may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
S & H Realty Management, LLP,
Commissioner of Economic Security,
Filed June 22, 1999
Department of Economic Security
File No. 5556-UC 98
S & H Realty Management, L.L.P., 8120 Penn Avenue South, Minneapolis, MN 55431 (respondent)
Kent E. Todd, Department of Economic Security, 390 North Robert Street, St. Paul, MN 55101 (for respondent Commissioner)
Considered and decided by Schumacher, Presiding Judge, Amundson, Judge, and Halbrooks, Judge.
Relator Mindy Ostrow appeals from the denial of reemployment insurance benefits by the Commissioner of Economic Security. She contends the commissioner's representative erred in determining she committed misconduct. We affirm.
Ostrow managed an apartment complex for S & H Realty from January 1997 until April 30, 1998. Initially, S & H Realty was satisfied with Ostrow's job performance. Ostrow maintained a high occupancy rate at the apartments and, as a result, received bonuses. Ostrow, however, did not always follow S & H Realty's policies and procedures. For instance, if tenants wanted short-term leases, S & H Realty required them to pay an additional $50. Without authorization from S & H Realty, Ostrow decided not to charge the additional fee.
Ostrow also admittedly violated S & H Realty's policy requiring quarterly safety meetings. At the hearing before the reemployment insurance judge, she indicated she did not feel the meetings were important because there were only two staff people and they knew their jobs. After she was given several reminders regarding the safety meetings, she attempted to increase their frequency.
Additionally, Scott Elfstrom, S & H Realty's vice president, noticed the hallways at the apartment complexes were dirty. Elfstrom both spoke to Ostrow about this and gave her written reminders on October 12, 1997 and February 2, 1998.
In October 1997, Elfstrom gave Ostrow a focus memorandum listing 45 items to correct or complete. At the time of Ostrow's separation in April 1998, many of the items were not yet completed.
In December 1997, Ostrow hired her husband to paint at the apartment complex. She informed the painter whom S & H Realty had previously used that he would be working as a backup for her husband. This was not acceptable to the painter and he terminated his contract with S & H Realty. When Elfstrom questioned Ostrow about the situation, she informed him her husband was working as a backup to the previous painter.
Elfstrom testified he told Ostrow she could not hire her husband to work for S & H Realty because he was a family member. Ostrow contends Elfstrom did not inform her of this until after she had hired her husband. After Ostrow and Elfstrom discussed the situation, Ostrow's husband continued to paint at the apartments with Elfstrom's knowledge.
Subsequently, Elfstrom learned Ostrow had hired a former employee to perform cleaning services for S & H Realty and instructed Ostrow to discharge the employee. Ostrow did not do so until Elfstrom's second request.
In April 1998, Elfstrom learned Ostrow had falsified time records for an employee so that the employee's time records showed more hours than the employee actually worked. Ostrow admits she did this, but argues it was necessary because she could not find a cleaning person for less than $8 per hour and did not believe Elfstrom would allow her to pay more than $8 per hour. She also contends Elfstrom did not know about the time card falsification until after she resigned.
On April 13, 1998, Elfstrom reviewed Ostrow's entire job performance and decided to discharge her. Although he compiled a list of deficiencies in Ostrow's performance, he did not show it to her.
On April 30, Elfstrom met with Ostrow and gave her the choice of being discharged from work and receiving a list of reasons for her discharge, or resigning with severance pay for six weeks. Ostrow elected to resign and receive the severance pay.
On May 24, 1998, Ostrow opened a reemployment insurance account with the Minnesota Department of Economic Security. The department subsequently disqualified Ostrow from receiving reemployment insurance benefits because S & H Realty alleged she was discharged from employment for gross misconduct. Ostrow appealed from the determination and a reemployment insurance judge conducted an evidentiary hearing. The reemployment insurance judge reversed the department's determination.
S & H Realty appealed to the Commissioner of Economic Security from the reemployment insurance judge's determination. The commissioner's representative found S & H Realty had discharged Ostrow for misconduct and reversed the reemployment insurance judge's decision. This appeal followed.
Minn. Stat. § 268.095, subd. 6 (1998) defines misconduct as:
intentional conduct showing a disregard of:Upon a thorough review of the record, we conclude the evidence sustains the commissioner's representative's factual findings, and Ostrow's behavior constitutes misconduct.
(1) the employer's interest;
(2) the standards of behavior that an employer has the right to expect of the employee; or
(3) the employee's duties and obligations to the employer. Misconduct also includes negligent conduct by an employee demonstrating a substantial lack of concern for the employment. Inefficiency, inadvertence, simple unsatisfac-tory conduct, or poor performance as a result of inability or incapacity are not misconduct.
1. Falsifying employee time card
In several cases, we have held falsifying work documents such as inspection reports and time cards constitutes disqualifying misconduct. See, e.g., McKee v. Cub Foods, Inc., 380 N.W.2d 233, 236 (Minn. App. 1986); Ruzynski v. Cub Foods, Inc., 378 N.W.2d 660, 662 (Minn. App. 1985); Whorton v. Department of Health & Human Servs., 368 N.W.2d 750, 752 (Minn. App. 1985). Ostrow's decision to falsify the employee's time card rather than requesting permission to hire her at an increased salary falls into the category of misconduct previously recognized by this court. It is not a "good faith error of judgment." See Riley v. Transport Corp. of America, 462 N.W.2d 604, 608 (Minn. App. 1990) (quoting Benson v. Iowa Beef Processors, 348 N.W.2d 394, 397 (Minn. App. 1984) (holding employee's unknowing violation of unstated policy was not willful disqualifying misconduct). At the hearing, Ostrow admitted she should not have falsified the time card, and her only justification was her belief Elfstrom would not allow her to pay more than $8. Elfstrom testified he would have permitted her to pay over $8 per hour and he was presently paying $11 per hour for cleaning services.
Moreover, Ostrow's argument that the time card falsification could not have been a reason for her resignation because S & H Realty did not find out about it until after she resigned on April 30, 1998 is contradicted by the April 13, 1998 memo Elfstrom drafted listing the reasons for requesting Ostrow's resignation. In the memo, Elfstrom included the time card falsification.
2. Failure to follow procedures and directives
The commissioner's representative found Ostrow committed misconduct when she refused Elfstrom's request to stop contracting for cleaning services with a former employee and did not follow S & H Realty's policy regarding setting rents, holding staff meetings, and maintaining the apartment complex. An employer must be allowed to expect an employee to abide by reasonable policies and procedures. McGowan v. Executive Express Transp. Enter., 420 N.W.2d 592, 596 (Minn. 1988). Generally, if an employer makes a reasonable request that does not impose an undue burden on the employee, the employee's refusal to comply with the request constitutes misconduct. Soussi v. Blue & White Service Corp., 498 N.W.2d 316, 318 (Minn. App. 1993).
Each of the requests made by S & H Realty was reasonable and within Ostrow's job description. Although Ostrow eventually performed many of the requests, her initial unwillingness and the numerous incidents of refusal appear to be more than "mere inefficiency" or "good faith errors in judgment or discretion." See Barstow v. Honeywell, Inc., 396 N.W.2d 714, 716 (Minn. App. 1986) (holding several instances of behavior unrelated in time or tenor may, when aggregated, support a determination of misconduct). Ostrow deliberately chose to continue contracting with the cleaning person. She also decided not to follow her employer's policy regarding rental rates and safety meetings, because she believed the rental policy would cause the employer to lose money and the safety meetings were unnecessary. Under these circumstances, we find the commissioner's representative properly determined Ostrow's failure to follow S & H Realty's policies and reasonable requests was misconduct.
3. Hiring husband
The commissioner's representative found Ostrow was dishonest about hiring her husband and did not follow Elfstrom's directive to stop contracting with him. Dishonesty that is connected with employment may constitute misconduct. Baron v. Lens Crafters, Inc., 514 N.W.2d 305, 307 (Minn. App. 1994).
Although the evidence regarding Elfstrom's initial instructions to Ostrow regarding hiring her husband is conflicting, there is no question Ostrow was dishonest with Elfstrom concerning the scope of her husband's employment. Ostrow told Elfstrom she was hiring her husband as a backup painter when in fact she intended him to be the primary painter. This is evident from Elfstrom's uncontradicted testimony and the letter Ostrow sent to the painter. Accordingly, we conclude the representative properly found Ostrow's dishonest conduct was disqualifying misconduct for the purposes of reemployment insurance benefits.