Claimant Fired For Refusal To Sign Disciplinary Memo Was Not Entitled To Unemployment Benefits

June 24, 2012 | Bulletin No. 1002962.1

A California court of appeal recently held that a claimant who was terminated by his employer because he refused to sign a disciplinary memorandum that dealt with a prior incident of misconduct was disqualified from receiving unemployment benefits because his refusal to sign amounted to misconduct.  (Paratransit, Inc. v. Unemployment Insurance Appeals Board (--- Cal.Rptr.3d ----, Cal.App. 3 Dist., May 31, 2012).

Facts

Craig Medeiros (“Claimant”) worked for Paratransit, Inc. as a driver for approximately six years.  Claimant was required to join a union as a condition of his employment.  The collective bargaining agreement (“CBA”) provides that Paratransit must provide Claimant with copies of letters regarding job performance and disciplinary notices.  The CBA further provides, “All disciplinary notices must be signed by a Vehicle Operator when presented to him or her provided that the notice states that by signing, the Vehicle Operator is only acknowledging receipt of said notice and is not admitting to any fault or to the truth of any statement in the notice.” 

After a passenger lodged a complaint against Claimant, Paratransit investigated the matter and concluded the alleged misconduct had occurred.  Paratransit management called Claimant into a meeting and told him he was being disciplined for the incident.  Representatives for Paratransit had previously prepared a memorandum that advised Claimant he was being disciplined for the incident and would be suspended for two days without pay.  The representatives asked Claimant to sign the memorandum.  Below the signature line read, “Employee Signature as to Receipt.”  Claimant refused to sign the memorandum “because he believed he should not sign anything without a union representative present.”  The union president had previously provided him a card that advised him “not to sign anything without a union representative which could in any way lead to him being disciplined because once a document was signed the employer could use it as an admission of guilt and the union would not be able to defend him.”

The Paratransit representatives told Claimant he was required to sign the memorandum under the terms of the CBA and if he did not sign it, his refusal would be treated as insubordination and Paratransit would terminate his employment.  Claimant said he had been told by the union president not to sign anything and therefore he would not sign the memorandum.  Claimant left the meeting without signing the memorandum.  Paratransit terminated his employment.

Claimant applied for unemployment insurance benefits.  The Employment Development Department denied his request.  An administrative law judge (“ALJ”) upheld that decision finding Claimant’s deliberate disobedience when he refused to sign the memorandum constituted misconduct.  The ALJ held Claimant was disqualified from receiving unemployment benefits because Paratransit had terminated him for misconduct.  The Unemployment Insurance Appeals Board (“Board”) reversed the ALJ’s decision finding that Claimant’s failure to sign the memorandum was “at most, a simple mistake or an instance of poor judgment.”  Paratransit filed a petition for writ of administrative mandamus.  The trial court granted Paratransit’s petition finding that “Claimant deliberately disobeyed a lawful and reasonable directive of his employer and this amounted to misconduct rather than a good faith error in judgment.”

Decision  

Section 1256 of the Unemployment Insurance Code disqualifies an individual from receiving unemployment benefits if the employer discharged the employee due to misconduct.  Misconduct for the purposes of section1256 includes “a willful or wanton disregard of an employer’s interests or such carelessness or negligence as to manifest equal culpability.”  A good faith error in judgment does not amount to misconduct.

Claimant asserted he was not required to sign the memorandum when it was presented to him by Paratransit because it did not comply with the CBA.  He further asserted that even if he was required to sign the memorandum, his failure to sign the document was at most a good faith error in judgment.  The court of appeal rejected Claimant’s assertions and affirmed the decision of the trial court. 

Labor Code section 2856 provides that an employee must comply with the directions of his employer regarding the service in which he is engaged unless “such obedience is impossible or unlawful, or would impose new and unreasonable burdens upon the employee.”  The California Code of Regulations, at title 22 section 1256-36, provides that implicit in an employment agreement is the understanding “that an employee is subject to some degree of authority exercised by the employer.”  An employee is insubordinate if the employee “intentionally disregards the employer’s interest and willfully violates the standard of behavior which the employer may rightfully expect,” including circumstances where an employee “[r]efuses without justification, to comply with the lawful and reasonable orders of the employer or the employer’s representative.”   

Claimant asserted that the lawfulness of Paratransit’s demand for him to sign the memorandum depends on whether it complied with the CBA, which he asserts it does not.  The court found that the issue of whether the memorandum complied with the CBA is not the primary issue because there is no indication that Claimant was even aware of the terms of the CBA.  After Paratransit told Claimant he was being disciplined, he asked for union representation and was informed he was not entitled to representation.  Claimant did not challenge this point on appeal.  Claimant did not sign the memorandum because “[h]e believed he should not sign anything without a representative present.”  Therefore, the court found there was “no reason to believe Claimant would have signed the document even if it had been in a form more in line with the requirements of the CBA.” 

The court found that Claimant’s failure to sign the memorandum outlining his discipline violated his obligations to Paratransit under section 2856.  The next question before the court was whether Claimant’s failure to sign was a good faith error in judgment.  The court of appeal found that there was substantial evidence in the record to support the determination by the trial court that Claimant’s refusal to sign the memorandum was not a good faith error in judgment. 

Claimant did not testify that he refused to sign the document because of the absence of specific language in it.  Instead, he stated he was reluctant to sign the memorandum because the union had told him not to sign documents.  However, “[t]he trial court made a credibility determination that the union president did not in fact say what Claimant testified he said.”  The court of appeal concluded that even if the union president had told Claimant not to sign anything without having a union representative present, Claimant was not entitled to rely on such erroneous advice.  The court stated, “Were it otherwise, a union could insulate members from adverse employment action simply by giving them bad advice that they need not comply with an employer’s order.”

Also, Claimant presented no evidence that he should not have been able to believe Paratransit when it said the act of signing the memorandum was only an acknowledgement of receipt and not an admission of guilt.  Also, Claimant had no reasonable basis to believe he had a right to union representation at the meeting.  The meeting was solely for the purpose of notifying Claimant of the discipline that had been predetermined. 

The court concluded Claimant was not entitled to unemployment benefits.  His action in refusing to sign the memorandum amounted to misconduct and was not just a good faith error in judgment.           

Questions

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Bruce A. Scheidt, Laura Izon Powell or David W. Tyra | 916.321.4500