Mosby Law Firm v. Director, Employment Security Department and Diedra M. Hurt

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JUNE 22, 2005


REVIEW, [NO. 20004-BR-01460 ]


John B. Robbins, Judge

Appellant Mosby Law Firm appeals the award of unemployment benefits to Diedra M. Hurt, who was employed as a paralegal by Lori Mosby's law firm from September 2003 until late January 2004. Hurt applied for unemployment benefits, which were approved by the Arkansas Employment Security Department, then reversed by the Appeals Tribunal, and then reinstated by the Board of Review. Appellant raises three arguments in support of its brief urging our court to reverse the award of benefits: (1) that Hurt committed misconduct that resulted in her separation from work; (2) that Hurt voluntarily terminated her employment; and (3) that Hurt was an independent contractor and not an employee. We hold that the Board's decision, that Hurt was discharged for reasons other than misconduct connected with the work, is supported by substantial evidence. Therefore, we affirm its decision.

Our standard of review of the Board's findings of fact is well-settled:

We do not conduct a de novo review in appeals from the Board of Review. In appeals of unemployment compensation cases we instead review the evidence and all reasonable inferences deducible therefrom in the light most favorable to the Board of Review's findings. The findings of fact made by the Board of Review are conclusive if supported by substantial evidence; even when there is evidence upon which the Board might have reached a different decision, the scope of judicial review is limited to a determination of whether the Board could have reasonably reached its decision based on the evidence before it. Substantial evidence is such evidence as a reasonable mind might accept as adequate to support a conclusion.

Snyder v. Director, 81 Ark. App. 262, 263, 101 S.W.3d 270, 271 (2003). Additionally, the credibility of witnesses and the weight to be accorded their testimony are matters to be resolved by the Board of Review. Williams v. Director, 79 Ark. App. 407, 88 S.W.3d 427 (2002).

An individual shall be disqualified for benefits if he or she is discharged from his or her last work for misconduct in connection with the work. Ark. Code Ann. § 11-10-514(a)(1) (Repl. 2002). In Willis Johnson Co. v. Daniels, 269 Ark. 795, 601 S.W.2d 890 (Ark. App. 1980), we explained that "misconduct," for purposes of unemployment compensation cases, must be:

an act of wanton or willful disregard of the employer's interest, a deliberate violation of the employer's rules, a disregard of standards of behavior which the employer has the right to expect of his employees, or negligence in such degree or recurrence as to manifest culpability, wrongful intent, or evil design, or show an intentional substantial disregard of the employer's interest or of the employee's duties and obligations to the employer.

Mere inefficiency, unsatisfactory conduct, failure of good performance as the result of inability or incapacity, inadvertencies, ordinary negligence or good faith errors in judgment or discretion are not considered misconduct for unemployment insurance purposes unless it is of such a degree or recurrence as to manifest culpability, wrongful intent, evil design, or an intentional or substantial disregard of an employer's interests or an employee's duties and obligations.

Willis, 269 Ark. at 800, 601 S.W.2d at 892-93 (citations omitted). In order for misconduct to occur, there must be an element of intent. See id. Whether the employee's acts are willfulor merely the result of unsatisfactory conduct or unintentional failure of performance is a fact question for the Board to decide. George's, Inc. v. Director, 50 Ark. App. 77, 900 S.W.2d 590 (1995).

With these statements of Arkansas law in mind, we proceed to examine the evidence presented to the Board and the findings it reached. Hurt began to work for the law firm as a paralegal (officially an "employee") in September 2003. Although she continued to perform the same duties for appellant and received direction from Lori Mosby, the owner of the law firm, the parties executed a document titled, "Independent Contractor Agreement," on December 15, 2003. The document stated that Hurt would work from 8:00 a.m. to 5:00 p.m., with an hour lunch break, performing such work as answering the telephone, typing correspondence, organizing and updating client files, maintaining the court schedule, assisting clients, and taking on other assigned tasks. Hurt continued being paid by the hour, her work hours remained the same after the document was signed, she continued with the same work duties and to meet Mosby each day to receive her work assignments, and she was subject to the same workplace policies as employees of the law firm. Hurt said that she agreed to Mosby's suggestion about being an independent contractor because her take-home pay increased when the law firm ceased taking out taxes. Hurt continued to work as a paralegal until late January when she was hospitalized for problems with her pregnancy.

Hurt went to her doctor for an appointment on the afternoon of Thursday, January 22, 2004, and she was admitted for an overnight stay at the hospital. On Friday morning, January 23, Hurt testified that she called her employer to say that she would be at work as soon as she was discharged, which was that afternoon. Hurt said that she went to the law firm upon her release, picked up her paycheck, and informed everyone that she would be back to work on Monday morning, January 26.

On that Monday upon her arrival, Hurt was informed by Mosby that she would not be permitted to return until she had a doctor's note. Mosby was concerned about Hurt experiencing further problems with her pregnancy while performing work duties. Hurt contacted her doctor's office and acquired a doctor's note; Hurt said she drove to the doctor's office and brought it back to Mosby, who admitted receipt of the doctor's office letter, which approved her return to work and stated her due date of February 25. However, Mosby thought that the letter appeared to have a stamped signature of Dr. Skokos. Mosby told Hurt that she wanted to speak directly with Dr. Skokos. Hurt called Dr. Skokos's office a couple of times, in attempt to have him call her employer, but Dr. Skokos did not call.

The record contained a letter from Mosby to Dr. Skokos dated Tuesday, January 27, 2004, reflecting Mosby's request to speak directly with him. Because Dr. Skokos did not call Mosby at her law firm, Mosby did not permit Hurt to return to work. Hurt said that she went back to the law firm on the following Friday and asked Mosby if she had spoken to the doctor; Mosby said "no." Hurt said that she contacted Mosby again, asking Mosby to contact her at home to let her know when Mosby talked to Dr. Skokos. At Hurt's next doctor's appointment in February, she was seen by another doctor because Dr. Skokos was delivering babies. Mosby stated that she left messages with Dr. Skokos, which were never returned. Mosby testified that she never fired Hurt; instead, she maintained that Hurt was an independent contractor who did not return.

Hurt said that she had made the effort to go back to work and was upset by not being allowed to earn much-needed income. Hurt understood why Mosby wanted assurances that she was capable of standing and working safely during her pregnancy, but Hurt said she had given Mosby the requested doctor's note okaying her return to work. At some point in February, Hurt believed that she had been terminated, and thereafter filed for unemployment benefits, which were awarded.

The law firm appealed to the Appeals Tribunal, arguing in part that Hurt was not qualified to receive such benefits because she was an independent contractor. The Appeals Tribunal specifically stated that the appeal was focused on Ark. Code Ann. § 11-10-514, which concerns the statutory definition of "misconduct." The Appeals Tribunal found that Hurt was an employee who had been terminated for misconduct. Hurt appealed to the Board of Review, which noted that the issue was section 11-10-514. The Board found that Mosby did not meet the burden on the employer to prove by a preponderance of the evidence that Hurt had committed misconduct, despite Mosby's belief that she was justified in requiring to speak directly to the obstetrician prior to returning Hurt to work. The Board found that Hurt made efforts to comply with Mosby's requirement that she speak directly with Dr. Skokos, and therefore she had not committed misconduct. Though Mosby testified that Hurt was an independent contractor, the Board referred appellant to other employment-security regulations and statutes that control adjudication of employer coverage. The Board concluded that Hurt was entitled to benefits "if otherwise in compliance with the law." This appeal followed.

Appellant Mosby argues that the Board's finding, that Hurt was discharged for reasons other than misconduct connected with the work, is not supported by substantial evidence. Appellant asserts that Hurt failed to take the necessary steps to ensure that her doctor contacted the law firm in willful disregard of her employer's interest. We disagree. The testimony deemed trustworthy by the Board indicated that (1) Hurt acquired, at Mosby's request, a doctor's note with Dr. Skokos's signature that permitted her to return to work, and (2) she attempted to comply with Mosby's requirement that Dr. Skokos call the law firm. Given that misconduct for purposes of unemployment requires a level of misfeasance or malfeasance manifesting wrongful intent, and none was demonstrated here, we cannot conclude that the Board's decision is not supported by substantial evidence.

Appellant argues in the alternative that Hurt was not fired, but instead she voluntarily quit without good cause, disqualifying her from unemployment benefits. Appellant essentially asserts that Hurt's failure to be returned to the workplace was of her own choosing. We do not agree. The undisputed fact is that Hurt was disengaged from employment because her employer would not allow her to return until Mosby had spoken with her treating physician. There is an absence of any evidence to show that Hurt voluntarily quit her job; Hurt was simply unable to force Dr. Skokos to speak with Mosby.

Appellant's final argument on appeal is that Hurt was an independent contractor and thus disqualified from receiving unemployment benefits because she was not an employee. Appellant cites to Ark. Code Ann. § 11-10-210(e) and the three required elements that an employer must show to establish independent-contractor status for purposes of the employer's exemption from paying unemployment insurance taxes. The sole issue before the Board of Review, whose decision we review on appeal, was the circumstance of Hurt's separation from work. The Board indicated that Mosby was attempting to raise a collateral issue, not properly before it and not relevant to Hurt's separation from the work. To the extent that this argument could be construed as relevant to Hurt's separation from the work, appellant failed to obtain a ruling on that argument, which would prevent appellate review. See Barber v. Director, 67 Ark. App. 20, 992 S.W.2d 159 (1999). To the extent that appellant argues that it was not liable for unemployment taxes because Hurt was an independent contractor, we would be required to dismiss such an appeal as not final for purposes of appellate review. See Hargrett v. Director, 44 Ark. App. 111, 866 S.W.2d 432 (1993).

In conclusion, we hold that the Board's findings of fact, that Hurt was discharged for reasons other than misconduct in connection with the work, are supported by substantial evidence. Therefore, we affirm.


Pittman, C.J., and Vaught, J., agree.