stating that “[f]or an employee’s conduct to constitute willful misconduct, it must be of such a degree or recurrence as to manifest culpability, wrongful intent, or evil design, or show an intentional and substantial disregard of the employer’s interest or of the employee’s duties and obligations to the employer”
How later courts described this case
- stating that “[f]or an employee’s conduct to constitute willful misconduct, it must be of such a degree or recurrence as to manifest culpability, wrongful intent, or evil design, or show an intentional and substantial disregard of the employer’s interest or of the employee’s duties and obligations to the employer”
- stating that “[w]e have no doubt that even one isolated instance of theft is sufficient to constitute willful misconduct . . .”
- cautioning counsel to be thorough in his research and candid in his filings
- adopting the referee’s conclusion that Claimant did not credibly assert that she intended to pay for the service
Written by the judges who cited it.
The opinion
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Reading Area Water Authority, :
Petitioner :
:
v. : No. 1177 C.D. 2015
: Submitted: November 25, 2015
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge1
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION BY JUDGE BROBSON FILED: April 21, 2016
Reading Area Water Authority (Employer) petitions this Court for
review of an order of the Unemployment Compensation Board of Review (Board).
The Board affirmed the Unemployment Compensation Referee’s (Referee)
decision, thereby granting unemployment compensation benefits to German
Guzman (Claimant). For the reasons discussed below, we affirm.
On September 28, 2014, Claimant, a maintenance worker at
Employer’s filtration plant, removed parts from a discarded compressor in the
scrap pile behind the office of Employer’s Lake Ontelanuee location. (Reproduced
Record (R.R.) 79.) Claimant informed his supervisor, Michael Carl, that he had
removed the parts in order to fix a compressor at the filtration plant that was
leaking oil. (R.R. 79.) Employer contacted the local police and they conducted an
1
This case was assigned to the opinion writer on or before January 31, 2016, when Judge
Leadbetter assumed the status of senior judge.
investigation into the removed compressor parts. (R.R. 79.) Claimant was
suspended from his employment on October 12, 2014, based on allegations that he
stole property from Employer. (R.R. 79-80.) Claimant was subsequently charged
with theft by unlawful taking2 and receiving stolen property.3 (R.R. 59-60.)
Claimant filed for unemployment compensation benefits on
October 26, 2014. (Certified Record (C.R.), Item No. 2.) On November 7, 2014,
the Allentown UC Service Center (Service Center) denied Claimant benefits under
Section 402(e) of the Unemployment Compensation Law (Law).4 (C.R., Item
No. 6.) Claimant appealed the Service Center’s determination, and a Referee
conducted a hearing on December 17, 2014. The Referee reversed the Service
Center’s determination and concluded that Claimant’s actions did not constitute
willful misconduct and granted Claimant unemployment compensation benefits.
(R.R. 52-53.) Employer appealed the Referee’s determination to the Board. By
order dated January 30, 2015, the Board directed that a hearing be held to
determine the outcome of the criminal charges pending against Claimant. (C.R.,
Item No. 15.)
At the remand hearing, Claimant presented evidence that on
March 27, 2015, he agreed to enter the Accelerated Rehabilitation Disposition
(ARD)5 program for 30 days. (R.R. 75.) Claimant was required to pay $190 in
2
18 Pa. C.S. § 3921.
3
18 Pa. C.S. § 3925.
4
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§ 802(e).
5
Acceptance into an ARD program requires neither an admission nor a denial of guilt.
Rather, in accordance with Pa. R. Crim. P. 315, when a defendant is accepted into an ARD
program, all proceedings on the charges are deferred until the program has been completed.
(Footnote continued on next page…)
2
costs, but he was not ordered to make any restitution payment. (R.R. 75.) In the
ARD colloquy, admitted into evidence at the remand hearing, the Court of
Common Pleas of Berks County (trial court) noted that Claimant was not pleading
guilty to any charge by agreeing to enter the ARD program and that upon
completion of the program the charges and the arrest would be expunged from his
record. (R.R. 75.)
Following the remand hearing, the Board issued a determination,
which contained the following Findings of Fact:
1. The claimant was employed from 2012 through
October 12, 2014 as a full-time Maintenance
Worker 2 with Reading Area Water Authority,
earning around $19.30 per hour.
2. The employer has a policy which provides theft or
inappropriate removal or possession of property is
grounds for termination of employment.
3. The claimant was aware of the employer’s policy.
4. On September 28, 2014 the claimant went from the
filtration plant, where he performed work, to the Lake
Ontelanuee office location and removed parts of a
discharged compressor from the employer dumpster
pile.
5. On or around November 29, 2014 the claimant spoke
to his Supervisor, the Maintenance Foreman, and
advised that he had removed parts from a discarded
compressor from the disposal area and was going to
use those parts to fix the compressor at the filtration
plant that was leaking oil.
(continued…)
Moreover, Pa. R. Crim. P. 319 and 320 provide that upon successful completion of an ARD
program, the charges against the defendant are dismissed and the defendant’s arrest record is
expunged.
3
6. The Executive Director became aware that parts were
removed from a compressor at the disposal area on
September 28, 2014 and conducted an investigation
and contacted the local police regarding allegations of
theft.
7. The removed parts from the compressor were
discovered in the filtration plant.
8. The claimant was suspended as a result of the
allegation of theft.
9. As criminal charges were filed in December 2014
against the claimant with probable cause of theft, the
claimant was discharged from his employment.
10. The claimant entered Accelerated Rehabilitation
Disposition (ARD) with regard to the charges.
11. The claimant did not plead guilty and did not pay
restitution.
12. The claimant successfully completed one month of
probation.
13. The claimant’s criminal charges have been or will be
expunged.
(R.R. 79-80.)
The Board concluded that Claimant was not ineligible under
Section 402(e) of the Law, reasoning that:
In this case, the employer has a policy which prohibits
theft or removal of employer property, which is grounds
for termination of employment. The claimant was aware
of the employer’s policy. The claimant, by his own
admission, had removed parts from a discarded
compressor to fix a compressor at the filtration plant.
The claimant notified the maintenance foreman that he
removed the parts for the intent of fixing the compressor
at the filtration plant. Parts were found in the filtration
plant that the claimant had removed. The claimant was
suspended pending the investigation and based on the
record, the employer has not sustained its burden in
proving that the claimant was suspended as a result of
willful misconduct and benefits cannot be denied.
4
Additionally, the claimant was not convicted of any
criminal charges in connection with the incident.
(R.R. 80-81.) Employer then petitioned this Court for review, and Claimant
intervened in this matter.
On appeal to this Court,6 Employer argues that the Board erred as a
matter of law because Claimant’s entry into the ARD program was proof he
committed willful misconduct. Whether or not an employee’s actions amount to
willful misconduct is a question of law subject to review by this Court. Nolan v.
Unemployment Comp. Bd. of Review, 425 A.2d 1203, 1205 (Pa. Cmwlth. 1981).
Section 402(e) of the Law provides, in part, that an employee shall be ineligible for
compensation for any week in which “his unemployment is due to his discharge or
temporary suspension from work for willful misconduct connected with his work.”
The employer bears the burden of proving that the claimant’s unemployment is due
to the claimant’s willful misconduct. Walsh v. Unemployment Comp. Bd. of
Review, 943 A.2d 363, 369 (Pa. Cmwlth. 2008). The term “willful misconduct” is
not defined by statute. The courts, however, have defined “willful misconduct” as:
(a) wanton or willful disregard for an employer’s
interests; (b) deliberate violation of an employer’s rule;
(c) disregard for standards of behavior which an
employer can rightfully expect of an employee; or
(d) negligence indicating an intentional disregard of the
employer’s interest or an employee’s duties or
obligations.
6
This Court’s standard of review is limited to determining whether constitutional rights
were violated, whether an error of law was committed, or whether necessary findings of fact are
supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S.
§ 704. Employer does not challenge the Board’s findings of fact and, consequently, those
findings are binding on this Court.
5
Grieb v. Unemployment Comp. Bd. of Review, 827 A.2d 422, 425 (Pa. 2003). For
an employee’s conduct to constitute willful misconduct, it must be “of such a
degree or recurrence as to manifest culpability, wrongful intent, or evil design, or
show an intentional and substantial disregard of the employer’s interest or of the
employee’s duties and obligations to the employer.” Id. at 425-26. Furthermore,
this Court has previously held that an employee’s theft from an employer is willful
misconduct. On Line Inc. v. Unemployment Comp. Bd. of Review, 941 A.2d 786,
790 (Pa. Cmwlth. 2008).
Thus, the question becomes whether Employer proved Claimant
committed theft. The Board concluded that Employer failed to carry this burden,
and we agree. In order to prove its case, Employer relies on Claimant’s entry into
the ARD program. Employer argues that by accepting entry into the ARD
program, Claimant essentially admitted his guilt to the criminal charges of theft
and receipt of stolen property. In support of its argument, Employer cites an
unreported7 opinion of this Court, Borough of Fountain Hill v. Unemployment
Compensation Board of Review (Pa. Cmwlth., No. 1848 C.D. 2013, filed
Aug. 7, 2014). In Borough of Fountain Hill, this Court held that a police officer
who entered into an ARD program for a DUI charge was ineligible for
unemployment benefits under Section 402(e) of the Law. The dispositive fact in
Borough of Fountain Hill, however, was not that the claimant accepted entry into
the ARD program, but rather that the Police Department’s “Policies and
Procedures Manual expressly provided that ‘[f]or administrative disciplinary
7
Pursuant to Section 414(a) of the Commonwealth Court’s Internal Operating
Procedures, “[p]arties may . . . cite an unreported panel decision of this court, issued after
January 15, 2008, for its persuasive value, but not as binding precedent.”
6
purposes, Accelerated Rehabilitative Disposition (ARD) shall be considered a
conviction,’” and that the terms of the claimant’s ARD prohibited him from
carrying a gun. Borough of Fountain Hill, No. 1848 C.D. 2013, slip op. at 3, 9
(alteration in original). In this case, Employer has offered no evidence of a similar
policy regarding ARD and no evidence that the terms of Claimant’s ARD would in
any way impact his ability to do his job.
This Court has previously addressed the question of whether entry
into an ARD program is sufficient proof of willful misconduct. In Unemployment
Compensation Board of Review v. Vereen, 370 A.2d 1228 (Pa. Cmwlth. 1977), the
claimant was charged with theft from his employer. Although he maintained his
innocence, he entered into and successfully completed an ARD program which
consisted of six months’ probation and no restitution.8 This Court held that the
employer failed to prove willful misconduct and that the claimant was, therefore,
eligible for unemployment benefits:
We have no doubt that even one isolated instance of theft
is sufficient to constitute willful misconduct, and we so
held in Kostik v. Unemployment Compensation Board of
Review, . . . 315 A.2d 308 ([Pa. Cmwlth.] 1974).
However, we have also held that more is needed than
mere evidence of criminal arrest before the Board may
deny compensation benefits. In Unemployment
Compensation Board of Review v. Derk, . . . 353 A.2d
915, 917 [(Pa. Cmwlth. 1976)], we stated:
‘The employer must present some evidence
showing conduct of the claimant leading to
the criminal arrest which is inconsistent with
8
For clarity’s sake, we note that although the Board in Vereen found that the claimant
made restitution, this Court concluded that there was no evidence in the record to support the
finding. Vereen, 370 A.2d at 1230.
7
acceptable standards of behavior and which
directly reflects upon his ability to perform
his assigned duties. Of course, no proof of
criminal conviction is necessary. Cf.
Commonwealth v. Daugherty, . . . 305 A.2d
731 ([Pa. Cmwlth.] 1973). The employer
need only produce evidence that would have
established fault on the part of the employee
which would be incompatible with his work
responsibilities.’ (Footnote omitted.
Emphasis in original.)
Returning then to the record at hand, we note that the
employer produced no evidence to support its burden of
proving willful misconduct. Next we are cognizant that
the ARD program does not at any point determine guilt
or culminate in a criminal conviction. Participation in
the ARD program leads, if the program is completed
satisfactorily, to the dismissal of the charges. . . .
Therefore, the Board has made supportable findings that
establish only that claimant’s last day of work for his
employer was October 8, 1974, when he was discharged
and accused of improperly taking merchandise of his
employer, and that the claimant denies that accusation
but was placed on 6 months’ probation under an ARD
program. Since these are the only findings of fact
supportable by the evidence on this record, we cannot
conclude that the employer has met the burden of proving
willful misconduct . . . .
Vereen, 370 A.2d at 1231. Thus, “where a claimant is discharged for a criminal
act, such as theft, the subsequent acceptance into an ARD program is insufficient
proof of willful misconduct.” Bruce v. Unemployment Comp. Bd. of Review,
2 A.3d 667, 677 (Pa. Cmwlth.) (emphasis added) (citing Vereen, 370 A.2d at
1231), appeal denied, 12 A.3d 753 (Pa. 2010).9
9
We note that counsel for Employer did not cite or discuss Vereen or Bruce, cases which
have been binding precedent on this Court for the last thirty-nine and six years, respectively. We
(Footnote continued on next page…)
8
As the recitation above makes clear, this case is much more similar to
Vereen than Borough of Fountain Hill. Here, as in Vereen, the only facts found by
the Board show that Claimant was charged with theft, an accusation he denies, and
entered into a one-month ARD program with no restitution payment. As pointed
out in Vereen, “the ARD program does not at any point determine guilt or
culminate in a criminal conviction.” Vereen, 370 A.2d at 1231. Because
Employer has not offered any other evidence of willful misconduct, Employer has
failed to meet its burden of proof.10 Bruce, 2 A.3d at 677. Consequently, the
Board did not err in granting unemployment benefits to Claimant.
Employer also asserts that entry into the ARD program should be
treated the same way as a nolo contendre plea for purposes of unemployment
compensation, arguing that ARD does not assert the innocence of a criminal
defendant, but it is instead used by prosecutors to lessen a criminal punishment.
Employer offers no legal argument in support of this assertion. To the extent
Employer is making a policy argument, it ignores this Court’s precedent regarding
both nolo contendre pleas and entry into an ARD program. As this Court
explained in Smith v. Unemployment Compensation Board of Review, 967 A.2d
1042 (Pa. Cmwlth. 2009), a plea of nolo contendre “‘says, in effect, ‘I will not
(continued…)
are uncertain if counsel did not include these cases because he was unaware of them or because
of a lack of candor before this Court. We caution counsel to be thorough in his research and
candid in his filings to this Court.
10
Employer’s willful misconduct argument relies entirely on the assertion that
Claimant’s entry into the ARD program somehow constituted either a conviction or an admission
of theft. Employer does not argue that Claimant’s conduct, if it does not constitute theft,
otherwise rose to the level of willful misconduct.
9
contest’ and admits the facts charged,’” and, therefore, “essentially constitute[s]
admission[] of the facts charged in the underlying criminal proceeding[].” Smith,
967 A.2d at 1046 (quoting Commonwealth v. Hayes, 369 A.2d 750, 751 (Pa.
Super. 1976)). Conversely, entry into the ARD program “does not at any point
determine guilt or culminate in a criminal conviction.” Vereen, 370 A.2d at 1231.
Employer has offered no argument for why we should ignore these differences and
equate entry into an ARD program with a nolo contendre plea, and we see no
reason to disregard this Court’s precedent.
For the reasons discussed above, the order of the Board is affirmed.
P. KEVIN BROBSON, Judge
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Reading Area Water Authority, :
Petitioner :
:
v. : No. 1177 C.D. 2015
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 21st day of April, 2016, the order of the
Unemployment Compensation Board of Review is hereby AFFIRMED.
P. KEVIN BROBSON, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Reading Area Water Authority, :
: No. 1177 C.D. 2015
Petitioner : Submitted: November 25, 2015
:
v. :
:
Unemployment Compensation :
Board of Review, :
:
Respondent :
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
CONCURRING OPINION
BY SENIOR JUDGE FRIEDMAN FILED: April 21, 2016
I agree with the majority that Claimant is entitled to unemployment
compensation benefits. I write separately, however, because I believe that the
majority mischaracterizes the Board’s Finding of Fact Number 11 and unnecessarily
discusses an unreported, non-precedential decision of this court.
The Board found that criminal charges were filed against Claimant and
that Claimant entered into an Accelerated Rehabilitation Disposition (ARD) program.
(Board’s Findings of Fact, Nos. 9-10.) Claimant did not plead guilty and paid
restitution. (Id., No. 11.)
The majority states that “the only facts found by the Board show that
Claimant was charged for theft, an accusation he denies, and entered into a one-
month ARD program with no restitution payment.” (Maj. Op. at 9.) Acceptance into
an ARD program requires neither an admission nor a denial of guilt. Rather, in
accordance with Pa. R. Crim. P. 315 and 316, when a defendant is accepted into an
ARD program, the defendant is not required to enter a plea of guilty or not guilty and
all proceedings on the charges are deferred until the probationary period has been
completed. Moreover, Pa. R. Crim. P. 319 and 320 provide that upon successful
completion of an ARD program, the charges against the defendant are dismissed and
the defendant’s arrest record is expunged.
Next, I disagree with the majority’s need to distinguish an unreported
decision where, as here, a reported opinion of this court is directly on point and is
binding precedent. Section 414(a) of this court’s Internal Operating Procedures (IOP)
states that “[p]arties may . . . cite an unreported panel decision of this court issued
after January 15, 2008, for its persuasive value, but not as binding precedent.”
Section 414(c) of the IOP provides that “[a] reported opinion of the . . . panel may be
cited as binding precedent.” (Emphasis added.)
In Unemployment Compensation Board of Review v. Vereen, 370 A.2d
1228, 1230 (Pa. Cmwlth. 1977), the employer discharged the claimant for an alleged
theft. The claimant entered into an ARD program and paid restitution. Id. at 1230.
This court held that because the ARD program does not determine guilt, the employer
did not meet its burden of proving willful misconduct. Id. at 1231. See also Bruce v.
Unemployment Compensation Board of Review, 2 A.3d 667, 677 (Pa. Cmwlth. 2010)
(holding that where a claimant is discharged because of an illegal act, acceptance of
ARD program is insufficient to prove willful misconduct).
RSF - 2 -
Vereen is factually indistinguishable from the present case and is binding
precedent. Thus, I am dismayed by Employer’s citation to and the majority’s in-
depth discussion of Borough of Fountain Hill v. Unemployment Compensation Board
of Review, (Pa. Cmwlth., No. 1848 C.D. 2013, filed August 7, 2014), which is an
unreported, non-precedential decision of this court. I acknowledge that the majority
has an obligation to address the parties’ arguments. However, I submit that because
Vereen is a reported opinion of this court, which is on all fours with the facts at hand,
this court should not engage in a lengthy analysis of a factually distinguishable and
unreported decision of this court that I submit has no persuasive value.
I am further troubled because although Employer found and relied upon
Borough of Fountain Hill, nowhere in its brief does Employer, or Claimant for that
matter, mention Vereen, decided nearly 40 years ago, or this court’s 2010 decision in
Bruce, which reiterated Vereen’s holding that entrance into an ARD program is not
proof of willful misconduct. I submit that such omission is sanctionable. Rule 1.1 of
the Pennsylvania Rules of Professional Conduct provides that “[a] lawyer shall
provide competent representation to a client. Competent representation requires the
legal knowledge, skill, thoroughness and preparation reasonably necessary for the
representation.” Additionally, Rule 3.3 (a)(2) of the Pennsylvania Rules of
Professional Conduct provides that “[a] lawyer shall not knowingly . . fail to disclose
to the tribunal legal authority . . . known to the lawyer to be directly adverse to the
position of the client and not disclosed by the opposing counsel.”
Even if Borough of Fountain Hill were a reported opinion, I would not
find it persuasive because the facts and issues are critically distinguishable. The
RSF - 3 -
claimant in Borough of Fountain Hill was a police officer charged with driving under
the influence of alcohol (DUI) while off-duty. Id., slip op. at 1, 3. In determining
that he was ineligible for unemployment compensation benefits, this court recognized
that the “[c]laimant was not an ordinary employee; he was a police officer and his
DUI was a violation of a law that his duties required him to enforce.” Id., slip op. at
9. Further, the “[c]laimant’s criminal DUI [was] inconsistent with acceptable
standards of behavior and with his job responsibilities as a police officer.” Id., slip
op. at 10.
In this case, Claimant is an ordinary employee, who should not be
disparaged by a comparison to the police officer in Borough of Fountain Hill, who
violated a law he was obligated to uphold. In this day and age, employers search the
internet for information about potential employees. Experience has taught us that
when there are numerous applicants for a job, employers are less likely to hire a
candidate whose image has been besmirched because he has been falsely accused of
employment wrongdoing.
Accordingly, I concur in the result only.
___________________________________
ROCHELLE S. FRIEDMAN, Senior Judge
RSF - 4 -