HODGE v US SECURITY ASSOCIATES, INC

Docket No. 149984. Decided February 6, 2015.

Carnice Hodge brought an action in the Wayne Circuit Court to appeal the 

Unemployment Insurance Agency’s determination that she was disqualified from receiving

unemployment benefits under MCL 421.29(1)(b), a provision of the Michigan Employment 

Security Act (MESA) that disallows benefits for individuals discharged for work-related 

misconduct, after respondent U.S. Security Associates, Inc., terminated her employment as a 

security guard at Detroit Metropolitan Wayne County Airport. Claimant was fired for accessing 

publicly available flight departure information on a computer near her post at the request of a 

traveler in violation of respondent’s policy regarding the unauthorized use of client equipment. 

Administrative Law Judge Lawrence E. Hollens affirmed the denial of benefits, as did the 

Michigan Compensation Appellate Commission (MCAC), but the Wayne Circuit Court, Robert 

L. Ziolkowski, J., reversed. The Court of Appeals, O’CONNELL, P.J., and WILDER and METER, 

JJ., granted respondent’s application for leave to appeal and affirmed, holding that the circuit 

court had not erred by concluding as a matter of law that claimant’s behavior was a good-faith 

error in judgment rather than misconduct under MCL 421.29(1)(b). 306 Mich App 139 (2014).

In a unanimous opinion per curiam, the Supreme Court, in lieu of granting leave to 

appeal and without oral argument, held:

The Wayne Circuit Court and the Court of Appeals applied an incorrect standard of 

review by substituting their own assessment of the relative severity of claimant’s violation of her 

employer’s rules for the assessment of the MCAC. Because the MCAC’s assessment of the 

claimant’s conduct was made within the correct legal framework and was therefore authorized 

by law and not contrary to law, the courts below improperly reweighed the evidence in order to 

reach a different assessment in violation of Const 1963, art 6, § 28 and MCL 421.38.

Court of Appeals judgment reversed; MCAC judgment reinstated.

©2015 State of Michigan

Michigan Supreme Court

Lansing, Michigan

Syllabus Chief Justice:

Robert P. Young, Jr.

Justices:

Stephen J. Markman

Mary Beth Kelly

Brian K. Zahra

Bridget M. McCormack

David F. Viviano

Richard H. Bernstein

This syllabus constitutes no part of the opinion of the Court but has been 

prepared by the Reporter of Decisions for the convenience of the reader.

Reporter of Decisions:

Corbin R. Davis
FILED February 6, 2015

S T A T E O F M I C H I G A N

SUPREME COURT

CARNICE HODGE,

Claimant-Appellee,

v No. 149984

U.S. SECURITY ASSOCIATES, INC.,

Respondent-Appellee,

and

DEPARTMENT OF LICENSING &

REGULATORY AFFAIRS/

UNEMPLOYMENT INSURANCE

AGENCY,

Appellant.

BEFORE THE ENTIRE BENCH

PER CURIAM.

In this case involving a claim for unemployment benefits, we must determine 

whether the lower courts applied the proper standard for reviewing determinations made 

by an administrative agency. Specifically, claimant was terminated from her 

Michigan Supreme Court

Lansing, Michigan

Opinion Chief Justice:

Robert P. Young, Jr.

Justices:

Stephen J. Markman

Mary Beth Kelly

Brian K. Zahra

Bridget M. McCormack

David F. Viviano

Richard H. Bernstein
2

employment for willfully violating her employer’s computer use policy. The state’s 

unemployment agency denied her claim for unemployment benefits and this decision was 

affirmed by an administrative law judge (ALJ). In turn, the Michigan Compensation 

Appellate Commission (MCAC) affirmed the ALJ’s decision, holding that the decision 

was made in conformity with the facts as developed at the hearing and properly applied 

the law to the facts. On appeal to the circuit court, however, the court concluded that,

because claimant violated her employer’s policy to assist a customer, the conduct did not 

warrant a denial of unemployment benefits. The Court of Appeals, in a published 

opinion, affirmed the circuit court, agreeing that claimant’s violation of her employer’s 

rules was not sufficiently egregious to deny the claimant benefits. 

We reverse the judgment of the Court of Appeals and we reinstate the judgment of 

the MCAC. Both the Wayne Circuit Court and the Court of Appeals applied an incorrect 

standard of review by substituting their own assessment of the relative severity of the 

claimant’s violation of her employer’s rules for the assessment of the MCAC. The 

MCAC’s assessment of the claimant’s conduct was made within the correct legal 

framework and, therefore, was authorized by law and was not contrary to law, and the 

courts below improperly reweighed the evidence in order to reach a different assessment 

in violation of Const 1963, art 6, § 28, and MCL 421.38(1).

I. BASIC FACTS AND PROCEEDINGS

Claimant, Carnice Hodge, was employed as a security guard with U.S. Security 

Associates, Inc (USSA). On November 11, 2008, shortly after being hired, Hodge signed 

an acknowledgement of USSA’s “Security Officer’s Guide,” which provided, in relevant 
3

part, that the “[u]nauthorized use of client facilities or equipment, including copiers, fax 

machines, computers, the internet, forklifts, and vehicles” may result in immediate 

termination. USSA had a contract to provide security at Detroit Metropolitan airport, and 

she was assigned to work at the airport. Despite acknowledgement of USSA’s “Security 

Officer’s Guide,” on January 27, 2011, Hodge accessed the airport’s computer system in 

order to assist a passenger by retrieving departure information. 

The parties agree to the following facts: (1) USSA had a policy that prohibited 

employees from accessing airport computers, (2) Hodge knew of this policy, (3) Hodge 

had violated this policy on some occasions in the past, (4) Hodge never received any 

instruction or approval to violate this policy, and (5) Hodge violated this policy on 

January 27, 2011 when she accessed the airport’s computer system in order to retrieve 

departure data for a passenger. 

Given these facts, the ALJ concluded that Hodge’s reason for using the airport 

computer was irrelevant because USSA’s policy prohibited computer access for any 

reason. The ALJ concluded that the unauthorized computer access constituted 

misconduct, disqualifying Hodge from benefits under MCL 421.29(1)(b), because Hodge

“was discharged for reasons which would constitute behavior beneath the standard the 

[e]mployer had reason to expect . . . .”1

 1 MCL 421.29(1) reads, in pertinent part:

(1) Except as provided in subsection (5), an individual is disqualified from 

receiving benefits if he or she:

* * *
4

The MCAC upheld that decision, ruling that the ALJ’s decision conformed to the 

facts as developed at the administrative hearing and that the ALJ properly applied the law 

to the facts.

II. APPLICABLE STANDARDS OF REVIEW

Michigan’s Constitution sets forth the guiding principles of how courts should 

review a decision of an administrative body. It provides:

All final decisions, findings, rulings and orders of any administrative 

officer or agency existing under the constitution or by law, which are 

judicial or quasi-judicial and affect private rights or licenses, shall be 

subject to direct review by the courts as provided by law. This review shall

include, as a minimum, the determination whether such final decisions, 

findings, rulings and orders are authorized by law; and, in cases in which a 

hearing is required, whether the same are supported by competent, material 

and substantial evidence on the whole record.[2]

Consistent with this provision, the Michigan Employment Security Act, 

MCL 421.1 et seq., expressly provides for the direct review of unemployment benefit 

claims. Specifically, MCL 421.34 addresses an appeal from an ALJ to the MCAC. 

MCL 421.38 then addresses an appeal from the MCAC to a circuit court:

 

(b) Was suspended or discharged for misconduct connected with the 

individual’s work or for intoxication while at work. [Emphasis added.] 

In Carter v Employment Sec Comm, 364 Mich 538, 541; 111 NW2d 817

(1961), this Court defined “misconduct” as including “such willful or wanton 

disregard of an employer's interests as is found in deliberate violations or disregard 

of standards of behavior which the employer has the right to expect of his 

employee . . . .”

2 Const 1963, art 6, § 28.
5

The circuit court . . . may review questions of fact and law on the 

record made before the administrative law judge and the Michigan 

compensation appellate commission involved in a final order or decision of 

the [MCAC], . . . but the [circuit] court may reverse an order or decision 

only if it finds that the order or decision is contrary to law or is not 

supported by competent, material, and substantial evidence on the whole 

record.

[3]

Using this standard, a circuit court must affirm a decision of the ALJ and the 

MCAC if it conforms to the law, and if competent, material, and substantial evidence 

supports it. A reviewing court is not at liberty to substitute its own judgment for a 

decision of the MCAC that is supported with substantial evidence.4

 The Court of 

Appeals then reviews a circuit court’s decision “to determine whether the lower court 

applied correct legal principles and whether it misapprehended or misapplied the 

substantial evidence test to the agency’s factual findings . . . .”5

III. ANALYSIS

We conclude that both the circuit court and Court of Appeals erred by departing 

from the applicable standard of review. 

The circuit court determined that Hodge ultimately had to make a decision 

between two conflicting policies: one, to not use the airport’s computer system, and two, 

to assist passengers by retrieving departure information.

6

 The lower court record, 

 3 MCL 421.38(1).

4 Smith v Employment Security Comm, 410 Mich 231, 256; 301 NW2d 285 (1981). 

5 VanZandt v State Employees Ret Sys, 266 Mich App 579, 585, 701 NW2d 214 (2005).

6 The circuit court inaccurately characterized this case as placing Hodge in a dilemma in 

which she had to choose to violate one of two company policies. There is no evidence 

that it was the policy of Hodge’s employer that employees assist passengers with flight 

information. Hodge admitted as much during a July 13, 2011 hearing with the ALJ. 
6

however, does not contain any evidence of a stated policy to assist passengers by 

retrieving departure information. Even if such a policy can be implied from the record, 

the ALJ determined, in a factual finding, that the most weight should be given to the 

expressly stated policy against access of the airport’s computer system. Thus, the circuit 

court erred when it discounted the stated policy of Hodge’s employer and, instead,

credited Hodge with complying with a nonexistent policy of assisting passengers by 

retrieving departure information. 

Likewise, the Court of Appeals erred by determining that Hodge’s act of helping a 

passenger actually benefitted USSA.

7

 The panel reached this conclusion despite the 

ALJ’s contrary finding that Hodge’s violation was so severe that it went against USSA’s 

interest. Instead of determining whether factual assessments made by the agency were 

supported by substantial evidence, both the lower courts engaged in an unbridled effort to 

reevaluate the ALJ’s factual findings.

The ALJ, the only adjudicator who actually heard testimony and observed the 

demeanor of the witnesses while testifying, reviewed all the evidence in the record and 

made findings of fact based on the credibility of witnesses and weight of the evidence. 

 

When asked if there is “anything in the policy that says it’s okay to violate these rules [to 

not access the airport’s computers] so long as you’re assisting a passenger,” Hodge 

responded “no.” But even if such a policy existed, there was no dilemma presented. 

Hodge could have complied with the express policy barring the use of airport computers 

and at the same time assisted the passenger seeking flight departure information by 

directing the passenger to airport personnel authorized to obtain and provide flight 

information to passengers. 

7 Hodge v US Sec Assoc, Inc, 306 Mich App 139; 855 NW2d 513 (2014). 
7

The ALJ ultimately determined that Hodge’s violation of the computer policy was a 

deliberate disregard of USSA’s interest and that Hodge was discharged for reasons that 

would constitute behavior beneath the standard expected of employees. Thus, the ALJ

disqualified Hodge from unemployment benefits for committing misconduct, in 

accordance with MCL 421.29(1)(b), and most prominently defined in Carter, 364 Mich 

at 541.

8

 

The ALJ reached this conclusion by giving weight to evidence within the lower 

record. The lower courts should have given deference to the ALJ and the MCAC by 

reviewing those decisions only to ensure conformity with the law and the existence of 

competent, material, and substantial evidence. In sum, the lower courts improperly 

discounted the ALJ’s findings to apply their own factual assessments, in violation of 

Const 1963, art 6, § 28 and MCL 421.38(1).

 8 Hodge claims that the lower courts applied the proper standard of review and reversed 

the MCAC because its decision did not conform to the law. Specifically, Hodge claims 

that the test for “misconduct” as set forth by this Court in Carter was not satisfied by the 

undisputed facts presented in this case. We disagree. The test for “misconduct,” first and 

foremost, looks to whether the claimant’s conduct showed a willful disregard of her 

employer’s interest. One example of such disregard is the deliberate violation of 

standards of behavior that the employer has the right to expect of its employees. Such 

standards are set out in an employer’s policy, and in this case that policy clearly and 

unequivocally prohibited the use of the airport’s computers. Hodge was fully aware of 

the policy and knew that, by going to the computer to check on flight information, she 

was violating that policy. In short, plainly and unequivocally, Hodge engaged in 

“misconduct” as defined in Carter. 
8

IV. CONCLUSION

The application for leave to appeal the July 15, 2014 judgment of the Court of 

Appeals is considered and, pursuant to MCR 7.302(H)(1), in lieu of granting leave to 

appeal, we reverse the judgment of the Court of Appeals and we reinstate the judgment of 

the Michigan Compensation Appellate Commission.

Robert P. Young, Jr.

Stephen J. Markman

Mary Beth Kelly

Brian K. Zahra

Bridget M. McCormack

David F. Viviano

Richard H. Bernstein