Treva A. Pearcy, Relator, vs. Cintas Corporation No. 2, Respondent, Department of Employment and Economic Development, Respondent.

Treva A. Pearcy, Relator, vs. Cintas Corporation No. 2, Respondent, Department of Employment and Economic Development, Respondent. A05-1046, Court of Appeals Unpublished, April 11, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-1046

 

Treva A. Pearcy,
Relator,
 
vs.
 
Cintas Corporation No. 2,
Respondent,
 
Department of Employment and Economic Development,
Respondent.

 

Filed April 11, 2006

Affirmed

Peterson, Judge

 

 

Department of Employment and Economic Development

File No. 13103 04

 

 

Michael C. Hager, 301 Fourth Avenue South, Suite 270N, Minneapolis, MN  55415 (for relator)

 

Cintas Corporation No. 2, Brooklyn Park Location, C/O TALX Employer Services, LLC, P.O. Box 1160, Columbus, Ohio  43216-1160 (for respondent Cintas Corporation No. 2)

 

Linda A. Holmes, Department of Employment and Economic Development, 332 Minnesota Street, Suite E200, St. Paul, MN  55101-1351 (for Department of Employment and Economic Development)

 

 

            Considered and decided by Peterson, Presiding Judge; Klaphake, Judge; and Hudson, Judge.

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

PETERSON, Judge

In this certiorari appeal from the decision of a senior unemployment review judge that relator is disqualified from receiving unemployment benefits because she was discharged for misconduct, relator argues that (1) the evidence does not support the findings; and (2) the conduct was a single incident that did not have a significant adverse impact on the employer.  We affirm.

FACTS

            Relator Treva A. Pearcy was employed by respondent Cintas Corporation No. 2 as an accounts-receivable coordinator at its Eagan office.  Her duties included posting the proceeds of checks received from customers to the customers' accounts and applying the proceeds to the correct invoices according to the customers' instructions.  When payments were received for services provided at more than one Cintas location, relator was responsible for posting the portion of the payment that was for her location and then transferring the remaining amount to other Cintas locations.

            Relator was also responsible for handling "unapplied cash," which included overpayments, advance payments, and payments that a customer had not directed to be applied to a specific invoice.  Unapplied cash could not be applied to an invoice without the customer's approval.  When the customer's approval was obtained, Cintas's policy required that the approval be documented in a note entered in the accounts-receivable system.

            Relator was eligible for a performance-incentive bonus.  Under the bonus plan, the more invoices an employee cleared, particularly older invoices, the greater the potential bonus.  A high percentage of old, unpaid invoices could significantly reduce the potential bonus.  The amount of unapplied cash held at a location was also used as a performance measurement, which created an incentive for employees to apply cash to invoices.

            On February 25, 2004, relator posted a $489.92 check from Border Foods.  Border had designated $238.11 to be applied to an invoice issued by relator and $251.81 to be applied to an invoice issued by Cintas's Maple Grove office.  Relator applied the $238.11 to her invoice and correctly followed company procedure by crediting the remainder of the payment to Border's account as unapplied cash pending transfer to Cintas's Maple Grove office.  Relator forgot about the unapplied cash in Border's account and failed to transfer it to Cintas's Maple Grove office.

            For purposes of its performance-incentive bonus plan, Cintas evaluated the clearing of old invoices at the end of May, which was the end of the fiscal quarter.  On May 25, 2004, relator applied the $251.81 that remained in Border's account as unapplied cash to 11 open invoices that Border had at Cintas's Eagan office.  No documentation in Cintas's accounts-receivable system indicated that relator obtained Border's permission to apply the money to the invoices.  On June 6, 2004, after Cintas's Maple Grove office began looking for the $251.81 that should have been transferred to it, relator transferred $251.81 in unapplied cash from an unrelated customer's account to Cintas's Maple Grove office to be applied to Border's outstanding invoice at that office.

            On June 28, 2004, relator met with her supervisor, Sarah Grahek, and general manager Brad Hoag.  Grahek and Hoag told relator that they had no record of authorization for relator to apply the $251.81 of Border's unapplied cash to past-due invoices at the Eagan office and that they believed she had applied the money in that manner to make her books look better and earn a larger quarterly bonus.  Relator claimed that Cintas management trainee Kristin McConnell told her to apply the money in that manner.  When Grahek brought McConnell into the meeting, relator claimed that either Grahek or McConnell had told her how to apply the money, but she did not recall which one.  Cintas suspended relator pending an investigation.  While relator was suspended, Cintas discovered the June 6, 2004 transfer from the unrelated customer's account to Cintas's Maple Grove office and discharged relator on July 6, 2004, for repeated misapplication of funds.

            Relator testified that in April 2004, as part of McConnell's training, Grahek assumed responsibility for unapplied-cash accounts.  McConnell and Grahek contacted customers and entered notes on unapplied-cash reports, but company policy did not permit them to make the actual money transfers.  Relator made the actual transfers based on informal oral instructions from Grahek or McConnell.  Grahek's procedure in April and May 2004 was to call customers with McConnell and request that unapplied cash be applied to the account's oldest invoices.  As a result, Grahek routinely instructed relator to apply money to the oldest invoices.  Relator was present when Grahek called Border and, after the call, Grahek told relator how to apply the money, and Grahek was going to put into the system the note documenting Border's approval of the application.  At the June 28, 2004 meeting with Grahek and Hoag, relator gave Hoag an unapplied-cash report indicating that relator was not accountable for unapplied cash and documenting authorization of the Border's application.  Hoag took the report from relator and failed to produce it at the hearing before the ULJ.

            Relator filed a claim for unemployment benefits with respondent Department of Employment and Economic Development.  A department adjudicator determined that relator was discharged from employment for errors not amounting to employment misconduct and, therefore, was not disqualified from receiving unemployment benefits.  Respondent appealed to an unemployment law judge (ULJ).  Following an evidentiary hearing, the ULJ determined that relator was discharged from employment for reasons other than misconduct and affirmed the determination of nondisqualification.  Respondent appealed to a senior unemployment review judge (SURJ).  The SURJ determined that relator was discharged from employment for misconduct and reversed the ULJ's decision.  Relator filed this certiorari appeal, seeking review of the SURJ's decision.

D E C I S I O N

            An employee discharged for employment misconduct is disqualified from receiving unemployment benefits.  Minn. Stat. § 268.095, subd. 4(1) (Supp. 2003).  Whether an employee has committed employment misconduct presents a mixed question of fact and law.  Colburn v. Pine Portage Madden Bros., Inc., 346 N.W.2d 159, 161 (Minn. 1984).  The SURJ determines the fact question of whether an employee committed the alleged acts of misconduct.  Scheunemann v. Radisson S. Hotel, 562 N.W.2d 32, 34 (Minn. App. 1997).  The SURJ's factual findings are "viewed in the light most favorable to the decision, and if there is evidence reasonably tending to sustain them, they will not be disturbed."  White v. Metro.  Med. Ctr., 332 N.W.2d 25, 26 (Minn. 1983).  This court reviews de novo whether the employee's actions constituted employment misconduct that disqualifies the employee from receiving unemployment benefits.  Ress v. Abbott Nw. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).

            Minn. Stat. § 268.095, subd. 6(a) (Supp. 2003), states:

Employment misconduct means any intentional, negligent, or indifferent conduct, on the job or off the job (1) that evinces a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee, or (2) that demonstrates a substantial lack of concern for the employment.

 

            Inefficiency, inadvertence, simple unsatisfactory conduct, a single incident that does not have a significant adverse impact on the employer, conduct an average reasonable employee would have engaged in under the circumstances, poor performance because of inability or incapacity, good faith errors in judgment if judgment was required, or absence because of illness or injury with proper notice to the employer, are not employment misconduct.

 

Relator argues that the May 25, 2004 posting of the unapplied cash in Border's account to past-due Eagan invoices was not misconduct because she made the application pursuant to Grahek's instruction.  But there was conflicting evidence on whether Grahek authorized relator to apply the funds in that manner.  When witness credibility and conflicting evidence are at issue, the reviewing court defers to the SURJ's ability to weigh the evidence and make those determinations and does not weigh the evidence on review.  Whitehead v. Moonlight Nursing Care, Inc., 529 N.W.2d 350, 352 (Minn. App. 1995).  An appellate court reviews the SURJ's findings, not those of the ULJ, even though the findings might involve witness credibility.  Lolling v. Midwest Patrol, 545 N.W.2d 372, 377 (Minn. 1996). 

            The SURJ specifically found that, "[o]n May 25, 2004, [relator] applied the $251.81 in unapplied cash in Border's account to eleven of Border's invoices which were more than ninety days old.  [Relator] did not receive permission from Border to apply the cash in this way."  The SURJ explained:

            Each party provides very different accounts of the events leading to [relator's] discharge.  [Relator] testified to being told by her supervisor to make the May 25, 2004 transfer and doing as she was told.  [Grahek] testified that she had never told [relator] to make the transfer and that she feels [relator] made the transfer to make her books look better and make it more likely for her to receive a quarterly bonus.  [Relator] testified that she had documentation showing [Grahek] had given her authorization to make the May 25, 2004 transfer.  She testified that she showed this document to Hoag but had the documents taken away.  She provides no explanation why Hoag would not take this document into consideration when making the decision to discharge her.  This documentation was also not subpoenaed to be presented as evidence for the hearing.  We find that [relator] made the decision to make the May 25, 2004 transfer on her own and did not have authorization from either the client or [Grahek].  In addition, we find [Grahek's] testimony that [relator] transferred funds from [an unrelated customer] in order to make up for the missing $251.81 in Border funds to be more convincing than [relator's] general denial of the incident.

 

            A preponderance of the evidence shows that [relator] knew [respondent's] policies concerning application and transfer of funds.  On February 25, 2004, she made a simple mistake and forgot to apply funds as required.  On May 25, 2004, she intentionally exploited her earlier mistake to make her book of business look better in hopes of receiving a higher quarterly bonus.  On June 6, 2004, she intentionally misappropriated funds to cover up her actions.  Her actions display clearly a serious violation of the standards of behavior an employer has a right to expect of its employees.

 

            Relator argues that even crediting Grahek's testimony, the evidence shows only that relator made an unauthorized posting and not that she engaged in any intentional conduct showing intent to disregard job duties or standards.  But the evidence is sufficient to support a finding of misconduct.  Grahek testified that the number of outstanding invoices affected an employee's bonus and that the unauthorized May 25, 2004 application of funds to 11 old invoices could potentially have affected relator's bonus.  The SURJ specifically found with respect to the June 6, 2004 transfer from the unrelated customer's account to Border's account at Maple Grove that relator "intentionally misappropriated funds to cover up her actions."  The evidence supports an inference that relator intentionally misappropriated client funds, initially, to improve her potential quarterly bonus and later to cover up the initial misappropriation.  The evidence also supports the SURJ's findings that the May 25 and June 6 applications of funds to Border's account was contrary to company policy and that relator understood the company policy.  "[A]n employee's decision to violate knowingly a reasonable policy of the employer is misconduct." Schmidgall v. FilmTec Corp., 644 N.W.2d 801, 806 (Minn. 2002).  

Relator argues that the application of funds to the Border account should be held to be a single incident that does not have an adverse impact on the employer and, therefore, is not misconduct.  But under Schmidgall,even a single violation by an employee of an employer's reasonable policy can constitute misconduct.

            Relator argues that the evidence was insufficient to show that the May 25, 2004 transfer could have affected her bonus, and, without such evidence, the evidence was insufficient to support a finding that the transfer was motivated by the hope of receiving a higher bonus.  But even if the May 25 transfer was simply a mistake, the June 6, 2004 transfer of funds from an unrelated customer's account to Border's account could be held to be misconduct.  The transfer was made following an inquiry by the Maple Grove office about the money from Border's account, and the amount of money transferred from the unrelated customer's account matched exactly the amount of unapplied cash in Border's account that was supposed to have been transferred from the Eagan office to Maple Grove.  It is a reasonable inference that relator made the June 6 transfer to cover up the May 25 transfer.

            Affirmed.