The opinion
Cite as 2024 Ark. App. 606
ARKANSAS COURT OF APPEALS
DIVISION IV
No. E-23-263
CITY OF FORT SMITH Opinion Delivered December 11, 2024
APPELLANT
V. APPEAL FROM THE ARKANSAS
BOARD OF REVIEW
DIRECTOR, DIVISION OF [NO. 2023-BR-00115]
WORKFORCE SERVICES; AND
MARTIN BOSCO
APPELLEES
AFFIRMED
BART F. VIRDEN, Judge
The City of Fort Smith (City) appeals from an order issued by the Arkansas Board of
Review (Board) awarding unemployment-compensation benefits to Martin Bosco. We
affirm.
I. Relevant Facts
On August 16, 2022, Martin Bosco was fired for insubordination from his position
with the City. Bosco filed a claim for unemployment benefits that the Division of Workforce
Services denied, finding that Bosco was discharged from work for insubordination and
dishonesty. On October 28, Bosco appealed the determination to the Appeal Tribunal
(Tribunal), and a hearing was held on the matter.
At the hearing, the hearing officer acknowledged the inclusion in the record of a two-
page disciplinary memorandum from the City, and counsel for the City summarized the
memorandum in the opening statement. The memorandum provided the following
information. Bosco worked for the City in the information-technology department for
twenty-one years; however, on the day of his termination, he was employed as a water-project
specialist. On Friday, August 12, Bosco was informed during a meeting with City
Administrator Carl Geffken, Human Resources Director Rick Lolley, and Utility Director
Lance McAvoy that starting the following Monday, he would be transferred to the water-
project-specialist position and receive a 3 percent pay increase. During the meeting, Bosco
was ordered to return his city-issued cell phone, laptop, identification badge, and access card.
Bosco “wiped” the cell phone, returning it to factory settings, and returned it along with his
identification badge and an access card. He did not inform the others in the meeting that he
had a second access card, and he did not turn it in at that time. Bosco was told not to reenter
the IT building without an escort and to report to the utilities department on Monday.
Before leaving work that day Bosco told McAvoy that he had turned in his laptop; however,
he had not done so. After work on Friday, Bosco returned to the IT building and used his
second access card to enter the building. There, McAvoy saw Bosco with the laptop that he
earlier stated he had returned. On the following Tuesday, Bosco was fired for misconduct
based on his dishonesty, unauthorized reentry into the building, and failing to return his
access card as ordered.
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Bosco testified that in the last few years before he was fired, he worked for the City
in the IT department as a cyber-security administrator. During his employment, he had never
received a negative performance review or any criticism of his job performance. Bosco
testified that in June and July, the IT department underwent an audit regarding patch
management and firewall concerns, and “what policies did we have, you know, what were
our pitfalls.” City Administrator Carl Geffken told Bosco not to answer the auditor’s
questions. The auditor explained to Bosco that he was required to answer the questions, and
Bosco answered them to the best of his ability. The auditor compiled reports from the audit,
and the reports were published to the City’s website around the end of July. In early August,
immediately after the audit report was published, Bosco contracted COVID-19 and was
absent from work for a week. On August 12, after Bosco had returned to work, he was asked
to attend a meeting with Geffken, McAvoy, and Lolley. Geffken told him the purpose of the
meeting was to transfer him to the position of water-project specialist “due to my, you know,
impressive track record and—and credentials, they really needed me to focus on this new
task.” Geffken also stated Bosco had been seen speaking with an auditor, and he was upset
and “felt that was wrong.” Nonetheless, Bosco was told to start his new position Monday.
Bosco was not given a job description, and there was no discussion regarding Bosco’s
transition to the new job. Bosco was not told that his access to the IT building was restricted,
and in fact, Bosco was informed he would work at both the IT building and the Kelley
Highway location. He was asked to return his phone, but no one informed him that any
passcodes should remain on the phone. Bosco explained that he never kept passcodes,
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passwords, or passphrases on his phone, and all that information was kept in other records
that could be accessed by his supervisor if needed. Bosco reset the phone to factory settings,
as was the customary practice when he collected phones from employees who left work. He
noted that sometimes employees wiped their own phones before returning them, and there
was no written policy regarding this practice. Bosco was told to return his laptop and any
other technological device that he used for work. Bosco also returned his primary
identification badge and access card because Lolley had explained to him that he would need
a new badge displaying his new job title. When the workday ended and Bosco was leaving
the building, McAvoy asked him if he had turned everything in, and he said yes, though he
did not remember specifically mentioning the laptop. When he was halfway home, he
realized the laptop was in the backseat of his truck, and he returned to the office to leave it
on his desk as instructed. Bosco saw McAvoy’s car in the parking lot and assumed he was
still in the building. Bosco used his second blank access card (without his photo and job
description) to enter the building. McAvoy came to Bosco’s office as he was trying to check
his email before he returned the laptop, and McAvoy told him he could not check his email.
McAvoy told Bosco to leave the second access card and laptop in the office, and then McAvoy
watched Bosco leave the building. Bosco explained that the City routinely issued secondary
access cards or fobs to employees when requested, and around three hundred of
approximately nine hundred employees had secondary cards. There was no written policy
regarding the production of secondary cards, and Geffken, McAvoy, and Lolley had not
ordered him to return his second card during the meeting. Bosco was never told he was
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restricted from the building, and he assumed he would have access to the building during
the transfer period to assist the new IT director. On Monday, Bosco reported to work at 8:00
a.m. McAvoy discussed Bosco’s new duties with him, and when Bosco asked about the job
description and pay grade, McAvoy said he was working on it. Then, McAvoy asked Bosco
to sit in the breakroom. Within fifteen minutes, Lolley and McAvoy entered the breakroom
and ordered Bosco to go home. On Tuesday, McAvoy called Bosco and told him to meet
him at the IT building. Once inside, Lolley read the disciplinary memorandum aloud to
Bosco and terminated his employment. Bosco explained to Lolley and McAvoy he had no
intention of being insubordinate, he had done his best to comply with their requests, and
there was a “gross misunderstanding.” Later, Bosco learned that there was no water-project-
specialist job title. Bosco noted that he was paid for August 15 and 16 at his IT pay rate and
not the increased rate that was to come with his transfer.
After the hearing, the Tribunal entered into evidence the hearing officer’s written
determination denying benefits, finding that Bosco was fired for misconduct—specifically,
for his deception of his employer, pursuant to Ark. Code Ann. § 11-10-514(b) (Supp. 2023).
The Tribunal found that Bosco was insubordinate and dishonest when he entered the
building using a duplicate badge that the employer had no knowledge of, wiped his phone
before returning it, and failed to return his work laptop during the meeting, instead
returning it “under secretive conditions.”
Bosco appealed the Tribunal’s determination to the Board. The Board reversed the
decision, stating that it relied on the documents and testimony presented to the Tribunal.
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The Board also found that the record contained an email sent on October 4 recounting the
meeting on August 12 with Bosco regarding his transfer, 3 percent raise, and orders to turn
in his employer-issued phone, computer, identification badge, and computer access codes.
The email contained the same information as the disciplinary memorandum, including that
Bosco wiped his phone without asking and without his employer’s knowledge, and he was
told he was not allowed to enter the IT building without an escort, which he later did. The
Board recounted Bosco’s testimony. Also, the Board clarified that it would not consider the
City’s opening statement by counsel regarding the contents of the disciplinary memo as
evidence; however, the Board also stated that the documentary evidence was “substantive.”
The Board addressed the weight of the evidence, finding that
[t]he employer heavily relies upon hearsay documentation in the written record in
this case. In its email and memorandum, the employer asserted that the claimant was
discharged for erasing important information from a cellphone, entering a building
using a duplicated access code, lying about turning in a laptop while accessing the
employer’s facilities without permission. The claimant presented sworn testimony
rebutting these assertions. Sworn testimony carries greater evidentiary weight, and the
Board finds the claimant’s testimony credible.
The Board determined that Lolley’s statement that Bosco wiped the phone without
the knowledge of his supervisor lacked credibility, and regarding the laptop, the Board found
Bosco’s version of events to be more credible. The Board stated that the City’s
contention that the claimant was told to not enter the employer’s facility without an
escort is curious. The employer did not indicate that the August 12 meeting was a
disciplinary meeting. There may have been a good reason for why an employee may
be so told, but the employer did not provide one aside from a vague statement about
security, nor did the employer provide witnesses that could be asked.
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The Board decided that even if Bosco had entered the building without his employer’s
consent, Bosco did not do so in a way that was intended to disregard his employer’s interests.
The Board found that the City had not established that having an additional access card was
contrary to its interest and that Bosco “testified that many such cards had been issued, and
his testimony is more persuasive than the hearsay documents.” The City timely filed its notice
of appeal, and this appeal followed.
I. Discussion
A. Reliance on New Evidence
On appeal, the City asserts that it is likely that Board impermissibly considered new
evidence. Specifically, the City argues that Bosco’s posthearing sixteen-page document dated
January 5, 2023, and titled “2nd Appeal” is included in the record, which implies that it was
considered by the Board. The City contends that the document, which was not served on
the City, includes references to the City’s human resources handbook, information
regarding Bosco’s pay for the new position, argument that Bosco’s supervisor was fraudulent
in his communications with him, and statements regarding “unnamed ‘administrators’” who
could have known about his second access card. The City’s argument is not well taken.
In Thomas v. Director, 2019 Ark. App. 468, at 3–4, 587 S.W.3d 612, 615–16 (citations
omitted), we set forth the following standard of review in employment cases and the criteria
to prove that the employee was fired for misconduct:
Board decisions are upheld if they are supported by substantial evidence.
Substantial evidence is such relevant evidence that reasonable minds might accept as
adequate to support a conclusion. In appeals of unemployment-compensation cases,
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we view the evidence and all reasonable inferences deducible therefrom in the light
most favorable to the Board’s findings. Even if there is evidence that could support a
different decision, our review is limited to whether the Board could have reasonably
reached its decision as a result of the evidence presented. However, our function on
appeal is not merely to rubber-stamp decisions arising from the Board.
When an individual is discharged from employment, the employer has the
burden of proving by a preponderance of the evidence that the employee engaged in
misconduct. Misconduct, for purposes of unemployment compensation, involves (1)
disregard of the employer’s interest, (2) violation of the employer’s rules, (3) disregard
of the standards of behavior the employer has a right to expect of its employees, and
(4) disregard of the employee’s duties and obligations to the employer. Mere
inefficiency, unsatisfactory conduct, failure in good performance as the result of
inability or incapacity, inadvertencies, ordinary negligence in isolated instances, or
good-faith errors in judgment or discretion do not rise to the level of misconduct.
There must be an intentional or deliberate violation, a willful or wanton disregard,
or carelessness or negligence of such degree or recurrence as to manifest wrongful
intent or evil design.
The City acknowledges that the Board’s January 27 letter is also in the record and
states that the appeal had been received and “the Board of Review will make its decision in
this matter based upon a review of the entire record of evidence as forwarded to the Board
of Review by the Appeal Tribunal.” The letter further provides that “the Board of Review is
without jurisdiction to accept or consider as evidence any submissions made by the parties
after the closure of the record by the Appeal Tribunal without further hearing or consideration
of any additional information offered.” (Emphasis added.) Additionally, at the close of the
hearing, the Tribunal hearing officer stated that “[t]he record in Docket No. 2022-AT-08022
is now closed.”
The City contends that the Board did not refer to any specific postappeal submissions
that would not be considered or that specific postappeal submissions would be discarded.
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The Board’s letter notice regarding the exclusion of any new evidence, the City contends, is
insufficient to overcome the requirement set forth in Ark. Code Ann. § 11-10-525(c)(1)
(Repl. 2012) that “[u]pon review on its own motion or upon appeal and on the basis of
evidence previously submitted in the case, or upon the basis of any additional evidence as it
may direct be taken, the Board may affirm, modify, reverse, dismiss, or remand the case.”
The City also contends that Brewer v. Everett and Leckenby Co., 3 Ark. App. 59, 621 S.W.2d
883 (1981), and Brown Jordan v. Dukes, 269 Ark. 581, 600 S.W.2d 21 (Ark. App. 1980),
support its argument that the Board must specifically reject any evidence offered after the
hearing. Both Brewer and Brown Jordan are distinguishable from the instant case.
In Brown Jordan, an employee lost his appeal to the Tribunal. While the appeal to the
Board was pending, Brown’s coworker signed a statement that was sent to the Board
containing new information. Notice of the letter was not sent to the employer, and the Board
did not direct that the evidence be taken; however, in its decision reversing the Tribunal
“the board of review emphasized” facts from the statement in its determination in Brown
Jordan’s favor. Brown Jordan, 269 Ark. at 583, 600 S.W.2d at 23. This court held that the
Board’s consideration of the statement sent while the appeal to the Board was pending
constituted a denial of due process, and it was not harmless error. Brown Jordan is
distinguishable because here, the Board clearly stated twice that the record had been closed
at the end of the hearing, and there is no indication that the Board relied on the “2nd
Appeal” document in the decision to award benefits.
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Similarly, in Brewer, the employee seeking unemployment benefits provided a letter
to the Board containing new evidence. This court held that “there is nothing in the record
to refute this charge. It is not contended by appellees that appellant had notice of the letter,
nor is it contended that the letter was not a factor in the decision of the Board.” Brewer, 3
Ark. App. at 60, 621 S.W.2d at 884. Herein lies the difference. The record in this case
contains multiple instances when the case file specifically was closed to additional evidence.
The City identifies new facts in Bosco’s letter; however, there is no indication that the Board
relied on the letter or any new information.
Our caselaw does not support the City’s argument that the Board committed
reversible error by not specifically rejecting the new evidence offered in the “2nd Appeal”
letter submitted after the hearing. On this point we affirm.
B. Hearsay Evidence in Unemployment Cases
The City argues that the Board erred by failing to consider evidence the Board
improperly determined was hearsay. The City contends that the disciplinary memorandum
written by McAvoy was not hearsay because McAvoy discussed the facts later included in the
memorandum with Bosco, and the statements in the memorandum are based on what
McAvoy observed; thus, for the first time on appeal, the City argues that the memorandum
was a record made as a part of a regular business activity. We decline to address the merits
of this argument. It was not made below, and this court does not consider issues raised for
the first time on appeal. Hampton v. Dir., 2023 Ark. App. 352, at 3, 673 S.W.3d 804, 807.
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Additionally, the City argues that it does not matter if the memorandum is hearsay
because the Arkansas Rules of Evidence do not apply to administrative tribunals. The City’s
argument fails because the Board considered the documentary evidence. The Board found
that it would not consider counsel’s opening statement summarizing the disciplinary
memorandum; however, the Board explained that
the Board may consider the documentary evidence as substantive. However, the facts as
presented by the employer’s attorney will not be considered evidence as the attorney
was merely relaying the employer’s position and was not involved in the separation.
(Emphasis added.)
The City’s argument relies on the Board’s refusal to consider the memorandum;
however, the Board clearly states in its decision that it weighed the memorandum against
Bosco’s conflicting testimony, and it was the attorney’s summary of the document that could
not be considered. Moreover, at the Tribunal hearing, the hearing officer specifically noted
that the disciplinary memorandum is part of the record, stating, “I have an email from Rick
Lolley, . . . I also have an insubordination statement from the employer.” We find no error
and affirm.
C. The Weight of Oral Testimony
The City contends that the Board’s statement that “[s]worn testimony carries greater
evidentiary weight, and the Board finds the claimant’s testimony credible” implies that the
Board did not exercise its discretion to weigh the evidence, automatically giving Bosco’s
testimony more weight than the City’s documentary evidence. We disagree.
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The Board exercised its discretion by carefully weighing the evidence, making
extensive findings, and establishing a thorough record:
While the claimant admitted to resetting the phone, he did so in full view of
supervisors and human resources personnel, making Lolley’s email suggesting that
the administrator was not aware that the claimant reset the phone during the meeting
noncredible. The Board finds the employer’s assertion that the claimant lied about
turning in a laptop to be less credible than the claimant’s testimony that he did not
do so. The employer’s contention that the claimant was told to not enter the
employer’s facility without an escort is curious. The employer did not indicate that
the August 12 meeting was a disciplinary meeting. There may have been a good reason
for why an employee may be so told, but the employer did not provide one aside from
a vague statement about security, nor did the employer provide witnesses that could
be asked. Again, the claimant’s testimony that he was not told he could not access the
facility is credible. Moreover, even if the claimant was not allowed in the building,
the employer has not shown by a preponderance of the evidence that the claimant
did so in willful disregard of the employer’s interests. The claimant testified that he
did not think that his entering a facility at which he worked to tum in a laptop was a
“big deal,” and the Board believes him. This leaves the Board with the employer’s
assertion that the claimant created a duplicate access identification card. The claimant
testified that many such cards had been issued, and his testimony is more persuasive
than the hearsay documents. As such, the employer has not established that his
having an additional access card was an intentional disregard of its interests. The
claimant also presented evidence suggesting that there may have been some other
element which impelled the employer to discharge him, namely his prior conversation
with a city auditor. However, the Board need not address it because the onus is on
the employer to prove that the claimant was discharged for misconduct connected
with the work, and it has not done so.
The specific, detailed findings demonstrate that the Board weighed Bosco’s testimony
against the evidence presented by the City and found that Bosco’s testimony carried greater
weight; thus, the Board clearly exercised its discretion. Accordingly, we affirm.
Affirmed.
KLAPPENBACH and BARRETT, JJ., agree.
Daily & Woods, P.L.L.C., by: Douglas M. Carson, for appellant.
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Cynthia L. Uhrynowycz, Associate General Counsel, for appellee.
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