 Franklin v. Employment Dept.
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FILED: January 30, 2013 IN THE COURT OF APPEALS OF THE STATE OF OREGON SUZANNE G. FRANKLIN, Petitioner, v. EMPLOYMENT DEPARTMENT and MILWAUKIE CONVALESCENT HOSPITAL, INC., Respondents. Employment Appeals Board 11AB0569 A148253 Submitted on May 03, 2012. Thomas K. Doyle filed the briefs for petitioner. Peter D. Hawkes and Lane Powell, PC, filed the brief for respondent Milwaukie Convalescent Hospital, Inc. Denise G. Fjordbeck, Attorney-in-Charge, Civil/Administrative Appeals, waived appearance for respondent Employment Department. Before Armstrong, Presiding Judge, and Duncan, Judge, and Brewer, Judge pro tempore. DUNCAN, J. Reversed and remanded. 1 DUNCAN, J. 2 Claimant seeks review of a final order of the Employment Appeals Board 3 (EAB) determining that she was discharged for "misconduct connected with work," ORS 4 657.176(2)(a), and, therefore, that she is not eligible for unemployment benefits. The 5 EAB concluded that an on-the-job error that claimant made, which gave rise to a 6 disciplinary proceeding against her by the Oregon State Board of Nursing (Board of 7 Nursing), was not misconduct. However, it reasoned that claimant's negotiated resolution 8 of that proceeding, in which she agreed to a temporary suspension of her nursing license, 9 was misconduct. We review for substantial evidence, substantial reason, and errors of 10 law, Freeman v. Employment Dept., 195 Or App 417, 421, 98 P3d 402 (2004), and 11 conclude that the EAB erred in its interpretation of the Employment Department's 12 (department's) rule defining misconduct. Consequently, we reverse and remand. 13 An unemployment claimant "shall be disqualified from the receipt of 14 benefits" if the claimant "[h]as been discharged for misconduct connected with work." 15 ORS 657.176(2)(a). The employer bears the burden of showing that a claimant has been 16 discharged for misconduct connected with work. McDowell v. Employment Dept., 348 17 Or 605, 610 n 2, 236 P3d 722 (2010) ("Long-standing Court of Appeals decisions hold 18 that * * * an employer has the burden of proving that a discharge was for misconduct."); 19 Babcock v. Employment Div., 25 Or App 661, 664, 550 P2d 1233 (1976) ("The burden of 20 proving claimant's misconduct rests on the employer." (Internal quotation marks 21 omitted.)). 1 1 2 Pursuant to authority delegated to it in ORS 657.610(4), the department has defined "misconduct" as follows: 3 4 5 6 7 "(a) As used in ORS 657.176(2)(a) and (b) a willful or wantonly negligent violation of the standards of behavior which an employer has the right to expect of an employee is misconduct. An act or series of actions that amount to a willful or wantonly negligent disregard of an employer's interest is misconduct. 8 9 10 11 "(b) Isolated instances of poor judgment, good faith errors, unavoidable accidents, absences due to illness or other physical or mental disabilities, or mere inefficiency resulting from lack of job skills or experience are not misconduct. 12 13 14 15 "(c) The willful or wantonly negligent failure to maintain a license, certification or other similar authority necessary to the performance of the occupation involved is misconduct, so long as such failure is reasonably attributable to the individual." 16 OAR 471-030-0038(3) (emphasis added). 17 We take the facts, which are undisputed, from the EAB's order and the 18 record. Claimant is a registered nurse who worked for employer from July 28, 2009 to 19 December 1, 2010. In December 2009, claimant was on probation with the Board of 20 Nursing for conduct unrelated to this case. On December 4, 2009, claimant misread a 21 handwritten patient chart and, as a result, oversaw administration of a 1.0 ml dose of 22 methadone instead of the prescribed 0.1 ml.1 23 Another nurse, reading the same chart, made the same mistake a few days 24 later. That nurse discovered both her mistake and claimant's and reported the errors to 25 employer. Employer suspended both nurses. Claimant filed for unemployment benefits 1 The patient was not harmed by the mistake. 2 1 for the period of her suspension, and, after a hearing, an administrative law judge (ALJ) 2 concluded that claimant had not been suspended for misconduct because employer failed 3 to prove that claimant's conduct was willful or wantonly negligent, as required by OAR 4 471-030-0038(3)(a). 5 In keeping with the terms of claimant's probation with the Board of 6 Nursing, employer reported claimant's mistake to the Board of Nursing. After receiving 7 the report, the Board of Nursing initiated a disciplinary investigation of claimant. The 8 result of that investigation was that on November 2, 2010, claimant and the Board of 9 Nursing agreed to a stipulated order. Claimant acknowledged that her medication error, 10 as alleged in the order, constituted "conduct derogatory to the standards of nursing," see 11 ORS 678.111(1)(f); OAR 851-045-0070, and agreed to a 60-day suspension of her 12 license and an extension of her probation.2 The order noted that a nurse's "license may be 13 revoked or suspended or the licensee may be placed on probation for a period specified 14 by the Oregon State Board of Nursing and subject to such conditions as the Board may 15 impose" for causes that include conduct derogatory to the standards of nursing. ORS 16 678.111(1)(f). 17 The order explained, "[claimant] wishes to cooperate with the Board in 18 resolving the present disciplinary matter. Therefore, the [60-day suspension and 19 extension of probation] will be proposed to the Board and is agreed to by [claimant]." It 2 The stipulated order also stated that claimant had failed to obtain preapproval of her position with employer from the Board of Nursing, in violation of a term of her probation. 3 1 also provided, "[Claimant] understands that, by entering into this Stipulation, she waives 2 the right to an administrative hearing under ORS 183.310 to 183.550." 3 On the day that claimant's license was suspended, employer terminated 4 claimant's employment. Claimant applied for unemployment benefits, and the 5 department concluded that employer had discharged claimant for "misconduct," ORS 6 657.176(2)(a), and, therefore, claimant was not eligible to receive unemployment 7 benefits. Claimant requested an administrative hearing, and an ALJ affirmed the 8 department's decision. That ALJ's conclusion rested on the premise that the conduct that 9 gave rise to the stipulated order--the medication error that the first ALJ had concluded 10 11 was not misconduct--was misconduct. Claimant filed for review by the EAB. The EAB concluded that it was 12 bound by the first ALJ's determination that claimant's medication error was not 13 misconduct. Nevertheless, the EAB continued: 14 15 16 17 18 19 20 21 22 "[C]laimant and the ALJ overlook the fact that claimant knowingly and voluntarily entered into the Stipulation, in which she agreed to the suspension of her registered nurse license, and waived her right to an administrative hearing. Claimant knew that agreeing to the Stipulation would result in her license being suspended, effective December 1, 2010. Claimant's decision not to request an administrative hearing demonstrated her indifference to the consequences of her actions. Claimant's failure to maintain her registered nurse license was at best wantonly negligent, and reasonably attributable to claimant." 23 (Emphasis added.) As a result of its conclusion that claimant's entry into the stipulated 24 order with the Board of Nursing was misconduct, the EAB concluded that claimant was 25 not eligible for unemployment benefits. Claimant seeks review of the EAB's order. 4 1 Claimant argues that the EAB's interpretation of the department's definition 2 of "misconduct" is erroneous as a matter of law because claimant's conduct in entering 3 into a stipulated agreement with the Board of Nursing "[cannot] be divorced from" the 4 medication error that caused the Board of Nursing to take disciplinary action against 5 claimant. That is, claimant asserts that, in evaluating whether a claimant's conduct with 6 respect to the loss of a license is "misconduct," the EAB may consider only the conduct 7 that underlies the loss of license, not the claimant's resolution of a resulting disciplinary 8 proceeding. In order to evaluate claimant's argument, we must interpret OAR 471-030- 9 0038(3)(c) to ascertain whether employer proved that claimant's conduct amounted to a 10 "failure to maintain a license."3 11 Before beginning our analysis, however, we turn to a question regarding 12 our standard of review and the proper disposition of this case. Generally, we use "the 13 same interpretive framework with respect to administrative rules that we use with respect 14 to statutes." Gafur v. Legacy Good Samaritan Hospital, 344 Or 525, 532, 185 P3d 446 15 (2008). That is, "[w]e begin by considering the text of the rule itself, together with its 16 context, which includes other provisions of the same rule, other related rules, the statute 17 pursuant to which the rule was created, and other related statutes." Id. at 533. 18 When interpreting an administrative rule, we defer to any "plausible 3 As mentioned, the EAB concluded that claimant's agreement to the stipulated order was "at best wantonly negligent." OAR 471-030-0038(3)(c) requires a "willful or wantonly negligent failure to maintain a license." Our conclusion that claimant's agreement to the stipulated order did not constitute a "failure to maintain a license" obviates the need to review the EAB's conclusion regarding claimant's mental state. 5 1 interpretation" by the agency that promulgated the rule. Don't Waste Oregon Com. v. 2 Energy Facility Siting, 320 Or 132, 142, 881 P2d 119 (1994); Johnson v. Employment 3 Dept., 189 Or App 243, 248, 74 P3d 1159, adh'd to as modified on recons, 191 Or App 4 222, 81 P3d 730 (2003). A "plausible interpretation" is one that is not "inconsistent with 5 the wording of the rule itself, or with the rule's context, or with any other source of law." 6 Don't Waste Oregon Com., 320 Or at 142. 7 Determination of whether a particular act constitutes "misconduct" under 8 OAR 471-030-0038(3)(c) requires an interpretation of that rule. Ring v. Employment 9 Dept., 205 Or App 532, 536, 134 P3d 1096 (2006); Jordan v. Employment Dept., 195 Or 10 App 404, 409, 97 P3d 1273 (2004); see also McPherson, 285 Or 541, 550, 591 P2d 1381 11 (1979). However, the department, rather than the EAB, is the agency to which we defer: 12 "[T]he ALJ and the [EAB] do not have the delegated authority to articulate policy 13 through the interpretation of rules; they are reviewing bodies, not policy-making ones." 14 Ring, 205 Or App at 536. The consequence of that arrangement is that we defer to the 15 department's conclusion about whether particular conduct constitutes misconduct under 16 the rule, but we do not defer to the EAB's conclusion. 17 Our deference to the department, however, is limited to its conclusions of 18 law. As to the facts, the EAB reviews the record de novo. ORS 657.275(2). We review 19 the EAB's findings for substantial evidence. Freeman, 195 Or App at 421. Thus, we are 20 bound by the EAB's findings of fact that are supported by substantial evidence, but we 21 defer to the department's legal conclusions as to whether certain facts constitute 6 1 2 3 4 5 6 7 misconduct. As a result, "[w]hen the [department] makes a legal conclusion based on an incomplete factual record, there is, in essence, no legal interpretation for us to review; the [department] has not pronounced on the actual fact situation that the case presents. In such circumstances, we remand with instructions to determine the department's interpretation under an adequate factual record." Ring, 205 Or App at 537. 8 In this case, the department never concluded that claimant's conduct in 9 resolving the disciplinary proceeding was misconduct apart from her medication error. 10 Instead, only the EAB came to that conclusion. Consequently, "there is, in essence, no 11 legal interpretation for us to review," id.; ordinarily, that would require remand. 12 However, there is an exception to that general rule: No remand is 13 necessary where "[t]he facts as found by the [EAB] * * * allow for only one conclusion." 14 Id. at 538 (concluding that no remand was necessary because the claimant's conduct was 15 not an isolated instance of poor judgment where it "was tantamount to assault," which 16 was misconduct under the department's rules); see also Jordan, 195 Or App at 410 17 (explaining that remand was not necessary where "any interpretation of departmental 18 rules resulting in a conclusion that [the] claimant's conduct here was not misconduct 19 would be implausible" (emphasis in original)). Here, the facts found by the EAB allow 20 for only one conclusion: Claimant's agreement to the stipulated order was not 21 misconduct because it did not amount to a "failure to maintain a license," OAR 471-030- 22 0038(3)(c). 23 In reaching that conclusion, we need not address claimant's contention, 7 1 noted above, that the EAB may consider only the underlying conduct that leads to a 2 license suspension, and, correspondingly, that it may never consider a claimant's conduct 3 in resolving a disciplinary proceeding against her. That is so because, on this record, 4 claimant's agreement to the stipulated order cannot plausibly be understood to constitute 5 a "failure to maintain a license" as that phrase is used in OAR 471-030-0038(3)(c). 6 As noted, employer bore the burden of proving that claimant's discharge 7 was for "misconduct," McDowell, 348 Or at 610 n 2. Consequently, here, employer had 8 to prove that claimant's agreement to the stipulated order constituted a failure to maintain 9 her license. Employer failed to do so. 10 11 12 13 14 15 16 17 18 19 In defense of the EAB's reasoning, set out above, __ Or App at __ (slip op at 4), employer now states the following: "[Claimant] voluntarily gave up her opportunity to argue that her underlying conduct did not amount to 'conduct derogatory to the standards of nursing' in violation of ORS 678.111(1)(f) or, even if it did, that the State Board of Nursing should impose a lesser penalty than suspension or revocation of her license. To be sure, had [claimant] proceeded to an administrative hearing, a revocation or suspension of her license was a possible outcome. But by entering into the stipulation, she guaranteed that outcome through her own knowing and voluntary act." 20 (Emphasis in original; citation omitted.) That reasoning is not persuasive in light of 21 employer's failure to show any reason for claimant to contest the proposed license 22 suspension. 23 First, before the ALJ, employer conceded that claimant's underlying 24 conduct--which included the medication error--violated the Nurse Practice Act, ORS 25 678.010 to 678.445. Therefore, employer may not dispute that the Board of Nursing had 8 1 authority to suspend or revoke claimant's license. See ORS 678.111(1). 2 Second, employer produced no evidence indicating that, had claimant 3 sought a hearing and challenged the Board of Nursing's proposed suspension of her 4 license, she might have received a less severe sanction. Claimant's medication error 5 violated the Nurse Practice Act and she was subject to discipline--including suspension or 6 revocation of her license--by the Board of Nursing for that violation. No evidence 7 suggests that there was any ground on which claimant could have resisted the Board of 8 Nursing's discipline. 9 In sum, (1) the Board of Nursing could have suspended or revoked 10 claimant's license regardless of her agreement to the stipulated order and (2) there is no 11 evidence that it might have imposed a lesser penalty if claimant had insisted on fighting 12 the discipline instead of agreeing to the stipulated order. Consequently, employer failed 13 to carry its burden of proving that claimant was terminated for misconduct; it failed to 14 prove that claimant's agreement to the stipulated order amounted to a "failure to 15 maintain" her license. OAR 471-030-0038(3)(c). Indeed, it appears that her agreement 16 was a reasonable attempt to mitigate the consequences of her medication error. 17 Any other interpretation of OAR 471-030-0038(3)(c) would be implausible 18 because it would conflict with the statutory term "misconduct." It is beyond dispute that 19 misconduct involves something improper or wrongful. See, e.g., Bunnell v. Employment 20 Division, 304 Or 11, 17, 741 P2d 887 (1987) (noting that, in order to be misconduct, a 21 claimant's conduct must be "more severe than poor judgment"); Steele, 143 Or App at 9 1 112-16 (citing numerous definitions of misconduct, all of which refer to wrongfulness or 2 impropriety). It is because of that impropriety or wrongfulness that, unlike a discharge 3 for other reasons, a discharge for misconduct makes an employee ineligible for 4 unemployment benefits. See Bunnell, 304 Or at 17 (emphasizing the seriousness of 5 "misconduct" and explaining that the test is "not whether the employer was entitled to 6 discharge the employe, but rather whether a legally discharged employe is disqualified 7 from unemployment compensation"). 8 9 Here, employer simply did not show that claimant's conduct was improper or wrongful. It is undisputed that claimant's medication error constituted a violation of 10 the Nurse Practice Act for which claimant was subject to discipline by the Board of 11 Nursing. There is no evidence that claimant's agreement to the stipulated order caused 12 anything more than the same (or less severe) disciplinary consequences that the Board of 13 Nursing would have imposed had claimant sought a hearing. 14 Reversed and remanded. 10
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