Court Opinion

ID: 1035701
Source: CourtListenerOpinion
Date Created: 2013-07-30 00:04:17.379163+00
Date Added: 2024-06-11T11:38:20.163096
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                                                                   c__
NOELEE LOEFFELBEIN,
                                                  DIVISION ONE
                     Respondent,                                                   \JD

                                                  No. 68537-6-1
                                                                                    v,0
                                                  UNPUBLISHED OPINION
STATE OF WASHINGTON,                                                                 CO   -:

DEPARTMENT OF EMPLOYMENT
SECURITY,
                                                  FILED: July 29, 2013
                     Appellant.

       Dwyer, J.—Bartell Drugs discharged Noelee Loeffelbein from employment

after she repeatedly violated the company's policy regarding cashing of personal

checks. A commissioner of the Washington State Employment Security

Department correctly determined that Loeffelbein was terminated for misconduct

and thereby disqualified from receiving unemployment benefits. We agree, and

reverse the superior court's ruling to the contrary.

                                           I

       Loeffelbein worked for Bartell Drugs from November 8, 1996 to March 10,

2010. At the time she was discharged, Loeffelbein was the manager of the

University Way store in Seattle.

       Bartell Drugs' employee manual contains a policy regarding acceptance of

personal checks from employees. The policy states, in pertinent part:
No. 68537-6-1/2

        10.9.3 Personal Check Acceptance Policy
        When making purchases at any of our stores, you may make
        payment by personal checks.
        The following types of checks, written by employee associates, will
        be accepted:
             1. Personal checks made payable to the Bartell Drug
             company for the purchase of the merchandise.
             2. Checks written for up to $50.00 over the amount of
             purchase (At manager's discretion).111
        Loeffelbein acknowledged that she received a copy of the employee

manual and was aware of the personal check policy. Nevertheless, between

January 19 and February 16, 2010, Loeffelbein wrote a series of checks to

Bartell Drugs in exchange for cash. Several of the checks were for $500.00

each, and the total amount of the checks was approximately $3,620.00.

Loeffelbein gave the checks to an assistant manager and had the assistant

manager place them in the cash register and give her the equivalent amount in

cash.

        As a result of an anonymous tip regarding Loeffelbein's actions, Bartell

Drugs initiated an investigation. Loeffelbein admitted to Dave Siler, Bartell

Drugs' director of loss prevention, that she had written seven to eight personal

        1A copy of the policy is not part of the administrative record. However, it was
discussed at length during the administrative hearing and Loeffelbein attached a copy of
the policy to her brief in the superior court. Accordingly, we grant the Department's
motion to supplement the record with a copy of the policy, pursuant to RAP 9.11.
No. 68537-6-1/3

checks that she had exchanged for cash totaling $3,620.00. In a written

statement, Loeffelbein admitted:

       Some of these checks were written to the store before payday
       knowing that they would be covered by my paycheck.12'.. . In talking
       with Dave, I am now aware that my actions exceeded my authority.
       I did not have the authority to cash $500 checks at Bartell's and I
       did not have the authority to get an advance on my paycheck[3]
       which I did by writing checks before payday.

       Bartell Drugs terminated Loeffelbein's employment on March 10, 2010.

The Department denied Loeffelbein's application for unemployment benefits,

finding that she was terminated for misconduct and therefore disqualified from

receiving benefits.

       Loeffelbein appealed the Department's decision to the Office of

Administrative Hearings (OAH). An Administrative Law Judge (ALJ) held a

hearing at which Loeffelbein was represented by counsel. Loeffelbein testified

that she wrote several checks made out to Bartell Drugs in the amount of

$500.00 so that she could take $500.00 in cash from the cash register.

Loeffelbein admitted that, at the time she wrote the checks, she was aware of the

company policy limiting "cash back" transactions to $50.00 over the amount of a

       2At the time Loeffelbein was writing the checks, she believed that she did not
have enough money to cover the checks but that she would have sufficient funds by the
time the checks cleared because her paycheck would have been deposited. However,
at the administrative hearing Loeffelbein presented bank statements showing that she
did, in fact, have sufficient funds to cover the checks at the time that she wrote them.
       3 Bartell Drugs has a policy that paycheck advances must be approved by the
vice president of human resources.
No. 68537-6-1/4

purchase. Loeffelbein claimed, however, that because the policy included the

words "[a]t manager's discretion," and she was a store manager, she believed

she had the ability to write checks in excess of $50.00. Loeffelbein stated that

she had previously cashed a personal check written by another employee for

$100.00, but could not remember any checks larger than that amount.

       The ALJ issued an order setting aside the Department's decision. In

doing so, the ALJ concluded that Loeffelbein's conduct did not constitute

misconduct as defined in RCW 50.04.294(1 )(a) because it did not amount to

"willful or wanton disregard of the interests of the employer."

       A claimant's act in apparent violation of the employer's policy does
       not constitute disqualifying misconduct if the act had been routinely
       authorized by the claimant's immediate supervisor, and no
       disciplinary action had ever been instigated against the claimant for
       the act. In re Griswold. 102 Wn. App. 29, 15 P.3d 153 (2000).

       Though the claimant's actions were not the wisest choice, the
       checks were authorized by other managers on duty. Once the
       claimant's actions were reported to the employer, no warnings or
       other disciplinary action short of discharge was instigated. The
       testimony of the claimant clearly demonstrated that she did not
       understand her actions were in violation of the policy as she
       believed she had discretion to do what she did. This
       misunderstanding does not meet the statutory definition requiring
       willful or wanton disregard of employer policy, and therefore
       statutory misconduct is not established.

       Bartell Drugs appealed the ALJ's decision to the commissioner of the

Department. The commissioner adopted the ALJ's findings of fact, with the

following modification:
No. 68537-6-1/5

            The undersigned augments the findings to show that
      claimant wrote seven to eight checks to the employer for cash
      between January 19, 2010 and February 16, 2010. Each check
      was for approximately $500. At the time claimant was interviewed
      by the employer's investigator, claimant admitted that cashing the
      checks exceeded her authority and that she did so to get advances
      on her paychecks. Claimant had her second assistant or assistant
      manager perform the check cashing transactions for her. At
      hearing, when claimant explained her understanding of the
      employer's policy, she indicated she never thought about the
      amount, except as manager, she had discretion to cash checks for
      above $50.

The commissioner concluded that Bartell Drugs had established misconduct

pursuant to RCW 50.04.294(1)(b) and (2)(f).

              In the absence of credibility findings by the administrative
      law judge, the undersigned did notfind claimant's version of events
      probable or reasonable. Claimant was aware ofthe employer's
      policy regarding employee check cashing and she herself could
      only recall a check for $100. In the undersigned's opinion, it was
      not reasonable for claimant to believe that as manager, she could
      approve her own checks for amounts overthe employer's limit and
      have her subordinates complete the transactions. By engaging in
      the conduct described above, claimant did not act as a reasonably
      prudent person under the circumstances of her employment. Her
      conduct constituted an intentional violation of a company rule and
      was in willful disregard of standards of behaviorthe employer had a
       right to expect.

       Loeffelbein appealed the commissioner's decision to the superior court.

The superior court found thatthe commissioner's findings of fact were supported
by substantial evidence. However, the superior court concluded that
Loeffelbein's conduct did not constitute misconduct and reversed the

commissioner's order denying her benefits. The Department appeals.
No. 68537-6-1/6

      The Washington Administrative Procedure Act (WAPA), chapter 34.05

RCW, governs judicial review of a final administrative decision of the

Employment Security Department. Tapper v. Emp't Sec. Dep't.. 122 Wn.2d 397,

402, 858 P.2d 494 (1993). When reviewing agency action, this court "sits in the

same position as the superior court, applying the standards of the WAPA directly

to the record before the agency." Tapper, 122 Wn.2d at 402. Because this court

sits in the same position as the superior court, we do not give deference to the

superior court's rulings. Verizon Nw.. Inc. v. Emp't Sec. Dep't, 164 Wn.2d 909,

915, 194 P.3d 255 (2008). The decision on review is that of the commissioner of

the Department, not the underlying decision of the administrative law judge.

Verizon Nw.. 164 Wn.2d at 915.

       A commissioner's decision is considered "prima facie correct." Anderson

v. Emp't Sec. Dep't, 135 Wn. App. 887, 893, 146 P.3d 475 (2006). The party

asserting invalidity of agency action—in this case, Loeffelbein—carries the

burden of proving the invalidity. RCW 34.05.570(1 )(a); Daniels v. Emp't Sec.

Dep't, 168 Wn. App. 721,727, 281 P.3d 310. review denied, 175Wn.2d 1028

(2012). We will reverse a commissioner's decision only if (1) the agency

erroneously interpreted or applied the law, or (2) substantial evidence does not
No. 68537-6-1/7

support the decision, or (3) the order is arbitrary or capricious. RCW

34.05.570(3); Tapper, 122 Wn.2d at 402.

       Whether an employee's actions constitute misconduct is a mixed question

of fact and law. Tapper, 122 Wn.2d at 402. We review findings of fact to

determine whether, based on the record, substantial evidence supported those

findings. William Dickson Co. v. Puaet Sound Air Pollution Control Agency, 81

Wn. App. 403, 411, 914 P.2d 750 (1996). Where findings of fact are

unchallenged, we treat the findings as verities on appeal. Fuller v. Dep't of Emp't

Sec, 52 Wn. App. 603, 606, 762 P.2d 367 (1988). We review de novo whether

the commissioner correctly applied the law to the findings, according substantial

weight to the agency's interpretation of the law. William Dickson, 81 Wn. App. at

407.

                                         Ill

       The Employment Security Act exists to provide compensation to

individuals who are "involuntarily]" unemployed "through no fault of their own."

RCW 50.01.010. Accordingly, an individual is disqualified from receiving

unemployment benefits if he or she is discharged "for misconduct connected with

his or her work." RCW 50.20.066. The statute provides a non-exclusive list of

                                               -7-
No. 68537-6-1/8

conduct that constitutes misconduct.4 In addition, certain types of conduct are

defined as misconduct per se.5 Among these are a "[vjiolation of a company rule

if the rule is reasonable and if the claimant knew or should have known of the

existence of the rule." RCW 50.04.294(2)(f).

      4 RCW 50.04.294(1) provides:
      "Misconduct" includes, but is not limited to, the following conduct by a
      claimant:
                (a) Willful or wanton disregard of the rights, title, and interests of
      the employer or a fellow employee;
             (b) Deliberate violations or disregard of standards of behavior
      which the employer has the right to expect of an employee;
              (c) Carelessness or negligence that causes or would likely cause
       serious bodily harm to the employer or a fellow employee; or
              (d) Carelessness or negligence of such degree or recurrence to
       show an intentional or substantial disregard of the employer's interest.
      5 RCW 50.04.294(2) provides:
      The following acts are considered misconduct because the acts signify a
      willful or wanton disregard of the rights, title, and interests of the employer
      or a fellow employee. These acts include, but are not limited to:
               (a) Insubordination showing a deliberate, willful, or purposeful
       refusal to follow the reasonable directions or instructions of the employer;
                (b) Repeated inexcusable tardiness following warnings by the
       employer;
                (c) Dishonesty related to employment, including but not limited to
       deliberate falsification of company records, theft, deliberate deception, or
       lying;
               (d) Repeated and inexcusable absences, including absences for
       which the employee was able to give advance notice and failed to do so;
               (e) Deliberate acts that are illegal, provoke violence or violation of
       laws, or violate the collective bargaining agreement. However, an
       employee who engages in lawful union activity may not be disqualified
       due to misconduct;
                (f) Violation of a company rule ifthe rule is reasonable and if the
       claimant knew or should have known of the existence of the rule; or
               (g) Violations of law by the claimant while acting within the scope
       of employment that substantially affect the claimant's job performance or
       that substantially harm the employer's ability to do business.

                                                   -8-
No. 68537-6-1/9

       Loeffelbein does not dispute that Bartell Drugs maintained a policy

regarding the cashing of employees' personal checks. She furthermore does not

dispute that the rule was reasonable and that she was aware of the rule.

Instead, Loeffelbein argues that the rule was vague and she did not believe she

was violating the rule.

       Loeffelbein's claim is not supported by the evidence. The policy is clear.

Bartell Drugs employees may write personal checks for the payment of
merchandise. They may also write personal checks in an amount up to $50.00
over the amount of a purchase. The acceptance of such checks is at the store

manager's discretion. Nowhere in the policy does it indicate that the amount of
cash back an employee may receive is at the store manager's discretion.
       Loeffelbein's conduct violated the policy for two reasons. First, the check

acceptance policy requires that the checks be written for a purchase. None of
the checks Loeffelbein cashed were for purchases; instead, she had an assistant

manager simply deposit her checks in the register and remove an equivalent
amount of cash. Second, the policy clearly establishes the maximum amount

over the amount of a purchase an employee may write a check. Even if
Loeffelbein had written the checks for the purpose of making a purchase, the

amount of cash Loeffelbein removed from the register vastly exceeded the

amount allowed by the policy.

                                            -9-
No. 68537-6-1/10

       The commissioner found that Loeffelbein "admitted that cashing the

checks exceeded her authority and that she did so to get advances on her

paychecks." The commissioner found that it was not reasonable for Loeffelbein

to believe that, as a store manager, she was exempt from the company's check

cashing limits. A commissioner is authorized to make his or her own

independent determinations based on the record, including findings of witness

credibility. Regan v. Dep't of Licensing, 130 Wn. App. 39, 59, 121 P.3d 731

(2005). We will not substitute our judgment for that of the commissioner

regarding witness credibility or the weight of evidence. Affordable Cabs, Inc. v.

Emp't Sec. Dep't, 124 Wn. App. 361, 367, 101 P.3d 440 (2004).

       Loeffelbein argues that "[tjhere was no warning issued, which is one

stipulation for finding willful disregard of company rules under the Employment

Security Act." But Loeffelbein provides no authority for this contention.6
Loeffelbein further argues that: (1) her statements to Siler should be disregarded

because they were made under duress, and (2) the fact that Bartell Drugs has

since amended its personal check policy is proof that the existing policy was

     6Although not entirely clear, it appears as though Loeffelbein is referring to cases
decided prior to the adoption of RCW 50.04.294(2), defining per se misconduct. See,
e.g., Hamel v. Emp't Sec. Dep't. 93 Wn. App. 140, 148, 966 P.2d 1282 (1998). ("[A]n
employer's previous warnings to avoid certain behavior may provide strong evidence .
that the conduct is inconsistent with the employer's interest."). These cases are
inapposite.

                                               -10-
No. 68537-6-1/11

vague. These claims are not part of the administrative record and we do not

consider them. See RCW 34.05.558.

      The evidence in the record was sufficient to support the commissioner's

conclusion that Loeffelbein committed misconduct because she violated a

reasonable company rule of which she was aware. We reverse the superior

court and reinstate the commissioner's decision.7

We concur:

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