This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).







Michael R. Gerundo,





Asset Marketing,



Commissioner of Economic Security,



Filed June 25, 2002


Huspeni, Judge*


Department of Economic Security

File No. 872501


Michael R. Gerundo, 2208 Buchanan Street Northeast, #1, Minneapolis, MN 55418 (pro se appellant)


Mark Alan Pihart, Winthrop & Weinstine, PA, 30 East 7th Street, St. Paul, MN 55101 (for respondent Asset Marketing)


Philip B. Byrne, 390 North Robert Street, St. Paul, MN 55101 (for respondent Commissioner of Economic Security)


            Considered and decided by Randall, Presiding Judge, Stoneburner, Judge, and Huspeni, Judge.



U N P U B L I S H E D  O P I N I O N


            Relator challenges the decision by the commissioner’s representative that he was disqualified from receiving unemployment benefits because he was discharged due to misconduct when he charged a customer’s credit card without authorization.  Relator contends that he was doing his job properly, the company policy was not always followed, and his behavior was reasonable.  Because the commissioner’s representative did not err in concluding that relator’s actions constituted misconduct, we affirm.


            Relator Michael R. Gerundo was employed as a telemarketer full-time by Asset Marketing Services, Inc. (Asset) from September 13, 1999, to June 18, 2001.  As part of his employment with Asset, Gerundo was to contact prospective customers and try to sell them collectible coins.  When a prospective customer agreed to purchase an item, Gerundo would charge that person’s credit card and arrange to have the item shipped to the customer.  Gerundo was paid on a straight-commission basis.

Asset has a policy regarding compliance with Federal Trade Commission (FTC) telemarketing sales rules.  This policy covers such things as disclosures to prospective customers, timing of calls, record keeping, deceptive practices, and solicitation lists.  Gerundo signed an acknowledgement that he read this policy when he was hired.  Gerundo also signed separate policies on monitoring of customer calls and proper credit card authorization.  This latter policy states:

It is unlawful to use a customer’s credit card without their permission.

Policy requires that you must contact the customer any time you intend to charge their card.  First you must verify the card number and expiration date.  Then the customer must be notified in person before any charge can occur; this includes new purchases, decline issues, collection and outstanding balance issues, and expired credit card issues.

* * * *

I understand that any infraction of these policies may result in immediate dismissal.

On June 18, 2001, Gerundo called one of his previous customers and discussed selling a coin to him.  The price of the coin was approximately $800-$1,000.  Although the customer never clearly gave his consent to being charged, Gerundo testified that he believed that the customer had agreed to take the coin on an approval basis (paying 10% down) so that the customer could show it to his wife.  Once the conversation ended, Gerundo wrote up the order as a sale, charged the customer’s credit card, and shipped the coin.

According to Gerundo, he intended to follow up with this customer and call him to confirm that he, in fact, wanted the coin.  In a matter only tangentially related to this sale, however, Gerundo was suspended from work for three days—ostensibly for abuse of the company’s e-mail system—and he claims he was unable to follow up with the customer.

While Gerundo was suspended, the customer received the coin, and called Asset to complain.  Asset investigated, and upon listening to the tape, concluded that Gerundo had violated the credit card authorization policy.  Asset terminated Gerundo.

The Minnesota Department of Economic Security initially determined that Gerundo had been terminated from employment due to misconduct, and was disqualified from receiving benefits.  Gerundo appealed, and at the hearing before an unemployment law judge Gerundo’s direct supervisor testified that FTC violations like Gerundo’s warranted “instant termination.”  Another former manager testified on behalf of Gerundo that, although FTC violations of the type committed by Gerundo were grounds for termination, there were several instances of violations where no termination resulted.  This manager detailed at least two situations where the violations were similar to or more severe than Gerundo’s and where the violator was not terminated.  This former manager believed the decision to terminate was “political,” i.e., based on whether the sales person was a leader or a “higher level salesperson,” in which case the salesperson would only receive a reprimand.  The relevant portion of the tape of the phone call at issue was then played for the unemployment law judge:

CUSTOMER:  The only problem taking me here is the wife.

MR. GERUNDO:  How come?

CUSTOMER:  She does the books.

MR. GERUNDO:  Do you want me to send them somewhere else?  I can send them anywhere you like because you’ve already done an order with us.  If it was the first order we wouldn’t, we’d have to send it to where the credit card is billed to.  But I can send it somewhere else if you’d like.  But if she does the books, she’s gonna see it anyway.  Show her the coin—is outstanding, tough coin to come by.  I wouldn’t hide anything from her, you know if she’s gonna beat you up or anything.

CUSTOMER:  She screams and bitches …

MR. GERUNDO:  … you need it for the kids or put some away for the kids.

CUSTOMER:  Your number is 952 …

MR. GERUNDO:  707.


Mr. Gerundo:  7000.

Customer:  7000, and that’s …

MR. GERUNDO:  2004.

CUSTOMER:  2004.

MR. GERUNDO:  And when I ship I’ll call you, you can both look at them together when she sees ‘em she’ll be like, “okay, you made a wise move,” so don’t worry about it.  Okay?

CUSTOMER:  She’s not really a coin freak.

MR. GERUNDO:  Most women are not, you know, but they’ve got to let you enjoy what you enjoyed.  I mean, I play—softball you know?  My girlfriend doesn’t like to too much, but it’s never gonna stop me from collecting or playing ball.  Nothing they can do about it.  It’s up to you to decide, it’s your money, right?

CUSTOMER:  Joint money.

MR. GERUNDO:  All right, well, joint money, you know, I mean you both bought a set of coins.

CUSTOMER:  Actually, I got one set from my own money that’s all I could do.

MR. GERUNDO:  Well, I’ll tell you what, when these ship, I call my customers so when they go out the door, I’ll call you, Tom.  Do you have a daytime phone number?

CUSTOMER:  Yeah, 651-488-0336.

Mr. Gerundo:  Work phone number?

CUSTOMER:  I don’t work; I’m disabled.

Mr. Gerundo:  Is that a cell phone?

CUSTOMER:  It’s a cell phone.

MR. GERUNDO:  That’s your own number, okay, that’s what I got—488-0336.  OK, no problem, when it goes out the door, we’ll give you a call, okay?

CUSTOMER:  Let me talk to her about it first before it goes out any door.

Mr. GERUNDO:  Okay, well just give me a call, the order’s down, I’ve got you set up and again, you get the 30 days and we’re only billing ten percent.  So I wouldn’t worry about it.  All right?  And, yeah, give me a call.  I’ll be here …

The unemployment law judge reversed the department’s determination, concluding that Gerundo was discharged for reasons other than employment misconduct.  The judge determined that the customer had requested that he be able to talk to his wife “before [the product] goes out the door,” and that Gerundo intended to follow that process by calling the customer back, but was unable to do so because of the suspension.  The unemployment law judge determined that Gerundo “did not intentionally intend to disregard the interests of the employer.”

Asset appealed this decision to the commissioner’s representative who determined that Gerundo was disqualified from receiving benefits based on employment misconduct because the commissioner’s representative was “not persuaded by * * * Gerundo’s testimony that he somehow thought the customer had authorized the sale.”  The commissioner’s representative concluded that Gerundo’s conduct was intentional, violated the standards of behavior the employer had a right to expect, and was, therefore, misconduct.

This appeal followed.


Gerundo challenges the commissioner’s representative’s conclusion that his action in charging the customer’s credit card was misconduct.  Even though the unemployment law judge ruled in Gerundo’s favor, this court must examine the decision of the commissioner’s representative, rather than that of the unemployment law judge.  Kalberg v. Park & Recreation Bd., 563 N.W.2d 275, 276 (Minn. App. 1997).  Decisions of the commissioner’s representative are accorded particular deference.  Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995).  This court defers to the commissioner’s findings of fact if the evidence in the record reasonably supports them, but exercises its independent judgment with respect to questions of law.  Ress v. Abbott NW Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).  The commissioner’s determination that an employee is disqualified for reasons of misconduct is a mixed question of fact and law, Colburn v. Pine Portage Madden Bros., Inc., 346 N.W.2d 159, 161 (Minn. 1984), and this court will affirm if the findings of fact “are not without support in the evidence” and if “the conclusion on those facts is not contrary to the statutory mandate.”  Id. 

There is no dispute over what Gerundo said and did; the sole question before us is whether those acts constituted misconduct.  Whether an employee’s acts constitute misconduct is a question of law upon which reviewing courts remain free to exercise their independent judgment.  Ress, 448 N.W.2d at 523.

Employees who are discharged for misconduct are disqualified from receiving unemployment benefits.  Minn. Stat. § 268.095, subd. 4 (2000).  The definition of employment misconduct is to be narrowly construed.  Smith v. Am. Indian Chem. Dependency Diversion Project, 343 N.W.2d 43, 44 (Minn. App. 1984).  At the hearing, an Asset representative stated that Gerundo’s dismissal was wholly based on his alleged violation of the FTC credit-card rule.  The issue is whether that behavior was intentional conduct that disregarded the duties and obligations Gerundo owed Asset or the standards of behavior that Asset had the right to expect of Gerundo.  See Minn. Stat. § 268.095, subd. 6(a)(1) (2000) (defining intentional conduct employment misconduct).  The statutory definition of employment misconduct does not include inefficiency, inadvertence, simple unsatisfactory conduct, and mere poor performance.  Minn. Stat. § 268.095, subd. 6(b) (2000). 

The credit-card rule (protecting against FTC violations) is unquestionably a rule with which the employer had the right to expect compliance.[1]  The unemployment law judge identified the significant question in this case:  did Gerundo’s actions constitute an intentional violation of that rule?  The unemployment law judge concluded that the violation was unintentional because Gerundo intended to follow his standard procedure, which was to call the customer before the coin shipped out, but was prevented from doing so by the suspension.  The commissioner’s representative made no findings or conclusions on this point, concluding only that Gerundo could not have credibly believed that the customer consented to purchasing the coin.  A review of the recorded telephone conversation between Gerundo and the customer leaves no doubt as to the ample support for that conclusion.  Gerundo’s final words in that conversation were:  “[W]ell just give me a call * * * And, yeah, give me a call.  I’ll be here …”

Although the question of Gerundo’s intent is relevant, it is also one fatal to Gerundo’s claims.  According to him, had he not been suspended, he would have called the customer for confirmation on the day the coin shipped.  Assuming that is when the card would have been charged, this process would not have resulted in an FTC violation.  But the evidence shows that Gerundo set up the ship-and-charge order before the customer agreed to be charged.  In doing so, Gerundo, at a minimum, set in motion the process that resulted in the FTC violation.  Once this occurred, it was Gerundo’s responsibility to ensure that the violation did not occur.  Regardless of the suspension, Gerundo could have asked his supervisors to follow through on his intended course of action or at least stop the process.  His failure to protect against the FTC violation that he set into motion constituted employment misconduct.

Gerundo argues that, regardless of the written policy, his behavior in making a sale on approval was common, approved practice, and therefore the policy had been “amended by practice,” an argument distinct from the question of whether a rule has been applied.  See Turnquist v. Amoco Oil Co., 397 N.W.2d 442, 444 n.1 (Minn. App. 1986) (distinguishing Sivertson v. Sims Security, 390 N.W.2d 868 (Minn. App. 1986), review denied (Minn. Aug. 20, 1986), where the employee admittedly violated the employer’s rule, but argued that it was unfairly applied to him because it was not consistently enforced from Turnquist, where the employee argued that he never actually violated the employer’s real rules at all).  But even if we accept Gerundo’s argument that sales on approval were common practice, and even if we were to conclude that high-pressure sales tactics and less than pristine compliance with commendable sales practices existed, there is no evidence that Asset permitted FTC violations.  Gerundo’s managers testified that FTC violations were taken very seriously by Asset.



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

[1]  The fact that other Asset employees may not have been disciplined or may have been disciplined differently has no direct relevance to the question of whether Gerundo’s sales approach was misconduct.  See Sivertson v. Sims Sec., Inc., 390 N.W.2d 868, 871 (Minn. App. 1986) (holding that the employer’s handling of previous rules violations is not relevant in examining whether employee’s violation of the same rules constituted misconduct), review denied (Minn. Aug. 20, 1986).