Aisha Nichols v. Auto Club Services Incorporated

STATE OF MICHIGAN

COURT OF APPEALS

AISHA NICHOLS, UNPUBLISHED

November 19, 2015

Claimant-Appellant,

v No. 322231

Wayne Circuit Court

AUTO CLUB SERVICES, INC., LC No. 14-001823-AE

Respondent,

and

DEPARTMENT OF TALENT AND ECONOMIC

DEVELOPMENT/UNEMPLOYMENT

INSURANCE AGENCY,

Respondent-Appellee.1

Before: JANSEN, P.J., and MURPHY and RIORDAN, JJ.

PER CURIAM.

Claimant, Aisha Nichols, appeals by leave granted2 a circuit court order affirming a

decision by the Michigan Compensation Appellate Commission (“MCAC”), which affirmed the

decision of an administrative law judge (“ALJ”) finding that claimant was properly disqualified

from receiving unemployment benefits. On appeal, claimant argues that the decisions of the

lower tribunals are contrary to law because the tribunals failed to apply, in determining whether

claimant’s absences constituted disqualifying misconduct, the correct standard for absences that

are beyond an employee’s control. Claimant also argues that the circuit court erred in

concluding that the ALJ’s factual findings were supported by competent, material, and

1

Because respondent Auto Club Services, Inc., is not a party in this appeal, we will refer to

respondent Department of Talent and Economic Development/Unemployment Insurance Agency

as “respondent” in this opinion.

2

Nichols v Auto Club Servs, Inc, unpublished order of the Court of Appeals, entered October 30,

2014 (Docket No. 322231).

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substantial evidence. We agree that claimant’s disqualification from unemployment benefits was

contrary to law and reverse.

I. FACTUAL BACKGROUND

This case arises from claimant’s application for unemployment benefits following her

discharge from Auto Club Services, Inc. (“ACS”) in March 2013. In October 2012, claimant

was hired as a customer sales and service representative at ACS. ACS had a written no-fault

attendance policy with no written exceptions, and exceptions were “very rare” in practice. ACS

employees received three days off from work every six months, which the employees earned

after working for 90 days as long as they were not “on formal discipline.”

Between December 3, 2012, and February 25, 2013, claimant received three written

discipline notices, two of which were related to being absent from work or leaving work early.

The absence giving rise to the last discipline notice was illness-related, and claimant sought

medical treatment for her condition.

On February 28, 2013, claimant’s vision became blurry and she was unable to see while

she was driving to work. This was the second time that she had experienced blurred vision, and

she was concerned that she was “having a thyroid storm.” After she pulled over to the side of the

road, a man assisted her in calling ACS so that she could leave a voicemail message regarding

her absence that day. Claimant testified that she stated in the voicemail that (1) the reason for

her absence was “personal,” (2) she would explain the reason for her absence when she returned,

and (3) she would return to work on March 1, 2013.

When claimant returned to work on March 1, 2013, she was discharged from ACS for her

absence on February 28, 2013. As she was being discharged, claimant explained to her

supervisor that she had not been feeling well and had been unable to see, but she did not provide

documentation from her doctor confirming this condition. Following her termination, claimant

never gave ACS a doctor’s statement or any other medical documentation regarding the

circumstances of her medical condition on February 28, 2013. It is unclear from claimant’s

testimony at the hearing before the ALJ whether she provided ACS with a statement from her

doctor regarding her medical condition earlier in February 2013, but claimant did testify that she

told her employer that she was not feeling well prior to the time that she was discharged.

Claimant sought unemployment benefits under the Michigan Employment Security Act

(“MESA”), MCL 421.1 et seq. The State of Michigan Unemployment Bureau disqualified her

from receiving unemployment benefits pursuant to MCL 421.29(1)(b) on the basis that claimant

was terminated for deliberately disregarding her employer’s interest. Claimant subsequently

appealed the agency’s decision to an ALJ, the MCAC, and the Wayne Circuit Court. At the

hearing before the ALJ, the parties stipulated that claimant’s absences were related to an illness

or medical condition, although the parties dispute on appeal whether the ALJ accepted that

stipulation. Regardless, the tribunals below affirmed claimant’s disqualification from

unemployment benefits.

II. STANDARDS OF REVIEW

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The Michigan Supreme Court recently explained the standard of review applicable to

unemployment benefit claims based on Article 6, § 28 of Michigan’s 1963 Constitution, which

provides the standard of review applicable to a decision of an administrative body; MCL 421.34,

which pertains to an appeal from an ALJ to the MCAC; and MCL 421.38, which also pertains to

an appeal from the MCAC to a circuit court:

[A] circuit court must affirm a decision of the ALJ and the MCAC if it conforms

to the law, and if competent, material, and substantial evidence supports it. A

reviewing court is not at liberty to substitute its own judgment for a decision of

the MCAC that is supported with substantial evidence. The Court of Appeals

then reviews a circuit court’s decision to determine whether the lower court

applied correct legal principles and whether it misapprehended or misapplied the

substantial evidence test to the agency’s factual findings . . . . [Hodge v US

Security Assoc, Inc, 497 Mich 189, 193-194; 859 NW2d 683 (2015) (quotation

marks and footnotes omitted).]

As such, our review of the lower court’s application of the “substantial evidence test”

is indistinguishable from the clearly erroneous standard of review that has been

widely adopted in Michigan jurisprudence. As defined in numerous other

contexts, a finding is clearly erroneous when, on review of the whole record, this

Court is left with the definite and firm conviction that a mistake has been made.

[Logan v Manpower of Lansing, Inc, 304 Mich App 550, 555; 847 NW2d 679

(2014) (quotation marks and citations omitted).]

Stated differently, “[s]ubstantial evidence is that which a reasonable mind would accept as

adequate to support a decision, being more than a mere scintilla, but less than a preponderance of

the evidence.” Petrelius v Houghton-Portage Twp Sch, 281 Mich App 520, 521; 761 NW2d 395

(2008) (quotation marks and citation omitted).

Additionally, we “review questions of statutory interpretation de novo. The primary goal

when interpreting a statute is to ascertain and give effect to the Legislature’s intent.” Logan, 304

Mich App at 555 (citations omitted). “If the statutory language is unambiguous, appellate courts

presume that the Legislature intended the plainly expressed meaning, and further judicial

construction is neither required nor permitted.” Petrelius, 281 Mich App at 522. This Court has

recognized that the MESA “generally is to be liberally construed, [but] those provisions

regarding disqualification from benefits are to be construed narrowly.” Korzowski v Pollack

Indus, 213 Mich App 223, 229; 539 NW2d 741 (1995).

III. APPLICABLE LAW

Pursuant to MCL 421.29(1)(b), an individual is disqualified from receiving benefits

under the MESA if he or she “[w]as suspended or discharged for misconduct connected with the

individual’s work or for intoxication while at work.” “Misconduct” is not statutorily defined, but

the Michigan Supreme Court adopted the following definition of “misconduct” for purposes of

MCL 421.29(1)(b):

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[“Misconduct”] is limited to conduct evincing such willful or wanton disregard of

an employer’s interests as is found in deliberate violations or disregard of

standards of behavior which the employer has the right to expect of his employee,

or in carelessness or negligence of such degree or recurrence as to manifest equal

culpability, wrongful intent or evil design, or to show an intentional and

substantial disregard of the employer’s interests or of the employee’s duties and

obligations to his employer. On the other hand mere inefficiency, unsatisfactory

conduct, failure in good performance as the result of inability or incapacity,

inadvertencies or ordinary negligence in isolated instances, or good faith errors in

judgment or discretion are not to be deemed [“]misconduct[”] within the meaning

of the statute.” [Carter v Mich Employment Security Comm, 364 Mich 538, 541;

111 NW2d 817 (1961) (quotation marks and citation omitted).]

“[W]rongdoings which may justify termination of employment under a[n employment] contract

do not necessarily qualify as ‘misconduct’ for purposes of the [MESA].” Hagenbuch v Plainwell

Paper Co, Inc, 153 Mich App 834, 837-838; 396 NW2d 556 (1986). Similarly, some actions

may constitute statutory “misconduct” even if they do not justify termination under the terms of

a particular employment contract. Id. at 838. As such, a claimant’s behavior must be assessed

objectively, independent from the requirements of his or her employment contract. Id.

“It is well established that excess absenteeism and tardiness for reasons not beyond the

employee’s control constitutes misconduct under MCL 421.29(1)(b)[.]” Id. at 837; see also

Washington v Amway Grand Plaza, 135 Mich App 652, 658; 354 NW2d 299 (1984) (“An

employee’s failure to report to work on time may in certain circumstances constitute statutory

misconduct.”). However,

applying the Carter, [364 Mich at 541], definition to the facts of this case,

claimant’s tardiness or absences cannot support a finding of statutory misconduct

unless it is determined that they were without good cause, which could include

personal reasons or other reasons beyond claimant’s control. As a matter of law,

tardiness or absences resulting from events beyond the employee’s control or

which are otherwise with good cause cannot be considered conduct in wilful or

wanton disregard of the employer’s interests. Carter, supra. This interpretation

is consistent with the Court’s duty to narrowly construe the disqualification

provisions of the act so as to further the remedial policy of the act, which is, in

part, to provide benefits to persons unemployed through no fault of their own.

[Washington, 135 Mich App at 658 (emphasis added).]

In general, “the employer bears the burden of proving [statutory] misconduct,”

Korzowski, 213 Mich App at 229; see also Washington, 135 Mich App at 658, but the burden

shifts when “the relevant facts are entirely in the hands of the former employee and, for all

practical purposes, cannot be discovered by the employer,” Veterans Thrift Stores, Inc v Krause,

146 Mich App 366, 368; 379 NW2d 495 (1985). “[O]nce the employer raises the issue of

disqualification for misconduct under [MCL 421.]29(1)(b) and submits evidence of a number of

absences which, if unsupported by sufficient reasons, are so excessive as to constitute

misconduct within the contemplation of this section, then the burden is upon the claimant to

provide a legitimate explanation for the absences.” Id.

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IV. APPLICATION

The question here is whether claimant’s absences constituted a basis for a finding of

statutory misconduct, disqualifying her from receiving unemployment benefits. There is no

dispute that she violated respondent’s no-fault attendance policy and that the violation was the

basis for her termination. But, respondent stipulated at the hearing that the reason for claimant’s

absences was her illness. Thus, the relevant inquiry is whether respondent discharged claimant

for “misconduct” as that term is construed under MCL 421.29(1)(b).

The ALJ found that claimant’s actions displayed willful disregard of her employer’s

interest and, therefore, constituted misconduct because her attendance “left much to be desired,”

claimant had received warnings related to her attendance issues, and she did not advise her

employer or submit medical evidence in support of her claim that her last absence was due to a

medical condition. The MCAC and the circuit court concluded, and we agree, based on the

record, that these factual findings are not clearly erroneous. The record demonstrates that

claimant was absent from work or left early from work on multiple occasions. The record also

indicates that she received disciplinary write-ups based on her attendance issues. Finally,

although claimant testified at the hearing that she told her ACS supervisor, at the time that she

was being discharged, that she was absent on February 28, 2013, because she was not feeling

well and could not see, the record supports the ALJ’s finding that claimant failed to expressly

advise her employer, or provide medical documentation specifically indicating, that her last

absence was due to a medical condition.3

However, even if we assume, without deciding, that the ALJ did not accept the parties’

stipulation that all of claimant’s absences were due to a medical condition, there is nothing in the

record contradicting the evidence proffered by claimant that at least two of her absences, i.e.,

those occurring on February 18, 2013, and February 28, 2013 (the absence that precipitated her

discharge), were due to illness or a medical condition. Likewise, the ALJ did not state any

factual findings that discredited claimant’s explanation for her attendance issues. Nevertheless,

the ALJ concluded that respondent’s failure to advise her employer of the reason for her last

absence or submit medical evidence following her last absence, in conjunction with her repeated

absences and warnings, constituted statutory misconduct. Similarly, in affirming the ALJ’s

decision, the circuit court focused on the fact that claimant did not provide an explanation for her

absences when she was discharged and the fact that claimant did not submit documentation from

her doctor concerning her absences until shortly prior to the hearing before the ALJ, reasoning

that the ALJ was permitted to consider the explanation offered by claimant at the hearing and the

content and timing of the doctor’s letter in assessing claimant’s credibility. Accordingly, even if

the ALJ and the circuit court arguably “stated doubt regarding [claimant’s] explanation for her

3

We conclude that the ALJ’s factual findings were based on substantial evidence because

claimant did not identify a particular medical condition in her conversation with her supervisor

when she was terminated. See Petrelius, 281 Mich App at 521 (“Substantial evidence is that

which a reasonable mind would accept as adequate to support a decision, being more than a mere

scintilla, but less than a preponderance of the evidence.”).

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absences,” as respondent contends on appeal, it is evident that neither tribunal made factual

findings contrary to claimant’s explanation for her absences or specifically found that claimant’s

explanation was not credible.

As such, it is apparent that the ALJ, the MCAC, and the circuit court failed to recognize

that absences for good cause do not constitute “misconduct” for purposes of MCL 421.29(1)(b),

even if those absences violate the terms of a claimant’s employment under a no-fault attendance

policy. See Hagenbuch, 153 Mich App at 837-838; Washington, 135 Mich App at 658. MCL

421.29(1)(b) provides for a disqualification from unemployment benefits if an individual was

“discharged for misconduct connected with the individual’s work.” (Emphasis added.) Thus,

under the plain language of the statute, a disqualification for misconduct can only arise from the

conduct that served as the basis of an employee’s discharge. See Petrelius, 281 Mich App at

522. Allowing an individual to be disqualified from unemployment benefits on the basis of

conduct that should not impact his or her disqualification contradicts the principle, based on the

remedial nature of the MESA, that “provisions regarding disqualification from benefits are to be

construed narrowly.” Korzowski, 213 Mich App at 229.

Here, failing to notify ACS that her final absence was due to a medical condition was not

the basis of claimant’s discharge. Instead, claimant was discharged because she accumulated

excessive absences in violation of ACS’s no-fault attendance policy, regardless of the reasons for

her absences; a senior employee relations specialist for ACS expressly confirmed that the

reasons for claimant’s absences did not matter, and that claimant would have been terminated

despite any explanation that she provided for her absences. Thus, the only acts properly

considered in determining whether claimant committed statutory misconduct for purposes of

MCL 421.29(1)(b) are claimant’s absences themselves, not whether claimant advised her

employer of the reasons for her absences or provided medical documentation to her employer

concerning those absences.

The record shows that claimant provided a “legitimate explanation” for at least two of her

absences at the hearing before the ALJ, see Veterans Thrift Stores, 146 Mich App at 368, which

was supported by her testimony at the ALJ hearing, the ACS write-ups included in the record

and referenced during the senior employee relations specialist’s testimony, and the certification

to return to work or school prepared by claimant’s doctor concerning claimant’s February 18,

2013 absence.4 In addition to specifically noting that claimant was under her doctor’s care on

February 18, 2013, the certification provided evidence that claimant had one or more chronic

medical conditions related to her thyroid:

Limitations/Remarks: DX: Toxic Diffuse Goiter and Anxiety disorder. This

patient was taken care of by us with a follow up appointment from an ER visit in

February. She has a history of Grave’s Disease, which can cause numerous

fatigue symptoms which may cause her to go to the hospital on occasion. She

was able to continue work with no restrictions at this time when released from our

4

We recognize that the certification was prepared several months after claimant’s last two

absences.

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office; however, she has had the same symptoms also in March 2013, which can

be caused by her anxiety and her thyroid issues. Aisha’s symptoms are heart

palpitations, some blurred vision, headaches, and severe dry mouth. Please assist.

It is also apparent from the hearing transcript that claimant did not provide additional testimony

regarding the medical reasons for her absences in light of the ALJ’s response, i.e., “[W]hy do we

need to go into detail?,” after the parties offered to stipulate that claimant’s medical condition

was the reason for her absences.

Except for providing evidence that respondent left early on November 29, 2012, due to a

family emergency, respondent did not contradict the medically-related reasons provided by

claimant for her absences. Likewise, none of the lower tribunals stated factual findings that

contradicted the reasons provided by claimant or concluded that claimant’s absences were

without good cause. Instead, the lower tribunals focused on claimant’s lack of attendance, the

fact that claimant received warnings regarding her attendance, and the fact that claimant did not

provide an explanation or proffer documentation for her absences until after she was terminated.

However, these facts do not establish, on their own, that claimant’s absences constituted

statutory misconduct. Again, a “claimant’s tardiness or absences cannot support a finding of

statutory misconduct unless it is determined that they were without good cause, which could

include personal reasons or other reasons beyond claimant’s control.” Washington, 135 Mich

App at 658 (emphasis added). Accordingly, because the lower tribunals did not determine that

claimant’s absences were without good cause, the ALJ, the MCAC, and the circuit court erred in

concluding that claimant’s absences constituted statutory misconduct that justified a

disqualification from unemployment benefits under MCL 421.29(1)(b). Hodge, 497 Mich at

193-194; Logan, 304 Mich App at 554-555.

V. CONCLUSION

The lower tribunals did not determine whether claimant’s absences were without good

cause in light of her alleged illness or medical condition. Accordingly, without such a factual

determination, claimant was wrongfully disqualified from receiving unemployment benefits

under MCL 421.29(1)(b).

Reversed and remanded for further proceedings consistent with this opinion. We do not

retain jurisdiction.

/s/ Kathleen Jansen

/s/ William B. Murphy

/s/ Michael J. Riordan

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