KRS 341.370(6). Roberts' conduct falls squarely into these two provisions, and the trial court erred in holding otherwise. See City of Lancaster v. Trumbo, Ky. App., 660 S.W.2d 954 (1983) (denial of benefits is proper where employee's discharge resulted from intent to disobey reasonable instructions of employer); Kentucky Unemployment Ins. Commission v. King, Ky. App., 657 S.W.2d 250 (1983) (holding that employee's wilful disregard of reasonable employer policy constitutes misconduct connected with work for purposes of disqualifying employee from receiving benefits).

Roberts' reliance on Shamrock Coal Co. Inc. v. Taylor, Ky. App., 697 S.W.2d 952 (1985), is misplaced. The record clearly establishes that Roberts' conduct was wilful, thus Shamrock does not apply.

-11- BRIEF FOR APPELLANT: John T. Lovett Barbara W. Menefee Louisville, KY

BRIEF FOR APPELLEE: Adrienne A. Berry Louisville, KY