Many employers require employees to acknowledge in
writing the employee’s receipt of a notice or memorandum of discipline when
workplace discipline is imposed. In Paratransit, Inc. v. Unemployment Insurance Appeals Board, the California Court of Appeal held: (1) it is lawful for an
employer to require an employee to sign such an acknowledgement, (2) an
employee’s refusal to sign such an acknowledgement form when lawfully presented
to the employee is “misconduct” as that term is defined in Unemployment Insurance Code section 1256, and (3) such “misconduct”
is grounds for denying unemployment insurance benefits to an employee who is
terminated for refusing to sign a discipline acknowledgement form lawfully
presented to him or to her.
Following its investigation of a customer complaint,
Paratransit conducted a post-investigation meeting with its employee, Craig
Medeiros, to inform Medeiros that Paratransit investigated the complaint, that
Paratransit concluded the customer’s complaint was valid, and that Medeiros
would receive two days off without pay as discipline. Paratransit informed Medeiros that signing
the form was merely an acknowledgement of his receipt of the notice of
discipline and not an admission of wrongdoing.
Medeiros requested that a representative of his union be present, stated
his union instructed him not to sign anything without a union representative
present, and refused to sign the form despite being informed by Paratransit
that his employment would be terminated.
Medeiros refused to sign the form, and Paratransit terminated his
employment. A four-year saga followed.
After he was terminated, Medeiros submitted a claim for
unemployment insurance benefits, which the California Employment Development Department
(EDD) denied. Medeiros appealed that
decision, and the Administrative Law Judge (“ALJ”) who heard the appeal upheld
the EDD’s denial of the claim following an evidentiary hearing. Medeiros then appealed to the California Unemployment Insurance Appeals Board, which reversed the decision of the ALJ, finding
Medeiros’ refusal to sign the form “was, at most, a simple mistake or an
instance of poor judgment” on the part of Medeiros. Paratransit then filed in the Sacramento
County Superior Court a Petition for Writ of Mandamus requiring the
Unemployment Insurance Appeals Board to vacate its decision in favor of
Medeiros and enter instead a decision against Medeiros. The trial court granted that Petition, and
Medeiros then appealed to the California Court of Appeal.
On appeal, the Court of Appeal affirmed the trial
court’s decision in favor of Paratransit and against the Unemployment Insurance
Appeals Board. In so holding, the Court
of Appeal looked to Labor Codes section 2856 which states that “an employee shall substantially comply with all
the directions of his employer concerning the service on which he is engaged, except
where such obedience is impossible or unlawful or would impose new and
unreasonable burdens upon the employee.”
The court distinguished what is and what is not “misconduct” for
purposes of determining whether a terminated employee is eligible for unemployment
insurance benefits:
Misconduct within the meaning of
section 1256 is “limited to conduct evincing such willful or wanton disregard
of an employer’s interest as is found in deliberate violations or disregard of
standards of behavior which the employer has the right to expect of his
employee, or in carelessness or negligence of such degree or recurrence as to
manifest equal culpability, wrongful intent or evil design, or to show an
intentional and substantial disregard of the employer’s interests or the
employee’s duties and obligations to his employer. On the other hand mere inefficiency,
unsatisfactory conduct, failure in good performance as the result of inability
or incapacity, inadvertencies or ordinary negligence in isolated instances, or
in good faith errors in judgment or discretion are not to be deemed
“misconduct” within the meaning of the statute.”
The court concluded, based on the record facts, that
Medeiros’ “failure to sign the disciplinary memo violated his obligations to
Employer under Labor Code section
2856,” and was “misconduct” that disqualified Medeiros for unemployment
insurance benefits. The court determined
that even though the document he was asked to sign did not specifically
indicate that he was not admitting fault, it was clearly a “receipt” of a
notice regarding an investigation that had already been completed. His refusal to sign the document, when
instructed to do so by his employer, was without any legitimate basis, and his
actions were therefore determined to be “misconduct,” pursuant to Unemployment Insurance Code section
1256, precluding his right to unemployment insurance benefits.
The court further concluded, for purposes of determining
whether Medeiros’ engaged in “misconduct” by refusing to sign the disciplinary
memorandum, that the meeting Paratransit held with Medeiros to inform him of
the results of Paratransit’s investigation of the customer complaint and to
inform him of the discipline Paratransit decided to impose did not
trigger Medieoros’ rights as an employee subject to a collective bargaining
agreement to have a union representative present during the meeting because the
meeting was not an investigatory meeting that could result in discipline. Rather, Medeiros “never asked for union
representation during [the] investigation.
The only thing [Medeiros] was confronted with at the . . . meeting was
his employer’s decision to discipline him at which time he did not have a right
to union representation.” In this
regard, we note that the National Labor Relations Board has exclusive
jurisdiction over claims of alleged unfair labor practices, and the court’s
decision in this case is not a precedential decision as to whether Medeiros did
nor did not have a right to union representation during the meeting under the
National Labor Relations Act
The court concluded, also, that Medeiros was not
entitled to rely on purported union advice the court found erroneous: “The trial court also concluded that, even if
the union president had told [Medeiros] not to sign anything without union
representation, [Medeiros] was not entitled to rely on such erroneous
advice. We agree. Were it otherwise, a union could insulate
members from adverse employment action simply by giving them bad advice that
they need not comply with an employer’s orders.
If the union gave [Medeiros] bad advice that resulted in his
termination, [Medieros’] recourse may be against his union, not a claim for
unemployment insurance funds.”
It is important to note that the question of whether an
employee has engaged in “misconduct” that disqualifies him or her for
unemployment insurance benefits often will be a fact-specific inquiry. Unfortunately, there is no bright line
rule. Examples of “misconduct” giving
rise to disqualification, as that term has been interpreted, have included
repeated tardiness despite admonitions from an employer, a refusal to submit to
a drug test in a safety-sensitive position, and, more generally, dishonest acts
committed willfully and which have injured the employer. As reiterated in Paratransit, mere inefficiency, unsatisfactory conduct, failure in
good performance, inadvertencies or ordinary negligence in isolated instances,
or good faith errors in judgment or discretion, are not to be deemed misconduct
within the meaning of the statute. The
EDD provides some guidance on the issue of what might rise to the level of
“misconduct” here.
Nevertheless, we think this decision is a good decision for
employers that brings some welcome clarity regarding the rights of employers to
expect and, if necessary, to demand compliance with lawful directives to
employees.
