Court Opinion

ID: 4175187
Source: CourtListenerOpinion
Date Created: 2017-06-07 15:17:53.985358+00
Date Added: 2024-06-11T14:39:16.736928
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
         parties in the case and its use in other cases is limited. R.1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-1420-15T1

GARY HOLMES, III,

        Appellant,

v.

BOARD OF REVIEW and
AUTOZONERS, LLC,

        Respondents.

____________________________________

              Submitted February 7, 2017 – Decided            March 21, 2017

              Before Judges Fisher and Leone.

              On appeal from the Board of Review, Department
              of Labor, Docket No. DKT00060289.

              Gary Holmes, III, appellant pro se.

              Christopher S. Porrino, Attorney General,
              attorney for respondent Board of Review,
              (Melissa Dutton Schaffer, Assistant Attorney
              General, of counsel; Tasha Bradt, Deputy
              Attorney General, on the brief).

              Respondent AutoZoners, LLC has not filed a
              brief.

PER CURIAM
     Claimant Gary Holmes III (Holmes) appeals the September 21,

2015 decision by the Board of Review (Board) affirming the denial

of   unemployment    benefits    after     his   termination    for    severe

misconduct.     We affirm.

                                      I.

     The following facts are derived from testimony heard by the

Appeal Tribunal (Tribunal).        Beginning in February 2012, Holmes

was employed as a full-time parts manager at an AutoZone retail

store.1    He held this position until May 14, 2015, when he was

terminated for unauthorized removal or consumption of company

property without payment.       Specifically, Holmes was discharged for

taking ten bottles of water over a period of approximately three

years, resulting in a loss of $16.90 for the retail store.

     Holmes filed a claim for unemployment benefits.             The Deputy

Director   of   Unemployment    and   Disability    Insurance    ("Deputy")

determined Holmes was disqualified from receiving unemployment

benefits on the grounds that he was terminated as a result of

"severe misconduct connected with the work."           Holmes appealed to

the Tribunal, which held a telephonic hearing on July 13, 2015.

1
  "AutoZone" is an auto parts retail chain. Holmes's employer was
AutoZoners, LLC, a wholly owned subsidiary of AutoZone Stores,
Inc. responsible for leasing employees to AutoZone retail stores.
We refer to both entities as "AutoZone." Diaz v. AutoZoners, LLC,
484 S.W.3d 64, 71 (Mo. Ct. App. 2015).

                                      2                               A-1420-15T1
     At    the    hearing,   AutoZone's        Regional   Loss   Manager,    Sean

Finegan, testified as follows.                 He and the District Manager

presiding    over   Holmes's   store         discovered   Holmes's   misconduct

during an unrelated loss prevention investigation after a returned

battery went missing.        During the course of the investigation,

Finegan and the District Manager interviewed all the employees

working in the store that day.                 During his interview, Holmes

admitted to taking the ten bottles of water without paying for

them.     Holmes was discharged shortly after the interview.

     Finegan also testified Holmes knew stealing the bottles of

water was a violation of company policy.                  The company handbook

bars the "unauthorized possession or removal of . . . AutoZone's

property    include[ing]     but   not   limited     to    merchandise."      The

handbook stated that "AutoZone has zero tolerance for any dishonest

activity."       As an employee of AutoZone, Holmes was required to

acknowledge each year that he received and read the handbook.

     Holmes testified at the hearing before the Tribunal.                  Holmes

confirmed he read and acknowledged AutoZone's company policy in

the handbook regarding theft of company merchandise.                       Holmes

conceded he signed a statement provided to him after his interview,

which explicitly stated that "[o]ver the three years of" employment

with AutoZone "I took ten bottles of water without paying for it."

Holmes initially testified that he admitted to taking the ten

                                         3                              A-1420-15T1
bottles of water, but that he merely forgot to pay for them when

he took them.      Holmes later testified he "never took bottles of

water without authorization."

     On July 13, 2015, the Tribunal affirmed the Deputy's denial

of unemployment benefits.        Holmes appealed to the Board of Review.

The Board agreed with the Tribunal's findings of fact and opinion,

and affirmed.     Holmes appeals.

                                     II.

     We must hew to our "limited" standard of review.                Brady v.

Bd. of Review, 152 N.J. 197, 210 (1997).              "'[I]n reviewing the

factual findings made in an unemployment compensation proceeding,

the test is not whether an appellate court would come to the same

conclusion if the original determination was its to make, but

rather whether the factfinder could reasonably so conclude upon

the proofs.'" Ibid. (citation committed). "If the Board's factual

findings are supported 'by sufficient credible evidence, courts

are obliged to accept them.'"         Ibid.      Therefore, our review "is

limited    to   determining    whether     the   agency   acted   arbitrarily,

capriciously, or unreasonably."            Lourdes Med. Ctr. of Burlington

Cnty. v. Bd. of Review, 197 N.J. 339, 360 (2009).

     Prior to 2010, the Unemployment Compensation Law, N.J.S.A.

43:21-1 to -24.30, included only two levels of misconduct which

could     disqualify   an     individual     from   unemployment    benefits:

                                      4                                A-1420-15T1
misconduct and gross misconduct.        N.J.S.A. 43:21-5(b) (2007); see

Silver v. Bd. of Review, 430 N.J. Super. 44, 48 (App. Div. 2013)

(tracing the evolution of the statute).       Misconduct results in an

eight-week disqualification from unemployment benefits.          N.J.S.A.

43:21-5(b).     Gross misconduct requires "an act punishable as a

crime" and results in complete disqualification for benefits.

Silver, supra, 430 N.J. Super. at 48.

     N.J.S.A.    43:21-5(b)   was   amended   in   2010   to   include    an

intermediate level of misconduct, termed "severe misconduct."

Disqualification from benefits for severe misconduct remains in

effect until the individual becomes reemployed, works at least

four weeks, and reaches a certain earnings amount. N.J.S.A. 43:21-

5(b) (2010).    The statute does not comprehensibly define severe

misconduct, but does provide examples of what may constitute severe

misconduct.

          [R]epeated violations of an employer's rule
          or policy, repeated lateness or absences after
          a    written   warning    by    an    employer,
          falsification of records, . . . misuse of
          benefits, misuse of sick time, abuse of leave,
          theft of company property, . . . theft of time,
          or where the behavior is malicious and
          deliberate but is not considered gross
          misconduct as defined in this section.

          [N.J.S.A. 43:21-5(b) (emphasis added).]

     In Silver, supra, we noted that the existing regulations,

promulgated before the 2010 statutory amendment, provided: "For

                                    5                              A-1420-15T1
an act to constitute misconduct, it must be improper, intentional,

connected with one's work, malicious, and within the individual's

control, and is either a deliberate violation of the employer's

rules or a disregard of standards of behavior which the employer

has the right to expect of an employee." 430 N.J. Super. at 52-

53 (quoting N.J.A.C. 12:17-10.2(a)(2003)).                      We held "[i]t would

make    no   sense      to   allow    for    conduct     with    a   lower   level    of

culpability (such as mere inadvertence or negligence) to qualify

as severe misconduct[.]"             Id. at 55.        Thus, we construed the two

examples of severe misconduct quoted above as requiring acts done

"intentionally, deliberately, and with malice."                      Ibid.   However,

the Silver court made clear "repetitive violation . . . may justify

a     reasonable     inference        that       the   employee's     disregard      was

deliberate and in that sense, malicious."                  Id. at 57.

       The regulations were amended by 47 N.J.R. 1009(a), effective

May 18, 2015.        In response to Silver, this amendment repealed and

replaced N.J.A.C. 12:17-10.2 (2003); defined "severe misconduct"

as "an act which (1) constitutes 'simple misconduct,' as that term

is defined in this section; (2) is both deliberate and malicious;

and    (3)   is   not    'gross      misconduct,'"       N.J.A.C.    12:17-2.1;      and

incorporated the statutory examples of severe misconduct, ibid.

See 46 N.J.R. 1796(a); 47 N.J.R. 1009(a).                 The Board cites the new

                                             6                                 A-1420-15T1
regulations, which became effective just four days after Holmes's

termination.

     We need not decide whether the 2003 or 2015 regulations govern

here, because the evidence supported the Board's finding that

Holmes's conduct fell within the statutory examples of severe

misconduct, and was intentional, deliberate, and malicious.

                                  III.

     Here,     the   Tribunal   properly   found   "the   claimant   was

discharged for theft in the amount of $16.90" and that "[h]e

admitted to his action" of causing a loss to AutoZone when he took

ten bottles of water without paying for them over three years.

The evidence also showed Holmes was aware of AutoZone's policy

manual, which detailed the company's prohibitions against the

unauthorized possession or removal of company merchandise, and its

zero tolerance policy.

     Holmes argues he was wrongfully accused of stealing a missing

battery, and deceived into confessing he stole the bottles of

water.   However, Holmes was free to leave the interview at any

time, and he instead voluntarily agreed to make a statement and

knowingly signed a written statement.      The Tribunal could properly

credit his statement and find that his taking without paying was

intentional.    We give "'due regard to the opportunity of the one

who heard the witnesses to judge [] their credibility.'"       Makutoff

                                    7                           A-1420-15T1
v. Bd. of Review, 427 N.J. Super. 218, 223 (App. Div. 2012)

(citation omitted).

     Thus, Holmes admitted to both "theft of company property" and

"repeated violations" of AutoZone's company policy, both examples

of severe misconduct in N.J.S.A. 43:21-5(b).     Additionally, his

"repetitive violation[s] . . . justif[ied] a reasonable inference

that his disregard of company policies was deliberate and in that

sense malicious."     Silver, supra, 430 N.J. Super. at 55, 57.

Therefore, Holmes's actions rose to the level of severe misconduct

under Silver, N.J.S.A. 43:21-5(b), and the various regulations.

The Board's decision was supported by sufficient credible evidence

in the record.

     We recognize that a theft of ten water bottles, worth $16.90,

over three years, is hardly grand larceny.   If Holmes's theft had

been criminally prosecuted, it would be a disorderly persons

offense.   N.J.S.A. 2C:20-2(b)(4).   Moreover, under the de minimis

exception in N.J.S.A. 2C:2-11(b), assignment judges are afforded

the discretion to dismiss a criminal prosecution if they find the

defendant's conduct "[d]id not actually cause or threaten the harm

or evil sought to be prevented by the law defining the offense or

did so only to an extent too trivial to warrant the condemnation

of conviction[.]"     Such an exception has been applied in some

criminal theft cases.    See State v. Smith, 195 N.J. Super. 468

                                 8                          A-1420-15T1
(Law Div. 1984) (applying the de minimis exception where a student

stole three pieces of gum valued at fifteen cents per piece).

However, N.J.S.A. 2C:2-11 expressly applies only in a criminal

"prosecution."   Ibid.   It "does not apply to persons charged with

juvenile delinquency," let alone to civil matters such as this.

State v. I.B., 227 N.J. Super. 362, 367 (App. Div. 1988).

     N.J.S.A. 43:21-5(b) has no de minimis exception, and we

decline to create one.    Further, even in the criminal context we

have cautioned that "attempts to define triviality by a monetary

amount are fraught with potential dangers."     State v. Evans, 340
N.J. Super. 244, 252 (App. Div. 2001) (finding shoplifting of a

$12.90 hair bow was not de minimus).     Ruling that an item is of

such a low value to be per se trivial "would send the wrong

message" which "could be seen as an authorization to shoplift

below that amount."   Ibid.   "For merchants it would be a potential

nightmare."   Ibid.   To create a de minimis exception for Holmes

could similarly encourage employee theft of low-value items over

extended periods of time.     Moreover, as a parts manager, Holmes

is not someone who should have a casual attitude about theft of

company property.

     In affirming the Tribunal's decision, the Board noted Holmes

admitted both verbally and in writing that he stole the water

bottles.   Additionally, the Board noted Holmes "was given a full

                                  9                          A-1420-15T1
and impartial hearing and a complete opportunity to offer any and

all   evidence."   We   cannot   say   the   Board   acted   arbitrarily,

capriciously, or unreasonably.

      Affirm.

                                  10                              A-1420-15T1