This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Basel M. Judeh,
Lexmark International, Inc.,
Commissioner of Employment and
Filed August 19, 2003
Willis, Judge (dissenting)
Department of Employment and Economic Development
File No. 2320 01
Karl E. Robinson, Winthrop & Weinstine, P.A., 225 S. Sixth Street, Suite 3500 Minneapolis, MN 55402 (for relator)
Lexmark International, Inc., 7900 Xerxes Avenue South, #860, Bloomington, MN 55431 (respondent)
M. Kate Chaffee, Philip B. Byrne, Amy Goltz, Certified Student Attorney, 390 Robert Street North, St. Paul, MN 55101 (for respondent Commissioner)
Considered and decided by Willis, Presiding Judge, Hudson, Judge, and Forsberg, Judge.
Relator challenges the decision by the commissioner’s representative that he was disqualified from receiving unemployment benefits because he was discharged for misconduct. Because relator did not have the intent to submit false claims for commission as required for a determination of employment misconduct, we reverse.
Relator Basel Judeh was employed by Lexmark International, Inc. (Lexmark) as a sales account executive from December 1999 to January 18, 2001. Relator did not sell Lexmark products directly to customers (end users), dealers, or distributors, but rather tried to convince potential end users to purchase Lexmark products from various dealers and distributors of Lexmark products. Relator’s end-user accounts were various state and local government agencies and school districts in Minnesota and other Midwest states. Lexmark’s account executives were paid commissions based on the sales made by dealers and distributors of Lexmark products to end users assigned to them as their accounts.
In order to determine whether relator, like the other account executives, should receive a commission for a sale, he was required to review 25-30 reports with up to 15,000 entries per report each month to determine which sales went to his end users. Sometimes reports would have entries that were duplicates of entries on other reports. Relator submitted monthly claims for commissions based on these reports to Lexmark’s Automated Claims Entering (ACE) system used for tracking commissions. Some claims were automatically entered into the system through the reports and others had to be manually entered into the system by an account executive. This was a long, arduous process. If a sale was listed twice because it appeared on two reports, the account executive was expected, as best as he or she could, to discover the double entry to avoid submitting two claims for commissions on essentially one sale, known as “double claiming.” Some reports did not contain the same information or enough particular information for the account executive to identify whom the end user was to avoid double claiming or mistaking a claim. An account executive was supposed to have documentation to support his claims, but not necessarily at the time the claims were made.
Relator submitted his claims to his manager, Mike Peterson, for his review of reasonableness and approval. The claims were then reviewed by the internal auditing team to ensure that the claims were sales to relator’s end-user accounts. If relator did not have documentation to support his claims and for ones that were questioned, he could “back out” the claims from the system for the previous month without penalty during a two-week window between the end of the month and the closing of that month’s records. If the error was made more than a month before, another Lexmark employee would have to back out the claim.
In November and December 2000, relator manually submitted claims for most of the sales made by GE Capital, a distributor in Minnesota, based on his understanding that GE Capital was a distributor selling exclusively to governmental agencies and school districts that were relator’s end-user accounts. Peterson approved the claims, but the internal auditor requested further documentation of the sales to relator’s end users. On January 15, 2001, Peterson brought this problem to relator’s attention. Relator was unable to obtain documentation immediately and backed out the December claims from the system the next day. He was unable to back out the November claims because those records were closed. On January 18, 2001, Peterson terminated relator’s employment on the basis that he believed relator intentionally made double claims and fraudulent claims for sales relator knew he did not make. Relator testified that he was terminated before he could provide the necessary documentation.
On appeal, a reviewing 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). This court reviews the findings of fact in the light most favorable to the commissioner’s decision and will not disturb them provided there is evidence that reasonably tends to sustain them. Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).
Whether an employee has committed employment misconduct presents a mixed question of fact and law. Colburn v. Pine Portage Madden Bros., Inc., 346 N.W.2d 159, 161 (Minn. 1984). Whether an employee committed the act in question is a question of fact. Scheunemann v. Radisson S. Hotel, 562 N.W.2d 32, 34 (Minn. App. 1997). This court reviews de novo whether the employee’s actions constitute employment misconduct so as to disqualify the employee from receiving unemployment benefits. Ress, 448 N.W.2d at 523.
Employment misconduct is defined as follows:
(1) any intentional conduct, on the job or off the job, that disregards the standards of behavior that an employer has the right to expect of the employee or disregards the employee’s duties and obligations to the employer; or
(2) negligent or indifferent conduct, on the job or off the job, that demonstrates a substantial lack of concern for the employment.
Minn. Stat. § 268.095, subd. 6(a) (2002).
A two-prong test is used to determine whether an employee’s actions constituted “employment misconduct” within the meaning of Minn. Stat. § 268.095, subd. 6(a). Houston v. Int’l Data Transfer Corp., 645 N.W.2d 144, 149-50 (Minn. 2002). The employee’s conduct must “(1) be intentional and (2) disregard standards of behavior the employer has a right to expect or the employee’s duties and obligations to the employer.” Id. at 149.
Under the first prong, the disqualifying misconduct must be “deliberate, calculated, and intentional.” McGowan v. Executive Express Transp. Enter., Inc., 420 N.W.2d 592, 596 (Minn. 1988). To be intentional, the conduct must not be accidental. Houston, 645 N.W.2d at 149. The second prong requires an analysis of the employee’s intent that is “separate and distinct” from the intentional conduct required in the first prong. Id. at 150. Thus, the test for employment misconduct requires
that the employee not only engaged in intentional conduct, but also intended to, or engaged in conduct that evinced an intent to, ignore or pay no attention to his or her duties and obligations or the standards of behavior the employer has a right to expect.
Here,it is undisputed that the claims relator entered into the ACE system are the basis of the termination. This was a deliberate and intentional act, thus meeting the first prong of the test for determining employment misconduct.
We next consider whether relator intended to claim sales that he knew were not made by his end-user accounts. Mike Peterson, relator’s manager, testified that relator had repeated problems with properly entering claims into the ACE system. Even after receiving additional training, relator continued to make double claims, but always backed out claims he could not verify. Peterson also acknowledged that there were problems with the ACE system and that other account executives made double claims and errors. A former Lexmark account executive testified that she had similar problems with the ACE system. She stated that the claiming process was very time consuming and prone to errors because of overlapping of reports with sometimes incomplete information. Relator, like the other account executives, had to rely on dealers and distributors to provide thorough and accurate information in order to make accurate claims.
Relator understood that claims needed to be supported with documentation. When the errors in question were discovered, he tried to obtain the necessary documentation, but could not before his employment was terminated. When relator realized he did not have the proper documentation, he backed out the claims for December and agreed that he made a mistake in November and that those claims should be removed. Relator received no commission for any of these claims. In many instances, an account executive was not aware of a mistake or double claim until the auditor raised a question. Because the evidence fails to show that relator engaged in conduct that evinced intent to defraud or to ignore his employer’s interests, the second prong of the testhas not been met.
In addition, the statute makes it clear that “[i]nefficiency, inadvertence, simple unsatisfactory conduct, poor performance because of inability or incapacity * * * are not employment misconduct.” Minn. Stat. § 268.095, subd. 6(b). Relator’s conduct here could be characterized as inadvertent error because of the claiming system used by Lexmark, or unsatisfactory conduct, or poor performance, because of relator’s inability to fully understand and use the ACE system. Relator’s requests for additional training and willingness to correct his mistakes fail to show a “substantial lack of concern” for his employment. Minn. Stat. § 268.095, subd. 6(a)(2). Moreover, because relator was not required to have documentation when submitting the claims, he could not provide such documentation before he was terminated. We therefore conclude that the evidence fails to reasonably support the commissioner’s representative’s decision that relator engaged in employment misconduct. Rather, because the evidence shows that the employer’s confusing and complicated commission claiming system played a substantial role in relator’s termination, the evidence strongly suggests that relator is “unemployed through no fault of [his] own.” Minn. Stat. § 268.03, subd. 1 (2002).
WILLIS, Judge (Dissenting)
I respectfully dissent. Relator’s employment with Lexmark was terminated because he wrongfully claimed commissions on all sales in November and December 2000 in Minnesota involving GE Capital, although relator had no documentation that the end users of those sales were his accounts. As the majority opinion notes, relator claims that it was his understanding that sales involving GE Capital in Minnesota were exclusively to governmental agencies and school districts that were relator’s end-user accounts. But the record belies relator’s claim. While relator claimed commissions on all sales involving GE Capital during November and December 2000, that had not been his historic practice, which suggests that relator knew that not all sales involving GE Capital went to his end-user accounts.
I would affirm the decision of the commissioner’s representative.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.