Labor Law

Raven Akram, Esquire

Denial of unemployment benefits upheld because of employee misconduct. Fendler v. Hudson Services, et al, No. 92177 (Mo. banc., July 3, 2012), Stith, J.

Carol Fendler was an operations assistant with Hudson Services since 1994. One of Fendler’s job duties was to verify the hours employees worked. There was no written policy as to how Fendler was to undertake the verification, but until July 2008, her supervisor authorized her to call employees to verify the hours they worked and then enter the total hours employees said they worked. In July 2008, Fendler’s supervisor was replaced and she was then directed to record the specific times that employees said they started and ended work. During 2009, Fendler was warned on two occasions when she failed to comply with the new procedure. In December 2009, Fendler was warned a third time that she failed to comply with the required verification procedure. Nevertheless, during January 2010, Fendler failed to properly record time on 11 separate occasions. Fendler’s employment was terminated on January 25, 2010.

Fendler filed a claim for unemployment benefits. On March 3, 2010, the Division of Employment Security denied Fendler’s claim because it found she was discharged for misconduct. Fendler appealed and the appeals tribunal reversed the finding of misconduct. Hudson appealed to the Labor and Industrial Relations Commission, which found that Fendler had engaged in misconduct. Fendler appealed and the Missouri Supreme Court granted transfer.

Held: Affirmed.
Unemployment benefits are granted to persons unemployed through no fault of their own. As a result, unemployment benefits are restricted if an employee is fired for misconduct. Misconduct includes not just a willful violation of the employer’s rules but also negligence in such degree or recurrence as to manifest culpability, wrongful intent or evil design, or show an intentional and substantial disregard of the employer’s interest or of the employee’s duties and obligations to the employer. The evidence showed Fendler’s repeated failure to comply with explicit instructions took her conduct outside the realm of mere mistakes or poor work performance into the realm of insubordination. Fendler’s defense that she did not know that her failure to follow instructions would jeopardize her employment was not convincing. There is no requirement that employees be entitled to a warning that they will be fired for intentionally violating a reasonable work rule. Fendler’s failure to follow her supervisor’s instructions was a deliberate choice to disregard instructions and misconduct warranting a denial of unemployment benefits.

: Chief Justice Teitelman opined that there is a vast distinction between conduct that would justify an employer in terminating an employee and conduct that is misconduct for the purposes of denying unemployment benefits. The unemployment security law should be liberally construed against the disallowance of benefits. Judge Teitelman would have applied the rule of strict construction and held that the facts demonstrated that Fendler’s failure to follow her employer’s instructions was negligent as opposed to willful misconduct.

Labor and Industrial Relations Commission’s finding of overpayments made to claimant upheld because not timely appealed. Hergins, Jr. v. Division of Employment Security, No. 73190 (Mo. App. W.D., June 19, 2012), Smart, Jr., J.

After losing his job, Homer Hergins, Jr. began receiving unemployment benefits in Missouri. After exhausting his regular unemployment benefits in Missouri, he filed for extended benefits in Missouri under the Federal Emergency Unemployment Compensation Act. After exhausting his extended benefits, he filed a claim for regular unemployment benefits in Kansas. That claim was granted and the Kansas Department of Labor found that Hergins was eligible to have received regular unemployment benefits in Kansas during the period of time he was receiving emergency unemployment benefits in Missouri. The Missouri Division of Employment Security then found that 1) Hergins was ineligible for emergency unemployment compensation benefits in Missouri during the same period of time that he was eligible to claim regular unemployment benefits from the State of Kansas, and 2) that Hergins had been overpaid during the period of ineligibility. Hergins appealed the Division’s determinations to the Appeals Tribunal, which conducted a hearing on the eligibility issue and overpayment issue under two separate appeals numbers. The Appeals Tribunal upheld the Division’s determination of ineligibility and directed the recovery of overpayments. Hergins, through inadvertence or misunderstanding, appealed only the issue regarding ineligibility to the Labor and Industrial Relations Commission. The Commission affirmed the Appeals Tribunal’s decision.

Held: Affirmed.
The Missouri Court of Appeals is authorized to grant judicial review only in cases that have been appealed to the Commission, and then from the Commission to the Court. Hergins applied for review to the Commission only with regard to the eligibility decision. The overpayment decision was deemed to be final because it was not timely appealed. The Missouri Court of Appeals was without authority to address the overpayment decision on the merits.     

Bryan Cavanaugh, Esquire

Plaintiff was eligible for unemployment benefits because she was available for work, in spite of her part time contract position. Gardner v. Division of Employment Security., No. 97740 (Mo. App. E.D., June 26, 2012), Ahrens, J.

Gardner lost her job and applied for unemployment benefits. She unsuccessfully sought a job for two months, then accepted a commission-only position selling insurance. Gardner worked at that insurance sales job for over four months. She failed to make any sales and so received no pay. She worked between zero and 33 hours per week. Throughout this four-month period, she continued to look for full-time work and continued to receive unemployment benefits.

Gardner re-applied for benefits in July 2011. The deputy denied her application and declared her retroactively ineligible back to April 2011, when she started selling insurance as an independent contractor. The appeals tribunal affirmed and so did the commission. Gardner appealed, contending the commission erred by denying her partial benefits.

Held: Reversed and remanded.
In an unusual move, the court of appeals weighed the evidence and reversed because the commission’s determination was against the weight of the evidence. Section 288.040.1(2), RSMo, specifies a claimant may receive benefits only if he or she is able and available for work. The question here is whether Gardner was available for work. Being “available” means the claimant must be actively and earnestly seeking work. The commission found Gardner was working full-time as an independent contractor and was therefore not available for work. The court of appeals said this finding was contrary to the overwhelming weight of the evidence. While Gardner initially testified her hours per week selling insurance ranged from 22 to 40, a review of the entire record showed Gardner actually never worked full-time during this period. The court of appeal therefore found Gardner was “available for work.”

Next, the court of appeals examined whether Gardner would still be ineligible because she was self-employed. The court explained that unemployment benefits are not designed to provide a supplemental income to self-employed individuals. However, if a claimant is available for work and is only working in a self-employed capacity until he or she finds full-time employment, then the claimant is still eligible. “To be eligible, a claimant must clearly possess a genuine attachment to the labor market and be able, willing, and ready to accept suitable work,” explained the court. In this case, Gardner’s work selling insurance was not a full-time endeavor but “a part-time fill in.”

As a result, Gardner was unequivocally available for work and therefore eligible for benefits.

180-day deadline to file charge of discrimination with Missouri Commission on Human Rights is firm and is not tolled by an employee’s pursuit of internal grievance proceedings. Farrow v. St. Francis Medical Center, et al., No. 96532 (Mo. App. E.D., May 22, 2012), Per curiam.

Farrow worked as a nurse at St. Francis Medical Center from 1991 until December 2008. She alleged Dr. Strange began making sexual propositions to her in December 2005. Farrow alleged she reported the unwanted advances to her employer and was subjected to retaliation as a result. Farrow was eventually terminated on December 10, 2008, for the articulated reason that she failed to meet customer services expectations.

Farrow filed an internal grievance on December 15, 2008, and that grievance was ultimately upheld on March 2, 2009. She filed a charge of discrimination with the Missouri Commission on Human Rights on July 27, 2009. She received her notice of right to sue from the MCHR on December 18, 2009 and filed her lawsuit on March 18, 2010. Farrow filed an eight-count first amended petition against her St. Francis and Dr. Strange, and the defendants moved to dismiss it. The court treated that motion as one for summary judgment. The court granted defendants’ motion for summary judgment, and Farrow appealed, contended ten points of error.

Held: Affirmed.
The court of appeals affirmed the trial court’s judgment for the specific reasons summarized below:

Counts I, II, and III – Violations of the Missouri Human Rights Act (Sexual harassment, retaliation, and retaliatory discharge):
Farrow needed to file a charge with the MCHR within 180 of the last discriminatory act. She filed the charge 230 after her discharge, so these claims were time-barred.

Neither the doctrine of equitable estoppel, nor waiver, nor tolling saved Farrow’s claims. Farrow argued these doctrines should apply essentially to toll the 180-day deadline from starting until her grievance process was completed, which occurred 77 days after her discharge. If the deadline had been tolled for 77 days, then her charge of discrimination would have been timely filed, since it would have been filed 153 after the end of the grievance process. However, the record revealed no false representation or concealment of material facts by St. Francis or Dr. Strange, so the doctrine of equitable estoppel did not apply.

Farrow argued that the defendants waived their right to challenge the timeliness of her charge because they did not do so at the administrative level.

Farrow cited no cases to support her proposition that failure to challenge the timeliness of a charge at the administrative level waives a later assertion of untimeliness in the circuit court, and the court of appeals rejected this argument.

As for tolling, while the strict 180-day charge filing deadline is not immune from the principle of equitable tolling, Farrow cited no authority that the pursuit of an internal grievance process equitable tolls the filing deadline. In fact, the U.S. Supreme Court held in a 1980 case that the pendency of a grievance does not toll the running of the limitations period on federal employment discrimination claims. The court of appeals noted that employer-provided grievance procedures are separate from the MCHR’s procedures. The two are not mutually-exclusive, and there is no reason they cannot be pursued at the same time.

Count IV – Retaliatory Discharge against St. Francis for Post-Termination Discrimination:
While a plaintiff may base a claim of retaliation upon actions taken by an employer after the employment relationship is severed, Farrow’s charge of discrimination did not describe any post-termination conduct by St. Francis. Farrow therefore failed to exhaust her administrative remedies for this claim, and the trial court did not err in dismissing it.

Count V – Wrongful Discharge against St. Francis and Dr. Strange:
Farrow alleged she was wrongfully discharged due to her complaining about defendants’ violations of the law and public policy as set forth in the Missouri Nursing Practices Act. The trial court did not err in dismissing Dr. Strange because there is no individual liability under this cause of action. As for St. Francis, the court noted that Farrow specifically alleged she complained about St. Francis’ removing the duty of administering PICC lines from nurses and giving it to non-nurses. As a matter of law, that complain is not a violation of the NPA. Therefore, this count did not state a claim against St. Francis.

Count VI – Defamation against Dr. Strange:
Farrow’s last alleged defamatory statement was in January 2007. Farrow filed her lawsuit in March 2010. Defamation carries a two-year statute of limitations. Farrow’s damages were ascertainable in 2006 or 2007, so her claim was filed beyond the statute of limitations.

Count VII – False Light Invasion of Privacy against Dr. Strange:
This tort requires proof that the false light be highly offensive to a reasonable person. This requires major misrepresentations of one’s character, history, activities, or belief such that serious offense may reasonably be expected. Dr. Strange’s alleged factual criticisms of Farrow’s job performance and work activities did not rise to this high level. The trial court did not err in dismissing this claim.

Count VIII – Tortious Interference with Business Expectancy against Dr. Strange:
One of the prima facie elements of this tort is lack of justification. Here, Farrow alleged no facts supporting Dr. Strange’s lack of justification for the statements he made about her work performance.