PARATRANSIT, INC., Plaintiff and Respondent, v. UNEMPLOYMENT INSURANCE APPEALS BOARD, Defendant and Respondent; CRAIG MEDEIROS, Real Party in Interest and Appellant.
No. S204221
Supreme Court of California
July 3, 2014
59 Cal. 4th 551
Legal Services of Northern California, Stephen E. Goldberg, Sarah R. Ropelato and Maya Roy for Real Party in Interest and Appellant.
Legal Aid Society-Employment Law Center, Carol Vigne; National Employment Law Project, Antony Mischel; Weinberg Roger & Rosenfeld, David Rosenfeld and Antonio Ruiz for Asian Americans Advancing Justice-Asian Law Caucus, Inc., Asian Americans Advancing Justice-Los Angeles, Bet Tzedek, Katharine and George Alexander Community Law Center, Legal Aid Foundation of Los Angeles, National Employment Law Project, Neighborhood Legal Services of Los Angeles County, SEIU-United Service Workers West, Women‘s Employment Rights Clinic at Golden Gate University School of Law and Worksafe, Inc., as Amici Curiae on behalf of Real Party in Interest and Appellant.
Altshuler Berzon, Stephen P. Berzon and Stacey M. Leyton for United Steelworkers as Amicus Curiae on behalf of Real Party in Interest and Appellant.
Rediger, McHugh & Owensby, Laura C. McHugh, Alec K. Levine, Candice K. Rediger and Jimmie E. Johnson for Plaintiff and Respondent.
No appearance for Defendant and Respondent.
OPINION
BAXTER, J.—In this case, an employee refused his employer‘s repeated orders to sign a written disciplinary notice, because he disputed the notice‘s factual allegations and thought he was entitled to consult with his union representative first. There is no dispute over whether the employer was within its rights to fire the employee for his insubordination. The only question is whether that single act of disobedience constituted misconduct within the meaning of California‘s Unemployment Insurance Code. If so, then the employee is disqualified from receiving unemployment compensation benefits.
Based on the undisputed facts in the administrative record, we conclude the employee‘s refusal to sign the disciplinary notice was not misconduct but was, at most, a good faith error in judgment that does not disqualify him from unemployment benefits.
FACTUAL AND PROCEDURAL BACKGROUND
The record before the administrative law judge (ALJ) discloses the following pertinent facts.
Craig Medeiros (Claimant) worked for Paratransit, Inc. (Employer), as a vehicle operator for approximately six years. As a condition of his employment, Claimant was required to join a union. The union and Employer were parties to a collective bargaining agreement (CBA) containing the following provision: “The Employer shall provide a Vehicle Operator with copies of complimentary letters received regarding his or her job performance and with copies of disciplinary notices, including verbal warnings that have been put in
In February 2008, a passenger filed a complaint with Employer alleging that Claimant had unlawfully harassed her. Employer investigated and concluded the alleged misconduct had occurred. On May 2, 2008, Employer, through its human resources manager and its director of administrative services, held a meeting with Claimant and told Claimant he was being disciplined for the February 2008 incident. Claimant disagreed the incident had occurred as alleged.
During this meeting, Employer gave Claimant a memorandum documenting that Claimant was being assessed discipline for the February 2008 incident, including suspension for two days without pay. Employer explained the substance of this disciplinary notice and asked Claimant to sign the notice above words that read, “Employee Signature as to Receipt.” Claimant refused to do so, stating his belief that signing would constitute an admission of guilt. Claimant requested that a union representative be present at the meeting, but was told he was not entitled to one. Employer warned Claimant that his refusal to sign the disciplinary notice was in violation of the CBA and would be viewed as insubordination and grounds for termination of his employment. Claimant did not accept Employer‘s repeated assurances that his signature would not be an admission of guilt but would only acknowledge receipt of the disciplinary notice. Claimant explained he would not sign because the union president told him not to sign anything without a union representative.
At the hearing before the ALJ, Claimant testified, without refutation by Employer, that he was confused and tired during the meeting with Employer. Claimant explained he was “not functioning right” because he had just finished his work shift, and he got confused because Employer did not immediately show him the disciplinary notice but simply started talking about its contents. Employer also brought up matters that had occurred when Claimant had been hired six years earlier—i.e., saying he “lied when [he] first got hired“—which added to Claimant‘s confusion and made him think the earlier incident was being discussed at the meeting. Claimant did not believe he would be fired for failing to immediately sign the disciplinary notice, and he thought the meeting would be rescheduled to give him an opportunity to consult with the union. He left the meeting without signing and without asking that the meeting be rescheduled.
Employer subsequently informed Claimant that his employment had been terminated for insubordination due to his failure to sign the disciplinary notice. Claimant had not received any prior warnings for insubordination.
Claimant appealed to the California Unemployment Insurance Appeals Board (Board). The Board, by a split vote, reversed the ALJ‘s decision, finding that Claimant did not commit misconduct and that his failure to sign the disciplinary notice “was, at most, a simple mistake or an instance of poor judgment” that did not disqualify him from receiving benefits.
Following the Board‘s decision, Employer filed a petition for writ of administrative mandamus in the superior court. In reviewing the record before the ALJ, the court found it undisputed that Claimant deliberately disobeyed Employer‘s order to sign the May 2, 2008 disciplinary notice. Ruling that Claimant had no legal right to union representation at the meeting because its purpose was not investigatory, the court concluded that nothing said or raised in that meeting transformed it into an investigatory interview that would have triggered Claimant‘s Weingarten rights.1 Moreover, the court did not believe the union president actually told Claimant not to sign anything without first obtaining union representation; rather, it appeared the union president simply told Claimant to follow the advice provided on a written card setting forth his Weingarten rights.2 The court further concluded that, even if the union president told Claimant not to sign anything without union review, the court was “not persuaded that [Claimant] could in good faith have relied on that advice to excuse his refusal to sign the memorandum,” given all the circumstances presented.
Finally, the superior court concluded the discrepancy between the language of the disciplinary notice and the terms of the CBA could not have confused Claimant, because the CBA did not require disciplinary notices to use the CBA‘s exact language and because the language in the disciplinary notice was sufficiently clear. The court then emphasized that, even if the notice‘s language, by itself, was unclear, Employer had “expressly advised” Claimant
The Court of Appeal affirmed the superior court judgment in a split decision. We granted Claimant‘s petition for review.
DISCUSSION
The fundamental purpose of California‘s
In Amador, we held that
It is settled that “an employee‘s unequivocal refusal to comply with the employer‘s rule, without more, is not misconduct within the meaning of
To establish misconduct, there must be “substantial evidence of deliberate, willful, and intentional disobedience” on the part of the employee. (Robles, supra, 207 Cal.App.4th at p. 1035.) Determinations regarding an employee‘s intent ” ‘must take account of ” ‘real circumstances, substantial reasons, objective conditions, palpable forces that operate to produce correlative results, adequate excuses that will bear the test of reason, just grounds for action, and always the element of good faith.’ ” ’ ” (Amador, supra, 35 Cal.3d at p. 679.) This standard is both subjective and objective, and depends on the totality of the circumstances surrounding the employee and the alleged misconduct. (Id. at p. 683, fn. 9.) Thus, while the inquiry ” ‘tends to place emphasis upon the subjective motives and attitudes of the employee rather than upon objective standards, ... one cannot determine whether an employee‘s action is misconduct within the humanitarian purpose of the unemployment compensation statutes without judging the reasonableness of his act from his standpoint in the light of the circumstances facing him and the knowledge possessed by him at the time.’ ” (Ibid.; see Moore, supra, 169 Cal.App.3d at pp. 242-243.)
Amador, supra, 35 Cal.3d 671, is instructive. There, plaintiff Amador was a hospital staff histotechnician responsible for preparing tissue samples for analysis by pathologists and physicians. Two doctors asked her to perform a procedure called grosscutting, which required the selection and removal of small tissue samples from organs or other large (gross) specimens removed
This court reversed the judgment, concluding Amador had “presented uncontroverted evidence both as to her reasons for refusing to perform grosscutting and as to the factual and logical basis of those reasons.” (Amador, supra, 35 Cal.3d at p. 681.) Viewing the record in the light most favorable to the judgment below, we held the facts did not support the superior court‘s finding of misconduct. “... Amador wilfully refused to perform a work order because her past experience and her consultations with outside authorities led her to conclude that the health of patients would be jeopardized. These facts compel the conclusion that Amador refused to perform grosscutting because—from her standpoint in the light of the circumstances facing her and the knowledge possessed by her at the time—she reasonably and in good faith feared harm to others. Accordingly, she is entitled to benefits.” (Id. at p. 686.)
Regulations promulgated by the director of EDD are in accord.5 Section 1256-30, subdivision (b), of the Regulations specifies four elements of misconduct: “(1) The claimant owes a material duty to the employer under the contract of employment. [] (2) There is a substantial breach of that duty. [] (3) The breach is a willful or wanton disregard of that duty. [] [] (4) The breach disregards the employer‘s interests and injures or tends to injure the employer‘s interests.” Insubordination qualifies as one form of misconduct, and an employee “is insubordinate if he or she intentionally disregards the employer‘s interest and willfully violates the standard of behavior which the employer may rightfully expect of employees.” (Regs., § 1256-36, subd. (b).)
The Regulations contemplate that an employee may be found insubordinate if he or she “[r]efuses, without justification, to comply with the lawful and reasonable orders of the employer or the employer‘s representative.”6 (Regs., § 1256-36, subd. (b)(1).) The Regulations stipulate, however, that
compliance with an order is not required if the order is unreasonable in certain enumerated ways (Regs., § 1256-36, subd. (b)(1)(A), (B), (C)), or if the employee acts reasonably in specified circumstances, such as when “[t]he employee has a reasonable and good-faith doubt of the authority of the individual issuing the order” (Regs., § 1256-36, subd. (b)(1)(F); see id., § 1256-36, subd. (b)(1)(D), (E)). In accordance with the general regulatory principles pertaining to misconduct, an employer‘s right to discharge an employee for an act of disobedience does not necessarily mean the act amounted to misconduct for purposes of the Unemployment Insurance Code. (Regs., §§ 1256-30, subd. (e), 1256-36, subd. (a).)
Consistent with Amador, supra, 35 Cal.3d 671, the Regulations provide that “inadvertence or ordinary negligence in isolated instances or good faith errors in judgment or discretion are not misconduct....” (Regs., § 1256-30, subd. (d).) This remains true even when the employee‘s act violates a collective bargaining agreement between the employer and the employee‘s union. (Regs., foll. § 1256-41, com. foll. example 3.) As the official comments sensibly explain, “[i]n the normal working situation there is a degree of ‘give and take’ between the employer and employee.... Differences of opinion, disagreements, and misunderstandings arise, and participation in such discussions is not misconduct. The circumstances under which the argument or remarks were made are taken into consideration.” (Regs., foll. § 1256-36, com. before example 8.) While insubordination amounting to misconduct generally entails “cumulative acts with prior reprimands or warnings[,] ... a single act without prior reprimands or warnings can be insubordinate if the act is substantially detrimental to the employer‘s interest.” (Regs., foll. § 1256-36, com. before example 1; see Regs., foll. § 1256-30, example 6 [“if the injury to the employer‘s interests is trivial and inconsequential, and not substantial, such action standing alone, will not usually amount to misconduct, even though deliberate“].)
Here, the superior court concluded that Claimant committed misconduct within the meaning of
We may assume, for purposes of argument, that the superior court correctly determined that Claimant was not wrongfully denied Weingarten rights to union representation at the May 2, 2008 meeting. Nonetheless, there is no dispute that Claimant formed his belief to the contrary on the spot, after Employer started discussing discipline and mentioned Claimant‘s lying, which had occurred six years previously. As the record reflects, this was confusing to Claimant, who testified without contradiction that he was called into the meeting at the end of his work shift when he was tired and “not functioning right.” That Claimant‘s beliefs were not so unreasonable as to constitute misconduct is supported by the appellate decision of the Board, which offered its view that the meeting actually might have triggered Claimant‘s Weingarten rights: “In this case, the claimant was compelled to meet with the employer and his request for union representation was denied despite the fact that the discussion led to a threat of and actual termination.”
Likewise, there is no evidence that Claimant refused to sign the disciplinary notice simply to frustrate Employer‘s objectives or for the sake of being difficult. (See Amador, supra, 35 Cal.3d at p. 678.) The signature line on the notice was located above the words, “Employee Signature as to Receipt.” Although we need not decide whether this language complied with the terms of the CBA, we observe the notice contained no explicit admissions disclaimer and did not specify that signature was solely for receipt purposes. Given these omissions, the disciplinary notice was not so clear on the point that Claimant‘s excuse for not signing it smacked of wrongful intent or evil design. Moreover, under all the circumstances presented, it would be unreasonable to attribute fault to Claimant for declining to accept Employer‘s verbal assurances as to the legal effect of his signature on the written document.
Relying on Rowe v. Hansen (1974) 41 Cal.App.3d 512 [116 Cal.Rptr. 16], Employer contends an employee‘s deliberate disobedience of a lawful and reasonable order is an act of insubordination that results in a per se injury to
Employer may be understood to argue that Claimant‘s past experience with a disciplinary notice in 2004 undermines his claim of a good faith error in judgment. The administrative record discloses the following. Claimant received a disciplinary notice in 2004 after he raised his voice to a supervisor and used inappropriate language in a dispute over a vacation day. Claimant testified that when he met with Employer about the 2004 notice, he was told he would be fired if he did not sign it. Although Claimant did not understand at that time that he was signing as to receipt only, he testified he signed the notice so he would not get fired. Employer suggests this evidence discredits Claimant‘s excuse that he asserted his union rights and refused to sign the 2008 notice because he was “tired,” “confused” and “not functioning right.” We disagree.
The only record evidence of substance concerning the earlier incident is a copy of the signed 2004 disciplinary notice and Claimant‘s brief testimony as described above. It is uncontroverted that Claimant refused to sign the 2008 disciplinary notice because he disputed its factual allegations. The administrative record, however, contains nothing to suggest that Claimant disagreed with the contents of the 2004 notice or that he signed the 2004 notice despite any disagreement. Moreover, in contrast to the 2008 notice, the 2004 notice had a signature line that appeared above the language, “Employee Signature (as to receipt only).” The phrase “(as to receipt only)” was underlined, by hand and apparently in ink. Because there was no evidence that Claimant contested the factual contents of the 2004 notice, and because the language of that notice was discernibly more explicit regarding the legal effect of an employee signature, it is impossible to draw any meaningful inferences from the 2004 incident.
Although we have found no California decision addressing misconduct in this context, out-of-state authorities have reached similar conclusions. In Shannon Engineering & Construction, Inc. v. Mississippi Employment Security Com. (Miss. 1989) 549 So.2d 446, a worker refused his employer‘s order to sign a document, as required by the Mississippi Labor Department, which the worker believed erroneously characterized the work he performed. Applying the same definition of misconduct articulated in Amador, supra, 35 Cal.3d at page 678, the Mississippi Supreme Court held the employer had failed to meet its burden to show that the worker‘s actions constituted insubordination or any other type of misconduct. (Shannon, at pp. 448-450.) Although the worker‘s refusal to sign the document could (and did) expose the worker to termination of his job, the court agreed with the decision of the Mississippi Employment Security Commission Board of Review that the worker was entitled to an award of unemployment benefits. (Id. at pp. 448, 450.)
Similarly, in Del Pino v. Arrow Air Incorporated (Fla.Dist.Ct.App. 2006) 920 So.2d 772, an employee was fired after he refused to sign a supervisor‘s written warning imposing a suspension for certain work conduct. The Florida Unemployment Appeals Commission found the employee‘s refusal to do so was misconduct that disqualified him from receiving unemployment benefits. The Florida Court of Appeal reversed, observing the employee “would not have been terminated but for the fact that he did not agree to sign the employer‘s warning.” (Id. at p. 773.) Relying on a similar definition of misconduct, the court concluded the employee‘s failure to sign was an isolated incident that “did not rise to the level of misconduct that would result in denial of unemployment benefits.” (Ibid.)
Finally, Employer contends the superior court‘s misconduct finding is supported by two precedent benefit decisions of the Board: Matter of Ludlow (1960) Cal. Unemp. Ins. App. Bd. Precedent Benefit Dec. No. P-B-190 (Ludlow) and Matter of Gant (1978) Cal. Unemp. Ins. App. Bd. Precedent Benefit Dec. No. P-B-400 (Gant). We are not persuaded.
In Ludlow, the claimant was a paint and processing utility man who refused, on five separate occasions, to obey his employer‘s instruction to dust the fire extinguishers in his work area. (Ludlow, supra, Cal. Unemp. Ins. App. Bd. Precedent Benefit Dec. No. P-B-190, at pp. 1, 3.) Although six other employees in the claimant‘s same job classification did in fact dust fire
It is debatable whether a claim of good faith error in judgment was asserted in Ludlow, as the decision made no mention of the topic or any authorities thereon. (See Regs., foll. § 1256-41, com. foll. example 3 [even when employee‘s act violates a CBA, an inadvertence or “good-faith error[] in judgment or discretion [is] not misconduct“].) Moreover, as we explained in Amador, supra, 35 Cal.3d 671, which postdated Ludlow, an employee‘s action must be judged from the employee‘s standpoint in light of all the circumstances, including the knowledge possessed by him or her at the time. (Amador, at p. 683, fn. 9.) The law is now clear that deliberate disobedience of a lawful and reasonable instruction, by itself, generally is not misconduct.
The Gant decision also involved no contention or evidence that a good faith error in judgment excused the claimant‘s deliberate and repeated refusals to follow instructions. Instead, the claimant contended he was “being harassed” and ” ‘set up’ ” by the general foreman. (Gant, supra, Cal. Unemp. Ins. App. Bd. Precedent Benefit Dec. No. P-B-400, at p. 2.) Gant is inapposite and fails to support the misconduct finding below.
CONCLUSION AND DISPOSITION
Even assuming Employer‘s order to sign the disciplinary notice was reasonable and lawful, and even assuming Claimant‘s refusal to do so may have justified his termination from employment, the dispositive issue here is whether the probative facts, which are undisputed, establish that Claimant committed misconduct within the meaning of
The judgment of the Court of Appeal is reversed, and the matter is remanded to that court for further proceedings consistent with the views expressed herein.
Cantil-Sakauye, C. J., Werdegar, J., Chin, J., Corrigan, J., Liu, J., and Premo, J.,* concurred.
*Associate Justice of the Court of Appeal, Sixth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.