Case Name: Meredith A. GIBSON, Petitioner, v. DEPARTMENT OF EMPLOYMENT SECURITY and U S WEST Communications, Inc. Respondents
Court: Utah Court of Appeals
Jurisdiction: Utah
Decision Date: 1992-08-17
Citations: 840 P.2d 780
Docket Number: No. 910727-CA
Parties: Meredith A. GIBSON, Petitioner, v. DEPARTMENT OF EMPLOYMENT SECURITY and U S WEST Communications, Inc. Respondents.
Judges: Before BENCH, BILLINGS and GREENWOOD, JJ.
Reporter: Pacific Reporter 2d
Volume: 840
Pages: 780–788

Head Matter:
Meredith A. GIBSON, Petitioner, v. DEPARTMENT OF EMPLOYMENT SECURITY and U S WEST Communications, Inc. Respondents.
No. 910727-CA.
Court of Appeals of Utah.
Aug. 17, 1992.
M. David Eckersley and Samuel Alba, Salt Lake City, for petitioner.
Floyd A. Jensen, Salt Lake City, for respondent U.S. West Communications, Inc.
Before BENCH, BILLINGS and GREENWOOD, JJ.

Opinion:
OPINION
BILLINGS, Associate Presiding Judge:
Petitioner Meredith A. Gibson (Gibson) appeals a final decision of the Board of Review of the Industrial Commission (Board) denying her unemployment compensation benefits. We reverse.
FACTS
Prior to filing for unemployment benefits, Gibson worked for U S WEST Communications, Inc. (U S WEST) for almost twenty years. She and another U S WEST employee, Mary Tolman (Tolman), worked full-time as security assistants, Tolman handling court-ordered trap and traces and Gibson handling customer requests for trap and traces. The trap and trace procedure documents the origin of harassing telephone calls. Gibson and Tolman covered for one another during vacations. Gibson had received U S WEST'S policy manual requiring confidentiality of private customer information and knew that a violation of the policy could result in dismissal.
On December 16, 1990, while Gibson was on vacation, Tolman received a trap and trace request from a customer named Brenda Mehl. Brenda Mehl requested the trap and trace to establish that her former husband, Derek Mehl, was making threatening phone calls to her from his place of employment. Gibson normally would have been assigned the case, absent any conflict of interest. However, the circumstances, the general location of Brenda Mehl's residence, and the name "Brenda" made Tol-man wonder if Brenda Mehl was Gibson's sister whose name was Brenda. Because Tolman did not know Gibson's sister's last name, she decided to call Gibson.
Gibson was unavailable when Tolman called, so Tolman spoke with Gibson's husband, also a U S WEST employee. Tolman asked Gibson's husband what his sister-in-law's name was, and he told her it was Brenda Butcher. He then asked why she had asked. Tolman replied that a customer had requested a trap and trace, and she was concerned that it might be Gibson's sister.
Gibson's husband related the substance of the conversation to Gibson. Later that day, the Gibsons went to Brenda Butcher's home to borrow a carpet cleaner. When they arrived, Brenda Butcher was finishing a call with her exhusband and was upset. Gibson told her that a person named Brenda had requested a trap and trace order and Tolman thought she might have made the request. Coincidentally, Brenda Butcher's boyfriend, who was also Brenda Mehl's exhusband, Derek Mehl, was present. Nothing else was said about the matter. Gibson did not know either Derek's or the customer Brenda's last name.
On December 22, 1990, Brenda Mehl called U S WEST security and reported that Derek Mehl had told her he found out about the trap placed on her phone from a friend who worked at U S WEST. She told David Gomez, the security supervisor, that she felt his employees had compromised her case by notifying her exhusband that a trap and trace had been established. Gomez told her he would investigate the matter and contact her.
Gomez spoke with Gibson and Tolman to determine how the disclosure occurred. After determining the disclosure was unintentional and an unusual coincidence, he verbally reprimanded Gibson and Tolman and cautioned them to keep such information inside the office. Gomez took no further action because Gibson and Tolman had excellent work records.
On February 20, 1991, Brenda Mehl complained to U S WEST'S Director of Security and threatened suit. U S WEST suspended Gibson and Tolman, pending further investigation. They were discharged on March 31, 1991.
Gibson applied for and was awarded unemployment compensation benefits. After U S WEST objected, the Administrative Law Judge held a hearing and affirmed the award of benefits. U S WEST appealed to the Board, which reversed the Administrative Law Judge's decision, determining Gibson was terminated for just cause.
On appeal, Gibson claims she was not terminated for just cause, and, thus, she should receive unemployment benefits because: (1) Her conduct was an isolated incident in an excellent, twenty-year work record and, therefore, was not sufficiently culpable; and (2) she did not have sufficient knowledge that her conduct violated company policy. Because we reverse the Board and find Gibson's conduct was not sufficiently culpable to deny benefits, we do not reach the issue of knowledge.
STANDARD OF REVIEW
An employee is ineligible to receive unemployment compensation if the employee "was discharged for just cause . if so found by the commission." Utah Code Ann. § 35-4-5(b)(1) (Supp.1991). Thus, the legislature has granted the Board discretion in determining whether an employee was terminated for just cause. See Bhatia v. Department of Employment Sec., 834 P.2d 574, 577 (Utah App.1992); Department of Air Force v. Swider, 824 P.2d 448, 451 (Utah App.1991); Morton Int'l, Inc. v. Auditing Div. of the Utah State Tax Comm'n, 814 P.2d 581, 588 & n. 40 (Utah 1991). "Accordingly, we will reverse the Board's decision only if we determine that it is unreasonable or irrational." Wagstaff v. Department of Employment Sec., 826 P.2d 1069, 1072 (Utah App.1992); accord Bhatia, 834 P.2d at 577; Swider, 824 P.2d at 451.
In establishing whether Gibson was terminated for just cause, U S WEST has the burden of proving: (1) Gibson's culpability, (2) her knowledge of expected conduct, and (3) that the offending conduct was within Gibson's control. See Bhatia, 834 P.2d at 577; Kehl v. Board of Review, 700 P.2d 1129, 1133-34 (Utah 1985); accord Utah Code Admin.P. R475-5b-102 to -103 (1991). The employer must establish each of the three elements in order for the Board to deny benefits. Bhatia, 834 P.2d at 577; Utah Code Admin.P. R475-5b-102.
CULPABILITY
Gibson argues her conduct was not culpable because it was an isolated act of misjudgment in an excellent, twenty-year work record, and the situation was unlikely to repeat itself. U S WEST responds that Gibson's conduct was culpable because it seriously affected U S WEST'S legitimate interests, and a single, isolated violation, if sufficiently egregious, satisfies the culpability requirement. U S WEST claims Gibson seriously violated company policy, exposing the company to potential liability and loss of customer goodwill.
An employee's conduct may provide a legitimate basis for an employer to terminate the employee,- without requiring denial of unemployment benefits. Pro-Benefit Staffing, Inc. v. Board of Review, 775 P.2d 439, 443 (Utah App.1989). The purpose of the Employment Security Act is "to provide a cushion for the shocks and rigors of unemployment." Logan Regional Hosp. v. Board of Review, 723 P.2d 427, 429 (Utah 1986). The Utah Supreme Court has called for a liberal construction of this act: "mere inefficiency or failure of good performance as the result of inability or incapacity, inadvertences, isolated instances of ordinary negligence, or good-faith errors in judgment or decisions do not constitute culpable conduct which precludes a discharged employee from receiving unemployment compensation benefits." Id.
Board regulations define culpability as:
[T]he seriousness of the conduct . as it affects continuance of the employment relationship. The discharge must have been necessary to avoid actual-or potential harm to the employer's rightful interests . The wrongness of the conduct must be considered in the context of the particular employment and how it affects the employer's rights. If the conduct was an isolated incident of poor judgment and there is no expectation that the conduct will be continued or repeated, potential harm may not be shown and therefore it is not necessary to discharge the employee.
Utah Code Admin.P. R475-5b-102(1)(a) (1991). The regulation which focuses on whether conduct is merely an isolated incident, not rising to the level of culpability necessary to deny benefits, states:
Longevity and prior work record are important in determining if the act or omission is an isolated incident or a good faith error in judgment. An employee who has historically complied with work rules does not demonstrate by a single violation, even though harmful, that such violations will be repeated and therefore require discharge to avoid future harm to the employer.
Utah Code Admin.P. R475-5b-102(1)(a)(1) (1991).
These regulations defining culpability require a balancing of the employee's past work record, the employee's length of employment, and the likelihood the conduct will be repeated against the seriousness of the offense and the harm to the employer.
Utah case law is consistent with this balancing approach. Utah's appellate courts historically have balanced several factors in upholding or reversing the Board's determination of culpability. First, we have considered whether the employee's prior pattern of behavior was consistent with the incident of misconduct. See, e.g., Bhatia, 834 P.2d at 578 (court upheld denial of unemployment benefits, determining employee's behavior as not just an isolated incident of poor judgment but consistent with a prior pattern of behavior, including arguing with other employees and using foul language); Nelson v. Department of Employment Sec., 801 P.2d 158, 162 (Utah App.1990) (court upheld Board's determination that grocery checker was culpable for repeatedly violating store's coupon redemption policy).
Second, we have considered whether the employee's actions and admission of mistake indicate the conduct will not reoccur. See, e.g., Wagstaff, 826 P.2d at 1073-74 (court upheld denial of benefits when employee used cocaine during lunch break and admitted behavior only when confronted by authorities); Swider, 824 P.2d at 454 (court affirmed award of benefits for employee who smoked marijuana while on vacation and voluntarily entered drug treatment program).
The third factor Utah's appellate courts have addressed is the seriousness and flagrancy of the conduct. See, e.g., Grinnell v. Board of Review, 732 P.2d 113, 114-15 (Utah 1987) (court upheld denial of benefits where truck driver altered a road-speed governor, repeatedly violated the speed limit, disobeyed company's policies for consecutive hours operating a vehicle, and had traces of marijuana in his system); Kehl, 700 P.2d at 1134 (court upheld denial of benefits where truck driver violated company policy by driving heavy explosives over a railroad track without authorization).
Where the violations were inadvertent or unintentional with less potential for serious consequences, Utah's appellate courts have declined to find a dismissal was for just cause. See, e.g., Lane v. Board of Review, 727 P.2d 206, 211 (Utah 1986) (employee mistakenly sold beer to a minor); Pro-Benefit Staffing, 775 P.2d at 444 (accountant mistakenly credited the wrong account).
The fourth factor Utah's appellate courts have considered is the actual and potential harm to the employer and the public. See, e.g., Clearfield City v. Department of Employment Sec., 663 P.2d 440, 445 (Utah 1983) (police officer's violation of sodomy laws was egregious conduct threatening integrity of police force); Wagstaff, 826 P.2d at 1074 & n. 6 (potential safety risk created when Air Force jet mechanic returned to work after using drugs).
The final factor we have weighed is the length and strength of the prior work record. See, e.g., Swider, 824 P.2d at 454 (court upheld award of unemployment benefits for claimant who received numerous commendations for his performance during nearly twenty years of employment and had never been disciplined); Pro-Benefit Staffing, 775 P.2d at 444 (court upheld award of benefits to employee of seven months who had previous error-free work record).
In the present case, the Board made the following findings relevant to culpability:
The harm this act caused is readily apparent. That the sister's boyfriend would be the person targeted by the trap and trace the claimant discussed is a remarkable and truly unfortunate coincidence. But it is because coincidences occur and because one never fully knows or suspects the relationships of one's audience that the phone company confidentiality provision is absolute. The phone company client who went to the phone company for relief received instead a fresh source of trouble with her ex-husband as a result of the claimant's actions. This reflects poorly on the employer, completely nullifying the quality of their [sic] service and reputation to that particular client.
The Board focused on harm in determining Gibson's conduct was culpable. Although U S WEST demonstrated potential harm to its interests as an employer, the regulations and case law require a balancing of harm against the employee's prior work record, length of employment and the likelihood the conduct will be repeated. The Board failed to discuss what weight, if any, it gave to the unintentional nature of the act and Gibson's exemplary work record over nearly twenty years. The Board failed to even mention Gibson's undisputed claim that there was little chance the harm would continue or be repeated. This analysis is contrary to the Board's own regulations. See Utah Code Admin.P. R475-5b-102(1)(a)(1).
We conclude that, although U S WEST had the right to terminate Gibson for violating company policy, the Board's denial of unemployment benefits was unreasonable in light of the broad remedial purposes of and the liberal interpretation we grant to the Employment Security Act, and the Board's inadequate consideration of the relevant factors in denying compensation. We, therefore, conclude that the Board erroneously applied the law. See Utah Code Ann. § 63-46b-16(4)(d) (1989). In sum, we reverse the Board's decision and hold that Gibson's dismissal was not for "just cause" as her conduct was not culpable within the meaning of the Employment Security Act.
GREENWOOD, J., concurs.
. The Board reversed as to Gibson only, with one member dissenting. Tolman's award of benefits was affirmed.
. The dissent suggests we have presented a checklist of factors the Board must consider in every case. We do not set forth such a mandatory checklist. Rather, we have recognized what factors Utah's appellate courts historically have found persuasive in examining the Board's awards of unemployment benefits.
. Our determination is consistent with the original factfinder, the Administrative Law Judge, and the dissenting opinion of one of the three Board members.