Neil J. Cotton, Relator, vs. Laundry World MN, LLC, Respondent, Department of Employment and Economic Development, Respondent.

Neil J. Cotton, Relator, vs. Laundry World MN, LLC, Respondent, Department of Employment and Economic Development, Respondent. A05-2303, Court of Appeals Unpublished, September 12, 2006.

This opinion will be unpublished and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

A05-2303

 

Neil J. Cotton,

Relator,

 

vs.

 

Laundry World MN, LLC,

Respondent,

 

Department of Employment

and Economic Development,

Respondent.

 

Filed September 12, 2006

Affirmed Hudson, Judge

 

Department of Employment

and Economic Development

File No. 1288105

 

 

Martha A. Eaves, Southern Minnesota Regional Legal Services, Inc., 166 East Fourth Street, Suite 200, St. Paul, Minnesota 55101 (for relator)

 

Laundry World MN, LLC, 4315 Central Avenue Northeast, Columbia Heights, Minnesota 55421-2925 (respondent)

 

Linda A. Holmes, Minnesota Department of Employment and Economic Development, 1st National Bank Building, 332 Minnesota Street, Suite E200, St. Paul, Minnesota 55101-1351 (for respondent Department)

 

            Considered and decided by Halbrooks, Presiding Judge; Hudson, Judge; and Parker, Judge.*

U N P U B L I S H E D   O P I N I O N

HUDSON, Judge

Relator challenges the decision by the unemployment-law judge (ULJ) that he committed misconduct, contending that (a) the employer's evidence was mostly hearsay, there was a "surprise" witness, and the ULJ improperly refused to reopen the hearing to receive rebuttal evidence that corroborated relator's credibility; (b) the ULJ's credibility determinations are not supported by the evidence; and (c) the decision is not supported by substantial evidence and the record showed at most unsatisfactory conduct or poor performance.  Because the ULJ conducted the hearing properly and provided ample reasoning for and otherwise supported his/her credibility determinations, and because relator's repeatedly rude conduct toward customers constituted employment misconduct, we affirm.

FACTS

 

            On March 31, 2005, relator Neil Cotton began working as a laundry attendant for Laundry World Minnesota, LLC (the employer).  Relator worked at the laundromat for up to 32 hours per week and was paid a final wage of $8.25 per hour.  On July 15, 2005, relator was discharged from his employment.  Relator applied for unemployment benefits.  A department adjudicator determined that relator was not disqualified from benefits because an "[i]nability to meet expectations does not constitute employment misconduct."  The employer then challenged the non-disqualification and on September 15, 2005, a telephone hearing was held by an unemployment-law judge (ULJ).

Both relator and the employer were unrepresented by counsel.  The ULJ took testimony from relator, the employer, and one witness.  During the hearing the employer, one of the laundromat owners, Mala Himraj, testified that she and her husband (the other owner) decided to discharge relator because they "had received quite a bit of complaints about [relator's] conduct regarding the customers . . . ."  Himraj was allowed to call a witness, Linda Cason, relator's co-worker.  Relator objected to this witness because he had only worked with her for a couple of weeks before he was discharged.  Cason testified that she observed one occasion when a customer asked relator for some change and relator "was very upset with the person and wouldn't give him the change, and he told him he was very rude."  Cason testified that she made change for the customer.  Upon cross-examination by the ULJ, Cason added that the incident occurred during a shift change and that relator was in the process of counting out the till.  She also characterized relator's tone of voice as "kind of gruff" and "crabby."  Cason also testified that four other customers had complained to her about relator, saying that he was "real rude and not courteous whatsoever."  Finally, Cason testified that relator had once called her to tell her to lock the doors one half hour early, without any explanation. 

Himraj testified that she had not seen relator acting rudely to customers, but that customers had complained to her about relator, primarily reporting that relator was very rude and that he yelled at customers about cleaning up after themselves and not removing the laundry carts.  However, Himraj testified that she once observed relator yell at the children of customers for playing with the laundry carts.  After relator yelled at the children, "he took the car[t] away and push[ed] it back to the table you know in a rude manner."  Himraj said that she warned relator that although it was his job to tell the children not to play with the carts, he was not to be rude to them.  Himraj also testified that she gave relator several oral warnings about complaints from customers and that the week before he was discharged she told him that "if things [don't] change dramatically that we're gonna have to let him go." 

After that oral warning, Himraj's husband received two more complaints, and the incident regarding the change occurred.  The two individuals who complained to the employer's husband stated that they would not be using the laundry anymore because relator was so rude and treated the customers like children.  Finally, Himraj testified that an isolated incident in which relator inadvertently took the keys to the laundromat home overnight was not a big factor in her decision to discharge.  She testified, however, that when she called him at home about the keys, relator "got really upset with me and he was really rude with me at that time and you know I started seeing some of what I was hearing from the other attendants, what the customers were saying." 

Relator testified that he was not rude or abrupt with customers.  Relator denied that most of the incidents described by Himraj or the witness had ever occurred.  Relator testified that he thought he got along with a lot of people and that he was only enforcing the rules set by Himraj.  Relator also testified that Himraj talked to him only once about a customer complaint.  Relator did not call any rebuttal witnesses during the evidentiary hearing.

Following the hearing, the ULJ determined that relator was disqualified from benefits because relator had committed employee misconduct by not displaying conduct that the employer had the right to reasonably expect of the employee; specifically, that relator "would act politely and helpfully towards customers."  Relator requested reconsideration of the ULJ's determination.  Upon reconsideration, the ULJ found that relator's request was a restatement of his version of events, and the ULJ affirmed his decision.  Further, the ULJ determined that relator did not show good cause for reopening the evidentiary hearing to call his former co-workers to testify.  Relator appeals the ULJ's decision by writ of certiorari.

D E C I S I O N

This court reviews the decision of the ULJ under Minn. Stat. § 268.105, subd. 7(d) (Supp. 2005),[1] which states:

The Minnesota Court of Appeals may affirm the decision of the unemployment law judge or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioner may have been prejudiced because the findings, inferences, conclusion, or decision are:

(1)       in violation of constitutional provisions;

(2)       in excess of the statutory authority or jurisdiction of the department;

(3)       made upon unlawful procedure;

(4)       affected by other error of law;

(5)       unsupported by substantial evidence in view of the entire record as submitted; or

(6)       arbitrary or capricious.

 

I

 

            Relator makes numerous arguments as to why the ULJ should have reopened the evidentiary hearing.  Before a ULJ must reopen an evidentiary hearing, relator has the burden to show that evidence which was not submitted at the evidentiary hearing would either likely change the outcome and that there was good cause for not submitting it previously, or that the evidence submitted at the hearing was likely false.  Minn. Stat. § 268.105, subd. 2(c) (Supp. 2005).

            A.  ULJ's Assistance of Unrepresented Parties

First, relator argues that the ULJ's failure to assist him during the evidentiary hearing substantially prejudiced relator such that he did not receive a fair hearing.  The department argues that the ULJ properly followed the procedures outlined in the Minnesota Rules.

            The Minnesota Rules state that during an unemployment benefits hearing:

Each party may present and examine witnesses and offer their own documents or other exhibits. . . .  Opposing parties shall have the right to examine witnesses, object to exhibits and testimony, and cross-examine the other party's witnesses.  The [ULJ] should assist unrepresented parties in the presentation of evidence.  The [ULJ] shall rule upon evidentiary objections on the record.  The [ULJ] shall permit rebuttal testimony.  Parties shall have the right to make closing statements.  Closing statements may include comments based upon the evidence and arguments of law.  The [ULJ] may limit repetitious testimony and arguments.

The [ULJ] shall exercise control over the hearing procedure in a manner that protects the parties' rights to a fair hearing.  The [ULJ] shall ensure that relevant facts are clearly and fully developed.

 

Minn. R. 3310.2921 (2005). 

Here, both parties were unrepresented.  The record indicates that the ULJ assisted both parties by asking questions to elicit relevant evidence and that the ULJ provided each party an opportunity to ask any additional questions.  For the most part, both parties declined to question each other.  Because the ULJ adequately assisted both parties in eliciting relevant facts, we conclude that the ULJ properly protected both parties' right to a fair hearing.

B.  Hearsay Evidence

Next, relator challenges the ULJ's reliance on hearsay evidence in deciding the case.  It is undisputed that the testimony included considerable hearsay evidence.  Under the relaxed rules of evidence in these administrative hearings:

A [ULJ] may receive any evidence which possesses probative value, including hearsay, if it is the type of evidence on which reasonable, prudent persons are accustomed to rely in the conduct of their serious affairs.  A [ULJ] may exclude any evidence which is irrelevant, immaterial, unreliable, or unduly repetitious.  A [ULJ] shall not be bound by statutory and common law rules of evidence.  The rules of evidence may be used as a guide in a determination of the quality and priority of evidence offered. . . .  A [ULJ] shall only use reliable, probative, and substantial evidence as a basis for decision.

 

Minn. R. 3310.2922 (2005) (emphasis added). 

The ULJ acknowledged that much of the evidence provided by Himraj was hearsay.  But the ULJ also noted, and indeed, relied heavily upon the fact that Himraj herself, as well as Cason, had seen relator being rude to customers.  Plainly, the ULJ found these complaints, in conjunction with the eyewitness testimony, to be more persuasive than relator's denials.  Further, as the employer rightly observes, a business owner is entitled to rely on repeated complaints from customers.  Indeed, that is precisely the sort of hearsay upon which reasonable, prudent persons rely.  Because the ULJ relied primarily on the personal-observation testimony of Himraj and the witnesses and only relied on the substantial number of hearsay complaints to support his determination, the ULJ did not act improperly by considering the hearsay evidence.

            C.  Employer's "Surprise" Witness

Relator challenges the ULJ's decision to allow Himraj to present testimony from a previously unidentified witness.  Under the discovery rules for unemployment benefit hearings, a party only need disclose its witnesses "following a demand by another party."  Minn. R. 3310.2914, subp. 2 (2005).  The record does not indicate that relator made such demand.  During the hearing, Himraj called one witness, Cason, a co-worker who had worked with relator for a short time before relator was discharged.  Even though relator was then aware that Himraj was calling Cason as a witness, relator did not ask to call any witnesses of his own.  Relator fails to show how the ULJ's determination allowing the employer's witness to testify was unreasonable, arbitrary, or capricious.

            D.  Relator's New Rebuttal Witnesses

Relator challenges the ULJ's determination that he could not call rebuttal witnesses, but relator did not ask to call rebuttal witnesses until after denial of his request for reconsideration.  When deciding a request for reconsideration, the ULJ is generally not allowed to consider any evidence that was not submitted at the evidentiary hearing.  Minn. Stat. § 268.105, subd. 2(c) (Supp. 2005).  The only exception is "for purposes of determining whether to order an additional evidentiary hearing."  Id.  It is a statutory requirement that a ULJ order an additional evidentiary hearing if relator shows that the evidence not submitted at the evidentiary hearing would likely change the outcome and that there was good cause for not having previously submitted the evidence.  Id.

            Here, relator requested that the ULJ consider evidence from two persons whom relator did not call at the evidentiary hearing.  Relator asserts that these witnesses worked with him for a longer time than the witness called by the employer and that they would testify that relator did not treat customers in a rude manner.  Relator does not assert that the witnesses were present at any of the incidents testified toby the employer or by the employer's witness.  Thus, relator's witnesses could testify only that relator was not rude to customers in their presence.  Such evidence would not likely change the outcome of the hearing.  Further, relator failed to show good cause for not calling these witnesses during the evidentiary hearing.

Because (1) the ULJ assisted relator during the hearing process; (2) the ULJ properly allowed the employer's witness; (3) the ULJ gave appropriate weight to the hearsay evidence; (4) the testimony of the proposed new witnesses was not likely to change the outcome; and (5) relator did not show good cause for failing to call the proposed witnesses during the evidentiary hearing, we conclude that the ULJ was not required to reopen the evidentiary hearing.

II

 

            Relator argues that the ULJ failed to provide a specific reason for crediting or discrediting the testimony in accordance with Minn. Stat. § 268.105, subd. 1(c) (Supp. 2005).  Under this recent addition to the statute, "[w]hen the credibility of an involved party or witness testifying in an evidentiary hearing has a significant effect on the outcome of a decision, the [ULJ] must set out the reason for crediting or discrediting that testimony."  Id.  It is well settled that judging the credibility of witnesses and the weight given to their testimony rests within the province of the factfinder and does not fall to this court.  General v. General, 409 N.W.2d 511, 513 (Minn. App. 1987).  Thus, we review the ULJ's decision solely for an error of law.  Specifically, we review whether the ULJ set out his reasoning for the decision.

            Here, the ULJ reasoned that:

[Relator] denied that he acted rudely toward customers.  The evidence provided by Laundry World was, for the most part, of a hearsay nature.  [The employer] testified about her interactions with [relator] as did another employee who testified about her observation of one of the incidents of rudeness.  The large amount of complaints from numerous customers, as well as the observations of two witnesses at the hearing are preferable evidence to the denials of [relator].  If there were only one or two hearsay complaints, the testimony of [relator] may have prevailed.  However, the testimony of the two witnesses as well as the large number of other complaints are more persuasive than [relator]'s denial.

 

The ULJ's reasoning indicates that the personal-observation testimony of the employer and the other employee witness was the primary basis for discrediting relator's denials.  The ULJ's written decision provides adequate reasoning to comply with the statutory requirement.

III

 

            Relator argues that the ULJ erred in its determination that relator committed misconduct.  "Whether an employee engaged in conduct that disqualifies the employee from unemployment benefits is a mixed question of fact and law."  Schmidgall v. Filmtec Corp., 644 N.W.2d 801, 804 (Minn. 2002). 

A. Sufficiency of the Evidence

Whether or not an employee committed an act alleged to be misconduct is a fact question.  Scheunemann v. Radisson S. Hotel, 562 N.W.2d 32, 34 (Minn. App. 1997).  This court defers to the ULJ's findings of fact.  Ress v. Abbott Nw. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).  This court will reverse findings if they are "unsupported by substantial evidence in view of the entire record as submitted."  Minn. Stat. § 268.105, subd. 7(d)(5).

Here, there was testimony from two witnesses who personally observed relator acting in a rude manner to customers.  The employer observed relator yelling at the children of her customers for playing on the laundry carts.  The employer also experienced relator's rudeness during a telephone call regarding relator having inadvertently taken home the laundromat keys.  Relator's co-worker observed relator acting "very upset" with a customer who wanted to get some change while relator was counting his till.  In addition to these specific personal observations, both witnesses testified that they had received numerous complaints from customers regarding relator's treating them "rude and not courteous whatsoever."  Significantly, the owner testified that she had lost customers, two of whom she named, because they did not like the way they were treated by relator.  Based on these personal observations alone, the ULJ's finding that relator treated customers rudely was reasonably supported by the record.

B. Employment Misconduct

Whether a particular act constitutes employment misconduct under Minn. Stat. § 268.095, subd. 6 (Supp. 2005), is a question of law which we review de novo. Schmidgall, 644 N.W.2d at 804; Scheunemann, 562 N.W.2d at 34; see Minn. Stat. § 268.105, subd. 7(d)(4).

Minnesota defines "employment misconduct" as "any intentional, negligent, or indifferent conduct, on the job or off the job, (1) that displays clearly a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee, or (2) that displays clearly a substantial lack of concern for the employment."  Minn. Stat. § 268.095, subd. 6(a) (Supp. 2005).  But employment misconduct is not "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, [or] poor performance because of inability or incapacity . . . ."  Id. 

            Relator argues that a failure to meet the employer's expectations as to customer service demeanor while trying to perform job duties as directed by the employer is not misconduct, but is simply unsatisfactory performance.  The department argues that the issue is whether rudeness to customers, when repeated after oral warnings, constitutes misconduct. 

"As a general rule, refusing to abide by an employer's reasonable policies and requests amounts to disqualifying misconduct."  Schmidgall, 644 N.W.2d at 804.  Rudeness to customers has been found to rise to the level of misconduct.  See, e.g., Montgomery v. F & M Marquette Nat'l Bank, 384 N.W.2d 602, 605 (Minn. App. 1986), review denied (Minn. June 13, 1986).  And a continuing a course of conduct after an employer's warning to refrain from that conduct is also misconduct.  See, e.g., Schmidgall, 644 N.W.2d at 80607; Brown v. Nat'l Am. Univ., 686 N.W.2d 329, 333 (Minn. App. 2004), review denied (Minn. Nov. 16, 2004). 

            An employer has the right to reasonably expect that an employee will not repeatedly be rude to the business's customers.  While there was no indication that relator used any profanity, there was evidence that relator was rude and abrupt with both customers and their children.  The record also indicates that relator's rudeness resulted in a measurable loss of business.  When an employer warns an employee about being rude to customers and that employee's continued rude behavior toward customers causes numerous complaints over a relatively short period of time and a measurable loss of business, that employee's behavior constitutes a serious violation of the employer's expectations.  Relator's behavior meets the statutory definition of employee misconduct.  Thus, the ULJ properly determined that relator was disqualified from obtaining unemployment benefits under Minn. Stat. § 268.095, subd. 4 (Supp. 2005).

            Affirmed.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] This statute was amended in 2005 and became effective as to ULJ decisions issued on or after June 25, 2005.  2005 Minn. Laws ch. 112, art. 2, § 34, at 704, 710, 714.  The new language mirrors the judicial review standard of quasi-judicial decisions under the Administrative Procedure Act.  See Minn. Stat. § 14.69(a)(f) (2004).