Sharon Hobbs, Relator v. The Polishing Touch, Inc., Department of Employment and Economic Development, A16-619

Sharon Hobbs worked as a cleaning crew leader for The Polishing Touch, Inc. from August 2013 until her dismissal on January 4, 2016; she sought unemployment benefits after termination.
Employer owner Rebecca Hardwick maintained a contemporaneous business log documenting multiple incidents of deficient work by Hobbs (dusting, dirty floors, inadequate time spent, not cleaning appliances, leaving doors or codes unsecured, etc.).
Hardwick testified she warned Hobbs repeatedly, required changes in technique, and told Hobbs her job was at risk if performance did not improve; Hobbs acknowledged at least one warning but disputed the overall characterization of her performance.
The unemployment-law judge (ULJ) credited Hardwick’s testimony and business records over Hobbs’s testimony, found Hobbs was dismissed for misconduct, and denied benefits; the ULJ’s decision was affirmed on reconsideration.
Hobbs appealed, arguing she performed well, experienced a hostile work environment, and lacked warning; the appellate court refused to consider the newly raised hostile-environment claim and affirmed the ULJ’s decision based on substantial-evidence and credibility findings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Hobbs was dismissed for misconduct making her ineligible for unemployment benefits	Hobbs: she performed well and was not properly warned	Employer: Hobbs’s repeated poor performance and prior warnings constitute misconduct	Held: ULJ credibility finding supported; Hobbs’s dismissal was for misconduct, benefits denied
Whether the ULJ erred in crediting employer’s testimony and records over Hobbs’s testimony	Hobbs: employer’s account is inaccurate	Employer: contemporaneous business records and detailed testimony support findings	Held: appellate court defers to ULJ credibility determinations and finds substantial evidence supports them
Whether a newly-asserted hostile work-environment claim can be considered on appeal	Hobbs: environment was hostile (raised on appeal)	Employer/DEED: issue not raised below	Held: court will not consider issues raised for first time on appeal (Thiele rule)
Whether the ULJ met statutory requirements when making credibility findings	Hobbs: implied challenge to sufficiency of credibility explanation	DEED: ULJ gave reasons, relied on contemporaneous business records	Held: ULJ’s credibility explanation satisfied statutory standard and is supported by the record

Minn. Ctr. for Envtl. Advocacy v. Minn. Pollution Control Agency, 644 N.W.2d 457 (Minn. 2002) (defines substantial-evidence standard)
Skarhus v. Davanni’s Inc., 721 N.W.2d 340 (Minn. App. 2006) (appellate deference to ULJ factual and credibility findings)
Thiele v. Stich, 425 N.W.2d 580 (Minn. 1988) (issues not raised below generally not considered on appeal)
Hentges v. Minn. Bd. of Water & Soil Res., 638 N.W.2d 441 (Minn. App. 2002) (application of Thiele to administrative appeals)
Ywswf v. Teleplan Wireless Servs., Inc., 726 N.W.2d 525 (Minn. App. 2007) (credibility determinations require more than mere recitation; must explain reasons for crediting testimony)