DAVID KLEINSCHMIDT v. BOARD OF REVIEW DEPARTMENT OF LABOR

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

DAVID KLEINSCHMIDT,

Appellant,

v.

BOARD OF REVIEW,

DEPARTMENT OF LABOR and

FEDEX FREIGHT EAST, INC.,

Respondents.

___________________________

December 4, 2015

Submitted November 18, 2015 Decided

Before Judges Haas and Manahan.

On appeal from the Board of Review, Department of Labor, Docket No. 341,030.

David Kleinschmidt, appellant pro se.

John J. Hoffman, Acting Attorney General, attorney for respondent Board of Review (Melissa H. Raksa, Assistant Attorney General, of counsel; Alan C. Stephens, Deputy Attorney General, on the brief).

Respondent FedEx Freight East, Inc., has not filed a brief.

PER CURIAM

This case returns to us after remand proceedings directed by our previous opinion. See Kleinschmidt v. Bd. of Review, No. A-4375-11 (App. Div. May 14, 2014). On remand, the Board again found appellant David Kleinschmidt disqualified for unemployment benefits, based upon the administrative determination that he was terminated from his job for severe misconduct. N.J.S.A. 43:21-5(b). Appellant appeals, claiming that the Board erred. We affirm.

The facts in this case were set forth in detail in our prior opinion. Kleinschmidt, supra, slip op. at 1-6. Therefore, only a brief summary is necessary here. Appellant worked as a driver for FedEx Freight East, Inc. (FedEx) for five years. Id. at 1. According to FedEx's protocol, a driver must obtain a signature from the person who accepts a delivery. Id. at 1-2. "When a customer is not present to receive a package, the driver is required to call the FedEx dispatcher for instructions." Id. at 2. FedEx provides training in this protocol to all of its drivers. Ibid. FedEx also warns drivers "that '[a]ny instance of falsification of a Company document or record shall subject the offending employee to possible termination.'" Id. at 3 (alteration in original).

On May 5, 2011, FedEx assigned appellant to deliver a roll of carpet to a customer. Ibid. "One hour after the delivery," the customer called FedEx "to complain that the carpet was damaged and had been simply left at the facility by the driver." Ibid. The customer also stated that no one at the company signed a receipt for the carpet. Ibid. However, appellant submitted a receipt to FedEx with a name written on it, thus representing that the customer had signed for the delivery. Ibid.

Appellant's supervisor questioned appellant about the discrepancy and appellant initially alleged that he followed the FedEx protocol and had the customer sign for the carpet. Ibid. However, after the supervisor told appellant "that the delivery had been recorded by a video camera, appellant admitted that he left the carpet in the facility and that he had signed a fictitious name on the receipt." Id. at 3-4. Two days after the incident, FedEx terminated appellant's employment, and he later applied for unemployment benefits. Id. at 1, 6.

The Appeal Tribunal determined that appellant was disqualified for benefits because he had been terminated for "severe misconduct" under N.J.S.A. 43:21-5(b). Id. at 7. The Tribunal found that appellant falsified the FedEx receipt to make it appear that he had followed the company's protocol and that he then "fail[ed] to be truthful" about his misconduct when his supervisor questioned him. Id. at 8. The Board of Review affirmed the Appeal Tribunal's decision. Ibid.

In our prior opinion, we explained the differences between "misconduct," "gross misconduct," and "severe misconduct" by an employee as follows

Until 2010, N.J.S.A. 43:21-5(b) identified two types of misconduct that prevented full receipt of unemployment benefits. "[G]ross misconduct" is "an act punishable as a crime" and results in a complete disqualification for benefits. Ibid. "[M]isconduct" is found where an employee's act is "improper, intentional, connected with one's work, malicious, and within the individual's control, and is either a deliberate violation of the employer's rules or a disregard of standards of behavior which the employer has the right to expect of an employee." N.J.A.C. 12:17-10.2(a). It results in an eight-week disqualification from unemployment benefits. N.J.S.A. 43:21-5(b).

We described this "two-prong standard" for misconduct as follows: "First, the conduct must be improper, intentional, connected with the work, malicious, and within the employee's control. Second, the conduct must also be either a deliberate violation of the employer's rules or a disregard of the standards of behavior which the employer has the right to expect." [Silver v. Bd. of Review, 430 N.J. Super. 44, 53 (App. Div. 2013)]. Misconduct must also be "more than simply inadequate job performance that provides good cause for discharge." Parks v. Bd. of Review, 405 N.J. Super. 252, 254 (App. Div. 2009).

In 2010, an intermediate type of misconduct, "severe misconduct," was added to N.J.S.A. 43:21-5(b). L. 2010, c. 37, 2, eff. July 1, 2010. An employee who has been discharged for severe misconduct is disqualified for unemployment benefits until he or she has been reemployed for at least four weeks and has earned at least six times the employee's weekly unemployment benefit rate. Ibid. The statute does not define "severe misconduct," but does provide examples, such as "repeated violations of an employer's rule or policy, . . . falsification of records," and other "behavior [which] is malicious and deliberate but is not considered gross misconduct as defined in" the statute. Ibid.

However, the threshold of culpability required for severe misconduct, which carries a more stringent disqualification for benefits, cannot be less than that for simple misconduct. Silver, supra, 430 N.J. Super. at 55. As we observed in Silver, the conduct given as examples under the severe misconduct statute requires the same finding of intent, deliberateness, and malice as simple misconduct. Id. at 55-56.

[Id. at 8-10.]

Because the Board's determination that appellant was disqualified for benefits for severe misconduct was issued prior to our decision in Silver, we remanded "this case to the Board to reconsider its decision in light of the two-prong standard pronounced in Silver." Id. at 10.

On remand, the Board considered both prongs of the Silver test. The Board concluded that the first prong was met because appellant "lied to his supervisor regarding the signing of the signature. His action was intentional and within his control. This satisfies the first prong." Although the Board did not specifically state that appellant acted with malice in falsifying the receipt, we are satisfied that such a finding is implicit in the Board's finding that appellant "lied to his supervisor" about the signature appellant forged on the receipt.

With regard to the second Silver prong, the Board found that, because appellant "falsified the employer records, his actions were a deliberate disregard of the employer's best interest and therefore this satisfies the second prong." Thus, the Board concluded that appellant was discharged for severe misconduct and, therefore, disqualified for benefits.1 This appeal followed.

On appeal, appellant again argues that the Board erred in finding that he was terminated for severe misconduct. We disagree.

The scope of our review of an appeal from a final determination of the Board of Review is strictly limited. The Board's decision may not be disturbed unless it is shown to be "arbitrary, capricious, or unreasonable." Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). We can only intervene "in those rare circumstances in which an agency action is clearly inconsistent with its statutory mission or with other State policy." Ibid. (quoting George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994)).

Applying these principles, we conclude that there is sufficient credible evidence in the record to support the Board's finding that appellant deliberately violated FedEx's protocol concerning customer deliveries and disregarded his responsibilities by forging a customer's name on a receipt and attempting to mislead his employer about his misconduct. The evidence fully supports the Board's determination that appellant's actions satisfied both prongs of the Silver test. Although the Board's decision was made before the new implementing regulation was adopted, we are convinced the same decision would have been made if the revised regulation were applied. We therefore conclude that the Board properly found that appellant was disqualified for benefits due to severe misconduct connected with the work.

Affirmed.

1 After the Board's decision, the Department of Labor and Workforce Development promulgated a new regulation defining "[s]evere misconduct[.]" N.J.A.C. 12:17-2.1; see also 46 N.J.R. 1796(a) (August 18, 2014); 47 N.J.R. 1009(a) (May 18, 2015). The term now "means an act which (1) constitutes 'simple misconduct,' as that term is defined in [N.J.A.C. 12:17-2.1]; (2) is both deliberate and malicious; and (3) is not 'gross misconduct.'" N.J.A.C. 12:17-2.1.