IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
THE MARKAM GROUP, INC., P.S., No. 26566-8-III
)
Respondent, )
)
v. )
) Division Three
STATE OF WASHINGTON )
DEPARTMENT OF EMPLOYMENT )
SECURITY, )
)
Appellant. ) PUBLISHED OPINION
Sweeney, J. -- An employer must show that an employee was discharged for
"misconduct" to avoid paying state unemployment benefits. And that generally requires
showing that the conduct/misconduct was intentional. The pertinent findings on review
are those made by the commissioner, not those made by the superior court. Here, the
commissioner's findings support only the conclusion that the applicant performed her
work ineptly and that conclusion would not support a denial of her unemployment
benefits. The trial court's decision to deny benefits is not supported by the
commissioner's findings and conclusions. We therefore reverse.
FACTS
Stephanie Monroe worked as a legal secretary for The Markam Group, Inc., from
June 21, 2004, to July 10, 2006. Markam fired Ms. Monroe because she could not
perform her job as required.
Ms. Monroe filed a claim for unemployment benefits with Washington's
Employment Security Department (Department) in July 2006. The Department
concluded that she was not fired for disqualifying misconduct and awarded her
unemployment benefits. Markam appealed to the Department's Office of Administrative
Hearings.
An administrative law judge (ALJ) held a hearing, entered findings of fact and
conclusions of law, and affirmed the Department's decision. The ALJ found that
Markam discharged Ms. Monroe primarily because she lacked the necessary skills to
perform her job in accordance with Markam's expectations. And the ALJ concluded that
Ms. Monroe "did not intentionally do a bad job . . . [or] ignore [Markam's] demands."
Commissioner's Record (Comm'r R.) at 62 (Conclusion of Law (CL) 6). She
determined, instead, that Ms. Monroe "simply did not have the focus or the wherewithal
to perform the job to [Markam's] standards." Comm'r R. at 62 (CL 6). The ALJ
concluded that an employee's inability to perform her job well is not misconduct as
defined by the Employment Security Act, Title 50 RCW.
Markam petitioned the Department's commissioner to review the ALJ's decision.
A review judge in the commissioner's review office reviewed the administrative hearing
record and adopted the ALJ's findings and conclusions, except for conclusion of law 4
(concluding that conduct at issue was not willful, deliberate, careless, or negligent). The
review judge found that Ms. Monroe "attempted to perform to [Markam's] standards, but
was unable to do so." Comm'r R. at 81. And the judge concluded that Ms. Monroe's
"inability to do the job does not constitute statutory misconduct." Comm'r R. at 81. The
commissioner's review office affirmed the ALJ's decision.
Markam appealed the commissioner's decision to Spokane County Superior Court.
Markam complained that the Department erroneously required it to prove that Ms.
Monroe's conduct was intentional before the Department would find misconduct. It
contended that an employer establishes "misconduct" by showing that the employee
violated the employer's rules. Markam maintained that the administrative record
supported the conclusion that Ms. Monroe violated its rules. The superior court agreed
with Markam that the commissioner's decision was wrong. It entered findings and
conclusions and reversed the Department's decision to grant Ms. Monroe unemployment
benefits.
The Department and Ms. Monroe appeal the superior court's order.
DISCUSSION
Superior Court Findings of Fact
The Department and Ms. Monroe argue that the pertinent findings are those of the
commissioner, not those of the superior court. They urge us to first ignore the findings of
the court and then review the court's conclusions de novo. Markam argues that RCW
34.05.574(1) authorizes the findings and conclusions entered by the superior court and
that they are superfluous only when they conflict with the agency's findings.
The Washington Administrative Procedure Act, chapter 34.05 RCW, governs our
review of a decision by an Employment Security Department commissioner. Verizon
Nw., Inc. v. Employment Sec. Dep't, 164 Wn.2d 909, 915, 194 P.3d 255 (2008). We
review only the commissioner's decision, not the administrative law judge's decision or
the superior court's ruling. Id.; Kelly v. State, 144 Wn. App. 91, 95, 181 P.3d 871,
review denied, 165 Wn.2d 1004 ( 2008). And our decision is based on only the
administrative record before the commissioner. Verizon Nw., 164 Wn.2d at 915; Kelly,
144 Wn. App. at 95. We, therefore, do not consider the superior court's findings and
conclusions; we sit instead in the same position as the superior court. Verizon Nw., 164
Wn.2d at 915; Kelly, 144 Wn. App. at 95.
Markam also argues that the superior court's findings are verities on appeal
because they are consistent with the Department's findings. It is mistaken. Again, we
neither consider nor defer to a superior court's rulings when we review an administrative
decision. Verizon Nw., 164 Wn.2d at 915; Kelly, 144 Wn. App. at 95. Our conclusions
must be based on the commissioner's findings alone. Kelly, 144 Wn. App. at 95. And
those findings are verities on this appeal because neither Markam nor the Department nor
Ms. Monroe assigns error to any of them. See id. at 96.
Disqualifying Misconduct
We review a commissioner's legal conclusions for error of law. Verizon Nw., 164
Wn.2d at 915. We may, then, substitute our view for the commissioner's. Id.; Kelly, 144
Wn. App. at 96. We nonetheless give substantial weight to the commissioner's
interpretation of "misconduct," as it is defined under the Employment Security Act
because of the agency's special expertise. Verizon Nw., 164 Wn.2d at 915; Kelly, 144
Wn. App. at 96.
Markam contends that the commissioner erroneously concluded that Ms. Monroe
did not commit "misconduct." It argues that it did not have to show that Ms. Monroe's
actions were intentional to be "misconduct." And it argues that Ms. Monroe's actions
qualify as misconduct under RCW 50.04.294(1)(a).
Whether an employee's actions constitute misconduct is generally a mixed
question of fact and law. Tapper v. Employment Sec. Dep't, 122 Wn.2d 397, 402-03, 858
P.2d 494 (1993). But there are no questions of fact at issue here because the parties do
not assign error to the commissioner's findings. Those findings are, therefore, the facts
here on appeal. Id. at 407. The only question before us is a question of law -- whether
Ms. Monroe's actions amount to disqualifying misconduct.
An employee is not entitled to unemployment benefits if he or she is discharged
from employment for misconduct. RCW 50.20.066(1). The parties here disagree on the
definition of "misconduct." Markam contends that Tapper provides the definition. The
Department and Ms. Monroe argue that the definition of misconduct in RCW 50.04.294
applies.
A statutory definition of "misconduct" did not exist when the court decided
Tapper, 122 Wn.2d at 408. The legislature has since adopted a definition of
"misconduct." Laws of 1993, ch. 483, § 1. And it is that definition that we apply here.
See R.D. Merrill Co. v. Pollution Control Hearings Bd., 137 Wn.2d 118, 143, 969 P.2d
458 (1999) (acknowledging that absent a statutory definition, statutory words are given
their common law meaning). The effective date of an employee's claim determines
which statutory definition of "misconduct" applies. The definition in RCW 50.04.293
applies to claims filed before January 4, 2004. And the definition set out in RCW
50.04.294 applies to claims filed on or after January 4, 2004. Ms. Monroe filed her claim
for unemployment after January 4, 2004; therefore, RCW 50.04.294's definition of
"misconduct" applies.
"Misconduct" includes, but is not limited to, a number of specific acts set out in
the statute. RCW 50.04.294. Most, but not all, require that an employee act deliberately
or willfully. RCW 50.04.294(1), (2). Markam is, then, correct -- an unintentional act can
be "misconduct." See RCW 50.04.294(1)(c) (careless or negligent misconduct).
Markam claims, however, that Ms. Monroe committed misconduct as defined by
RCW 50.04.294(1)(a). Resp't's Br. at 26. RCW 50.04.294(1)(a) provides that an
employee commits misconduct when his or her conduct is a "[w]illful or wanton
disregard of the rights, title, and interests of the employer." "'Willful' means intentional
behavior done deliberately or knowingly, where you are aware that you are violating or
disregarding the rights of your employer or a co-worker." WAC 192-150-205(1). And
"'[w]anton' means malicious behavior showing extreme indifference to a risk, injury, or
harm to another that is known or should have been known to you. It includes a failure to
act when there is a duty to do so, knowing that injury could result." WAC 192-150-
205(2). Markam must, then, show that Ms. Monroe's acts were intentional to prove that
she committed misconduct.
The facts here do not support the conclusion that Ms. Monroe's conduct was in
willful or wanton disregard of Markam's interests. The commissioner found the
following relevant facts:
· Ms. Monroe was discharged primarily because "she lacked the skills that were
necessary to properly perform her job." Comm'r R. at 60 (Finding of Fact (FF) 2).
· "[S]he did not serve the opposing attorneys in a medical malpractice case." Id. at
61 (FF 3).
· "[S]he did not consistently check her work product. Besides making numerous
typographical errors, [she] did not always change the names of parties when she
used forms from other cases as templates." Id. (FF 4).
· Ms. Monroe "did not consistently retrieve and record the correct information when
she completed interrogatories." Id. (FF 5).
· She "provided information to an adjuster without having the employer's authority
to give information to this individual." Id. (FF 7).
· Ms. Monroe "simply did not have the skills that were necessary to fully and
properly perform her job in accordance with the employer's expectations." Id. (FF
8).
· She "attempted to perform to the employer's standards, but was unable to do so."
Id. at 81.
These findings do not suggest that Ms. Monroe deliberately or even knowingly
failed to perform her job duties correctly. They support, instead, the notion that Ms.
Monroe tried to perform to Markam's standards but was unsuccessful. The
commissioner's findings also do not show that Ms. Monroe acted with wanton disregard
for Markam's interests. Ms. Monroe's behavior was not malicious. The findings show
that she made mistakes.
Those facts, then, support the commissioner's conclusion that Ms. Monroe's acts
were not misconduct. RCW 50.04.294(3) lists certain acts that are expressly excluded
from the statutory definition of misconduct. Those acts include "[i]nefficiency,
unsatisfactory conduct, or failure to perform well as the result of inability or incapacity."
RCW 50.04.294(3)(a). Mere incompetence does not constitute statutory misconduct. Id.;
Barker v. Employment Sec. Dep't, 127 Wn. App. 588, 594, 112 P.3d 536 (2005). Ms.
Monroe was unable to perform her job to Markam's standards because she lacked the
skills she needed to properly manage a case. Comm'r R. at 61.
The commissioner's findings support its conclusion that Ms. Monroe was not
discharged for misconduct. Accordingly, the commissioner correctly determined that Ms.
Monroe is entitled to unemployment benefits.
Attorney Fees
Ms. Monroe requests attorney fees and costs under RCW 4.84.350 and RCW
50.32.160. We may grant a request for attorney fees and costs on appeal when permitted
by applicable law. Pruitt v. Douglas County, 116 Wn. App. 547, 560, 66 P.3d 1111
(2003).
RCW 4.84.350(1) allows petitioners to recover attorney fees from a state agency
for a successful appeal of an agency action unless a different statute provides otherwise:
Except as otherwise specifically provided by statute, a court shall award a
qualified party that prevails in a judicial review of an agency action fees
and other expenses, including reasonable attorneys' fees, unless the court
finds that the agency action was substantially justified or that circumstances
make an award unjust.
The Department argues that the exception in RCW 4.84.350 applies here because
the Employment Security Act has its own attorney fees statute at RCW 50.32.160. The
Department is correct. The Employment Security Act applies to the agency action
reviewed in this case. And RCW 50.32.160 states that a claimant must recover
reasonable attorney fees and costs from the unemployment compensation administration
fund when an appellate court reverses or modifies the decision of the commissioner.
The Department contends that Ms. Monroe is not entitled to fees and costs under
RCW 50.32.160 because, if Ms. Monroe prevails on appeal, the commissioner's decision
will be affirmed -- not reversed or modified. We agree. Ms. Monroe is entitled to
unemployment benefits and, therefore, we affirm the commissioner's decision. We
neither reversed nor modified the commissioner's decision. RCW 50.32.160, then, does
not provide a basis for a fee award in this case.
We reverse the trial court and deny fees.
_______________________________
Sweeney, J.
WE CONCUR:
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Kulik, A.C.J.
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