### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON June 3, 2002

Session
CAROLYN E. PHELPS v. MICHA EL MCGILL, COMM ISSIONER OF THE TENNESSEE DEPARTMENT OF LABOR AND WORKFO RCE

DEVELOPMENT, ET AL 

### . A Direct Appeal from the Chancery Court for Madison County No. 57754 The Honorable Joe C. Morris, Chancellor

No. W2002-00018-COA-R3-CV - Filed July 9, 2002

Plaintiff was discharged from her

employ ment for making a

false statement concerning her health in her applicat ion for employment t o defendant-employ er. The false statement was discovered some year s after her employ ment commenced

when she sustained

an injury at work w

hich had no relation to the false answers in the application. Plaintiff was denied unemploy

ment bene

fits because of work-related

misconduct which was affirmed by the Board of Review. Plaintiff filed a Petition for Judicial Review in the chancery court. The chancery

court affirmed the Board of Review , and plaintiff appeals . We affir

m. Tenn. R. App.P. 3; Appe al as of Rig ht; Judgme

nt of the C hancery C ourt Aff irmed and Remanded

W. F RANK C RAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. H IGHERS , J. and D AVID R. F ARMER , J., joined. Michael G. Tollison, Humboldt, For Appellant, Carolyn E. Phelps

Paul G. Summers , Attorney General and Reporter, War ren A. Jasper, Assistant Attorney Genera l, for Appe llee, Michael McG

ill P. Allen Phillips, Jackson, For Appellee, Maytag Jackson

OPINION
Plaintiff, Carolyn Phelps (here inafter Ms. Phelps), filed a petition against Michael McGill, Commissioner of the Te

nnessee Departm ent of Lab or and Workforce Development and May tag Jackson for judicial review of the Board of Revie w’s decision denying

her unemployment compensation.-2-

According to the findings of fact adopted by the Board of Review, Ms. Phelps workedon the production line for Maytag from March 9, 1998, un til she wa s termina ted on May

9, 2000. Ms

. Phelps’ job required her to tilt each dishwasher on the

assembly line. Shortly before he

r termination from Maytag , Ms. Phelps reported to Maytag that a dishwasher had

fallen on her twice during the
sameday, and

that she had injured her back. After receiving some medical treatment and being off work for a period of t

ime , she returned to work with “light duty ” restrictions. She also hired an at to rn ey t o h el p h er fi le a w or ke r’ s c om pe ns at io n c la im ag ai ns t M ayt ag fo r t hi s i nj ur y. During litigati on on the w orker’ s compens ation cla im, May tag reviewed M s. Phelps’ “Personal Medical History” form, whic h she had completed on February 25, 1998 as a condition of employ ment, and discovered that Ms. Phelps had not disclosed a previous back injury she sustaine d in 1993. This injury required Ms. Phelps to un de rg o s ev er al da ys of tests, o ne of whi ch resul ted in Ms. Phelps having headaches. As a result of the 1993 back injury, Ms. Phelps was informed that she had a slightly bulg ing disk in her back which, according to her phy sician, constitute d a 5% disa bility ratin g. Maytag

subsequently terminated Ms. Phelps for f ailure to report the 1993 back injury. The medical history form

that Ms. Phelps signed contained a provision which stated that “any omission, misstatemento r falsi fication of information is grounds for immediate discharg e based on dishonesty.”

After she was terminated, Ms. Phelps filed an Initial Claim for U nemployment Compensa

tio n withthe State of Tennesseeon May 9, 2000. The Tennessee Department of L abor and Workforce Development

(hereinafter “TDOL

” or “Agency

”) mailed May

tag a “Notice of Claim Filed and Request for SeparationInformation” on May 11, 2000. May

tag responded, via fax, on May 11, 2000 and, in its response, stated that Ms. Phelps was discharged for falsify ing a medical record form that was part of her application paperwork. By letter dated M ay 22, 2000, the Agency informed Ms. Phelps that her claim for unemployment

benefits was denied. The letter also stated that the reason f

or its den ial of the claim
was that the Agency

considered Ms. Phelps’ actions in falsify ing her medical record to be workrelated misconduct under T.C.A. § 50-7-303. Ms. Phelps appealed this decision and appeared before the TDOL Appeals Tribunal ( hereinafter “Tribunal”) on June 22, 2000 for an evidentiary

hearin g. The Tribunal mailed its decision on June 22, 2000, affirming the Agency ’s decision. Ms. Phelps then appealed to the TDOL B oard of Review (hereinafter “ Board”) and the Board, by letter date d August 1 , 2000, af

firmed th e decisi on of the T

ribunal.

The Board found that, as a matter of law, employ ees owe a duty

to their e

mploy ers to truthfull y and accurately

complete company records. The Board also found that the evidence was sufficient to sho w th at the injury she received in 1993 was significant, and that Ms. Phelps either knew or should h ave know n that she had a duty

to provide

her empl oye

r with this inform ation. Las tl y, the Board found that her failure to repor t the injury

violated a duty owed to her employer and
was “work connected misconduct” under T.C.A. § 50-7-303(a)(2), prohibiting her from receiving unemployment compensation.-3-

On September 1, 2000, Ms. Phelps filed a “Petition for Judicial Review,” pursuant to T.C.A. § 50-7-101 et seq. and T.C.A. § 4-5-101 et seq., in the Chan cery Court of Ma

dison Count

y a gainst bothMaytag

and Michael Magill, Commissioner of the TDOL . By orde r entered December 6, 2001, the trial court affirmed the Board’s dec ision de nying Ms. Phelps’s claim for unemployment compensation. Ms. Phelps a ppeals a nd prese nts the following three (3) issues as stated in her brief:

I. Is a cl a imant disqu alified f or “misco nduct con

nected with such claimant’s work” for a misstatement contained in an employment

applica t ion since the applicant is not an employee and is not performing any work for the employ er while com

pleting an applic ation for

employ ment.

II. Whethe r the definition of the disqualifying event of “m isco nduct

connected with such claimant’s work” under T.C.A. § 50-7- 303(a)(2) requires a causa l connection between any misconduct and the e mployee’s per

formance of work.

III. Whether

petitione

r’s missta

tement in her employment application is de minimi

s as the respondent

employer suffered no injury or prejudice

from the misstatement of petitioner.

The standar

d of revi ew for a

dmin istrat ive decisions involving claims for unemploy ment compensation is set out in T.C.A. § 50-7-304 (i)(2) (2001), which we quote:

(2) The chancellor may

affirm the decision of the board or the chancellor

may reve r s e, rema nd or modif

y th e decisi on if the r

ights of the petitioner have b een prejudiced because the administrative findings, inferences, conclusions or decisions are : (A) I n violation

of constitutional or

statutory provision s; (B ) In ex ce ss of

th e s ta tu to ry a ut ho ri ty o f t he ag en cy; (C) Made upon unlawful procedure; (D) Arbitra

ry or capr icious or characterized by

abuse of discretion or clearly unw arranted exercise of discretion; or (E) Unsupported by evide nce which is both substantial and material in the light of the entire record.

T.C.A

. § 50-7 -304 (2001) further specifies that “[i]n determining the substantiality of evidence, the chancellor sh all take into account whatever in the re cord fa

irly detrac ts from its w eight, butthe chancellor sh all not sub stitute the chancellor’s judgment for that of the board of review as to the weight of the evidence on questions of fact.” T.C.A. § 50-7-304 (i)(3) (2001).-4-

The Court of Appeals applies the s ame standar d as the trial court in reviewing trial court decisions in unemployment compensation case s. See Ford v. Traughber , 813 S.W.2d 141 (Tenn. Ct. App. 1991). Substantial and material evidence has been defined as any

“relevant evidence which
a reaso nable min d might a ccept to support a rationa l conclus ion and wh

ich furn ishes a r easonab ly sound basis for the action being reviewed.” Frogge v. Davenpor t , 906 S.W.2d 9 20, 922 (T enn. Ct. Ap p. 1995) (citi ng Southern R. Co. v. State Bd. of Equalization , 682 S.W.2d 196, 199 (Tenn

. 1984)). In Sabastian v. Bible , 649 S.W.2d 593 (Tenn. Ct. App. 1983), this Court said:

In order to sustai n the Boa rd of Review’s application of the provisions of the statute, we need not f ind that its construction is the only reasona ble one or

even tha t it is the re sult we would have reached had the question arisen in the firs t instanc e in a judicial procee ding. The reviewing court’s function is sever ely limited. All that is needed to support

the commission’s interpretation is that it has warrant in the record and a re asonable basis in law.

Id. at 594 -95 (ci ting Cawthron v. Scott , 400 S.W.2d 240, 242 (Tenn. 1966)).

We will now a

ddress the issues.

Ms. Phelps argues in her first and second issues that she c annot be disqualified fro m rece iving unemployment benefits for misconduct connected with her work because she was no t working for Maytag

at the time she completed her “Personal Medical History ” form and because the definition of “misconduct connected with [her] work” requires a ca usal connection between any misconduct

and her p erforma

nce of w ork. We dis agree . T.C.A. § 5 0-7-303( a)(2) p rovides i n pertine nt part: (a) DISQ

UALI FYI NG EVENT S. A claima nt s h all be disqualified for bene fits:

* * * (2) If the administrator finds that a claimant has been discharged from such claim ant's most recent work for misconduct connected with such claim ant's work , such disqualification shall be for the duration of the ensuing period of

unemployment

and until such claimant has secured subsequent

employment covered by an unemployment

compensation law of this state. . . .
Id

. (emp hasi s added). Although this statute does not define “misconduct connecte d with such claimant’s work,” our Supreme Court, in dealing with the meaning of this phrase, said:-5- [A]n essentia l element of ‘misco nduct con

nected with the wor

k’ is a breach of duty owed to the emplo ye r, as distinguishe d from soc iety in gene ral.

Weaver v. Wallace , 565 S .W.2 d 867, 870 (T enn. 1 978)( citi ng Dettere r v. Unemploy

ment Compensation Board of Review , 168 Pa

. Super. 29 1, 77 A.2d 886 (1951 ); Boynton Cab Co. v. Neubeck , 237 Wis. 249, 296 N.W. 636 (Wis. 1941)). The Weaver Court, in reaching its decision, quoted with approval 81 C.J.S. Social Se curity § 222 (199 7) which

provides : Depending on the specific provisions of the statute, in ord er to disqualify an employee

for unemployment bene

fits his misconduct must be in the c ourse of hi

s most rec ent work, connec ted with his work, or connected with the employment . Under s uch provisions, it is not necessary

that the act of

misconduct

occur during the working hours or at the place of employ ment, so lo ng as it

is connected with the employ

ment, and the fac t that misc onduct r ela tes to the p

rivate life o r off-du ty a

ctivities of the em

ploy ee does n ot neces sarily preclude its having a connection with the employ ment requisite to bar the right to compensation. Ordinarily , however, an emplo yee's conduct off the working premises or outside the course

or scope of his employment

is not cons idered a s miscondu ct inc onnectio n with employ ment.
Id . (emphasis added).
Furthermore, this Court, in Burrow v. Neal , C.A. No. 100, 1986 Tenn. App. LEXI S 3529 at *3-5 (Tenn. Ct. App. Dec. 12, 1986), in dealing with this issue, said:

The proo f shows that claimant stated on his employment application that he hadno past or present back injuries. However, claimant had a back problem dating back seve n yearsto his military service regarding which

he had received conflicting medic al opinions while he was in the service. There is tes timony in t he record that claima nt t old an ag ent of NA P that he ha

d not divulg ed this information on his a pplication because he knew he would not have gotten the job ha

d he done so. The e

mploy me nt application signed by claimant clearly

states that

misrepresentations of

facts will subject him to immediate discharge.

We find that the Board of Review' s determination that the claimant was properly

discharged for misconduct connecte d withhis work a nd th erefore disqualified from rece iving unemployment compensation benefits was supported by the evidence.-6-

In t he pr es en t c as e, it is un di sp ut ed th at Ms . P he lp s h ad a p re vi ou s b ac k i nj ur y, which was work-related , and, in two places on the form, denied such injury . It is further undisputed that the form contained a provision stating that “any omission, misstatement or falsification of information is grounds for immediate discharge based on dishon e sty .” Althou gh Ms. Phe lps was no t actuall

y employed withMa yta g a t t he ti me sh e c om pl et ed he r “ Pe rs on al Me di ca l H is to ry” form, we find that she nevertheless owed a duty to Maytag

to fully disclose her medica l history on

the form. This document was to be tru thfully compl eted as a condition

of employ

ment with M ay

tag, and was, theref ore, a c onnec tion to her emplo yment wit h Maytag.

We agree with th e Weaver Court’s de finition of “misconduct connected with such claimant’s work,” as well as this Court’s previous treatment of these issues and, therefore, find that Ms. Phelps committed work-related misconduct by failing to disclose her previous work-related ba ck injury on the “Per sonal Med

ical Histo ry ” form.

Las tl y, Ms. Phelps a

rgues t hat her m isstateme nt in her e

mploy ment appl icati on should be considered de minimi

s be cause i t did not mat

erially interfe re with Ms . Phelps’ e

mploy ment. Ms. Phelps relies on

this Court’ s decisio n in Armstrong v. Neel , 725 S.W.2d 953, 957 (Tenn. Ct. App. 1986), where we recognized the de minimi s rationale and held that an unemploy ment claimant was notdisqualif

ied afte r threa tening t o “whip” a co-wo

rker when it was s hown t hat the co-worker brought on the altercation which did not materially interfere with the work. Ms. Phelps’ reliance on Armstrong is misplaced. In Armstrong , the comments were directed towar d a co-worker, rather than toward a supervisor of the company in a work environment. However, in the present case, Ms. Phelps’ action, b y f

ailing to disclose her previous work-related back injury on the form, was directed towardhe r e mp lo ye r, Ma ytag , and results in “deliberate violations or disregard of standards of behavior which the employer

has the right to expect of his employ ee.” Armstrong v. Neel , 725 S.W.2d 953, 9 56 (Te nn. C t. App . 1986 )(quo ting Boynton Cab Co. v. Neubeck , 237 Wis. 249, 296 N.W. 636, 640 (1941)). We do not consider Ms. Phelps’ conduct to be so insignificant as to be de minimis

. Ac co rd in gl y, the order of the trial court is affirmed, and this ca se is remande d to the trial court for such further proceeding s as may be ne ce ss ar y. Costs of the appeal are assessed aga inst the ap pe ll an t, Ca ro lyn E. Ph el ps , a nd he r s ur et y.

__________________________________________ W. FRA NK CRAWFORD, PRE SIDING JUDGE, W.S

.