This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
IN COURT OF APPEALS
Commissioner of Economic Security,
Commissioner of Economic Security
File No. 50702
James Kaster, Nichols, Kaster & Anderson, 4644 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402-2242 (for respondent Kate Hansen)
M. Kate Chaffee, Lee B. Nelson, 390 North Robert Street, St. Paul, MN 55101 (for respondent Minnesota Department of Economic Security)
Louis A. Haik, Paul R. Haik, Krebsbach & Haik, Ltd., 701 Fourth Avenue South, Suite 500, Minneapolis, MN 55415-1631 (for relator)
Considered and decided by Kalitowski, Presiding Judge, Minge, Judge, and Hudson, Judge.
The commissioner’s representative determined that the respondent was not discharged for misconduct and was therefore entitled to unemployment compensation benefits. Because the facts of the discharge as found by the representative do not constitute misconduct, we affirm.
In May 1994, relator Infrastructure Technologies, Inc. (Infratech) was formed by five people, each a director in the company with 20% of the company shares. President and director Robert Thul hired respondent Kate Hansen as an administrative manager. Although part of Hansen’s job duties included preparing checks to pay invoices submitted for payment, she generally only saw computer-generated checks issued to pay invoices. If a check was drawn by hand to pay an invoice, she might not see it. She worked directly with and reported to Thul. Hansen stated that her work was consistently praised; she received additional compensation and was able to purchase two percent of the company shares. Shortly after Hansen was hired, she and Thul became romantically involved and subsequently lived together.
In June 2001, Infratech had its first independent audit of its accounting records. On July 19, 2001, the auditor reported to the company that they had discovered some irregularities and apparent misappropriation of funds by Thul. The auditor determined that Thul had paid for personal expenses out of company funds, including a window blind repair, an alarm system, and furnace expenses for the house Hansen and Thul shared. Hansen denied knowing of or participating in the misappropriation.
Hansen and Thul were both placed on a two-week leave of absence while the irregularities were investigated. During that period of time, Thul apologized for the misappropriation and denied any participation by Hansen. At the end of the two weeks, both Hansen and Thul returned to work. Thul was stripped of his presidency, his salary was reduced by $10,000, and he was required to repay all misappropriated funds and to reimburse the company for associated audit expenses. Thul maintained his directorship and his shares in the company. Although Hansen was unable to access the company’s accounting system to perform any of her duties, she was not informed of any formal changes in her position.
At a board meeting on August 24, 2001, Hansen was informed no decisions had been made about her position and would not be made for another three weeks. Hansen expressed concern that no one was performing her work and that she was afraid things were “getting all screwed up in the accounting.” According to Hansen, one of the directors swore at this point, stating that Infratech would not be in its difficult position if Thul had not done what he did. Hansen stated that although she also swore at this meeting, she only did so because she was very upset and had expected closure at this meeting, but instead believed the company was just trying to get rid of her. Hansen further testified she apologized and asked the directors to forgive her.
On September 21, the shareholders voted to restructure Hansen’s job duties based upon the recommendations of the auditors. The shareholders reduced Hansen’s salary from $56,000 to $36,000 annually, and agreed Hansen should be allowed to maintain her status as a shareholder. Although the company had agreed to present Hansen with a severance package at this meeting, they did not do so. Hansen contends that the request for the severance package was not because she intended to quit her job but because “with the continuing uncertainty about the scope of new job duties, she wanted to understand all of her options.” One of the directors suggested Hansen’s attorney send Infratech an offer for a severance package.
On October 1, 2001, Hansen’s attorney sent the company a letter stating that Hansen was concerned about the recent events “including her demotion, reduction in pay, and Infrastructure’s mistaken belief that [she] was somehow involved in the inappropriate conduct of Robert Thul.” Included in the letter was a request that Infrastructure purchase her shares.
On October 11, the directors met to discuss Hansen’s letter in the conference room next to Hansen’s office. The directors did not discuss the letter with Hansen prior to the meeting. Hansen testified that as the meeting was proceeding, she walked down the hallway by the conference room and overheard her name. She paused and listened, overhearing a conversation regarding stock valuation. She passed the information that she overheard on to her attorney. The following day, a co-worker reported to the directors that she had seen Hansen “eavesdropping” on the board meeting. Another employee testified she observed Hansen standing right next to the wall listening to the closed-door meeting.
On October 24, Hansen along with her attorney, Kaster, met with the newly-appointed president of Infratech, and with Paul Haik, the corporate attorney. The conversation at the meeting was only between the lawyers. Hansen’s attorney initially asked what Infratech wanted to discuss and what they had for Hansen. The company attorney responded that they were there to ask what Hansen wanted as a severance package or share buyout. The new president testified
Then Mr. Kaster jumped up and said, well, then we don’t even have reason to be meeting. And Mr. Haik said, well, yes, let’s just calm down and discuss what, you know, we can here. From there on, I believe this was after the letter, yes, it was after the letter that we got from Mr. Kaster that Ms. Hansen wanted to have a five-year salary and education and buy her stocks. And the two lawyers discussed that for a while. I don’t really remember much of that. I know that Mr. Kaster kept referring to the fact that we essentially had fired or terminated Ms. Hansen’s employment by the demotion and the reduction in salary. And after that went back and forth between the two lawyers a couple of times, then Mr. Haik finally just said, well, then if she believes that she has been terminated, then she is terminated.
This termination declaration was not withdrawn, modified, or protested. Instead, Hansen’s attorney stood up and announced that the meeting was over. Hansen did not go back to work after this meeting. She did apply for unemployment benefits.
The record indicates that Infratech as the employer accepted this termination decision by the attorney. The new company president stated that although he had not instructed the company attorney to discharge Hansen and was surprised when he did so, he did not disagree when the company attorney discharged her during the meeting. The president also testified that the company attorney was an authorized agent for the corporation in that meeting and that after the meeting the attorney told him that he had discharged Hansen because she “had already considered herself terminated.”
A Department of Economic Security adjudicator determined that Hansen was discharged for reasons other than employment misconduct and was therefore not disqualified from receiving unemployment benefits. Infratech appealed that determination. An unemployment law judge determined that Hansen was discharged for employee misconduct. Hansen appealed. Upon review of the case, the commissioner’s representative decided that Hansen was discharged for reasons other than employment misconduct and thus entitled to unemployment benefits. Infratech brought a certiorari appeal of that decision.
In this case, the issue to be determined is whether there is a reasonable basis in the record for the commissioner’s representative to find that Hansen was terminated from her employment for reasons other than misconduct. If an employee is discharged for misconduct, then the employee is disqualified from receiving unemployment benefits. Minn. Stat. § 268.095, subd. 4 (2002). This court is not to determine whether Hansen should have been terminated but rather whether she should be denied unemployment compensation benefits. See Lolling v. Midwest Patrol, 545 N.W.2d 372, 377 (Minn. 1996). This court gives special deference to the representative’s findings, even those findings relating to witness credibility. Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995). The commissioner’s representative’s factual findings are viewed in the light most favorable to the decision and are not disturbed if evidence in the record reasonably tends to sustain them. Lolling, 545 N.W.2d at 377.
It is assumed for purposes of this appeal that there was evidence in the record that would have constituted adequate employment misconduct to deny Hansen unemployment benefits. The question is whether that misconduct was the reason for Hansen’s discharge. The commissioner’s representative found that prior to the October 24 meeting with the company president and company attorney, Hansen had not decided to quit her job and the company president had not made any decision to terminate her; that the company attorney terminated Hansen; and at the time of the termination, no reasons were given for the termination. The company president testified that Hansen was terminated because of eavesdropping, but Infratech now contends she was discharged because she misappropriated company funds, swore at company officers, shouted at company auditors, refused to prepare a new job description, and threatened litigation.
The record gives specific indications that Hansen was not fired for misappropriation. The misappropriation came to light in late July 2001. At that time, Hansen was not discharged from her position. She was placed on a two-week leave and then brought back to work. Before the unemployment law judge, the company president stated that the misappropriation “wasn’t the reason for her discharge.” Instead, the company wanted to continue employing Hansen and was making arrangements to change her job duties as opposed to discharging her. The record also shows Hansen was not discharged for eavesdropping. The company president testified that he knew about the alleged eavesdropping for nearly two weeks prior to the October 24, 2001 meeting. He admitted he had discussed the alleged eavesdropping with the company attorney and decided to take no action on it. The record also shows that prior to the meeting, the company president had not intended to discharge Hansen and that after the meeting the company attorney stated he discharged Hansen because she believed herself to be discharged.
We find that the commissioner’s representative’s findings reasonably support the commissioner’s representative’s decision that Hansen was not discharged for misconduct but instead was discharged by Infratech’s attorney in the dynamics of the October 24, 2001 meeting.
In the alternative, Infratech alleged that Hansen quit by refusing to prepare a new job description. A job quit occurs only “when the decision to end the employment [is], at the time the employment end[s], the employee’s.” Minn. Stat. § 268.095, subd. 2(a) (2002). Here, the commissioner’s representative found that Hansen had no intention to quit. The record shows that Hansen cooperated with the company president in trying to determine her new job duties, including preparing a new job description. Hansen also suggested possible new duties for herself, including volunteering to write a policy manual. Infratech additionally alleged that Hansen evinced an intention to quit by threatening litigation. It is apparent that Hansen was concerned about her future. In this case, inquiries into a severance package and purchasing of her company shares are not indications that she was quitting but instead reasonable actions when planning her future.
We conclude that that commissioner’s representative’s findings are reasonably supported by the evidence, and that Hansen was not discharged because of misconduct.