Title: Medeiros v. Hawaii Department of Labor and Industrial Relations. Dissenting Opinion J. Levinson, with whom C.J. Moon joins [pdf].

State: hawaii

Issuer: Hawaii Supreme Court

Document:

FOR PUBLICATION ***

IN THE SUPREME COURT OF THE STATE OF HAWAT'T

00.

 

 

SUSAN C. MEDETROS, Appellant-Appellant,

HAWAT'T DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS,
UNEMPLOYMENT INSURANCE DIVISION; EMPLOYMENT SECURITY APPEALS
REFEREE’S OFFICE; CASTLE RESORTS & HOTELS; HILO HAWAIIAN HOTEL,
Appellees-Appellees..

r—— ee

No. 24318

APPEAL FROM THE THIRD CIRCUIT COURT
(CIV. NO. 00-1-0457)

a4

 

SEPTEMBER 1, 2005

 

NAKAYAMA, ACOBA, AND DUFFY, JJ. AND
LEVINSON, J., DISSENTING, WITH WHOM MOON, C.J., JOINS

QRINION OF THE COURT BY DUFFY, J.

Appellant-appellant Susan C. Medeiros appeals from the
May 4, 2001 final judgment of the Circuit Court of the Third
Circuit, the Honorable Riki May Anano presiding, alleging that
the circuit court erred in entering the May 4, 2001 order
affirming Decision No. 0001868 of the Employment Security Appeals
Referees’ Office (ESARO) for the following reasons: (1) “the
third circuit court committed error in affirming the decision of
the Appeals Officer because the findings of the Appeals Office:
are inconsistent with the conclusion that [Medeiros] was

terminated for misconduct connected with work as set forth in
*** FOR PUBLICATION ***

OO

(Hawa!

 

“{ Administrative Rule (HAR)] § 12-5-51 [(1981)]"s* and (2)
“the third circuit court committed error by addressing the
Appeals Officer's factual finding, although those findings had

not been challenged, and the issue before the [circuit] court was

S WAR § 12-5-51 provides as follows:

suspension or discharge for misconduct. (a) A discharge occurs
amen anvexployer 1s the "moving party” in the termination of the
Ghployment’ relationship

Tel A suspension occurs when the employer takes action to
refuse work and remuneration to an employee without terminating
the employment relationship.

Wc) Misconduct connected with work consists, of actions which
‘show a uilful or wanton disregard of the employer's interests,
Such ae'deliberete violations of or deliberate disregard of the
Standards of behavior which che employer has a right to expect of
an employee, or carelessness, or negligence of such @ degree or
Tocurkence as to show wrongfal invent oF evil design. Mere
Tneffieiency, unsatisfactory conduct, poor performance because of
inability ex incapacity, iaelated instances of ordinary negligence
Or inadvertence, er good-faith errors in judgment or discretion
Ste not misconduct. “The misconduct shall be related to the work
Gf 'the sndividuel or the individual's status employ

(Gy Tn determining whether an individual's act constituted
misconduct” the department shail consider any relevant evidence
presented which relates to:

(2) Employee’ jong for the act or omission, and efforts to

dvoid the set or failure to act;
(2) The relevant circunstances of the case and
Eiteative effect therefrom upon the employe

 

 

 

 

     

 

  

y

 

2 fare and importance to the employer of the offended

[nterest of the employer

(4) Any lawful and reasonable cospany policy or custom:

(S}  Stpuoyer's actsons to curtail er prevent, if possible, the
objectionable conducts and

(6) The nature of the act or failure to act.

(S} situations where misconduct mey be found include, but

are not’ Limited tor the following where the evidence denonstrat

(2) Onexcused absence or recurring unexcused tardiness;

(2) Altercation at work: oF

(5) Material false Fepresentations by the employee to the
employer; oF

(4) Employee's gross neglect of duty: or

{S} Employee's wilfal sisobedience of employer's directives or
Employee's Ingubordination) oF

(6) Intentional conversion of employer's property by the
employee: oF

(7) Employee's unauthorized use of intoxicants on the jobs oF

(2) Employee's wilfol and substantial abuse of the employer's
equipment. of property.

   

 

  

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whether the findings of the Appeals Officer supported the

[ESARO’ 5] conclusion.” (Emphasis in original.)

On appeal, Medeiros argues: (1) that she “is entitled

 

to unemployment compensation because the findings of the Appeals
Officer are inconsistent with [a] wilful er wanton disregard of
the (appellees-appellees Castle Resorts’ & Hotels’ and Hilo

Hawaiian Hotel's [collectively hereinafter, “the Employer")}

 

interest"; and (2) that “the third circuit court’s [May 4, 2001]
order affirming [the ESARO’s] decision (No.] 0001888
(hereinafter, ‘the May 4, 2001 order’], final judgment, [May 4,
2001] notice of entry of judgment [,] and order” are erroneous
“because they fail to address the inconsistency of the Appeals
Officer's findings with the Appeals Officer’ s conclusion.”

‘The appeliee-appellee Director of the Department of
Labor and Industrial Relations’ (DLIR), State of Hawai'i
[collectively hereinafter, “the Director”) counters that, “under
‘the employment insurance laws,” Medeiros’s “conduct of placing
her hands all the way around her co-worker's neck and throat and
shaking her co-worker for five seconds because she was angry at
her co-worker for causing a work schedule change[] was
misconduct” and asserts that this court should affirm the May 4,
2001 final judgnent of the circuit court “that . . . Medeiros was
disqualified for unemployment insurance benefits because she was

discharged for misconduct connected with work.”
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a
Medeiros replies: (1) “that the Appeals Officer was
incorrect” in affirming the Director's decision denying Medeiros
unemployment benefits because the Appeals Officer (a) “either
employed the hotel's ‘zero tolerance policy,’ which flies in the
face of the legislative intent calling for liberal construction
of Hawai"i’s unemployment compensation statute” or (b) “the
Appeals Officer . . . inconsistently concluded on one hand that
Appellant’ actions lacked wrongful intent but on the other hand

concluded they were wilful and wanton”; (2) that the Director’ s

 

argunent on appeal “mis-characterize[s] the unchallenged findings
[of the Appeals Officer] and . . . (would have] this Appellate
court . . . rely on findings which do not exist”; (3) that,
spased on the findings of the Appeals Officer in this case, those
cases relied upon by the Director which represent intentional
acts or life threatening acts can not be factually relevant to
the issue at hand”; and (4) that Medeiros “has met her burden of
making a convincing showing that the decision is invalid because

|. it is} unjust and unreasonable (in its] consequences.”
(internal quotation signals and citations omitted.)

For the reasons discussed below in section III, we

affirm the circuit court's (1) May 4, 2001 order affirming

ESARO’s Decision No. 0001888, and (2) May 4, 2001 final judgment.
*** FOR PUBLICATION ***
1. BACKGROUND
The following unchallenged statement of procedural
history and factual background is set forth in Decision No.
oooreea:

‘The claimant [(Lses, MedeLros)} worked as a hostess
for the Employer fron Novenber 1978 until she was suspended
fon guly 30, 2000 for placing her hands around the neck of
Co-worker.’ She was discharged effective August 9, 2000.

‘The claimant's co-worker was dissatisfied with @
policy of the Employer related to work scheduling. ‘The co-
Worker Conplained abeut the policy to the food and beverage
director and thereafter the policy was changed. Ae a result
Of the policy change, many employees” schediles changed,
Including that of the Claimant. On the morning of July 30,
2000, when the schedules changed, the clainant came up
benihd'the co-worker in the bus station of the restaurant,
Put her hands around the co-vorker’s neck and throat. and
Shook her lightly for about five seconds, and said[,) "it's
all because of you.” The claimant then voluntarily’ renoved
her hands from the (co-worker’ s) throat. The co-worker was
shocked because she nad not seen the claimant sppreaching
her, and she was offended because she did not think she
should be touched in that manner. She was not, however,
actually afraic of being hurt by the clsimant.| The claimant
land the co-worker had known each other for nine years and()
Prior to this incident were on good terns and joked around
with one another.

 

 

 

 

 

This incident was witnessed by another co-worker, who
did not perceive the claimant's actions az either violent or
threatening(} and who was of the opinion that the co-worker
Whose throst was grabbed “took it the wrong way.” Agter the
lincident, the three of chen sat together and taiked ane
Laughed for a few minutes. Although she participated in the
conversation, the co-worker who had been grabbed by the
throat continued to be upset but did not say anything
because she dig not want to make [a] scene. She also did
ot want te disrupt the work schedule so she did not report
the matter until her work schedule ended at about 9 of 5:30
aun.” Tash she reported the matter co the food and beverage
director. She also related the matter to the human
resources manager and the general manager.

 

 

 

 

‘These three managers then met and discussed the matter
in Light of the company’s "zero tolerance for violence”
policy. The company policy, which had been distributed to
employees, including the claimant, in 1998, provides:

“(Employer] has zero tolerance for violence in the

workplace. Violence is defined to include but is not
Tinited to: physically herming another, shoving,

5
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a

pushing, harassment, verbal or physical intimidation,
Egereion, brandishing weapons, and/or threats or talk
Sfviotence.. Norkplace is defined to include but is
Sot" limited tor being on Company prenizes, Company
Tine cr Company Business. No talk of violence,
[neluding Joking above violence, will be
colersted."(")

 

‘the managers discussed this policy and the manner st should
Be applisdt] and determined that the claimant should be
Mhspehded pending an investigation. The food and beverage
Sieector prepared a corrective action suspending the
SUSTESSE,PESLIES nex into his office on July 31, 2000, read
SENS hers] end then gave her an opportunity to make any
Stitten comments she wished. (The claimant] wrote that she
Neel poe ner hands around her co-worker’s neck, but that she
Rasrbt punched in for work at the time and that she and her
TercSEcrkers were “laughing and playing" thereafter. (1

 

 

} the company policy continu

 

in relevant part:

Any employee who believes that the actions or words of 3 co~
worker ye thizeeparty, constitute intimidation, harassment, or a threat
se ende should report it as soon as possible to the General Manager
Sha'ehe Corporate Husan Resources department. All complaints of

WL SMGaticn, harasenent, or threats of violence will be investigated
sesaptly and will be kept confidential to the extent possible. Any:
ceetyed uno Ls found ro have engaged in any intimidation, harassment,
srinkeae"of violence to another employes will be subject to
Serminstion-

 

 

 

 

fon August 15, 1998, Medeszos signed and dated a form entitled "Castle Resorts
HULLS Atkhonlesgment of Employes Handbook,” which provides in relevant
part

1 acknowledge receipt of the Employee handbook and agree to read
ali policies and gules contained herein. I understand that violation of
hy Pole ana/or policy say result in corrective action up to [and]
Including termination.

 

1 acknowledge that employment is on an at-will basis and that I oF
castle Roseres s Hotels may tetminate employment at any time, with or
Without notice, with or without cause.

1 understand that the policies described herein are not conditions
of employment and this Handbook ia not intended to create or imply =
Sbntrace ‘petueen myself and Castle Resorts & Hotels. In consideration
Sf employments and continued employment, I agree to abide with the
cesepeeeroceduress rules and regulations of castle Resorts ¢ Hotels.

 

scorrective action," dated July 30, 2000, described the incident.

 

con 7/30/00 a comptaint of physical assault has been filed against
you. Te haa been stated that upon entering your work area, you cane
(continued.

 
*** FOR PUBLICATION ***

 

The co-worker was then asked to make a written
statenent sbovt the incident. she provided the statement on
Duly"31, 2000. Her statement 014, among other things:

Sr was quite in shock as well as very upset that
this event had just occurred. My reaction consisted
Of swallowing the words and che neck grabbing,
Continuing on wich my job duties.”

 

 

“To me, anytime someone places two hands or even
fone hand on another person’s neck/throat ares, the
Sole intent of that aggressive behavior is definitely
fo choke or even hang thst person up. If she was 0
upset with the new changes and had a problen, 1 feel,
she should have taken the tine to talk personally with
you and our supervisors regarding her concerns.”

 

+, «I strongly felt yesterday was [2] great
example of how actions speak Louder than words. 11"

‘The information about the incident, sncluding this
statenent (,] was sent to the corporate office in Honolulu
because the managers on the Big Island were not empowered to
discharge employees. On August 08, 2000, the corporate
Office advised the general manager’ there were Sno
exceptions” to the “ero tolerance” policy and that the
Glsimant should be discharged.

 

 

The claimant had worked for the Exployer for 22 years
and had never before Been involved in such an incident
Although she had received a copy of the “sero tolerance”
Policy tuo years earlier, she cid not remember it.

 

*(. continued)
from Behind another employee, put your hands around her neck, [shook
her] with a slight back and forth movenent and accused her of being
Fesponsible for's change of schedule which was implemented in the
Queen’s Court restaurant. This sa in violation of company policy
located on page 37 of your handbook.” It states under the Viclence-Free
Workplace section: (*JCastle Resorte 6 Hotels has sero tolerance for
violence in the workplace, Violence is defined to include but not {be}
Limited to: physicall[y) harsing ancther, shoving, pushing, harassment,
verbal or physical intimidation, [and] coercion{.*] It also states on
page 28, ["JAny eaployee who is found to have engaged in any
intiaidation, harasesent, of threat of violence to another employee will
be subjected to termination. ("1

 

(Emphasis in original.)

Medeiros hand-wrote the following coments on the “corrective action”
form, ina space "provided to the employee to agree or disagree and state
Feason(s) why": “when I walked in on [che complainant and the witness,] they
were complaining about the schedule. I did put my hands around (the
Complainant’ s] ‘eck and said{, *]because of this the schedule was changed(,”)
but we were laughing and playing in the station before we all started to Work.
And wasa't punched in at that time.” (Eqphasie in original.)

 

1
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a
As noted above, Medeiros was suspended on July 30,

2000. on August 2, 2000, Medeiros filed a “common application
torn” for “determination of insured status” and/or “work
registration” with the Director's Unemployment Insurance Division
(ID). on August 14, 2000, the UID mailed two notices of
unemployment insurance decisions, which effectively ruled that
Medeiros was disqualified from receiving any unemployment
insurance benefits. ‘The first notice of decision explained as

follow:

 

you wore enployed with the Hilo Hawaiian Hotel as a
hostess from Novenber 1978. On July 20, 2000, you were
Mapensed until August €, 2000, for physically assaulting
Snether employee. on Jaly 30,2000, you placed your hands
Ground the neck of ancther employee, and insinuated thet a
Ghanget) tn the work schedule was due to this employes.
Kiehsogh you intended che incident as joking around, the
Biker auployes felt offended and assaulted, and reported the
{ncident’ eo the Employer. The company has a zero tolerance
policy Tegerding lolsnce in the workplace, of which you
Were issued a copy at hire.

 

 

 

You(r] physical assault on another exployee!]
constitutes @ wilful and deliberate disregard of the
Exployer’s and the other employee's interest. As such, you
ere suspended for misconauet connected with work.

 

the second notice of decision essentially provided the same
explanation as the first.

on August 15, 2000, Medeiros filed an “application for
reconsideration or notice of appeal” with the UID.

on September 28, 2000, an ESARO Appeals Officer
conducted @ hearing regarding Case No. 0001688, Medeiros’ s appeal
from the UID's two August 14, 2000 unemployment insurance

decisions. Medeiros testified, inter alia, that “[she] was not
*** FOR PUBLICATION ***

 

joking about violence . . . [but] was just joking with her{ co-
worker.]” The Appeals Officer also heard testimony that Medeiros
was a senior line employee in the highest pay grade (“Hostess
1"), while the co-worker was a part-time bus person.

As recited above,

 

on September 29, 2000, the Appeals
Officer issued Decision No. 0001888, which, inter alia, cited HAR
§ 12-5-51, see supra note 1, and ruled as follows:
‘REASONS FOR DecretoN,
‘The relevant issue in this case is whether the

claimant (Lue, Medeiros) was discharged for misconduct
Connected sith work.

 

Misconduct connected with work consists of actions
which show a wilful or wanton disregard of the employer's
Interests, sucn as deliberate violations of of Seliberste
Gisregard of the standards of behavior which the employer
has a right to expect of an employee. (See HAR § 12-5
Si(ch.} On the other hand, isolated instances of ordinary
negligence or inadvertence, or good faith errors in juagment
or discretion are not misconduct. (Sse id-] The burden of
proof is on the employer to show that the claimant was
Sischarged for misconduct

 

In this case, the claimant's attorney argues that the
claimant was discharged for an isolated instance of poor
Judgment, "and the claimant testified she Delieves she was
not “Joking about violence," but was only “Joking.”

Clearly, this was an isolated instance. Nothing itke it had
happened in the claimant's 22 year of prior enploysent. In
addition, it clearly constituted poor judgeent. While the
Claimant’ did not intend to actually threaten of harm her co-
Worker, she touched her co-worker in a clestly offensive
manner and without her permission.

 

 

 

 

Nowever, when the claimant
“joking about violence,” bur was only
denonstrated a Jack of forthright n

the claimant approached her covworker for behind, placed her
hands around the claimant's neck and throat and shook her,
however Lightly, her actions clearly constituted a “joke
about violence.” ‘Sokes about violence were pronipited by
the Enployer’s zero tolerance policy. Although the policy
refers to “talk” about violence, including “jokes about
Violence,” this should not be interpreted as excluding
physical jokes about violence, Jokes need not be verbal,

     

 

 

8
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ee

they can consist of physical actions. As the offended co-
Norker seated, sometimes “actions speak louder than words.”
This is one of those tines.

 

With or without 2 “zero tolerance policy” ageinst
violence, employers have the right to expect that their
Gigloyecs will Petrain from treating co-workers in ¢ ment
thet fan shock and upset them. The claimant in this case
breached that duty. Furthermore, she did so wilfully.
Aithough she did not intend to harm or threaten the co-
Norkers she did net plut hler hands around her co-worker’ ®
neck aad throst inadvertently or accidentelly, but
Tseontionally, Under these circumstances, it's concluded
the claimant did commit sets which showed’ e deliberate
GlSeegard of standards of behavior which the Employer had «
HSRC aspect of her. It de therefore concluded the
Eikihane was discharged for misconduct connected with . «
works

 

 

 

pecrsioN:

‘Te determinations of the [UI0) are affirmed. The
claimant is disqualified for benefits « «on the basis
that ane was discharged for misconduct connected with «
work.

 

on October 27, 2000, Medeiros filed a notice of appeal
to the eireuit court, requesting judicial review of Decision No.
0001886, pursuant to HRS $ 91-14 (1993), Hawas's Rules of Civil
Procedure (HRCP) Rule 72 (2000), and HAR § 12-5-51.

on becenber 22, 2000, Medeiros filed her opening brief
in the circuit court, arguing as follows: (1) that “the {UI0)
did not correctly apply HAR § 12-5-51 when it found that .
Medeiros’ s isolated instance of poor judgment, not intended to
actually harm or threaten, rose to the level of misconduct
connected with work”; (2) that “the DLIR incorrectly used the
Employer's ‘zero tolerance’ for violence policy to determine if
[Medeiros’ s} conduct rose to the level of misconduct connected

with work as defined by HAR § 12-5-51"; (3) that “the DLIR’s

10
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conclusion that [Medeiros’s] actions rose to the level of
misconduct connected with work is clearly erroneous in view of
the testimony and HAR § 12-5-51,” inasmuch as (a) “Medeiros did
not violate the ‘violence-free workplace’ policy” and (b)
“Medeiros{’s] actions did not rise to the level of misconduct
according to the standards of HAR § 12-5-Si(c)""; and (3) that
“the decision of the DLIR is unjust and unreasonable under the
circumstances and consequences of this case.”

On February 5, 2001, the Director filed an answering
brief in the circuit court, contending that “the Appeals
Officer's credibility determination that (Medeiros) was joking
about violence when she placed her hands around a co-worker’s
neck should not be disturbed, and therefore, the Appeals
Officer's decision that [Medeiros] violated [the] Enployer’s zero
tolerance policy against violence is not clearly erroneous.” on
February 8, 2001, the Employer filed an acknowledgment of service
of, and joinder in, the Director's answering brief.

On February 14, 2001, Medeiros filed a reply to the
Director's answering brief, asserting, inter alia, as follows:
(2) that “Camfalra vs Agsalud, 67 Haw. 212, 685 P.2d 794
(1984) [,] is the controlling case as it provides that it is not
the action of the claimant which is at issue but it is the intent
of the claimant,” such that, “[w]here the claimant’s intent does

not rise to the level of wilful or wanton disregard of the

a
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ee

employer's interest {,] the act itself does not allow for a denial
of unemployment. benefits”; (2) that she “reaffirms (her) position
that . . . [the] DLIR’s reliance on the (Elmployer’s ‘zero
tolerance for violence policy’ is an improper narrowing of the
unemployment security law which is to be liberally construed in
order to achieve the beneficent legislative purpose of relief of
workers under the stress of unemployment through no fault of
their own"; (3) that “[t]he threat of violence was neither
intended nor perceived and therefore the ‘zero tolerance to

violence policy’ does not apply’

 

(4) that “the Appeals officer's
decision is clearly erroneous because it is inconsistent with @
determination that . . . Medeiros acted in a manner inconsistent

with her employer's interests’

 

(5) that “(t]he decision is
unjust and unreasonable because . . . Medeiros was suspended and
terminated after 22 years of enployment without so much as her
employer investigating the circumstances of this incident"; (6)
that “the DLIR's reliance on [the Employer's ‘automatic
suspension/zero tolerance/ne case-by-case decision’) policy in
determining whether . . . Medeiros was entitled to unemployment
insurance compensation is wholly unfair and leaves the
determination of unemployment benefits in the hands of the
employer.” (Some internal quotation signals and citations
omitted.) Medeiros also stated that she would not submit 2 reply

to the Employer's joinder in the Director’s answering brief.

32
 

*** FOR PUBLICATION *

On March 16, 2001, the circuit court conducted a

hearing regarding Nedeiros’s appeal, entertaining arguments from
counsel for Medeiros, the Director, and the Employer. Following
the parties’ arguments, the circuit court orally ruled as
follows:

‘THe counr: 1 think that
not just one matter thet we look at oF one dimension thet we
Took at and certainly that's not what the hearings officer
of appeals officer looks at. [The Appeals Officer] looks at
fait the circumstances, and she did make a finding that it
Was not . . « Medeiros’ intention to scare someone oF
intention to’ choke someone... ; But that in the context
of ali that was occurring that ‘the act constituted (a)
Sufficient basis for (3) finding of misconduct under the
Unemployment law and, therefore, preciuded the recovery by
the appellant for tne same Benefits.
Taleo agree that the record as it currently stands
« . sufficiently supports the finding of... the appeals
Officer. And... . Tuhave looked at it carefully. 1 read
Che transcript. “I try to read the transcript because I know
how important it is. Given that, I look for errors,
Procedural and... factuei[} mistakes. There are none in
This recore
‘50 T am going to accord the sppesis officer() due
deference and going to deny or rather affizm the appeals
offices’s decision.
and, of course, [Medeizos's Counsel,} that
renedy ana that ie further appeal
[Wedeiros’s Counsel:) Yes, Your Honor.
And 1 think we! ve made a secord teday of

 

 

 

 

 

 

 

  

my reasons.

on May 4, 2001, the circuit court entered an order
affirming Decision No. 0001888, ruling in relevant part as
follows:

The Appeals Officer considered all the facts of this
case An reaching the decision that. . - Medeiros was
Gischarged for misconduct connected with work. the Appeals
Otficer’s decision is supported by the relisbie, proseciver
and substantial evidence in the record and the [etrea!t
Clourt is satisfied that . . . Decision (No.] 0001888 ie not
clearly erroneous

Based on the foregoing
dated Septenber 29, 2000, 13

Medeiros is denied

 

 

= Decision {No.] 0001888
ciemed and the appeal of

 

 

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a

‘That same date, the circuit court entered final judgment in favor
of the Director and the Employer and against Medeiros.

on May 30, 2001, Medeiros timely filed a notice of

appeal.

TT. STANDARD OF REVIEW

Review of @ decision made by the circuit court
upon its review of an agency's decision is @ secondary
“peal: the standard of review is one in which this
wire ust determine whether the circuit court was
Signe or wrong in ite decision, spplying the standards
Hetforth in ans $ 91-19(g) ((1998)] to the agency’
Secksion.

uns § Si-14, entitled “Judiclad review of contested cal

provides in relevant part:

ig) Upon Feview of the record the court may
affiem the Secision of the mand the. c
Guth instructions for further proceedings: or it may
Teverse of modify the decision and order if the
EiEstanciai rights of the petitioners may have been
Srejudiced because the adinistrative findings,
Eonlusions, decisions, or orders are:
{i)"" in violation of constitutional or
statutory provisions; or
(2) Inexcess of the statutory authority oF
Jurisdiction of the agency! oF

 

 

 

    

   

 

 

 

 

 

 

(3) ade upon undawfal procedure; or

(G) Retectea by other error of law) oF

(5) Clearly erfoneous in view of the reliable,
probative, and substantial evidence on the
Mhole record; oF

(6) Arbitrary, of cepricious, or characterized
By abuse of discretion or clearly
Ghwarranted exercise of discretion.

[w)nder HRs § 91-14(g), conclusions of law are reviewable

{nsor subsections (1), (2) and (4); questions regarding

procedirel defects inder subsection, (3); findings of fact

Biger subsection (5) and an agency's exercise of discretion

Under subsection (6).

 

AEL“CIO, 107 Hawai'i 178, 183, 111 P.3d $67, 592 (2005) (quoting
Paul's Elec, Serv., Inc. v. Befitel, 104 Hawai

 

412, 416, 91

ua
 

*** FOR PUBLICATION

 

P.3d 494, 498 (2004) (citations and some quotation signals
omitted) (brackets in original).

B. Construction of Administrative Rules

‘The general principles of construction which
apply to statutes also apply to administrative rules.
AS in statutory construction, couree look first st an
Saninistrative rule's language. If an adninistestive
rule's Language is unambiguous, and its literal
application is neither inconsistent with the policies
of the statute the rule implements nor produces an
absurd or unjust result, courts enforce the rule's
plain meaning.

 

 

t 88 Haw. S16, 325 119 Brad 963, 550 (1908)
(eitatsone omiteed)

Allstate Ins. Co, v. Ponce, 105 Hawai'i 445, 454, 99 P.3d 96, 105
(2004) (quoting In xe Doe Children: John, Born on January 27.
1982,_and Jane, Born on July 31, 1988, 105 Hawai'i 38, 53, 93
P.3d 1145, 1160 (2004) (quoting In_xe Wai‘ola O Moloks'i, Inc.,
103 Hawai'i 401, 425, 83 P.3d 664, 688 (2004) (quoting Lee ve
Elbaum, 77 Hawai'i 446, 457, 887 P.2d 656, 667 (App. 1993)))).
ITT. DiscuSsION
Medeiros contends in her opening brief that (1) in

Light of the Appeals Officer's findings of fact (FOFs) in
Decision No. 0001988, the Appeals Officer wrongly concluded that
Medeiros “did commit acts which showed a deliberate disregard of
standards of behavior which the Employer had a right to expect of
her,” such that Medeiros “was discharged for misconduct connected
with . . . work,” and (2) the circuit court erred in entering its

order affirming Decision No. 0001888 and the accompanying final

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judgment because of the foregoing inconsistency between the
Appeals Officer's FOFs and conclusion of law (COL). We disagree.
AL *Disquats 2 " =

‘The cl

 

r and unambiguous language of HRS § 383-30
(1993) states that an individual is disqualified from receiving
benefits under Hawai'i unemployment security law when the
employee is discharged for misconduct connected with work.
specifically, section 383-30 provides:

Disqualification for benefita. An individual shell be
Giequalified fer benefits:

 

(2) Discharge or suspension for misconduct. For any week
prior to October 1, 1989, in which the individual hee
Been discharged for mis on ‘sith

 

Ges coneinsing until the individual has, subsequent to
the week in which the discharge occurred, been
Enployed for at least five consecutive weeks of
Geploynent.. For the week in which the individual has
Been Zuspendes for misconduct connected with work and
fer net ess than one or more than four consecutive
Necks of unemployment which insediately follow such
Meck, ss ceternined in each case in accordance «ith
the derloveness of the misconduct. For the purposes
Of this paragraph, “weeks of exployment” means all
Chose weeks within each of which the individual has
performed services inemployment for not less than two
Says or four noure per week, for one or more

SeBiojers, whether or not such employers are subject
fortis chapters For any week besinning on and after
Sceober 1, 1989; in which the individual has been
Gischarged for misconauct connected with wo!

Gntil the individual has, subsequent to the week in
hich the discharge occurred, been paid wages in
Covered employment equal to not less than five times
the indiviguel's weekly benefit amount ag determined
under section 383-22(b)

 

 

 

 

 

 

(Emphasis added.) The statute’s lack of ambiguity is both
confirmed and explained by a review of its statutory history

within the context of Hawai'i unemployment security law. As set

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forth below, this history shows that the intent of the
unemployment benefits provisions is to pay benefits only to those
claimants who became involuntarily unemployed through no fault of
their own,
1. HRS § 383-30(2) Prior to 1976
Prior to 1976, HRS § 383-30(2)* allowed individuals
discharged for misconduct to receive unemployment benefits after
waiting out a minimum disqualification period of three weeks, and
which allowed those suspended for misconduct to receive benefits
without any disqualification period.*
2. The 1976 Amendment to HRS § 383-30(2)
In 1976, Section 383-30(2) was amended by Act 157 of
the Session Laws of Hawai'i of 1976 to provide that an individual
be disqualified for benefits:

For the week in which he [or she) has been discharged or suspended
for misconduct connected with his (oF Ref] work, and continuing
until he [or she] tas, subsequent to the week in which the
Gischarge or suspension occurred, been employed for at least five
consecutive weeks of employment.” For the purposes of thi:
Subsection, “weeks of employment” means all those weeks within
each of which he [or she] has performed services in employment for
hot ess than two days or four hours per week, for one oF more

 

        

 

“The pre-1976 HRS § 383-30(2) provided that an individual was

dinqualified for benetite:
For the week in which he has been discharged for misconduct
connected with his work and for not less than two or more chan
Seven consecutive wocks of unemployment which inmediately follow
Such week, as determined in each case in accordance with the
Seriousness of the misconduct

HRS § 383-3012) (1968)

* In 1973, this court held thet the words “discharged for misconduct” as
then provided for by HRS 3€3-30(2) did not include suspension for misconduct
jateon Terminals, te. a, 54 Haw. 563, 568, 512 P24 1, 3 (1993)

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‘employers, whether of not such employers are subject to this
chapter

1976 Haw. Sess. L. Act 157, § 2 at 293. The effect of the 1976
amendnent to HRS § 363-30 was to narrow the scope of unemployment
benefits coverage by expanding the minimum disqualification
period for receiving unemployment benefits to five weeks when an
individual was discharged or suspended for misconduct connected
with work.

Act 157 arose out of Senate Bill (SB) 2326-76, entitled
“A Bill for an Act Relating to Employment Security." In
explaining the purposes of $8 2326, the Senate Hunan Resources
Committee stated as follows:

‘The purpose of this bill ‘s to make several amendnents to the
inenpleyment Conpensation Law to engure that benefits are paid
pely te those claimants ho are au ef 1
fe daule of their oun, co provide the seans to detect and prevent
Pizodutent claims, and to provide adequate financing of the
Unemployment Insurance Trust Fund to restore its solvency.

‘The specific proposals are

2. to amend the provisions for disqualification due to voluntary
Separation from exployment without good cause (Section 303-30(11),
Gigeherge or suspension for misconduct (Section 383-30(2)), end
faliure wiehout good cause to apply for oF accept suitable’ work
{Section 283-30(8)) in order to require an individual to requality
for benefits by beconing employed for # minimum of five
Consecutive weeks subsequent to the disqualification, and then
Being seperated from such subsequent employment under non~
Slaquelitying conditions, Under the present law, an individual
Sisduslified for any ef the aforenentiones reasons may not 4ré
Benefits for three to elght weeks; however, after serving his [or
Ret] ‘sisgualificstion period, the indiviaual may then draw his [or
her] full benefit entitlesent, if he [or she] is otherwise

 

   

 

MEjbie co'se so. dhe intent of the law is to pay benefits to
workers who axe involuntarily unemploved, Under the proposed
‘GEendeent. an indivicual who caused bis Tor_her| un unemploveent

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bis for her) attachaant to che labor force by working subsequent
Sen. Stand. Comm. Rep. No. 352-76, in 1976 Senate Journal, at
1037-38 (emphases added). The House Labor and Public Employment
Committee similarly noted that the disqualification provisions
for misconduct and voluntary separation were being amended to
require “unemployment insurance claimants to work five
consecutive weeks in order to requalify for benefits if they
voluntarily quit their jobs without good cause, were suspended or
fired for misconduct or failed to apply for suitable work” in
order to “correct weaknesses in benefit provisions.” Hse. Stand.
comm. Rep. No. 776-76, in 1976 House Journal, at 1647 (emphasis
added). The report added:

[B)ecause the State's unenployzent program was established to
aitigate the effects of susden or extended unemployment on the
involuntarily onenployed, si howl
‘Ausonatie fay the eorker who-by bis actions. creates his own

Stemotsvmene
‘Id, at 1648 (enphasis added).

‘The statutory history of HRS § 383-30(2) is thus
consistent with the plain language of the statute: individuals
discharged for misconduct connected with work are disqualified
from receiving unemployment benefits, at least until the

statutory disqualification period has been satisfied.

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B. HAR 12-5-51,
As noted above in note 1, HAR § 12-5-51(c), adopted to

define “misconduct connected with work” under HRS § 383-30(2),

 

provides that:

Misconduct connected with work consists of actions which
Show a uiliol or wanton disregard of the gmplover's
interests, such a

digtesard of the ecandards of behavior which the empiover
hess right to expect of an-emploves, or carelessness, or
negligence of auch a degree or Fecurrence es to show
wrongful intent or evil design. Mere inefficiency,
Unsatisfactory conduct, pose performance because of
Inspility or incapacity, isolated instances of ordinary
negligence or inadvertence, or good-faith errors in judgment

or discretion are not misconduct. The alsconduct shall be

 

 

 

  

(Emphases added.)

HAR § 125-51 (d) in turn provides that, in determining
whether an individual's act constituted “misconduct” for
unemployment insurance purposes, the Director shall consider any
relevant evidence presented which relates to:

(1) Employee's reascns for the act or omission, and efforts to
avoid the act or failure to act

(2) The relevant circunstances of the case and any causative
effort therefrom upon the employee's actions:

(3) The nature and inportance to the employer of the offended
Interest of the exployers

(4) Any lawful and reasonable company po

(8) Empuoyer's actions to curtail or pre
objectionsble conduct; ana

(6) The nature of the act or failure to act.

  

  

cy of customs
nt, if possible, the

 

‘An analysis of the factors listed in HAR § 12-5-51(d)
shows that Medeiros’s actions constituted “misconduct” for

unemployment insurance purpo:

 

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Employee's reasons for the act or omission, and efforts
te avoid the act or failure to act.

The Appeals Officer found that Medeiros’s conduct was
prompted by a change in her work schedule, which she attributed
to her co-worker’s complaint to management about work schedules.
Medeiros’s statement, “It’s all because of you,” accompanying her
physical contact with her co-worker's neck and throat, further
shows that Nedeiros’s reason for acting was that she blamed her
co-worker for a change in her work schedule with which she was

displeased.

 

The Appeals Officer found that Medeiros’s conduct was

related to the change in her work schedule, which became
effective on the day of the incident. The Appeals officer also
found that change in work schedules was occasioned by her co-
worker’s complaint to management.

3. The nature and importance to the employer of the
offended interest of the employer.

As noted above in note 2, the Employer had a “zero
tolerance for violence in the workplace” policy, which policy vas
distributed to employees, including Medeiros, in 1998. This
policy defined “violence” as follows:

Miolence is defined to include but is not limited t
physically harming another, shoving, pushing, harassment,
verbal or physical intimidstion, ceereion, brandishing

weapons, and/or threats or talk of violence... . Ne talk

 

 

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ef violence, including iokina sbout vislence, will be
Eolerated:

(Emphases added.) The policy further provided the following

warning: “Any employee who is found to have engaged in any

intimidation, harassment, or threat of violence to another
employee will be subject to termination.” (Emphasis added.) The

importance of the Employer's “zero tolerance for viclence in the
workplace” policy cannot be disputed.
4, Any awful and reasonable company policy or custom.
Tt cannot reasonably be disputed that the Employer's
‘zero tolerance for violence in the workplace” policy is a lawful
and reasonable conpany policy.

5. Employer's actions to curtail or protect, if possible,
the objectionable conduct.

 

‘The Employer’s “zero tolerance for vii

 

nce in the
workplace” policy was distributed to all employees, including
Medeiros, in 1998, and Medeiros acknowledged receiving it.

6. The nature of the act or failure to act.

Medeiros, then a full-time, senior restaurant hostess,
does not dispute the Appeals Officer's finding that she
approached her co-worker, @ part-time restaurant bus person, from
behind in the workplace, placed her hands around her co-worker’ s
neck and throat, and shook her lightly for approximately five
seconds, while saying, “It’s all because of you.” Medeiros also

does not dispute that her above-described actions were

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intentional with respect to her conduct (i.e, that she intended
to place her hands around the co-workers neck and throat).
Although Medeiros does not dispute her objective conduct, she
contends that because she did not subjectively intend to harm or
threaten her co-worker as a result of that conduct, she cannot be
said to have wilfully or wantonly disregarded her Enployer’s
interest in eliminating violence in the workplace. We disagree
because, as set forth in this court's prior decisions and
discussed below, the level of culpability required to show wilful
or wanton disregard is not subjective intent, but conscious
@isregard of a known (or which should have been known) risk with
respect to @ result of the conduct.

In summary, an analysis of the HAR § 12-5-S1(d) factors
shows that Medeiros’ s actions constituted “misconduct connected
with work.” We thus agree with the Appeals Officer's conclusion
that Medeiros’s conduct demonstrated a wilful or wanton disregard
for the standards of behavior which the Employer had a right to
expect of Medeiros, and constituted misconduct connected with
work. We are not persuaded by the dissent’s contention that the
Appeals Officer's findings that the incident in question was “an
isolated instance” and “constituted poor judgment” necessarily
result in Medeiros’s conduct falling within instances enumerated
in HAR § 12-5-51(c) of what does not constitute misconduct. ‘The

portion of this rule which Medeiros refers to

 

not constituting

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misconduct is “isolated instances of ordinary negligence or
inadvertence, or good faith errors in judgment or discretion,”

both situations of simple negligence or mistake. The nature of

 

Medeiros’s conduct, however, was not negligence; as discussed
herein, Medeiros admitted that she intended the physical contact

with her co-worker (and does not deny telling the co-worke!

 

“It's all because of you,” while placing both of her hands around
her co-worker’s neck and throat, and lightly shaking her).
‘Therefore, although Medeiros’s conduct did represent an isolated
Ancident, it nevertheless fits within the definition of
“misconduct connected with work” set forth in HAR § 12-5-51, as
the Appeals Officer correctly concluded.
D. vant Prior Decisions is Ci

‘This court has on two previous occasions considered the
issue of “misconduct connected with work" under HAR § 12-5-51 as
related to disqualification for unemployment benefits pursuant to
HRS § 363-30(2). See Camara v, Agsalud, 67 Haw. 212, 685 P.2¢
794 (1984); Hardin v. Akiba, @4 Hawai‘ 305, 933 P.2d 1339
(1997). A comparison and contrast of those cases to the instant
case, set forth below, also persuades us that Medeiros was
properly found to be disqualified from unemployment benefits due

to having been discharged for misconduct connected with work.

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Camara v. Agsalud

 

We respectfully submit that the dissent’s reliance upon
Camara v. Aasalud is misplaced, as Camara is distinguishable. In
Camara, the employee was discharged because he was involved in a

traffic accident. Camai

 

67 Haw. 212, 213, 685 P.2d 794, 795.
‘The employee, while trying to pass a slow-moving truck, crossed
the center line on the highway near an intersection. Id. The
employee felt that he could safely pass the truck: his view in
front was unobstructed, there was no oncoming traffic, and the
center line was about to change from solid to broken. Id, at
213-14, 685 P.2d at 795-86. However, @ collision ensued when the

truck made an unsignalled left turn‘ at the intersection. Id.

 

The employee was discharged and subsequently denied unemployment
insurance benefits based upon a decision of the Appeals officer
(also known as “referee”) for unemployment compensation appeals
that the employee “acted in wilful disregard of the mmployer’s
best interest when he proceeded to cross the solid line.” Id. at
214, 685 P.2d at 796. The circuit court reversed the Appeals
Officer’s decision, stating that (1) the Appeals Officer’s
finding that the employee believed that he could safely pass the

truck was inconsistent with his (Appeals Officer’s) determination

‘the truck driver had activated his left turn signal Light but he later
found out that the signal light was incperable. 1g. at 214, 685 P.2d at 796

Also, the Appeals Officer found that the truck was partially at fauit for the
Secident because it was slow-moving. 2d.

 

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that the employee acted in wilful disregard of the Employer's

inte:

 

1st, and (2) the employee's single driving error does not
demonstrate a wanton disregard of the employer's interests absent
other evidence of poor driving or other misconduct connected with
work, Id at 214-15, 685 P.2d at 796. Under these facts, we
agreed with the circuit court that the Appeals Officer’ s
conclusion was inconsistent with and not supported by the
undisputed facts. Id. at 217, 685 P.2d at 798, Me further
stated that the Appeals Officer’s decision was not consistent
with the beneficent and humane purpose of the unemployment
compensation statute to relieve the stress of economic insecurity
due to unemployment, and held that the statute should be
Liberally construed to promote the intended legislative policy.
Id. at 218, 685 P.2d at 798.

In affirming the circuit court's reversal of the
Appeals Officer’s decision, we noted that “(alt best, the
Employee’s action was an isolated instance of negligence or a
good-faith error in judgment.” Id. We then specifically limited

our holding to the negligence facts of Camara as follows: “We

 

hold that Employee’s actions does not approach the degree of
negligence or carelessness to show wrongful intent or evil design
amounting to misconduct.” Id, at 219, 685 P.2d at 798. In other
words, Camara stands only for the proposition that simple

negligence does not constitute misconduct sufficient to

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disqualify an employee for unemployment benefits under HRS § 383-
30 and HAR § 12-5-51.

The dissent makes much of the beneficent intent and
rule of liberal construction cited in Camara. While we agre
that, as a general matter, the unemployment benefits statute does
evince a beneficent intent and should be liberally construed,
neither such intent nor liberal construction trumps the clear and
unambiguous language of HRS § 383-30(2) that an individual is
disqualified from receiving unemployment benefits when the
individual is discharged for misconduct connected with work. The
Intermediate Court of Appeals spoke to this point in Keanini v.
Akiba, 93 Hawai'i 75, 86, 996 P.2d 280, 291 (App. 2000):

With respect to the legislative purpose, Claimant cites the
general principle that the “Hewai't Unesployment Security Law
Should be liberally construed in order Co achieve the beneficent
legisiative purpose of relief of workers under stress of

(yoemployment: though ne fault of their oun.” Berkoff v, Waseaaya,
55 Haw. 22, 27, 514 P-2d 575, 579 (1973) {internal quotation macke
find citation omitted). We agree; however, based upon the
foregoing discussion, Claizant cannot be said to be without fault.

(Emphases added.) We concur; where a claimant, such as Medeiros,

is found to have been discharged for misconduct connected with
work, neither the beneficent intent of the unemployment benefits
statute nor the rule of liberal construction, trumps the clear

and unambiguous language of HRS 383-30(2) that the individual is

disqualified from receiving unemployment benefits.’

 

> While Camara is thus distinguishable on its facts, we take this
opportunity to reconfirm Canara’ s holdings that (1) @ single act of negligence
(Continued. --)

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‘Thirteen years after Camara, this court revisited the
issue of “misconduct connected with work” in Hardin v. Akiba, 64

Hawai'i 305, 933 P.2d 1339 (1997). In Hardin, an employee w:

 

discharged on the basis of a single unexcused absence after
“numerous counseling sessions and notices from (her employer}
regarding her poor dependability.” Id. at 318, 933 P.2d at 1352.
lihen she applied for unemployment benefits, the Director ruled
that she was disqualified due to having voluntarily abandoned her
position without compelling reason. Id. at 309, 933 P.2d at
1343. The circuit court reversed, holding that the employee had
in fact been discharged due to unsatisfactory performance and had
not voluntarily separated. Id, The circuit court also held that
because her discharge was not due to misconduct, she was not
disqualified from receiving benefits. Id.

on appeal, this court vacated the circuit court’s
decision and directed that judgnent be entered in favor of the
employer, holding that the employee had been discharged due to
misconduct connected with work pursuant to HRS § 383-30(2) and
HAR § 12-5-51(c), and was thus disqualified from receiving

{.. continued)

in driving @ moter vehicle does not demonstrate a wanton disregard of the
enployer's interests absent cther evidence of poor driving or other misconduct
SGhnegeed with werk, and (2) our unemployment conpensation statute should, as
Sogeneral matter, be liberally construed ro pronote the intended legislative
Policy of relieving the stress of economic insecurity due to unemployrent
Shieh occurs through no fault of the employee.

   

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benefits. Id. at 318, 933 P.2d at 1352. The Hardin court set

forth the basis for its decision as follows:

 

We agree with the (Director) that (the employee), after nunerous
SSonseling sessions and notices from [the employer] regarding her
poor dependability, knew or should have known that her job would
Bein Jeopardy if she chose to leave work early without peraission
fon June 11, 1994. “Accordingly, we hold that [the employee's)
Conscious decision to leave work early on June 11 in the face of
Ehis risk constituted an unexcused absence which demonstrated =
Naliful or wanton disregard of the employer's snterests(,]" HAR §
Les5eS1 (ce), thereby disqualifying [ner] for unemployment’ insurance
benefits, ‘Consequently, we also hold that the circuit court’ s
finding that [she] was not discharged for misconduct connected
with work was clearly erroneous

 

 

in

‘The Hardin facts are different from the instant case in
that Hardin had numerous counseling sessions regarding her prior
dependability before the final incident of leaving work early
without permission which led to her termination and subsequent
disqualification from receiving unemployment benefits, while
Medeiros had no such history. The facts are similar, however, to
the extent that the misconduct involved intentional actions by
the employee. Considering the similarity, and the fact that the
misconduct by Medeiros (violation of the Employer’s “zero
tolerance for violence in the workplace” policy) is at least as
serious (and presumably more so) as the misconduct in Hardin
(poor dependability), we believe that it is appropriate to apply

the Hardin rationale to this ca

 

Applying the Hardin rationale to the facts here, we
conclude that Medeiros “knew or should have known that her job
would be in jeopardy” if she violated her employer’s zero

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tolerance policy regarding violence in the workplace.*
Medeiros consciously disregarded that risk when she approached
her co-worker from behind, placing her hands around her co-

worker

 

neck, and shaking her while saying, “It’s all because of
you" (i.e, blaming the co-worker for a change in the employees’
work schedule), even if Medeiros did not subjectively intend any
physical harm and the co-worker did not subjectively perceive any
physical threat. In its best Light, Medeiros’s conduct
constituted a “joke about violence,” which conduct was in
violation of the Employer's zero tolerance for violence in the
workplace policy, as found by the Appeals Officer. Consequently,
Medeiros’s conduct showed a wilful or wanton disregard of her
employer's interest in having a violence-free workplace, and was
in deliberate disregard of the standards of behavior which the
employer had a right to expect of an employee. AS such,
Medeizos’s conduct constituted misconduct connected with work, as
found by the Appeals Officer and affirmed by the circuit court.

Accordingly, we hold that Medeiros’s misconduct connected with

 

We note, however, that an employer may aot, by way of a policy or
otherwise, unilaterally narrow the qualifications for unenployment benefits or
Fedefine & legal term of art such ag "alsconduct connected with work.”
Songales v. Industrial Commission of the State of Colorade, 740 P.24'999, 1003,
(Colo. 1961] (adoption of such an approach would in effect grent employers
ultimate authority to determine that gone claimants automatically should not
Feceive unemployment. compensation benefits"). To put it plainly, an
exployer's policy (and evidence of its distribution to the claimant] can be
Felevant in identifying (1) the existence and nature of an employer's interest
Under HAR § 12-5-81(c)7 and (2) an employee's awareness of that interest, but

‘onployes’e violation of such policy is not in itself sufficient co Justify
a tinding of misconduct connected with work #0 a8 to disqualify @ claimant for
Unemployment compensation benefits.

 

 

 

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work disqualified her from receiving unemployment benefits
pursuant to HRS § 383-30(2).
IV. cone)
Based on the foregoing analysis, we affirm the circuit
court’s (1) May 4, 2001 order affirming Decision No. 0001888 and

(2) May 4, 2002 f4nal judgment.

on the briefs:

Robert J. Crudele, Praucter Or euattiey aenac.

Brian J. De Lima,

foward #. Shizoms, and
wid He Lawton for

appel lant-appel ant

Sh8an €: Medeiros Yorme, aaa Be

Li-ann Yamashiro,
Deputy Attorney General
for appellee-appellee
Director of Labor and
Industrial Relations,
State of Hawai't

 

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