Colleen Matschi, Relator, vs. BlueCross BlueShield of Minnesota, Commissioner of Economic Security, Respondent.

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This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C8-98-606

Kory V. Krause,

Relator,

vs.

Prinsen Distributing Inc.,

Respondent,

Commissioner of Economic Security,

Respondent.

Filed October 27, 1998

Affirmed

Randall, Judge

Department of Economic Security

File No. 7 UC 98

Kory V. Krause, 6820 Brittany Road, Edina, MN 55435 (pro se relator)

Jon B. Albrightson, Hagerty, Johnson, Albrightson & Beit, 701 Fourth Avenue South, Suite 1700, Minneapolis, MN 55415 (for respondent Prinsen Distributing Inc.

Kent E. Todd, Minnesota Department of Economic Security, 390 North Robert Street, St. Paul, MN 55101 (for respondent Commissioner of Economic Security)

Considered and decided by Peterson, Presiding Judge, Huspeni, Judge, and Randall, Judge.

U N P U B L I S H E D O P I N I O N

RANDALL, Judge

Relator challenges the commissioner's representative's decision that he was discharged from employment for misconduct. We affirm.

FACTS

From August 1994 to April 28, 1997, relator Kory V. Krause was employed by respondent Prinsen Distributing Inc. as a route salesman/delivery driver. The company received a number of complaints about Krause's service during the summer and fall of 1996. In a meeting with Krause on September 26, 1996, Prinsen's president, Troy Prinsen, and Prinsen's secretary/treasurer, Nancy Wenzel, presented Krause with four different written reports of his behavior, and Krause signed these reports. The first noted that Krause had lost seven stores on his route but did not notify Prinsen of the lost stores or any problems with his stores. The second involved an incident where Krause failed to make a delivery to a SuperAmerica store in June 1996. The third concerned the fact that Krause brought a friend to a cocktail party and that Krause did not call the office after being left a note at the warehouse to do so. The fourth written complaint noted Krause's failure to make a delivery in September 1996 to the same SuperAmerica he failed to make delivery to in June. The fourth report also stated that although Krause was paged and a message was left at his home, he did not return the call. Krause received all of these written complaints at the September 26, 1996, meeting. At that meeting, he was informed that he could be terminated if the problems continued.

In September 1996, Prinsen discovered that it had overcharged some of its stores for a particular product. Prinsen's drivers were told to credit the overcharged stores. Krause was directed to credit a total of $180 to those stores. Because Krause had previously received $54 in commissions on sales that were now calculated as overcharges, although the record is not completely clear, it appears Krause might have to repay Prinsen the $54.

On January 27, 1997, Krause was injured in a traffic accident while working. He returned to work for a short time on February 10, 1997, but after that date he began receiving worker's compensation and never returned to work at Prinsen. On February 28, 1997, Troy Prinsen drove Krause's delivery truck and discovered that all of the paperwork related to issuing credits to Krause's stores was still attached to Krause's clipboard in his truck. On April 28, 1997, Prinsen sent Krause a letter notifying him that he had been terminated.

The Department of Economic Security determined that Krause was discharged from employment with Prinsen for theft. Krause appealed this decision, and an evidentiary hearing was held before a reemployment insurance judge. The judge concluded that Prinsen discharged Krause for misconduct. On appeal from the reemployment judge's decision, the commissioner's representative also determined that Prinsen discharged Krause for misconduct. Krause petitioned this court for a writ of certiorari.

D E C I S I O N

I. Misconduct

An employee discharged for misconduct is disqualified from receiving reemployment benefits. Minn. Stat. § 268.09, subd. 1 (1996).[1] Whether an employee has committed misconduct is a mixed question of fact and law. Colburn v. Pine Portage Madden Bros., 346 N.W.2d 159, 161 (Minn. 1984). The commissioner's representative's findings must be viewed in the light most favorable to the decision, and a reviewing court will not disturb these findings if there is evidence reasonably tending to sustain them. White v. Metropolitan Med. Ctr., 332 N.W.2d 25, 26 (Minn. 1983). Whether the commissioner's representative properly disqualified an employee from receiving reemployment insurance, however, is a question of law upon which an appellate court is "free to exercise its independent judgement." Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).

The burden is on the employer to prove that an employee committed misconduct. Id. Misconduct is defined as

"wilful 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."

Tilseth v. Midwest Lumber Co., 295 Minn. 372, 374-75, 204 N.W.2d 644, 646 (1973) (quoting Boynton Cab Co. v. Neuback, 296 N.W. 636, 640 (Wis. 1941)).[2] Misconduct does not, however, include "'mere inefficiency, unsatisfactory conduct, * * * inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion.'" Id. at 375, 204 N.W.2d at 646 (quoting Boynton Cab Co., 296 N.W. at 640). In determining whether an employee committed misconduct, this court has considered

(1) whether an employee deliberately violated standards of behavior which the employer had a right to expect of its employee, (2) whether an employee's conduct adversely affected the business or other employee's morale, and (3) whether an employee ignored past warnings.

Ress, 448 N.W.2d at 524.

A single incident may constitute misconduct if it evinces "a sufficient enough disregard for the employer's expectations." Blau v. Masters Restaurant Assocs., 345 N.W.2d 791, 794 (Minn. App. 1984) (citations omitted). Minnesota has also adopted the "last straw doctrine." Barstow v. Honeywell, Inc., 396 N.W.2d 714, 716 (Minn. App. 1986). Under this doctrine, the employee's prior actions need not be related in "'time or tenor'" to the action resulting in termination, but the final infraction must be "'of such a nature that it demonstrates conclusively the employee's utter disregard for the employer's interests.'" Id. (quoting Giddens v. Appeal Bd. of Michigan Employment Sec. Comm'n, 145 N.W.2d 294, 298 (Mich. 1966)).

The last straw doctrine is applicable here. Krause's failure to issue credits to his stores in a timely manner, may or may not have equated to misconduct on its own. But Krause had already received four prior warnings regarding his conduct. These warnings cited his failure to make deliveries, his failure to return telephone calls and pages from Prinsen, and the loss of seven stores on his delivery route. In combination with the previous warnings, Krause's failure to issue the credits supports a determination that Krause's behavior was "of such a nature that it demonstrates conclusively the employee's utter disregard for the employer's interests." Id. Thus, the commissioner's representative did not err in concluding that Krause was terminated for misconduct.

Hearing Procedure

Krause also asserts that the reemployment judge failed to follow proper procedure during the evidentiary hearing because Krause testified first, despite the employer having the burden of proof.

The reemployment judge informed the parties at the hearing's outset that Prinsen had the burden of proof. The transcript indicates that the judge asked Krause for some preliminary information before questioning the employer's witnesses. The judge asked Krause to provide his dates of employment, job description, salary, work schedule, and supervisor's name, then asked whether he quit or was discharged, the date of discharge, and the reason he was given for the discharge. The judge then proceeded to question Prinsen's witnesses.

Contrary to Krause's argument, there is no requirement that the reemployment judge take testimony in any particular order. The Minnesota Rules state,

The order of presentation of evidence shall be determined by the [reemployment judge].[3] The [reemployment judge] shall inform the parties of their burdens of proof before the taking of testimony.

Minn. R. 3310.2921 (1997). Therefore, the reemployment judge did not err by having Krause answer basic background questions at the beginning of the hearing.

Affirmed.

[1]Minn. Stat. § 268.09, subd. 1 was repealed in 1997, and Minn. Stat. § 268.09 (1996) was restructured. 1997 Minn. Laws ch. 66, § 43-54, 81. Because significant changes were made in the statute, and Krause was separated from employment prior to the July 1, 1997, effective date of the statute pursuant to 1997 Minn. Laws ch. 66, § 82, we apply the 1996 version of the statute.

[2]Although the legislature adopted a similar definition of misconduct in 1997, see Minn. Stat. § 268.09, subd. 12 (Supp. 1997), as stated previously, Krause was terminated prior to the July 1, 1997, effective date of the amendments to Minn. Stat. § 268.09.

[3]Reemployment judges were formerly called referees.