Lori A. Kartman, Relator, vs. Institute for Minnesota Archaeology, Inc., Respondent, Commissioner of Economic Security, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C8-02-1891

 

 

Lori A. Kartman,

Relator,

 

vs.

 

Institute for Minnesota Archaeology, Inc.,

Respondent,

Commissioner of Economic Security,

Respondent.

 

 

Filed June 24, 2003

Reversed

Anderson, Judge

 

Department of Economic Security

 

 

Lori A. Kartman, 3219 Lyndale Avenue South, Apartment 302, Minneapolis, MN  55408-3650 (pro se relator)

 

M. Kate Chaffee, Lee B. Nelson, Minnesota Department of Economic Security, 390 North Robert Street, St. Paul, MN  55101 (for respondent Commissioner)

 

Institute for Minnesota Archaeology Inc., 750 Transfer Road, St. Paul, MN  55114 (for pro se respondent employer)

 

            Considered and decided by Shumaker, Presiding Judge, Toussaint, Chief Judge, and Anderson, Judge.

U N P U B L I S H E D  O P I N I O N

 

G. BARRY ANDERSON, Judge

 

            Relator challenges a determination by a representative of respondent Commissioner of Economic Security (commissioner) disqualifying her from receiving unemployment benefits because of employment misconduct.  Because we conclude that the decision of the commissioner's representative was unsupported by the evidence, we reverse.

FACTS

 

            Respondent Institute for Minnesota Archeology (IMA) employed relator Lori Kartman from May 1997 through April 12, 2002.  The IMA is a private nonprofit organization that conducts archaeological research and provides educational and stewardship activities.  Kartman's last position at the IMA was as a controller, dealing generally with programs, finances, and administration.  For much of Kartman's employment, she and her supervisor, Beth Nodland, were IMA's only full-time employees.

            Shortly before Kartman's employment with IMA ended, Nodland instructed her to keep IMA's financial information confidential and to refer all inquiries about IMA's finances to Nodland.  Despite this instruction, Kartman admitted that she disclosed financial information on at least three separate occasions.  First, Kartman started to discuss details about IMA's budget at a staff meeting, only to be interrupted by Nodland and reminded that all requests for information had to go through Nodland.  Second, Kartman responded to a vendor's telephone inquiry regarding IMA's payment of a bill rather than referring the matter to Nodland.  Finally, in early April 2002, an IMA board member asked Kartman how a particular vendor bill had been paid.  When Kartman responded that IMA had received a loan that had been used to pay the vendor, the board member expressed surprise because he was unaware of the loan.

            A few days before Kartman was fired, Nodland instructed Kartman to prepare a cash-flow projection to be used by IMA in applying for a loan.  Nodland requested that a $150,000 grant from the McKnight Foundation be included in the projection, despite the fact that the grant had not yet been applied for or awarded.  Kartman expressed her concern to Nodland about this request, especially because the projection did not include any corresponding expenses showing where the grant would be spent.  Additionally, Kartman was uncomfortable including the entire $150,000 amount because the McKnight Foundation had never before awarded the IMA the full amount of a grant proposal.

            IMA contends that Nodland assured Kartman that the lending institutions had contacted the McKnight Foundation and had verified that there was a high likelihood that the grant money would be awarded to IMA.  Although Kartman included the full amount of the grant in the projection, Nodland claims Kartman "sneered" at her and accused her of forcing Kartman to prepare a false and illegal document. 

            The final incidents leading to Kartman's termination from IMA occurred on April 9, 2002.  First, Kartman was fidgeting at her desk in a way that caused her foot to repeatedly bang against her desk.  After Nodland asked Kartman to refrain from banging her desk in this manner, Kartman became emotional and allegedly said, "this is the way I am, take it or leave it."  To avoid annoying Nodland and other employees, Kartman offered to move her desk to another area of the office, but Nodland found this unacceptable.  Kartman alleges that she told Nodland that she has an anxiety disorder that causes her to act in a nervous manner causing her to fidget involuntarily.

            Later in the day, Kartman attended a meeting in a part of the office within range of Nodland's hearing.  According to Nodland, near the end of the meeting when someone asked Kartman what her opinion was, Kartman replied that she was not really paying attention and that she was "just [there] in body."  Kartman claims that Nodland was not a participant in the meeting and took this statement out of context.  Shortly thereafter, Kartman attended another staff meeting conducted by Nodland.  Nodland testified that at this meeting Kartman did not pay attention, rolled her eyes, and continually drummed her fingers in a disruptive manner.

            At the end of the day, Nodland talked with Kartman about her behavior and indicated that it was unacceptable.  Nodland told Kartman that she no longer trusted her work, that she believed Kartman had a bad attitude, and that she was placing Kartman on a one-week probationary period to correct her behavior, including (1) maintaining complete financial confidentiality; (2) improving her work performance; (3) changing her attitude, including an immediate cessation of sneering and sarcastic behavior; and (4) a renewed commitment to pursuing the goals of IMA.  Nodland told Kartman to return to work on April 11 if she was ready to begin her probationary period and make an effort toward complying with these four goals.[1]       

            Kartman returned to work on April 11 and, on April 12, Kartman requested specifics about which personal behavior she needed to change.  Following this discussion, Nodland discharged Kartman.  A letter dated April 15, 2002, states only that Kartman was fired "for failure to meet the requirements of this position."

            A Department of Economic Security adjudicator determined that Kartman was not disqualified from receiving unemployment benefits.  The commissioner's representative reversed, concluding that Kartman is disqualified from payment of unemployment benefits because she was discharged for employment misconduct, as defined under Minn. Stat. § 268.095, subd. 6(a) (2002).

 

D E C I S I O N

 

In unemployment benefits cases, we examine whether the record reasonably supports the commissioner's representative's decision.  Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995).  We review the factual findings of the representative in the light most favorable to the commissioner and we will not disturb those findings if there is evidence in the record that reasonably sustains them.  Schmidgall v. FilmTec Corp., 644 N.W.2d 801, 804 (Minn. 2002).  The factual findings should not be overturned on appeal unless the record does not reasonably support those findings.  McCourtney v. Imprimis Tech., Inc., 465 N.W.2d 721, 724 (Minn. App. 1991).  When parties present conflicting evidence, we defer to the representative's findings and ability to weigh the evidence; we will not consider that evidence de novo on review.  Whitehead v. Moonlight Nursing Care, Inc., 529 N.W.2d 350, 352 (Minn. App. 1995). 

Whether an employee engaged in disqualifying misconduct is a mixed question of law and fact.  Schmidgall, 644 N.W.2d at 804.  The issue is not whether the employee should have been fired, but whether he/she should be denied unemployment benefits.  McCourtney, 465 N.W.2d at 724.  Whether an employee's actions constituted misconduct is a question of law that we review de novo.  Ress v. Abbott N.W. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989). 

Respondent contends that Kartman was properly discharged for intentional employment misconduct under Minn. Stat. § 268.095, subd. 6(a) (2002).

Before 1997, employment misconduct was undefined by statute.  The unemployment compensation statutes provided merely that "discharge for misconduct" was a disqualifying condition for unemployment benefits. 

 

Houston v. Int'l Data Transfer Corp., 645 N.W.2d 144, 149 (Minn. 2002) (citing Minn. Stat. § 268.09, subd. 1(b) (1996) and Minn. Stat. § 268.09, subd. 1(1) (1971)).  In 1973, the supreme court interpreted the term "misconduct" to mean "willful or wanton disregard of an employer's interests" or a "deliberate violations or disregard of standards of behavior."  In re Tilseth's Claim, 295 Minn. 372, 374, 204 N.W.2d 644, 646 (1973).  The Tilseth description of "misconduct" was in effect until the legislature statutorily defined the term in 1997 and changed the statutory reference to "employment misconduct."  Houston, 645 N.W.2d at 149 (citing Act of Apr. 23, 1997, ch. 66, § 49, 1997 Minn. Laws 357, 387 (codified at Minn. Stat. § 268.09, subd. 12 (Supp. 1997)).  In 1999, the legislature amended the definition of employment misconduct, which now reads as follows:

(1) any intentional conduct, on the job or off the job, that disregards the standards of behavior that an employer has the right to expect of the employee or disregards the employee's duties and obligations to the employer;  or

(2) negligent or indifferent conduct, on the job or off the job, that demonstrates a substantial lack of concern for the employment. 

 

Minn. Stat. § 268.095, subd. 6(a)(1), (2).

            The commissioner points to three instances of Kartman's behavior that constitute intentional employee misconduct under Minn. Stat. § 268.095, subd. 6(a)(1): (1) disclosure of financial information after her supervisor told Kartman to refer all questions to her; (2) failure to comply with her supervisor's instructions; and (3) an uncooperative, rude, and sarcastic attitude toward work and other employees at IMA, especially Nodland.

            The commissioner's representative determined that the evidence supported a finding that she had been terminated for intentional misconduct.  The representative found that Kartman's

impertinent, negative and insubordinate behavior evinced a lack of concern for her job and a disregard of the standards of behavior [IMA] had a right to expect of her.   

 

Under the intentional prong, the supreme court has recently observed that the legislature has not precisely defined what constitutes "intentional" misconduct.  Houston, 645 N.W.2d at 150.  Houston held that to commit intentional employment misconduct, an employee must intentionally engage, or intend to engage, in conduct that shows the disposition to "ignore or pay no attention to his or her duties and obligations or the standards of behavior the employer has a right to expect."  Id. 

Kartman's disclosure to others of IMA financial information is not "intentional" misconduct as a matter of law.  Although Kartman conceded that on at least three separate occasions she discussed financial matters with those within IMA and also with individuals not connected to the organization, we find that these instances do not rise to the level of misconduct. 

First, there was a conversation between Kartman and a member of the board of directors of the organization.  It is clear that answering this board member's direct financial queries was contrary to Nodland's instruction to go through appropriate channels in dealing with such questions, but such a conversation is not misconduct.  To preclude an employee, for unemployment-benefit purposes, from answering direct questions posed to her by a board member, who is charged with knowing and inquiring as to such financial matters, would put an employee in a near-impossible situation.  While an argument can certainly be made that, in retrospect, Kartman should have declined to respond to the board member, providing factual financial information to a member of the organization's board of directors hardly constitutes misconduct as contemplated by Houston.

We also conclude that Kartman's other comments concerning IMA's financials that did not "go through channels" do not rise to the level of misconduct.  The commissioner is unable to demonstrate anything other than an inadvertent response or participation in a financial discussion.  It is undisputed, for example, that Kartman immediately ceased discussing financial matters in a staff meeting when reminded of IMA's policy. 

The commissioner also alleged that Kartman disregarded a direct order to include a grant in a projection of cash flow for IMA.  The commissioner's argument that Kartman's initial refusal to include the $150,000 grant in the cash-flow statement disregarded "the standards of behavior that an employer has the right to expect" under Minn. Stat. §268.095 subd. 6(a)(1), is absurd.  Kartman raised legitimate accounting concerns about the treatment of a grant not yet received and her actions here are not misconduct. 

The commissioner also claims that Kartman's negative attitude and unwillingness to trust Nodland's reassurances in this matter was tantamount to employee disloyalty.  But the commissioner offers only subjective, vague, and uncorroborated testimony by Kartman's supervisor, and all parties acknowledge that the relationship between Kartman and Nodland was difficult at best.

Finally, we return to the April 9, 2002 incidents, which the commissioner insists are disqualifying conduct.  These occurrences of fidgeting and foot banging are, at most, minor annoyances.  The absence of employee perfection is not the functional equivalent of employee misconduct.  See Minn. Stat. § 268.095, subd. 6(b) ("Inefficiency, inadvertence, simple unsatisfactory conduct, poor performance because of inability or incapacity * * * are not employment misconduct.").

Lastly, we note with interest here that the termination letter alleges no misconduct and simply concludes that Kartman was "fired … for failure to meet the requirements of this position."  Neither this letter nor the record of this interesting employment relationship sets out circumstances that might even arguably be considered misconduct. Thus we conclude that the holding of the commissioner's representative is unsupported and we reverse.

            Reversed.

[1]  There is some discrepancy in the record concerning the timing of the events leading up to Kartman's termination.  Nodland testified that the desk-banging incident occurred on April 9 and the meetings where Kartman acted inappropriately were on April 10.  Nodland claims that she placed Kartman on probation for one week on April 11 and sent her home for a 24-hour cooling-off period to return on April 12.  Kartman claims that the desk banging and the two meetings occurred on the same day, that she returned to work on April 11, and was eventually sent home to return again on April 12.