1995 cases
case590
REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 590
SEPTEMBER TERM, 1995
___________________________________
DEPARTMENT OF ECONOMIC AND
EMPLOYMENT DEVELOPMENT
v.
NANCY M. PROPPER
___________________________________
Wilner, C.J.
Bloom,
Hollander,
JJ.
___________________________________
Opinion by Hollander, J.
___________________________________
Filed: March 27, 1996
The Board of Appeals ("the Board") of the Department of
Economic and Employment Development ("DEED"), appellant,
determined that Nancy M. Propper, appellee, was disqualified from
receiving unemployment benefits based on her "gross misconduct"
within the meaning of Md. Code (1991, 1995 Supp.), 8-1002 of the
Labor and Employment Article ("L.E."). The Board concluded that
Propper was discharged by her employer, Antwerpen Dodge Ltd.
("Antwerpen"), for gross misconduct because she repeatedly worked
erratic hours, even through her employer warned her that her
conduct was unacceptable. Propper sought review of the Board's
decision in the Circuit Court for Baltimore City, which reversed.
The Board now appeals, and presents for our consideration two
questions, which we have re-worded slightly for clarity:
1. Was the Board's determination that Propper had been
discharged for gross misconduct a reasonable application
of L.E. 8-1002(a)(1)(i) (Supp. 1995)?
2. Was this determination supported by substantial
evidence?
We answer both questions in the affirmative. Accordingly, we
shall reverse the circuit court.
FACTUAL BACKGROUND
Prior to March 1994, Propper and her husband, Scott Propper,
were owners and employees of Motor Coach Ltd., located in
Randallstown, Maryland. On March 7, 1994, the assets of Motor
Coach Ltd. were purchased by Antwerpen. The company retained Ms.
Propper as a "transitional employee" in the office.
After Ms. Propper was terminated on May 7, 1994, she filed a
claim for unemployment benefits pursuant to Title 8 of the Labor
and Employment Article. A DEED claims examiner determined that
insufficient information had been presented to support a finding of
misconduct. Antwerpen appealed and, on July 5, 1994, an
evidentiary hearing was conducted before a hearing examiner.
The evidence showed that, immediately after Antwerpen assumed
control of the business, it began to experience problems with
Propper, because she worked an abbreviated day. Randy Silverman,
Antwerpen's office manager, testified that she was responsible for
making sure that employees arrived on time and completed their
assignments. She stated that Propper was required to work full-
time, from 9:00 a.m. to 5:00 p.m., Monday through Friday.
According to her testimony, Propper worked from approximately 9:30
a.m. to 3:00 p.m. or 3:30 p.m., although there were occasions when
she would come in later than 9:30 a.m. or as early as 8:00 a.m.,
and would stay as late as 6:00 p.m..
Time records kept by Silverman for the period from April 20,
1994 through May 3, 1994 evidenced a rather erratic schedule on
Propper's part. On April 20, she arrived at 10:15 a.m., took one
hour for lunch and an additional hour later in the afternoon, and
left at 5:00 p.m. On April 21, she did not come to work at all in
the morning, arrived at 1:30 p.m., and left for the day at 5:15
p.m. On April 22, she arrived at 9:15 a.m. and left at 3:45 p.m.
On April 25, she arrived at 9:00 a.m., took an hour for lunch, and
left at 3:00 p.m. On April 26, she arrived at 10:00 a.m., took one
hour and forty minutes for lunch, and left at 4:30 p.m. On April
29, she arrived at 9:15 a.m. and left at 3:15 p.m. On May 2, she
arrived at 9:15 a.m., took two hours and ten minutes for lunch, and
left at 3:50 p.m.. On May 3, she arrived at 9:30 a.m., took two
hours for lunch, and left at 3:45 p.m. By May 7, she was fired.
Silverman testified that she told Propper her work hours were
unacceptable and that Propper was required to work from 9:00 a.m.
to 5:00 p.m., Monday through Friday. Propper told Silverman that,
although she would try to arrive at 9:00 a.m., she could not stay
until 5:00 p.m. because she had to pick up her children on certain
days. Sharon Hamby, Antwerpen's comptroller, also spoke with
Propper about her hours. Jacob Antwerpen, the owner of the
business, discussed appellee's hours with Scott Propper, appellee's
husband, who had been retained as general manager of the business
after the purchase by Antwerpen.
The hearing examiner issued a written opinion in which he
found, inter alia, that Silverman had instructed Propper "that her
hours would be 9:00 a.m. to 5:00 p.m. Monday through Friday," but
Propper instead worked only around thirty hours per week. The
hearing examiner also found that Silverman reminded Propper about
what her hours should have been, "but this proved unaffected
[sic]." In addition, the examiner found that "[a]fter numerous
talks with the claimant regarding her erratic hours, the decision
was made to terminate the claimant effective May 7, 1994."
On the basis of his findings, the hearing examiner concluded
that Propper had been discharged for "misconduct" within the
meaning of L.E. 8-1003(a) (Supp. 1995), and was disqualified
from receiving benefits for ten weeks. The hearing examiner
concluded, however, that Propper's conduct did not constitute
"gross misconduct" within the meaning of L.E. 8-1002(a) (Supp.
1995), because "most of the job duties for Antwerpen were
accomplished even though she worked erratic hours."
Propper appealed the hearing examiner's decision to the Board.
The Board adopted the hearing examiner's findings of fact but
concluded that they warranted a different conclusion of law. It
found that "[a]fter counseling and in the face of warning,
[Propper] repeatedly violated her work schedule, working up to ten
hours per week less than required." It thus concluded that Propper
had been discharged for "gross misconduct" within the meaning of
8-1002 and was disqualified from receiving benefits.
Propper sought judicial review of the Board's decision in the
circuit court, which agreed with Propper and reversed. The court
ruled that the Board's decision was "not supported by substantial
evidence," and remanded to the Board for a new hearing on the
merits. This appeal followed.
Additional facts will be presented in our discussion of the
issues.
SCOPE OF REVIEW
L.E. 8-512(d) governs the standard of judicial review in
connection with administrative adjudications of unemployment
insurance benefits. It provides, in pertinent part, as follows:
In a judicial proceeding under this section, findings of
fact of the Board of Appeals are conclusive and the
jurisdiction of the court is confined to questions of law
if:
(1) findings of fact are supported by evidence that
is competent, material, and substantial in view of
the entire record; and
(2) there is no fraud.
See also Board of Education of Montgomery Co. v. Paynter, 303 Md.
22, 34-35 (1985) (interpreting predecessor statute, Md. Code Ann.,
art. 95A, 7(h) (1984)); Board of Appeals, Department of
Employment and Training v. Mayor and City Council of Baltimore, 72
Md. App. 427, 431-32 (1987); Adams v. Cambridge Wire Cloth Co., 68
Md. App. 666, 673-74 (1986).
Under the case law interpreting 8-512(d) and its
predecessor, "findings of fact made by the Board are binding upon
the reviewing court, if supported by substantial evidence in the
record." Board of Appeals v. Mayor and City Council of Baltimore,
72 Md. App. at 431. See also Allen v. Core Target City Youth
Program, 275 Md. 69, 74-75 (1975). Any inference to be drawn from
the facts is also left to the agency. It is "the province of the
agency to resolve conflicting evidence, but where inconsistent
inferences from the same evidence can be drawn, it is for the
agency to draw the inference." Baltimore Lutheran High School
Association v. Employment Security Administration, 302 Md. 649, 663
(1985).
The test is not how this Court would resolve a factual dispute
or questions of credibility. On review, we may only determine "if,
from the facts and permissible inferences in the record before the
[Board], reasoning minds could reach the same result." Id.
Consequently, we may not reject the Board's decision if it is
supported by substantial evidence, unless the decision is wrong as
a matter of law. Adams, 68 Md. App. at 673.
Furthermore, decisions of administrative agencies are prima
facie correct. On appeal, the agency's decision must be viewed in
the light most favorable to the agency. Paynter, 303 Md. at 35-36.
See also Bulluck v. Pelham Wood Apartments, 283 Md. 505, 511-13
(1978). Accordingly, "the reviewing court should not substitute
its judgment for the expertise of those persons who constitute the
administrative agency from which the appeal is taken." Paynter,
303 Md. at 35 (emphasis in original).
DISCUSSION
I.
Propper challenges the Board's determination that her conduct
constituted "gross misconduct" within the meaning of L.E. 8-
1002(a) (Supp. 1995). In the first instance, our inquiry is
directed to the disputed findings of fact that the Board adopted.
We must determine whether its findings are supported by substantial
evidence.
Based on the evidence, the hearing examiner found that
Silverman was Antwerpen's office manager. We reject Propper's
contention that Silverman was not Propper's supervisor. According
to Silverman, she had the responsibility of making sure employees
were at the office on time, keeping a log of when they arrived and
left, and making sure they did their jobs while they were at the
office.
At the hearing, Propper denied that Silverman ever took her to
task about her hours, although Silverman testified that she had
done so. The hearing examiner found that Silverman had told
Propper that she was to work from 9:00 a.m. to 5:00 p.m., Monday
through Friday, and that Propper failed to work a full work day.
The hearing examiner obviously believed Silverman; credibility
determinations are the sole province of the agency. See Board of
Appeals v. Mayor and City Council of Baltimore, 72 Md. App. at 432.
Therefore, the hearing examiner's determination is conclusive.
Propper also challenges the hearing examiner's finding that
the work hours evidenced by Silverman's time records for the period
April 20 through May 3, 1994 represented a "typical" week of work.
Although Propper argues that there was no testimony that the hours
from that week were "typical," her own testimony supported the
hearing examiner's conclusion that her hours from the April 20-May
3 time period were typical. Propper testified that she worked from
approximately 9:30 a.m. to 3:00 or 3:30 p.m., although there were
times when she would vary her arrival or departure times. Propper
also testified that, at times, she arrived or left earlier or
later. We are of the view, therefore, that a reasoning mind could
have found from the evidence that the work schedule shown by the
time records was typical for Propper.
Propper also claims that the hearing examiner's finding that
she averaged "around thirty" hours per week lacks a basis in the
record. Again, we disagree. Propper's own testimony confirms this
finding. She testified that she worked from approximately 9:00
a.m. to 3:00 or 3:30 p.m., which is about thirty hours.
Finally, Propper challenges the following finding of fact:
"After numerous talks with the claimant regarding her erratic
hours, the decision was made to terminate the claimant effective
May 7, 1994." (Emphasis added). She contends that there is no
evidence in the record that Antwerpen held "numerous" talks with
her about her work schedule.
Based on Silverman's testimony, which we recounted in note 4,
the Board was entitled to infer that Silverman had at least two
conversations with Propper. There is no mathematically bright
line as to what constitutes "numerous." We conclude that a
reasoning mind could reasonably conclude that there had been
several conversations between the employer and Propper about her
hours.
It is well settled that an agency decision may be affirmed
based only on the agency's findings and for the reasons presented
by the agency. United Parcel Service, Inc. v. People's Counsel,
336 Md. 569, 577 (1994); Department of Economic and Employment
Development v. Lilley, 106 Md. App. 744, 755-56 (1995). But, even
if the Board erred in concluding that there were "numerous talks"
between Propper and her employer, the mischaracterization as to the
number of talks was not the basis of the agency action. Thus, the
error, if any, is of no legal significance and is harmless. See
Motor Vehicle Administration v. Mohler, 318 Md. 219, 234 (1990)
(applying harmless error principle to administrative agency
decision); Bosley v. Quigley, 189 Md. 493, 508 (1948) (same);
Department of Public Safety v. Scruggs, 79 Md. App. 312, 324 (1989)
(same); Desser v. Department of Health and Mental Hygiene, 77 Md.
App. 1, 14-15 (1988) (same); Jacocks v. Montgomery County, 58 Md.
App. 95, 105-07 (1984) (same).
In our view, the existence of an unsupported or otherwise
erroneous finding of fact does not automatically warrant a
reversal. See, e.g, Denton v. Secretary of the Air Force, 483 F.2d
21, 28 (9th Cir. 1973), cert. denied, 414 U.S. 1146 (1974); 73A
C.J.S. Public Administrative Law and Procedure 225 at 303 (1983).
See also Braniff Airways, Inc. v. Civil Aeronautics Board, 379 F.2d
453, 465-67 (D.C. Cir. 1967) (discussing the harmless error
doctrine with respect to erroneous agency factual findings).
"Where a subsidiary finding is unsupported or otherwise erroneous
but the court is clear that its presence was not material to the
ultimate finding, reversal is inappropriate." Allison v.
Department of Transportation, 908 F.2d 1024, 1029 (D.C. Cir. 1990),
quoting Delta Air Lines v. Civil Aeronautics Board, 564 F.2d 592,
598 (D.C. Cir. 1977). See also Produce Terminal Corp. v. Illinois
Commerce Commission ex rel. Peoples Gas Light & Coke Co., 112
N.E.2d 141, 147 (Ill. 1953) ("It is generally recognized that
findings, recitals or reasoning in an order of an administrative
tribunal which are not of controlling weight and therefore not
essential to the validity of its order may be disregarded on appeal
as surplusage."). Cf. Campbell v. Merit Systems Protection Board,
27 F.3d 1560, 1570 (Fed. Cir. 1994) (where subsidiary facts are
unsupported or erroneous, reviewing court must ask whether the
agency would have reached the same result absent the impermissible
findings); National Labor Relations Board v. Milgo, Inc., 567 F.2d
540, 546 (2nd Cir. 1977) (reversal warranted only where reviewing
court has "substantial doubt" that the agency would have reached
the same result absent the erroneous findings of fact); Denton v.
Secretary of the Air Force, supra, 483 F.2d at 28 (same); National
Labor Relations Board v. Reed & Prince Manufacturing Co., 205 F.2d
131, 139 (1st. Cir. 1953) (same). Rather, a reversal is
appropriate only where "there is a reasonable probability that
[the] error may have affected the determination of the case."
Jacocks, 58 Md. App. at 107. The finding that Antwerpen Dodge had
"numerous talks" with Propper about her work schedule was not
material to the Board's determination that Propper's actions
constituted "gross misconduct."
In sum, whether Propper received one or twenty warnings is not
material to the determination of gross misconduct. Since appellant
had at least one warning from her employer, any error in finding
that Antwerpen had "numerous talks" with appellee was harmless.
II.
We next consider whether a reasoning mind could have concluded
from the evidence that Propper's decision to work abbreviated hours
constituted gross misconduct under L.E. 8-1002(a) (Supp. 1995).
L.E. 8-1002(a) states:
"Gross misconduct" defined.-In this section "gross
misconduct":
(1) means conduct of an employee that is:
(i) deliberate and willful disregard of standards
of behavior that an employing unit rightfully
expects and that shows gross indifference to the
interests of the employing unit; or
(ii) repeated violations of employment rules that
prove a regular and wanton disregard of the
employee's obligations; and
(2) does not include:
(i) aggravated misconduct, as defined under 8-
1002.1 of this subtitle; or
(ii) other misconduct, as defined under 8-1003 of
this subtitle.
The hearing examiner found that Silverman advised Propper that
her hours were unacceptable and that Propper ignored the warning.
In our view, this fact, coupled with the other evidence in the
case, supports the Board's finding of gross misconduct.
There are no hard and fast rules for determining what
constitutes "deliberate and willful" misconduct. Department of
Economic and Employment Development v. Owens, 75 Md. App. 472, 477
(1988). "The important element to be considered is the nature of
the misconduct and how seriously it affects the claimant's
employment or the employer's rights." Department of Economic and
Employment Development v. Jones, 79 Md. App. 531, 536 (1989). In
its determination of whether a claimant has committed gross
misconduct, DEED looks not only for "substandard conduct" on the
part of the claimant, but also "for a wilful or wanton state of
mind accompanying the . . . substandard conduct." Employment
Security Board v. LeCates, 218 Md. 202, 208 (1958), quoting
Sanders, Disqualification For Unemployment Insurance, 8 Vand. L.
Rev. 307, 334 (1955). DEED considers "two interrelated questions"
in this determination:
"1. Did the employee's conduct show deliberate and willful
disregard of the standards of behavior that the employer has a
right to expect? and
"2. Did the conduct show gross indifference to the employer's
interest?"
Department of Economic and Employment Development v. Hager, 96 Md.
App. 362, 373-74 (1993).
Maryland courts have sustained findings of gross misconduct in
a variety of fact situations. See, e.g., Hager, supra (claimant
refused, without meaningful explanation, to accept a transfer to a
night shift); Jones, supra (claimant was repeatedly absent from
work and tested positive for drugs after promising to remain drug-
free); Owens, supra (claimant was discharged after he threatened to
kill his supervisor); Painter v. Department of Economic and
Employment Development, 68 Md. App. 356 (1986) (claimant, while on
sick leave, failed to notify her employer that her physician had
released her to return to work); Employment Security Board v.
LeCates, 218 Md. 202 (1958) (claimant used a company truck without
permission, was involved in an accident, and did not report the
accident until being confronted by his employer and the police).
Courts in other jurisdictions have held, under their own
unemployment insurance schemes, that habitual or excessive
tardiness or early departure, particularly in the face of warnings,
may constitute misconduct of the type that disqualifies the
discharged employee from receiving benefits. See, e.g., Wilkerson
v. State, Office of Employment Security, 439 So.2d 506, 509 (La.
Ct. App. 1983); Johnson v. Director of Division of Employment
Security, 385 N.E.2d 975 (Mass. 1979); Drysdale v. Department of
Human Resources Development, 77 Cal. App. 3d 345, 142 Cal. Rptr.
495 (1978); Indiana Bell Telephone Co. v. Review Board of Indiana
Employment Security Division, 250 N.E.2d 24 (Ind. Ct. App. 1969);
Broadway & Fourth Avenue Realty Co. v. Crabtree, 365 S.W.2d 313
(Ky. 1963). See generally 76 Am. Jur. 2d Unemployment Compensation
93 at 864 (1992); 81 C.J.S. Social Security 223 at 441 (1977).
See also Morrison v. U.S. Pipe & Foundry Co., 598 So.2d 946 (Ala.
Civ. App. 1992) (claimant who had been previously warned and
suspended for lateness discharged after being thirty minutes late
to work due to appointment with her attorney; held, misconduct
disqualified claimant from benefits). But the parties have not
cited, and we have not found, any cases holding that a claimant
must receive more than one warning in order to be deemed to have
committed gross or willful misconduct.
Here, based on Propper's chronic practice of arriving at work
late and leaving work early, in the face of at least one warning
that such conduct was unacceptable, the Board did not err in
finding gross misconduct. The "[v]iolation of reasonable work
rules [has] been held to be willful and intentional misconduct."
Painter, 68 Md. App. at 358. In Watkins v. Employment Security
Administration, 266 Md. 223 (1972), the Court of Appeals held that
persistent absenteeism and tardiness, in spite of a warning from
the employer, can constitute gross misconduct.
This view is in accord with L.E. 8-1002(a) (Supp. 1995) and
the cases interpreting it. An employer has the right to insist
that its employees report to work on time, adhere to a specified
schedule, and leave only when that schedule has been completed. An
employee's decision to follow a come-and-go-as-I-please philosophy
could clearly disrupt the orderly operation of the work place. If
an employee deliberately and knowingly ignores his or her
employer's requirement that he or she arrive or leave at a certain
time, such behavior could evidence a gross indifference to the
employer's interests and a defiance of standards that the employer
has the right to expect will be followed. This is particularly
true if the employee continues this conduct in the face of a
warning that such behavior is not acceptable.
JUDGMENT REVERSED.
COSTS TO BE PAID BY DEED.