Geisinger Health Plan v. Unemployment Compensation Board of Review

DISSENTING OPINION BY

Judge FRIEDMAN.

Respectfully, I dissent. Although I believe that the Unemployment Compensation Board of Review’s (UCBR) analysis is incomplete, 1 I believe that the UCBR’s findings support the conclusion that Geis-inger Health Plan (Employer) failed to establish willful misconduct in this case.

The evidence established the following facts. 2 As John D. Buckeye (Claimant) knew or should have known, Employer’s electronic communications policy provides that access to pornography is strictly prohibited on Employer’s time and Employer’s resources and is grounds for termination. (UCBR’s Findings of Fact, Nos. 3-4; R.R. at 9a.) Employer discharged Claimant after an internal audit revealed that Claimant had been forwarding pornographic e-mails to other employees through Employer’s computer system. (UCBR’s Findings of Fact, Nos. 5, 8.) Some of the pornographic e-mails had been sent to Claimant from other employees, but those employees were not disciplined. (UCBR’s Findings of Fact, Nos. 6, 7.)

The UCBR recognized that Claimant’s conduct violated Employer’s electronic communications policy. However, the UCBR concluded that Claimant could not be denied benefits under section 402(e) of the Unemployment Compensation Law (Law) 3 because Employer did not uniformly enforce its policy. In reaching that conclusion, the UCBR specifically addressed the testimony of Erin Winn, Employer’s human relations manager:

The employer witness stated that it considered the amount of e-mails that the claimant sent. However, the employer’s policy is that it does not tolerate any access to pornography on its electronic communications systems. The employer witness also stated that the investigation was continuing. However, the claimant was discharged after the e-mails were discovered on his computer. The employer does not explain why an investigation of the other employees was allegedly continuing as of the time of the Referee’s hearing.

The Board can only conclude that the employer did not uniformly enforce its policy.

(UCBR’s decision at 2 (emphasis added)). The above reflects that the UCBR considered Winn’s testimony and, exercising its *980 exclusive authority over questions of witness credibility and evidentiary weight, determined that Winn’s testimony established only that Employer did not impose any discipline on the employees who sent pornographic e-mails to Claimant. In other words, the UCBR found that, with respect to these employees, Employer did not enforce its policy. Based on these findings, the UCBR held that Claimant is not ineligible for compensation under section 402(e) of the Law. Employer now petitions this court for review.

Unlike the majority, I agree with the UCBR that its findings do not support a determination of willful misconduct. Moreover, I believe that the court’s application of a “disparate treatment” analysis to evidence of an employer’s enforcement of its rules, policies and standards represents a departure from fundamental principles of unemployment compensation law.

The stated purpose of the Law is to provide economic security to persons who become unemployed through no fault of their own. 4 The Law is not intended to punish or provide damages for unlawful discrimination or for lawful but unfair treatment. Accordingly, it makes sense to consider evidence of an employer’s inconsistent disciplinary actions only insofar as it relates to the existence of the employer’s rules and standards or to the actual reasons for a claimant’s discharge.

As the majority notes, Woodson v. Unemployment Compensation Board of Review, 461 Pa. 439 , 336 A.2d 867 (1975), was the first case to consider such evidence in the context of a claim for unemployment compensation. The employer in Wood,son discharged black employees for tardiness and absenteeism but did not discharge white employees for similar misconduct. The claimants argued that their absenteeism and tardiness did not constitute “willful misconduct” because it did not violate any standard of conduct that the employer had a right to expect of its employees. The claimants further asserted that they were not discharged for violating their employer’s standard of conduct but, rather, because they were black. The court concluded that the record supported both contentions.

The court in Woodson first addressed the argument that the employer had not established a standard of conduct it rightfully expected of it employees:

A determination of whether an employee has engaged in willful misconduct can therefore only be made by considering what standard of conduct an employer reasonably requires. Standards expected by one employer may of course not be the standards of another employer. Willful misconduct cannot therefore be considered in a vacuum. It must be considered in relation to the particular employees and to the reasonable standards expected by a particular employer.

The [UCBR] found that the appellants had been excessively absent and tardy. Such a finding would constitute “willful misconduct” if the record established that the appellants’ employer discharged all employees with an absenteeism and tardiness record similar to that of the appellants. Under such circumstances, it could be said that the employer had a reasonable expectation that a certain standard of conduct would be met by its employees. The facts in this case, however, are otherwise.

Woodson, 461 Pa. 439, 442-43 , 336 A.2d 867, 868-69 (emphasis added). Importantly, the court observed that the employer made no claim that the white employees *981 wei'e other than full-time employees or that they had legitimate reasons for their absences. Accordingly, the court further determined that the evidence of inconsistent discipline supported the claimants’ second assertion, that the employer fired them only because they were black.

I recognize that the primary rationale in Woodson was to avoid legitimizing apparent racial discrimination; nevertheless, I suggest that a determination as to whether evidence proves unlawful discrimination is not necessary to an analysis under unemployment law. Instead, I believe that Woodson established two principles: 1) where the record reflects that the employer tolerates similar conduct from other employees, without justification, the employer has not proved that such conduct violates the standards of behavior it expects from its employees and benefits will not be denied pursuant to section 402(e) of the Law; and 2) if evidence establishes that the actual reason for a claimant’s discharge is something other than willful misconduct, benefits will not be denied under section 402(e). See Landy & Zeller v. Unemployment Compensation Board of Review, 110 Pa.Cmwlth. 183 , 531 A.2d 1183 (1987) (holding that a determination of willful misconduct must be based on the actual reason for the claimant’s discharge).

I believe that this interpretation of Woodson fits comfortably, and logically, within the traditional analysis of willful misconduct. 5 Unfortunately, I believe that our consideration of these evidentiary issues has deviated from traditional principles and has evolved over time to the point where, today, the majority recognizes “disparate treatment” as an “affirmative defense” to an allegation of willful misconduct.

“Disparate treatment” is a term of art that refers to a specific legal theory under which a party may establish a violation of laws prohibiting discrimination based on a protected trait. 6 The different reasoning *982 we have employed in “disparate treatment” cases and the irreconcilable holdings of those decisions demonstrate that this theory cannot be applied consistently or logically to determinations of willful misconduct.

For example, we have held that an employer’s discriminatory enforcement of its standards on the basis of an employee’s leadership position in a union precludes a denial of compensation based on willful misconduct. Stickloon v. Unemployment Compensation Board of Review, 82 Pa.Cmwlth. 223 , 475 A.2d 893 (1984); Birdsboro Corporation v. Unemployment Compensation Board of Review, 59 Pa.Cmwlth. 462 , 430 A.2d 361 (1981). In other cases, however, we upheld the denial of benefits on the grounds that differences in job responsibilities justified an employer’s application of different standards in judging an employee’s conduct. American Racing Equipment, Inc. v. Unemployment Compensation Board of Review, 144 Pa.Cmwlth. 310, 601 A.2d 480 (1991); Moran v. Unemployment Compensation Board of Review, 42 Pa.Cmwlth. 195 , 400 A.2d 257 (1979). In some cases, we have required a preliminary inquiry into whether the employees who were treated differently were “similarly situated,” and we have decided this threshold issue on the basis of various factors. 7 Alternatively, we also have reasoned that an employer may treat employees differently based on business necessity, Daniels v. Unemployment Compensation Board of Review, 755 A.2d 729 (Pa.Cmwlth.2000), i.e, without considering the concept of “similarly situated” in our “disparate treatment” analysis.

Moreover, relying on Woodson , we have held that, unless the employer’s inconsistent treatment of its employees demonstrates that the discharge is, in reality, unlawful discrimination, which the denial of unemployment compensation would reinforce, the denial of benefits will not be disturbed on the ground that other employees arguably equally guilty of willful misconduct were not discharged. Bays v. Unemployment Compensation Board of Review, 62 Pa.Cmwlth. 421 , 437 A.2d 72 (1981); Moran . Conversely, we have held that evidence of an employer’s inconsistent enforcement of its rules precludes a denial of benefits even if it does not demonstrate unlawful discrimination. Beaver Falls v. Unemployment Compensation Board of Review, 65 Pa.Cmwlth. 14 , 441 A.2d 510 (1982).

It does not appeal’ that our decisions are consistent with each other or with unemployment compensation law. In holding that evidence of inconsistent discipline is relevant only to prove unlawful discrimination, we negate the relevance and probative value of such evidence to determinations of an employer’s rules and expected standards of conduct. In holding that evidence of inconsistent discipline in and of itself suffices to preclude a denial of benefits, we ignore and undermine the purpose of the Law.

*983 Indeed, I submit that we are intuitively uncomfortable with the notion that a claimant whose actions fall within the definition of willful misconduct must be awarded benefits. Thus, we reach for ways to find that employees are not “similarly situated” and distinguish employees’ circumstances based on varying, subjective criteria. 8 However, as we observed in Moran , in unemployment compensation cases the focus is on the claimant’s conduct, not the conduct of the employer, and “[j]ust as two wrongs do not make a right, an employer’s wrongful conduct under one statute [concerning labor management and relations] cannot make right an employee’s wrongful conduct under another.” Moran, 400 A.2d at 259-60 .

Therefore, I propose that we abandon our struggle over questions concerning ever-shifting burdens, decline to characterize “disparate treatment” as an “affirmative defense” and clarify that the Law is not intended as a legal remedy to generic unfairness. I would hold that the UCBR may consider evidence of an employer’s inconsistent discipline and determine whether or not it outweighs other evidence presented to establish the standards of conduct expected by the employer and/or the actual reason for the claimant’s discharge.

These examples illustrate how a more straightforward analysis may be applied.

1. A claimant frequently takes pens and pencils home from the office. The employer fires the claimant and alleges that the violation of its rule prohibiting the theft of office supplies constitutes willful misconduct. The employer acknowledges that other employees took pens and pencils home and that employer was aware of their conduct but did not discipline these workers in any way for violating its policy. The UCBR is not persuaded that the witnesses’ testimony adequately explains why the other employees were not disciplined. Based on these findings, the UCBR concludes that the employer failed to establish a violation of its expected standard of behavior, and, therefore, the claimant cannot be denied benefits on the grounds of willful misconduct.

2. A claimant steals money from the employer’s cash drawer. The employer fires the claimant and alleges that stealing from an employer constitutes willful misconduct. The employer acknowledges, and the UCBR finds, that another employee also stole funds from the employer’s cash drawer and that the employer was aware of this but did not discipline that employee. The employer’s witness testifies that the other employee is his wife’s nephew and argues that its failure to discipline the coworker has no bearing on its decision to terminate the claimant. The UCBR finds that the employer’s failure to discipline the claimant’s coworker did not outweigh other evidence that the claimant’s theft violated the standards of behavior expected by this employer. Based on these findings, the UCBR concludes that the claimant was discharged for willful misconduct and is ineligible for benefits.

So long as the UCBR’s findings are supported by substantial evidence, the court could determine that those findings support the UCBR’s ultimate conclusion in both cases, without inquiring whether “dis *984 parate treatment” was established or whether employees were “similarly situated” and notwithstanding the fact that the employer’s disciplinary measures were not uniformly imposed.

In the present case, instead of inquiring whether Claimant established “disparate treatment,” I would inquire whether the UCBR determined that evidence of Employer’s failure to discipline other employees outweighed other evidence offered to establish the standard of conduct that Employer expected of its employees. In my view, the UCBR was not persuaded by Witts’ explanation as to why Employer did not pursue any disciplinary action against Claimant’s coworkers, who admittedly violated the same policy. Instead, I believe the UCBR was unable to find that Employer’s written policy represented the standards of behavior that this employer expected of its employees.

Like the majority, I do not read Employer’s policy as requiring that every employee who accesses pornography must be terminated. However, like the UCBR, I would interpret the phrase “is strictly prohibited” as requiring some disciplinary response to a violation, and I would conclude that the failure to impose any discipline for a violation of the policy renders the phrase “is sti’ictly prohibited” less than credible as a statement of Employer’s expected standards of behavior. Thus, I believe that the UCBR’s decision reflects its determination that Employer’s failure to impose any discipline upon the other employees who violated its rule rebutted Employer’s assertion that such conduct “is strictly prohibited.” The UCBR’s findings support the legal conclusion that Employer failed to meet its burden of proof in this case.

Accordingly, I would affirm.

Judge SMITH-RIBNER joins in this dissent.

.The UCBR concludes that Claimant is entitled to benefits because Employer did not discipline other employees who violated the same policy. However, the UCBR fails to explain how Employer’s failure to discipline other employees relates to Claimant’s eligibility for compensation.

. Findings of fact that are not challenged are binding on appeal. Campbell v. Unemployment Compensation Board of Review, 694 A.2d 1167 (Pa.Cmwlth.1997).

. Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(e).

. Section 3 of the Law, 43 P.S. § 752.

. A claimant is ineligible for benefits if his unemployment is due to willful misconduct connected with his work. 43 P.S. § 802(e). The burden of proving willful misconduct rests with the employer. Docherty v. Unemployment Compensation Board of Review, 898 A.2d 1205 (Pa.Cmwlth.2006). Willful misconduct includes conduct evincing a wanton and willful disregard of the employer’s interests, a deliberate violation of the employer’s rules, the disregard of standards of behavior that an employer can rightfully expect of an employee and negligence reflecting an intentional disregard of the employer’s interest or the employee’s duties. Lytle v. Unemployment Compensation Board of Review, 36 Pa.Cmwlth. 77 , 387 A.2d 962 (1978). Once the employer establishes a prima facie case of willful misconduct, the burden shifts to the claimant to demonstrate that under the facts of this particular case, his conduct does not constitute willful misconduct. Electric Material Co. v. Unemployment Compensation Board of Review, 664 A.2d 1112 (Pa.Cmwlth.1995). The claimant may satisfy his burden by proving that his actions were justified or reasonable under the circumstances. Frazier v. Unemployment Compensation Board of Review, 833 A.2d 1181 (Pa.Cmwlth.2003). In addition, through evidence that the employer did not enforce its rules or policies uniformly, the claimant can establish that his conduct did not violate the standards expected by his employer and/or that his discharge constituted unlawful discrimination. Woodson; Nolan v. Unemployment Compensation Board of Review, 57 Pa.Cmwlth. 186 , 425 A.2d 1203 (1981). A determination of willful misconduct is a question of law, reviewable by the court. Frazier .

In the present case, the majority reasons that because the UCBR does not question that Claimant violated Employer's rule, there is no dispute that Claimant was discharged for willful misconduct. Here, the majority confuses a factual determination with a conclusion of law.

. The Supreme Court has described “disparate treatment” as "the most easily understood type of discrimination.” Hazen Paper Co. v. Biggins, 507 U.S. 604, 610 , 113 S.Ct. 1701 , 123 L.Ed.2d 338 (1993) (citations omit *982 ted). The inquiry in “disparate treatment” cases is whether the employer is treating some people less favorably than others because of their race, religion or other protected characteristic. Id.

. See, e.g., Department of Transportation v. Unemployment Compensation Board of Review, 755 A.2d 744 (Pa.Cmwlth.2000), and American Racing, (citing differences in employees’ position in the workplace); Electric Material Company, and Seton, Co. v. Unemployment Compensation Board of Review, 663 A.2d 296 (Pa.Cmwlth.1995), (citing differences in employees' work history), appeal denied, 546 Pa. 659 , 684 A.2d 560 (1996); Walsh v. Unemployment Compensation Board of Review, 943 A.2d 363 (Pa.Cmwlth.2008), and Nolan , (citing differences in the nature of the employees' misconduct).

. In addressing claims of inconsistent discipline, we frequently inquire "whether similarly situated people are treated differently, based on improper criteria." Department of Transportation, 755 A.2d at 748 (emphasis added). The courts’ inability or unwillingness to establish an objective standard for evaluating whether criteria are "improper" leads to different and unpredictable results.