IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                       DIVISION  II

DAVID N. SMITH,                                                  No.  37492-7-II

                             Appellant,

       v.

EMPLOYMENT SECURITY                                         PUBLISHED OPINION
DEPARTMENT,

                             Respondent.

       Quinn-Brintnall, J.    --      David Smith seeks judicial review of a decision by the 

Commissioner of the Employment Security Department  (ESD)  denying his application for 

unemployment benefits because of his disqualifying misconduct.  The Commissioner found that 

Smith committed misconduct by secretly recording his conversations with co-workers and 

members of the public without their knowledge or consent in violation of Kitsap County policy 

and  state law.  Additionally, the Commissioner found that Smith committed misconduct by 

removing unauthorized software from his county-owned laptop computer after his supervisor 

instructed him to return the laptop without deleting anything on it.  Because substantial evidence 

supports the Commissioner's decision that Smith committed disqualifying misconduct and the 

Commissioner correctly applied the law, we deny Smith's petition and affirm the agency order  

denying him unemployment benefits.  

                                            FACTS

       Smith worked for the Kitsap County Department of Public Works from May 1990 until 

his termination on April 19, 2006.  At the time of Smith's termination, he was working as the 

Senior Program Manager for the Transportation Traffic Division.  Smith began secretly recording 

conversations with co-workers and members of the public in the fall of 2001 until November 

2004.  Smith asserts that he began making these recordings because he feared retaliatory 

harassment by his supervisors for his refusal to file a false affidavit on behalf of the county and for 

supporting an employee in her sexual harassment claim.  Smith also claimed that one of his 

supervisors threatened him with physical harm.  He did not report these alleged threats to the 

police.  

       Smith made his recordings on an unsophisticated digital voice recorder.  Smith would 

place the recorder in his pocket and leave it on "until the time ran out," at which point he would 

"either shut it off and start over, or if there was something [recorded] that [he] thought was 

interesting[,] take it home and download it onto [his county-owned] computer."  Administrative 

Record (AR) at 144.  Smith's recording  system  did not allow him to target any specific 

conversations and resulted in his surreptitious recording of random conversations with various 

individuals, including co-workers and members of the public.  Smith did not limit his recordings to 

conversations that took place in his office.  He surreptitiously recorded conversations that 

occurred in county-owned vehicles, local businesses, and inside Kitsap County residents' homes.  

       On February 9, 2004, Smith filed an administrative whistleblower complaint           with 

Jacquelyn Aufderheide, Civil Deputy Prosecutor for Public Works.  On February 11, 2004, Smith 

notified Aufderheide that he had recordings containing incriminating statements by his 

supervisors.  

       In March 2006, Smith filed an Equal Employment Opportunity Commission (EEOC) 

complaint  that alleged he faced retaliation for supporting  a     female subordinate's sexual 

harassment claims.  The county terminated Smith's employment five weeks after he filed  the

EEOC complaint.  

       On or about March 10, 2005, the Director of Public Works, Randy Casteel, instructed 

Smith to turn over his laptop to the county and to refrain from deleting anything on it because it 

was being subpoenaed by the prosecutor's office.  The parties dispute the specifics of Casteel's 

instruction.  ESD claims that Casteel told Smith not to remove "anything" from the computer; 

Smith claims that Casteel only told him not to remove any "files" from the computer.  Smith did 

not immediately turn over the computer, which was located at his home.  Before turning over the 

laptop, Smith removed an unauthorized program he had previously installed that allowed him to 

download and store his audio recordings.  Smith claims that he removed the program because he 

owned it and he feared that the county would not return the computer to him.  He did not inform 

his supervisor that he had removed the program.  

Procedural Facts

       On April 28, 2006, following his termination, Smith applied for unemployment benefits 

with ESD.  On May 20, 2006, ESD approved Smith's application for benefits, finding that Smith 

did not engage in disqualifying misconduct.  The county requested a hearing to contest ESD's 

determination and a hearing was held on September 19, 2006, before an administrative law judge 

(ALJ).  

       At the hearing, Smith testified that he was not aware of any county policy against 

recording without consent.  Several witnesses also testified that they were not aware of a county 

policy prohibiting employees from secretly recording others without their consent.  At the 

administrative hearing, Casteel conceded that the county did not have a specific policy that 

prohibited employees from recording others without their knowledge or consent but he testified 

that instructors covered the topic at a training seminar.  Casteel testified that the training seminar 

covered the topic of recording conversations in a role-play exercise, after which trainers discussed 

the statutory requirement of obtaining consent before recording.  Casteel also testified that 

Smith's personnel records show that he attended one of these training seminars, but Casteel 

admitted that he did not have personal knowledge of whether Smith was present for that portion 

of the training.  

       The ALJ affirmed  ESD's  decision, finding that Smith did not commit disqualifying 

misconduct and that he was eligible for unemployment benefits.  The county filed a petition for 

review of the ALJ's determination with the ESD Commissioner.  The Commissioner adopted the 

ALJ's findings of fact in part, made additional findings, and ultimately rejected the ALJ's decision, 

determining that Smith engaged in disqualifying misconduct.  The Kitsap County Superior Court 

affirmed the Commissioner's order.  Smith timely appeals.  

                                          ANALYSIS

Standard of Review

       The Washington Administrative Procedure Act (APA), ch. 34.05 RCW, governs judicial 

review of a final decision by the ESD Commissioner.  Verizon Nw., Inc. v. Employment Sec. 

Dep't, 164 Wn.2d 909, 915, 194 P.3d 255 (2008).  We sit in the same position as the superior 

court and apply the APA standards directly to the administrative record.  Verizon, 164 Wn.2d at 

915.  We review the decision of the Commissioner, not the underlying decision of the ALJ.  

Verizon, 164 Wn.2d at 915 (citing Tapper v. Employment Sec. Dep't, 122 Wn.2d 397, 405-06, 

858 P.2d 494 (1993)).  

       We consider a Commissioner's decision to be prima facie correct and the  "burden of 

demonstrating the invalidity of agency action is on the party asserting invalidity," here Smith.  

RCW 34.05.570(1)(a); Anderson v. Employment Sec. Dep't, 135 Wn. App. 887, 893, 146 P.3d 

475 (2006).  We may reverse the Commissioner's decision if the Commissioner based his decision 

on an error of law, if substantial evidence does not support the decision, or if the decision was 

arbitrary or capricious.  RCW 34.05.570(3)(d), (e), (i).  

       We review questions of law de novo, giving substantial weight to the             agency's 

interpretation of the statutes it administers.  Everett Concrete Prods., Inc. v. Dep't of Labor & 

Indus., 109 Wn.2d 819, 823, 748 P.2d 1112 (1988).  We review the Commissioner's findings of 

fact for substantial evidence in light of the whole record.  RCW 34.05.570(3)(e); Lee's Drywall 

Co., Inc. v. Dep't of Labor & Indus., 141 Wn. App. 859, 864, 173 P.3d 934 (2007).  Substantial 

evidence is evidence that would persuade a fair-minded person of the truth or correctness of the 

matter.  King County v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 142 Wn.2d 543, 553, 

14 P.3d 133 (2000).  Whether an employee's behavior constitutes misconduct, warranting 

termination, is a mixed question of law and fact.  Tapper, 122 Wn.2d at 402-03.

Failure to Assign Error to Findings of Fact

       As an initial matter, we note that Smith assigned error to only one finding of fact, which 

he now concedes was correct.  Additionally, Smith assigns error to the superior court's 

conclusions rather than the administrative agency's conclusions.  Generally, we treat unchallenged 

findings of fact as verities on appeal and limit review to determining whether the findings support 

the conclusions.  Fuller v. Employment Sec. Dep't, 52 Wn. App. 603, 605, 762 P.2d 367 (1988).  

But RAP 1.2(a) permits liberal interpretation of these rules and allows appellate review in spite of 

technical violations where proper assignment of error is lacking but the nature of the challenge is 

clear and the challenged findings are set forth in the party's brief.  Fuller, 52 Wn. App. at 605 

(citing Green River Cmty. Coll. Dist. 10 v. Higher Educ. Pers. Bd., 107 Wn.2d 427, 431, 730 

P.2d 653 (1986)).

       Here, we exercise our discretion to address Smith's challenges to the Commissioner's 

findings of fact because the nature of Smith's challenge is clear and because he discusses his 

contentions with specific findings of fact in the argument portion of his brief.  See Daughtry v. Jet 

Aeration Co., 91 Wn.2d 704, 709-10, 592 P.2d 631 (1979) (Despite failure to strictly comply 

with RAP 10.3, appellate courts may consider merits of the challenge where the nature of the 

challenge is perfectly clear and the challenged finding is set forth in the appellate brief.);

Hitchcock v. Dep't of Ret. Sys., 39 Wn. App. 67, 72 n.3, 692 P.2d 834 (1984) (failure to 

designate a specific finding of fact as error in an appeal from agency determination did not bar 

appellate review under RAP 10.3 where nature of the challenge was clear and the challenge to the 

finding was extensively discussed in the brief), review denied, 103 Wn.2d 1025 (1985).

Disqualifying Misconduct

       Under the Employment Security Act, Title 50 RCW, a discharged worker who commits 

"misconduct connected with his or her work" cannot receive unemployment compensation 

benefits.  RCW 50.20.066(1);  Tapper, 122 Wn.2d at 399.  Here the county presented two 

allegations of misconduct that it claimed disqualified Smith from receiving unemployment 

benefits:  (1) his surreptitious tape recordings of conversations with co-workers and members of 

the public and (2) his removal of an unauthorized program from a county-owned computer after 

his supervisor told him that the computer had been subpoenaed and directed that he turn the 

computer over without deleting anything on it.  

       A.     Recording Without Consent

       RCW 50.04.294(2)(f) provides that it is "misconduct" for an employee to "[v]iolat[e] a 

company rule if the rule is reasonable and if the claimant knew or should have known of the 
existence of the rule."1     Smith asserts that substantial evidence does not support the 

Commissioner's final order, which found that Smith engaged in disqualifying misconduct, because 

he (Smith) was not aware that there was a county policy prohibiting his recording of co-workers 

or members of the public without their knowledge and consent.  Specifically, Smith challenges the 

Commissioner's finding that 

       [c]ompetent evidence of record establishes, and we find as fact, that the claimant 
       was aware his recording of conversations with said parties was impermissible . . .,
       that the claimant was aware the recording of said conversations was not in the best 
       interests of his employer [and] that the claimant's assertion he concealed the 
       making of said recordings out of fear of [his supervisor] is not credible.

AR at 351.  

       Smith argues that substantial evidence does not support the Commissioner's finding 

because several witnesses testified that they were not aware of the county policy prohibiting 

employees from recording others without their consent.  Smith is essentially asking this court to 

reweigh the evidence and to evaluate the credibility of witnesses.  But we will not substitute our 

judgment for that of the agency regarding witness credibility or the weight of evidence.  Hahn v. 

Dep't of Ret. Sys., 137 Wn. App. 933, 942, 155 P.3d 177 (2007), review denied, 162 Wn.2d 

1017 (2008); Affordable Cabs, Inc. v. Employment Sec. Dep't, 124 Wn. App. 361, 367, 101 P.3d 

440 (2004).  Rather, our review is limited to determining whether substantial evidence supports 

the Commissioner's finding.

       Here, Casteel testified that a training seminar, which Smith attended, addressed the county 

policy against recording without consent in a role-play scenario.  Although Casteel testified that 

he did not know if Smith was present at the seminar for this portion of the training, this is 

substantial evidence that Smith  "should have known of the existence of the rule."         RCW 

50.04.294(2)(f) (emphasis added); see also WAC 192-150-210(5) ("The department will find that 

you knew or should have known about a company rule if you were provided an employee 

orientation on company rules.").  

       Although there was conflicting testimony regarding the existence of the county rule 

against recording without consent, the Commissioner apparently found Casteel's testimony 
credible,2 and we do not  "substitute our judgment for that of the agency regarding witness 

credibility or the weight of evidence."   Affordable Cabs, 124 Wn. App. at  367.  Because 

substantial evidence supports the finding that Smith knew or should have known that recording 

others without their consent was a violation of county policy, the Commissioner properly 

concluded that Smith's action constituted  "misconduct"     as that term   is defined in RCW 

50.04.294(2)(f).

       Moreover, even if substantial evidence did not support the Commissioner's finding that 

Smith was aware of the county policy against recording without consent, the record supports a 

conclusion that Smith nonetheless committed "misconduct" as defined in RCW 50.04.294(1)(d).

       RCW 50.04.294(1)(d) provides that it is  "misconduct" for an employee to engage in 

"[c]arelessness or negligence of such degree or recurrence to show an intentional or substantial 

disregard of the employer's interest." Here, the Commissioner concluded that Smith's conduct in 

recording members of the public without their knowledge and consent was in disregard to his 

employer's interest because 

       [s]uch conduct, if known by the general public of Kitsap County, could certainly 
       impact a citizen's willingness to discuss issues with a county employee, thereby 
       adversely impacting the county's interest in serving its constituents, as well as 
       exposing the county to litigation and liability.

AR at 357.  

       Smith contends that his actions were not adverse to his employer's interests because he 

did not "disclose that he was recording conversations."    Reply Br.  of Appellant  at  14.  But 

Smith's contention lacks merit.  By recording members of the public without their knowledge and 
consent, he potentially damaged the county's reputation.  Former WAC 192-150-200(2) (2005)3

states,  "action or behavior  must  result in harm or  create the potential for harm to your 

employer's interests.  This harm may be . . . intangible, such as damage to your employer's 

reputation." (Emphasis added.)  Additionally, the Commissioner was not required to find that 

Smith intended to harm his employer's reputation; it is sufficient that Smith intentionally 

performed an act in willful disregard for its probable consequences.  Hamel v. Employment Sec. 

Dep't, 93 Wn. App. 140, 146-47, 966 P.2d 1282 (1998), review denied, 137 Wn.2d 1036 (1999).  

Thus, the Commissioner's order finding that Smith was disqualified from unemployment benefits 

for engaging in disqualifying misconduct was not arbitrary or capricious.  RCW 34.05.570(3)(i).    

       B.     Privacy Act Violations

       Smith's recordings of co-workers and members of the public without their consent also 

disqualified him from receiving unemployment benefits under RCW 50.04.294.  RCW 

50.04.294(2)(e) and (g)   provide that an employee commits misconduct if he engages in 

"[d]eliberate acts that are illegal" or "[v]iolations of law . . . while acting within the scope of 

employment . . . that substantially harm the employer's ability to do business." Smith contends 

that substantial evidence does not support the Commissioner's finding that he recorded private 

conversations in violation of the  privacy  act, RCW 9.73.030, and, consequently, that the 

Commissioner erroneously interpreted the law when concluding that Smith's conduct was illegal.  

Specifically, Smith challenges the Commissioner's finding that

       [t]he work-related conversations secretly recorded by the claimant while speaking 
       on behalf of Kitsap County were  "private"       conversations, as that term is 
       contemplated by RCW 9.73.030 and interpreted in State v. Clark, 129 Wn.2d 211, 
       224-30, 916 P.2d 384 (1996).

AR at 357.  

       The privacy act, RCW 9.73.030, states in relevant part:

       (1) Except as otherwise provided in this chapter, it shall be unlawful for any 
       individual, partnership, corporation, association, or the state of Washington, its 
       agencies, and political subdivisions to intercept, or record any:
              . . . . 
              (b) Private conversation, by any device electronic or otherwise designed to 
       record or transmit such conversation regardless how the device is powered or 
       actuated without first obtaining the consent of all the  persons engaged  in the 
       communication.

       Under RCW 9.73.030,  "the protections of the Privacy Act apply only to  private

communications or conversations."   Clark, 129 Wn.2d at 224  (alteration in original)  (citing 

Kadoranian v. Bellingham Police Dep't, 119 Wn.2d 178, 189, 829 P.2d 1061 (1992)).  Because 

our legislature has not defined the term "private conversation" in chapter 9.73 RCW, appellate 

courts have given "private conversation" its ordinary and usual meaning: 

       "[B]elonging to one's self . . . secret . . . intended only for the persons involved (a 
       conversation) . . . holding a confidential relationship to something . . . a secret 
       message:  a private communication . . . secretly:  not open or in public."

State v. Forrester, 21 Wn. App. 855, 861, 587 P.2d 179 (1978) (some alterations in original) 

(quoting  Webster's Third International Dictionary (1969)),  review denied, 92 Wn.2d 1006 

(1979); see also Kadoranian, 119 Wn.2d at 190 (quoting Forrester, 21 Wn. App. at 861).

       The  "'intent or reasonable expectations of the participants [of a conversation] as 

manifested by the facts and circumstances of each case' control as to whether a conversation is 

private."   Clark, 129 Wn.2d at 224 (quoting  Kadoranian, 119 Wn.2d at 190).  Whether a 

particular conversation is private is a question of fact, but where the facts are undisputed and 

reasonable minds could not differ, the issue may be determined as a matter of law.  Kadoranian, 

119 Wn.2d at 190.  

       Here, the record clearly shows that Smith indiscriminately and surreptitiously recorded 

conversations with co-workers, superiors, and members of the public without the other 

individual's consent or knowledge.  Smith made these recordings in his office, as well as inside 

county-owned vehicles, local businesses, and Kitsap County residents' homes.4    Smith does not 

dispute that these recordings took place in this manner but,       instead, he  argues that the 

Commissioner failed to specify any facts showing that a particular conversation was private.  But 

the issue of whether a conversation is private may be decided as a matter of law where, as here, 

the facts are undisputed and reasonable minds could not differ.  Kadoranian, 119 Wn.2d at 190.  

Thus, substantial evidence supports the Commissioner's finding that Smith recorded private 

conversations and the Commissioner did not erroneously interpret the law in concluding that 

Smith's recordings violated the privacy act.  Accordingly, Smith is disqualified from receiving 

unemployment benefits because he engaged in "[d]eliberate acts that [were] illegal" and "violat[ed 

the] law . . . while acting within the scope of employment that substantially affect[ed his] 

employer's ability to do business," contrary to RCW 50.04.294(2)(e), (g).  

       C.     Violation of Employer Directive

       Last, Smith argues that substantial evidence does not support the Commissioner's finding 

that, 

       [i]n March 2005, the claimant was directed by the employer's Director of Public 
       Works to turn in his laptop computer without deleting any files from that
       computer.  The claimant returned the computer, but, prior to so doing, and in 
       direct violation of his employer's directive, he deleted the program that allowed 
       him to download recorded conversations from his digital recorder.  Such conduct 
       further establishes the claimant's awareness his above-cited record of 
       conversations was impermissible and not in the best interest of his employer.

AR at 352.  

       Smith asserts that substantial evidence does not support the Commissioner's finding 

because he testified that Casteel ordered him not to remove any "files" from his computer and he 

only removed a  "program," not a file.  Smith contends that his testimony was not rebutted 

because Casteel admitted he was unsure whether he instructed Smith not to remove any "files" or 

not to remove "anything" from his computer before turning it over to the county.  But in common 

parlance, a computer program is an electronic file.  Moreover, when asked whether he told Smith 

not to "[d]elete anything," Casteel responded, "Well, that's what I thought I said.  [Smith] says 

differently.  I don't know why I would specifically say files, but that's what he says." AR at 34.  

And later in the hearing, Smith's counsel asked Casteel on cross-examination, "Did you make it 

clear to [Smith] that you didn't want him to delete anything that included programs that he may 

own?"  AR at 60.  Casteel responded, "I don't recall saying specifically programs, files, I told him 

not to delete anything from the computer."   AR at 60.  Contrary to Smith's assertion, Casteel 

testified that he told Smith not to delete anything from his computer.  

       The Commissioner apparently found Casteel's testimony to be credible, and we will not 

substitute our judgment for that of the agency regarding witness credibility or the weight of 

evidence.   Hahn, 137 Wn. App.  at  942.  Substantial evidence supports the Commissioner's 

finding that Smith violated his employer's directive to return his laptop without deleting anything.  

And, under RCW 50.04.294(2)(a), "[i]nsubordination showing a deliberate, willful, or purposeful 

refusal to follow the reasonable directions or instruction of the employer"           constitutes 

"misconduct."   Thus, the Commissioner's order denying Smith's unemployment benefits for 

engaging in misconduct was not arbitrary or capricious.  Moreover, Smith's conduct in deleting 

his unauthorized program from the county-owned computer before turning it over in response to 

a subpoena potentially subjected the county to liability and, thus, disqualified him from receiving 

unemployment benefits under RCW 50.04.294(1)(d).  

       Smith's claim that the county actually terminated him for his whistleblowing activities and 

not for his admitted misconduct is a subject for a jury to determine in a wrongful termination 

action and is not relevant to our review of the agency decision here.  If the county terminated 

Smith in retaliation for his whistleblowing activities, he is entitled to compensation for wrongful 

termination. But that issue is not properly before us and we cannot treat every appeal from an 

unemployment compensation decision as a wrongful termination case.5      Accordingly, we affirm 

the Commissioner's order denying Smith unemployment benefits for engaging in disqualifying 

misconduct and denying his petition for judicial review.

                                                 QUINN-BRINTNALL, J.
We concur:

HUNT, J.

PENOYAR, A.C.J.

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