Murphy & Landon, P.A. v. Pernic
2015 Del. LEXIS 396
| Del. | 2015Background
- Chelsey Pernic, a paralegal, was terminated by Murphy & Landon, P.A. in May 2012; the termination letter listed multiple problems (lateness, long lunches, insubordination, refusal to help/overtime) and cited an unauthorized $3,000 invoice payment as a recent egregious example.
- Pernic applied for unemployment benefits; a Claims Deputy awarded benefits, and an Appeals Referee affirmed after limiting the employer to proof about the single invoice incident and preventing cross-examination on broader misconduct.
- The Unemployment Insurance Appeal Board (Board) later allowed evidence of cumulative misconduct on appeal but affirmed the Referee’s legal conclusion, finding a disconnect between the prior warnings and the final invoice incident and awarding benefits.
- The Superior Court affirmed the Board under the deferential substantial-evidence standard. The Firm appealed to the Delaware Supreme Court.
- The Supreme Court Majority reversed: it found the Board’s reliance on the Referee’s single-incident conclusion irrational given unrebutted evidence of cumulative misconduct and clear prior warnings; it remanded for further proceedings and instructed the Board to enter judgment for the Firm if Pernic fails to appear and submit to cross-examination.
Issues
| Issue | Plaintiff's Argument (Pernic) | Defendant's Argument (Firm) | Held |
|---|---|---|---|
| 1) Was Pernic terminated for "just cause" (willful/wanton misconduct)? | Pernic argued the invoice payment was not willful/wanton and she lacked notice that approval was required. | Firm argued termination resulted from cumulative misconduct over months, culminating in the invoice incident, so it had just cause. | Court held Board’s single-incident finding was not rationally supported; unrebutted evidence showed cumulative misconduct; reversal and remand. |
| 2) Did the Appeals Referee improperly limit admissible evidence, and did the Board cure that error? | Pernic benefitted from the Referee’s focus on the invoice; no relief on appeal. | Firm argued the Referee’s restriction prevented a full record and the Board’s cursory treatment failed to cure that error. | Court found the Referee erred; the Board attempted cure but then improperly deferred to the Referee without explaining why it discounted unrebutted evidence. |
| 3) Was the warning to Pernic sufficient to put her on notice termination could follow? | Pernic claimed she had not been warned that unauthorized invoice payments could result in firing. | Firm argued it gave clear, unequivocal warning about insubordination/uncooperative conduct that included the kind of disrespect shown by the invoice payment. | Court held substantial uncontradicted evidence showed Pernic received warning that her attitude/insubordination could lead to firing; Board’s conclusion otherwise unsupported. |
| 4) Remedy and consequence of Pernic’s failure to participate on remand | Pernic did not appear before Board or file a brief to Supreme Court. | Firm sought judgment or favorable finding if Pernic continued nonparticipation. | Court ordered remand for hearing consistent with opinion and directed Board to enter judgment for Firm if Pernic fails to appear and be subject to cross-examination. |
Key Cases Cited
- Thompson v. Christiana Care Health Sys., 25 A.3d 778 (Del. 2011) (defines substantial-evidence standard on review of administrative findings)
- Oceanport Indus., Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892 (Del. 1994) (substantial-evidence concept and appellate review limitations)
- Avon Prods., Inc. v. Wilson, 513 A.2d 1315 (Del. 1986) (concept that willful/wanton misconduct disqualifies for benefits)
- Moeller v. Wilmington Sav. Fund. Soc’y, 723 A.2d 1177 (Del. 1999) (burden on employer to prove just cause)
- Watson v. Wal‑Mart Assoc., 30 A.3d 775 (Del. 2011) (agency may not ignore undisputed evidence)
- Pusey v. Natkin & Co., 428 A.2d 1155 (Del. 1981) (unrebutted evidence cannot be ignored by the Board)
- Johnson v. Chrysler Corp., 213 A.2d 64 (Del. 1965) (principles on reviewing board factual findings and deference)
- Falconi v. Coombs & Coombs, Inc., 902 A.2d 1094 (Del. 2006) (reiterates scope of review for agency factfinding)