Misconduct MC 140
This section sets forth principles governing determinations of misconduct when a claimant is discharged from the most recent employment as the result of alleged job-related dishonesty on his or her part. If the claimant is discharged for dishonest acts which are not job-related, refer to Off-the-Job Conduct, MC 350.
Title 22, Section 1256-34(a) defines dishonesty as "such acts and statements as lying, theft, making false entries on records and other actions showing a lack of truthfulness and integrity."
Dishonesty may include both criminal and noncriminal dishonest acts and statements. Criminal action on the part of the employee is not required to establish misconduct within the meaning of the Unemployment Insurance Code. In order to constitute misconduct, the dishonesty need only be such as to tend to injure the interest of the employer or to breach the duty owned by the employee to the employer.
When a claimant is discharged for an act of dishonesty, he or she will be subject to disqualification if all of the following elements are present:
- The claimant wilfully committed the act complained of.
- The act was connected with the work.
- The act injured or tended to injure substantially the employer.
When a claimant is discharged for a substantial act of dishonesty, it is not necessary that prior warnings, reprimands or threats of discharge are present for a finding of misconduct.
What if the claimant contends that other employees were also dishonest? What if the claimant contends that he or she had been substantially dishonest in the past and had gotten away with it or that the employer did not have a specific rule forbidding dishonesty? These contentions would not render the discharge for reasons other than misconduct, according to Title 22, Section 1256-34(b), which provides:
An employee who has engaged in dishonest acts or statements connected with the most recent work and for that reason is discharged has been discharged for misconduct even though other employees engaged in similar past acts or conduct or the employee has previously successfully engaged in substantial dishonesty without reprimand or warning or the employer has no specific rule forbidding dishonesty.
Note that the above provision is only applicable if the employer has no knowledge that claimant or other employees have engaged in dishonest acts.
If the employer has knowledge that the claimant or other employees have engaged in dishonest acts and failed to take action against the claimant or other employees, the employer would have condoned their dishonest actions and the subsequent discharge for the same or similar dishonest act would not be for misconduct.
What if the claimant contends that the alleged dishonest act was a misunderstanding? Title 22, Section 1256-34(b) also provides in part:
Dishonesty does not exist if the employee's act or statements arise from a good-faith misunderstanding between the employer and employee where a reasonable person would not have interpreted the acts or statements as dishonest under the circumstances.
Such "misunderstandings" may arise in several ways. The employee, because of language difficulties, for example, may not understand what information is being requested of him or her, or the employer may not understand the information the employee has given. The general guide in such a case must be a decision as to whether a reasonable individual would have interpreted the statement or actions of either party in the same way as the claimant or employer did.
The common situations involving dishonesty in the work place for which a claimant may be discharged are:
- Aiding or abetting another in committing a dishonest act.
- Cash misappropriation.
- Cash shortage.
- Conversion of employer's or others' property.
- Destruction of employer's records.
- False statements about coworkers or employer.
- Falsification concerning work, work record including time card.
- Falsification of work application.
The different situations are discussed below. For a discharge related to a false reason for absence or false documentation regarding absence, see Attendance, MC 15.
B. Aiding and Abetting
A claimant may be discharged for either aiding or abetting another in committing a dishonest act with respect to the property or business of the employer. (If a claimant is discharged for allowing acts of theft or dishonesty to be committed without informing the employer or trying to prevent them, refer to Attitude Toward Employer, MC 45.)Title 22, Section 1256-34(b) provides:
An employee who willfully urges or aids another person to engage in a dishonest act which injures or tends to injure the employer's interests, or in a dishonest statement which is intended to and does cause or threaten substantial economic damage to the employer or a substantial threat to the health or safety of the employer, has engaged in dishonesty and misconduct even though the dishonest act or statement is committed or made by the other person.
It should be clear that any employee is wilfully failing to live up to the standards of conduct which the employer has a right to expect if he or she actively aids another person in committing illegal or dishonest actions against the employer. If it is established that the claimant knowingly engaged in such activity and that his or her discharge came as a result of the participation, the claimant is subject to disqualification because of misconduct connected with his or her most recent work.
A person who aids and abets another in the commission of a crime can be prosecuted just as if he or she had committed the crime. Likewise, when it can be conclusively established that the claimant knowingly encouraged or aided another person to injure the employer through the performance of a dishonest act, it is then considered as if the claimant committed the act himself or herself. If the act itself is an act of misconduct, the claimant is certainly guilty of misconduct. However, if the act itself is not an act of misconduct, aiding and abetting in the act cannot be misconduct.
Example Aiding in Dishonest Act:
The claimant was a cashier for a retail store. Before the claimant's last date of work, he entered into an agreement with some coworkers whereby they could go through a line at his cash register and he would ring up some small items they purchased but not the more expensive items. These transactions amounted to a loss for the employer of about $500. The claimant expected to receive payments from the other employees for aiding them. When the employer discovered what had occurred, the claimant was questioned. He admitted to being involved in these transactions and was discharged.
The discharge was for misconduct. The claimant entered into an agreement with other employees whereby they could remove items from the store without paying for them. His actions constituted a wilful breach of duty owed the employer.
If the claimant has been discharged for aiding and abetting another, it should be determined whether the other person also was discharged. If the actual act committed by the other person was not serious enough to warrant the discharge of the perpetrator, it is doubtful if the claimant is guilty of "any aiding and abetting" to a degree that would constitute misconduct.
It is also possible that a claimant accused of aiding and abetting has actually acted quite innocently. For example, he or she may have helped a coworker carry articles from the plant thinking the coworker had permission to take the articles. In such a case, it is necessary to consider whether the claimant reasonably could have acted unknowingly and innocently. If there is an employer's known rule which prohibits the taking of any property from the plant, a claimant who helps a coworker carry articles from the plant could not reasonably have believed that the coworker has permission to take the articles.
Likewise, in the following case, the discharge would be for misconduct.
Example - Punching in Another's Time Card:
The employer had a rule that each employee punched in his or her own time card. The claimant knew about it. On the last day of work, the claimant was observed punching in another person's time card even though that individual was not present. The claimant stated he did it because the other individual had called him and asked him to do so. The other employee had just returned from a suspension because of attendance problems and was warned that any future attendance problems would lead to his discharge.
The discharge was for misconduct. The claimant knew about the employer rule and deliberately chose to aid another employee in committing a dishonest act.
In the above case, the claimant was discharged because he punched in another person's time card. If the claimant is discharged for asking another person to punch in his or her time card, refer to Violation of Employer Rule, MC 485.
If a crime has been committed and the claimant has been tried on an "aid and abetting" charge, the verdict of the court would be conclusive of the guilt or innocence of the claimant on the aiding and abetting charge. If the aiding an abetting charge is the employer's sole reason for discharge, then the court's verdict would also be conclusive as to the determination of misconduct.
C. Cash Misappropriation
Cash misappropriation refers to a wilful taking or withholding of the employer's money with the intent of converting it to one's own use. Cash misappropriation invariably will be misconduct.
In P-B-57, the Board held that misappropriation of an employer's property by an employee is conclusive evidence of misconduct, because such conduct evinces a wilful or wanton disregard of an employer's interests.
Title 22, Section 1256-34(c)(2), also provides:
Cash misappropriation is misconduct regardless of whether there have been any prior warnings or reprimands for similar prior conduct or whether there is any employer rule against theft.
Thus in cases involving cash misappropriation, the only consideration required is whether it can be established that the claimant committed the act. The amount of cash misappropriated does not matter. Whether there are prior warnings or reprimands for similar conduct or whether there is an employer rule against theft is also not considered.
Example - Cash Misappropriation:
The claimant worked as a retail salesclerk and had been a suspect in store shortages for some time. One day the store manager observed the claimant pocketing the proceeds of a sale of a carton of cigarettes. The claimant was immediately fired although he was not formally told of the reason for discharge.
The discharge was for misconduct. The claimant was discharged for misappropriating money belonging to his employer. This certainly constitutes a material breach of a fundamental duty he owed to his employer.
Note that in this case, there were no prior warnings, no established policy against theft, no reprimands, or even a discussion with the claimant at time of discharge of the reasons for discharge.
In P-B-57, the Board cited Benefit Decision 5070 and held that the same degree of proof is not required to sustain a finding of misconduct under the unemployment insurance code as is required to sustain a conviction for an illegal act in a criminal proceeding; that is, guilt beyond a reasonable doubt. In the same precedent benefit decision, the Board also held that the quantum of proof required in an unemployment insurance proceeding need not substantially support a particular finding of fact. It needs only to outweigh opposing evidence.
Example - Greater Weight that Claimant Misappropriated Employer Money:
In P-B-90, the claimant was vice president and controller of a bank. His duties were to handle all of the accounting records of the bank and supervision of part of the operation. An investigation was undertaken by the bank's official because of a suspicion that there had been a misappropriation of bank funds.
The bank auditor testified that there was clear evidence that the claimant had diverted funds belonging to the bank--received in the form of checks payable to the bank--to his personal use. This was accomplished by substituting those checks without any entry for cash received that was recorded in the books.
The claimant was indicted after the completion of the investigation. He pleaded nolo contendere to the charge. He was found ineligible by the Board. The Board stated:
[W]e do not need to rely on the plea of nolo contendere since there was testimony by the auditor of the employer which clearly established that that claimant had engaged in misappropriation of the employer's funds. We find that the claimant was discharged for misconduct."
Example - Greater Weight that Claimant Withheld Employer Money:
The claimant worked for an auto repairs shop as its parts manager. Seven days before his discharge, he ordered a headlight assembly part for a customer's automobile being repaired by the employer. The price quoted was $174. The claimant had a check made out to the supplier for that amount. He took the check to the supplier to pick up the part. The supplier discovered that the part needed was different from that for which the quote was made. The correct part cost $112, not $174. The supplier took the check for $174 and gave the claimant $62 in cash. The claimant was also given the part and an invoice showing that the cost was $112.
Five days later, the employer tried to find the invoice or receipt and could not. The claimant was questioned, and on one occasion, he stated he did not have it and on another occasion, he stated he had already turned it in. The employer contacted the supplier and received a duplicate copy of the invoice and receipt, and also learned that $62 in cash was paid to the claimant. The employer then questioned the claimant about the case but the claimant denied receiving it. The claimant was then discharged.
The discharge was for misconduct. Even though the claimant denied taking the money, the weight of evidence shows that the claimant withheld employer's money with the intention of converting it to his own use.
However, where the weight of evidence does not show that the claimant takes or withholds employer's money, the discharge would not be for misconduct. An employer may suspect an employee of misappropriation and terminate the employee. A discharge based alone on suspicion of misappropriation would not be for misconduct.
D. Cash Shortage
Cash shortage refers to losses of the employer's money by the claimant. Unlike cash misappropriation, it carries no connotation of "wrong" or illegal action on the part of the claimant, and may or may not be misconduct. The fact that there were shortages does not indicate a wilful action by the claimant.
Title 22, Section 1256-34(c)(1) provides:
Cash shortages refer to an employee's loss of the employer's money without intent to convert or the conversion of the money to the employee's own use. Cash shortages arise from an employee's misconduct only where the employee fails to follow a rule of the employer for handling cash or the employee has shown negligence of such degree or recurrence as to show an intentional and substantial disregard of the employer's interests or of the employee's duties and obligation to the employer.
If negligence is involved, including a failure to follow a rule of the employer for handling cash, prior warnings or reprimands are relevant to the degree or recurrence of negligence.
If an employee acts in good faith and to the best of his or her ability in handling the employer's cash, a loss is ordinarily attributed to inefficiency, inability, incapacity, or good-faith errors in judgment or discretion, or some combination of these factors, and not to misconduct.
An employee's inexcusable failure to report known cash shortages where the employee is responsible for the handling of the cash is misconduct. Thus, in determining whether the discharge for cash shortage is misconduct, it is necessary to consider if:
- The claimant has failed to follow a rule of the employer for handling cash. (For a detailed discussion on violation of an employer rule relating to the handling of employer funds, see Violation of Employer Rule, MC 485.)
- The claimant's negligence is of such degree or recurrence as to show an intentional and substantial disregard of the employer's interests.
- The claimant fails to report without justification known cash shortages where the claimant is responsible for handling the cash.
The amount of a cash shortage will not be determinant of misconduct. Neither will prior reprimands and warnings carry weight in all cases.
Example - Failure to Follow Employer Rule:
The claimant was a cashier for a hotel. It was an employer rule, known to the claimant, that she was to keep the key to her bank secured so that no one could get into it. The claimant however left the key in a place, where she knew others could get at it. On the claimant's last day of work, $500 was missing from the claimant's bank. The claimant was discharged because of the shortage. The claimant contended that she did not take the money.
The discharge was for misconduct. Even though the claimant did not take the money, she knowingly violated an employer rule to safeguard her bank key, and this caused the employer a $500 loss.
Example 1 - Failure to Report Cash Shortage:
The claimant was employed as a retail salesman. The employer's policy required him to ring up a sale before wrapping the purchase. The claimant, instead, placed the money which he had received from a customer in the back of his sales book, had the article wrapped and failed to "ring up" the sale. He then discovered that his sales book had disappeared. He reported the loss of the book to his supervisor but did not tell him that money was in it. Later the sales book was recovered without the money in it. When a check of the sales records revealed his failure to ring up the sale, he was discharged.
The claimant failed to follow an employer rule regarding the handling of cash and then failed to report the loss of the money to management. This failure may not be excused on the grounds of a good faith error in judgment. The claimant willfully and knowingly disregarded the employer’s rule regarding the handling of cash. His conduct in this respect was a substantial violation of the employer's interests and of the claimant's duty and obligation to the employer. The discharge was for misconduct.
Even if the claimant had reported the cash shortage, the discharge would be for misconduct because he failed to follow an employer rule in handling cash.
Example 2 - Failure to Report Cash Shortage:
The claimant was a store manager for a restaurant and catering business. A customer paid for catering service by check, and the claimant did not record the sale or give the employer a copy of the receipt. The claimant deposited the check, withdrew an equivalent sum, and deposited the sum in the employer's safe. The claimant testified that he deposited sums in this manner to cover for employees' cash register shortages, as he did not always have time to look up "paid out" slips to compensate for shortages, and that loss of some of the "paid out" slips had occurred. He did not have permission from the employer to cover shortages in such a manner, nor did he advise the employer that he was withdrawing sums to compensate for shortages.
The discharge was for misconduct. The claimant's actions in forcing the balancing of the cash registers resulted in the falsification of business records and hid from the employer the fact that cash shortages existed. By covering up the fact cash shortages existed the claimant deprived the employer of the opportunity to timely investigate the cause of such shortages and to take action to preclude their recurrence. This claimant's actions in this case cannot be considered simply a good faith error in judgment or discretion.
On the other hand, if the cash shortage can be attributed to inefficiency, inability, or good faith errors in judgment, the discharge would not be for misconduct.
Example - Cash Shortage, Claimant Working to the Best of Ability:
The claimant worked for about one year as a cashier in a busy retail store. The employer had a policy which provided that a warning is given to any cashier who is either short or in excess in their register at the end of their shift by $5 or more. The same policy also provided that if there are three written warnings within a 12-month period, discharge is required. On January 24, the claimant was warned because of a shortage. On February 21, he received another such warning. On April 24, the claimant had another shortage and was discharged.
The claimant would ordinarily handle cash at his register in the amount of nine to ten thousand dollars per day. On the three occasions in question, the claimant was short less than one percent of the total cash that he was handling.
There was also evidence that on any given day approximately 25 percent of all cashiers at the store were either over or under $5 or more. The claimant testified that he was performing to the best of his ability and it was possible that on the final occasion the check which was the subject of the shortage was misplaced by someone other than himself.
The discharge was not for misconduct. The claimant was discharged because the three occasions occurred within a specified period of time, which triggered automatic termination. There was no evidence that the claimant failed to follow procedures or was negligent. On the other hand, at least 25 percent of all cashiers at the store were short or over $5 or more on any given day.
Example - Cash Shortage Due to Error in Judgment:
The claimant worked six months as a cashier checker for a market. She was discharged on May 12. In the middle part of that work day the facility became busy. A number of customers were to be checked out. Another cashier, one who had seniority and whom the claimant assumed to be in a supervisory capacity, told the claimant to go to lunch. The claimant attempted to lock her register, as each cashier checker was to lock his or her register when he or she was away from the register to prevent any losses to the employer. However, the other employee told the claimant to hurry up and that she would check out of the claimant's register.
When the claimant's drawer was checked at the end of the day, it was discovered that it was $342 short. A detail tape and the cash were checked and the cause of the loss could not be discovered. The claimant was discharged the following day. The more senior person who had taken over the claimant's register was not terminated.
The discharge was not for misconduct. The claimant was busy and was advised by a more senior checker to take her break and that she (the senior checker) would use her drawer to check out customers.
Certainly, the better course of conduct would have been for the claimant to insist that she lock the drawer. However, she received instructions from a person she assumed to be in a supervisory capacity. The claimant's failure to lock her drawer was an act of negligence resulting from an error in judgment, and not from a wilful disregard of the employer's interests.
E. Conversion of Employer's and Others' Property
This subsection discusses discharge resulting from the wrongful or unlawful taking of the property (other than money) of the employer, fellow workers, as well as property which does not belong to the employer but which has been placed in the employer's care (such as clothing in a laundry, cars in a garage) or to which an employee has access because of the work. The wrongful or unlawful taking of property which has been entrusted to the employer in the course of his or her business is in no way different from the wrongful or unlawful taking of the employer's own property.
There is no doubt that conversion of the employer's and others' property is misconduct. In P-B-57, the Board held that misappropriation of an employer's property by an employee is conclusive evidence of misconduct because such conduct evinces a wilful or wanton disregard of the employer's interests.
Title 22, Section 1256-34(d) also provides:
An employee's theft or unauthorized possession or use of noncash property of the employer, other employees, or customers is misconduct.
Example - Unauthorized Use of Customers' Property:
The claimant was an auto mechanic. The employer's rule provided that the use of employer's or customers' cars for personal business, such as going to lunch, was prohibited. The claimant was aware of this rule.
Less than one week prior to the final incident leading to his discharge, the claimant received a warning and counseling over his taking one of the employer's automobiles home over the weekend without authorization.
The final incident occurred the day before the claimant was discharged. He was to check out a customer's car because of a battery problem involving low power and low cranking of the engine. The employer had promised the customer that he could pick up the car at 12:30. Before that time, the claimant completed the repairs and left the premises driving the customer's car without authorization and without notifying anyone. The customer arrived as scheduled. After waiting for an hour to pick up his car, the customer left angrily.
The claimant returned in the customer's car at about 2 p.m. and admitted to his supervisor that he had gone to lunch in the customer's vehicle. The claimant was discharged the following day.
The discharge was for misconduct. The claimant had been warned about the improper use of one of the employer's automobiles just a few days before the final incident. He should know that the employer had rules regarding the use of employer's or customers' cars. His flaunting of these rules in the final incident shows a wilful disregard of the employer's interests.
The discharge was for misconduct. The claimant had been warned about the improper use of one of the employer's automobiles just a few days before the final incident. He should know that the employer had rules regarding the use of employer's or customers' cars. His flaunting of these rules in the final incident shows a wilful disregard of the employer's interests.
When it is charged that an employee has stolen or improperly acquired property of the employer or fellow worker or customer, fact finding is required to determine whether the claimant did commit the act. In the above case, the claimant admitted to committing the act. In other cases, the claimant may deny that he or she committed the act. The following provides a few guidelines in determining, if the claimant did commit the act. Also see PR 190, Evidence, for further assistance if necessary.
- If a claimant has been arrested on a charge of wrongful conversion of the employer's or others' property, the outcome of the arrest will be helpful as evidence. If the claimant is tried, the decision of the court will be final as to the claimant's guilt or innocence on the wrongful conversion charge. Sometimes, the claimant will offer to make restitution, and the complaining party declines to prosecute, and the claimant will be released without trial. Release under these circumstances would tend to support a finding that the claimant did in fact wrongfully convert the property of the employer to his own use.
- What if the claimant pleaded nolo contendere to the charge? A plea of nolo contendere is not a conclusive confession of guilt. By entering such a plea, a defendant does not confess or acknowledge the charge, as is done upon a plea of guilty. A plea of nolo contendere amounts only to an agreement on the part of the defendant that the fact(s) charged may be considered as true for the purpose of the particular case wherein the plea was entered. It cannot be used as an admission of the facts elsewhere. (P-B-90)
- Sometimes, the only evidence that the employer can offer to support a contention of theft is that the employer's property was found in the possession of the employee who was not authorized to have it. When it has been proven that an employee is, or was, in unauthorized possession of his or her employer's property, the burden shifts to the employee to explain how he or she acquired the property (P-B-57). When the claimant cannot reasonably explain why the property is in his or her possession which he or she is not authorized to have, the claimant is considered to have violated the duty owed to the employer even though it cannot be conclusively shown that the claimant actually stole the property.
Example - Unauthorized Possession of Employer Property:
The claimant, a production employee for a rubber manufacturer, was found to have company property in her locker at work. A general factory rule stated: "Unauthorized possession or removal of company property, regardless of value, from the premises without properly written authority will not be tolerated." The claimant’s locker contained 211 paint brushes, 22 shears, 21 stitchers, 10 new and used awls, 14 valve guards, 13 pair of new cotton and leather gloves, 36 assorted crayons and many other things.
The claimant first contended (at the determination interview) that the amount of property she was holding was not unusual. The claimant later denied having admitted in the presence of the assistant personnel manager and the chief of the plant protective force that she knew of the excessive material found in her locker. The claimant advanced the possibility that she might have been "framed," and testified that she had lost one or two keys to the locker and misplaced her key on other occasions. The only persons authorized to have keys to her locker were the chief of the plant protective force and the claimant herself. The material found in her locker could normally have been obtained only by her foreman on requisition from company stores and then issued to the claimant as she indicated to her foreman that it was needed in her work.
The claimant's denial of possession of unauthorized material does not warrant a finding that she was not discharged for misconduct, if in fact a preponderance of the evidence indicated that the unauthorized material was found in her possession. In this case, there is sufficient evidence that this claimant was aware that the property was in her locker. First, the statement of the assistant personnel officer that she first admitted knowledge that the property was in her locker and subsequently changed her story. Even if the employer’s statements were discounted as self-serving, we are still confronted with the unbiased testimony and written record of the Department representative, which was made at the conclusion of the interview with the claimant. This representative testified that the claimant's only defense to the employer's charge was that the amount of property was no greater than that held by other employees, and that this objection was made by the claimant with full knowledge of the quantity of material charged to her.
When it is proven by weight of evidence that the property was in the claimant’s possession, the burden of going forward shifts to the claimant to explain how and why the property was acquired.
Even when the claimant is not found in possession of the property, there is misconduct if the weight of evidence indicates that the claimant is attempting to steal the employer's property.
Example - Evidence That Claimant Intends to Steal:
The claimant was an assembly worker in an automobile plant. Approximately a week prior to the claimant's discharge, a guard who was stationed at the main gate of the plant observed the claimant returning to the plant during his lunch period attired in his street clothes. It was the recollection of the guard that when the claimant left the plant a few moments earlier, he had been wearing a pair of white company-issued coveralls. The guard informed a supervisor concerning his observation. It was determined that no action should be taken at the time in view of the fact that the guard was not positive and because there were no witnesses. The guard, however, was instructed to pay close attention to the claimant thereafter when he left and returned to the plant.
On the day of the claimant's discharge, he left the plant at the beginning of his lunch period. He left his soiled coveralls in the custody of fellow workers. However, as he was about to pass through the outside gate, he was observed by the same guard wearing a pair of clean white company-issued c overalls. The guard called this to the attention of a sergeant of plant protection, who was standing beside the guard. The sergeant, who also knew the claimant by sight and name, likewise observed that the claimant was wearing a clean pair of company-issued coveralls. The guard then notified a supervisor of plant protection and the supervisor also observed the claimant.
When the claimant reentered the plant about a half-hour later, he was not wearing and did not have in his possession, a set of coveralls. The claimant denied that he had left the plant wearing coveralls but refused to allow employer representatives to search his car unless they secured a search warrant or would wait until the end of his workday at 3:45. The claimant was discharged.
In this case, the preponderance of the evidence (multiple witnesses) leads to the conclusion the claimant wrongfully appropriated company property. The discharge would be for misconduct.
What if the claimant was discharged based on hearsay that he or she had misappropriated the employer's or others' property?
Example - Discharge Based on Hearsay:
The claimant worked for the employer for five years as a nurse's aide. He was discharged based on an accusation that he had stolen cigarettes from one of the residents of the employer's institution for mental patients. However, the nursing director who fired the claimant did not see him steal cigarettes. None of the employees who claimed to be eye witnesses to the alleged theft testified that he or she had seen the claimant commit the act. The claimant denied the accusation.
The discharge was not for misconduct. The employer has submitted no direct or competent evidence to support its charge that the claimant stole property belonging to patients of the employer's institution.
What if the employer's property involved consists of some small, insignificant, inexpensive items? Most companies frown officially on employees taking home such items as pencils, ball point pens, paper clips, etc. Quite frequently, however, the company will take no action to enforce its official stand on the matter and employees take such items as a matter of course. Under such circumstances, an employee discharged for removing a ball point pen from the employer's premises would not have been discharged for misconduct. The employer, by not enforcing its policy, would in fact have condoned such actions.
In the case of employees who normally work away from the premises of the employer, such as deliverymen, messengers, door-to-door salesmen, truck drivers, etc., the wrongful taking of property of others during working hours is likewise a violation of the standards to which an employer may reasonably hold his employees and constitutes misconduct.
What if an employee believes he or she has the authority to remove property from the employer's premises and the belief is reasonable? In such a case, conversion of the employer's property does not exist.
Example - Removal of Property Based on Reasonable Belief:
The claimant was a sanitation worker. Prior to the incident which led to his discharge he had, with his supervisor's knowledge and consent, taken home for his own use empty buckets which had contained a cleaning substance. On the last day of work, he observed a bucket which he believed was empty and, after running some water into the bucket, he placed it in his truck. The bucket in question is a 5-gallon receptacle and the purchase price of a full bucket of cleaning material is $32. Unknown to the claimant the bucket he placed in his truck contained between 1/2 and 1 gallon of cleaning material. The employer believed that the claimant was attempting to misappropriate its property, and discharged the claimant.
The claimant was found eligible because he believed he had the authority to remove the property. His supervisor had allowed him to do it before. The fact that he unknowingly removed one with some cleaning material was the result of an innocent misunderstanding.
Sometimes a claimant may reasonably believe that he or she is authorized to possess or use the employer's property, but refuses to return the property when requested to. If the claimant is discharged for such refusal, the discharge will be for misconduct, according to Title 22, Section 1256-34(d) which provides in part:
An employee who reasonably believes he or she is authorized to possess or use the employer's noncash property engages in misconduct if he or she refuses to return such property to the employer or other person upon request.
F. Destruction of Employer Records
An employee owes the employer a duty or obligation of not destroying the employer's records or property without the employer's permission. If an employee is discharged for resorting to destruction of employer records or property to eliminate the "work" he or she is required to do, the discharge is for misconduct.
Example - Unauthorized Disposal of Employer's Property:
The claimant worked as a library assistant. He felt that he was over-worked and shared his feeling with his supervisor on several occasions. Certain duties were then taken away from the claimant. One of his remaining functions involved logging in the numerous periodicals received in the library and taking them to the mail room for delivery to interested parties. Mail room personnel were responsible for attaching preprinted route slips.
On the last day of his employment, he was preparing to attend a raining session the following week and had at his work station numerous periodicals received during the last two months which had not been logged in or routed. He feared that in his absence, his supervisor would become aware of the backlog and disciplinary action would follow. Therefore, he threw a total of 26 periodicals away. His action was observed by a coworker who reported it to the chief librarian. The periodicals involved were sub-scribed to by the employer for business purposes and had cost the employer several hundred dollars.
The discharge was for misconduct. The claimant deliberately destroyed the employer's property. He might be frustrated by his inability to keep up with is work. However, the frustrations did not justify the unauthorized disposal of the employer's property.
Similarly, if a mail carrier is discharged for throwing away the mail he or she is supposed to deliver, the discharge is for misconduct.
Generally, misconduct is not found if an employee destroys records at the instructions of his or her supervisor.
G. False Statements About Co-Workers and Employer
Making false statements about coworkers or the employer may or may not be misconduct. Title 22, Section 1256-34(e) provides:
An employee who willfully makes false statements which relate to work records, other employees, the employer or the work, and which substantially injure or tend to injure the employer's interest or are a substantial violation of the employee's duty and obligation to the employer has engaged in misconduct.
Thus, making false statements about coworkers or the employer is misconduct if the following two conditions are met:
- The false statements are wilfully made.
- The false statements substantially injure or tend to injure the employer's interests or are a substantial violation of the employee's obligation to the employer.
But under what circumstances are false statements considered wilfully made? Title 22, Section 1256-34(e) explains:
False statements are willful when made with the employee's full knowledge of falsity, or made when the employee does not believe the statement is true, or made carelessly when the employee does not care whether the statement is true or not and has no basis for believing that the statement is true.
A false statement is therefore considered to be made wilfully whenever one of the following applies:
- The statement is made with full knowledge that it is false. For example, an employee states he or she has completed a certain work project when, in fact, he or she has not started work on it yet.
- The statement is made without belief in its truth. For example, an employee states that a work project is satisfactorily completed when, in fact, he or she has mental reservations about the quality of the work.
- The statement is so carelessly made as to show that the person making it does not care whether it is true or not. For example, a supervisor reports to his or her superior that all the members in his or her crew have reported and are working when actually he or she has not checked to see if all the members have reported and are working that day.
What about the substantial injury to the employer's interests or substantial violation of the employee's obligation to the employer? The employer's interests will be substantially injured or the employee's obligation substantially violated when the false statements, for example, have caused customers to withdraw patronage, damaged employee morale or serious friction among employees.
H. Falsification Concerning Work or Work Record (Including Time Card)
Like false statements about coworkers and the employer, falsifications concerning work, work record, including the time card, constitute misconduct if the following two conditions are met, in accordance with Title 22, Section 1256-34(e) cited above.
- The false statements are wilfully made.
- The false statements substantially injure or tend to injure the employer's interests or are a substantial violation of the employee's obligation to the employer.
When an employee falsifies the employer's records, or falsely asserts to the employer that he or she has performed some assigned duty when in fact he or she has not done so, he or she obviously is breaching an obligation due the employer. Whether this constitutes misconduct depends upon the magnitude of the injury or potential injury to the employer.
When an employee knowingly submits a false report of personal expenses, the manner in which the employer's money has been expended, or the amount of income received by or for the employer, he or she is breaching an obligation to his employer.
Example - Falsification of Work Record:
The claimant, an employee of a hotel, was responsible for conducting and reporting an inventory of the employer's linen on a monthly basis. On the last inventory submitted by the claimant, the employer noted a large variance from the numbers reported on the previous inventory. When questioned by the employer, the claimant admitted that he had entered incorrect figures on the previous five inventory forms, because he feared that he would lose his job due to linen losses. He entered the correct figures on the last inventory sheet because he realized that the variance was too large and could easily be detected by viewing the linen in stock.
The claimant had been completing these monthly inventory forms for four years and had not knowingly entered incorrect figures until the last six months of his employment. He stated he was not responsible for the losses and did not suspect any coworkers of taking any linen materials. He was discharged for the falsification of inventory reports.
The discharge was for misconduct. The claimant knowingly entered false figures on five monthly inventory forms during the last six months of his employment. Although he was not responsible for the linen losses, his falsification of employer records evinced a wilful breach of a material duty owed to the employer.
Example - Falsification of Work:
The claimant was an aircraft inspector who signed an inspection sheet stating that he had personally inspected certain plane installations and found them in order. It was later found that a part the claimant had stated was installed on the plane had not, in fact, been installed at all.
In failing to ascertain that an important part of the aircraft assembly had not been installed, the claimant admittedly was careless; further, the undisputed facts show that he proceeded to check and sign his inspection sheet indicating that he had inspected the missing part and that it was in fact properly installed. Considering this last circumstance, and bearing in mind the responsible position held by the claimant together with the possible consequences of his act, the claimant materially breached a duty owed the employer under his contract of employment as an inspector.
In this case, it is immaterial why the claimant failed to make a proper inspection he simply had not done what he said he had done. He clearly had a duty to properly perform the inspection. By stating that he had done so, when in fact he had not, he substantially breached an obligation owed his employer.
If a claimant is discharged for making false statements about his or her ability to work and about his or her claim for workers' compensation, the discharge is for misconduct.
Example - Falsification About Disability and Claim for Workers' Compensation:
The claimant was unable to work as a jackhammer operator because of a kidney condition. He was assigned to lighter work which he told his employer he was also unable to do. The claimant was sent home with instructions to report back when he felt able to work.
Meanwhile the claimant filed a claim for workers' compensation against the employer on the grounds that he was disabled due to his jackhammer work. At a subsequent workers' compensation hearing the claimant appeared to have difficulty seating himself and testified that he had not lifted anything heavier than a knife, fork or toothbrush. However, the employer submitted a video taken by investigators acting on its behalf. The video showed the claimant pushing and pulling a stalled automobile and engaging in heavy construction activities during the time of his alleged disability. The claimant was subsequently discharged for falsely asserting to his employer and at the workers' compensation hearing that he had been injured by his work.
The discharge was for misconduct. The claimant informed the employer that he was unable to perform the duties which he had formerly performed and later advised the employer that he was unable to do even lighter duties. He then filed a claim against the employer on the ground that his disability arose out of his employment. The evidence is overwhelming that the claimant made false statements to the employer and under oath at the hearing in connection with his claim for workmen's compensation.
It should be noted that for misconduct to be found, the weight of evidence must establish that the claimant did make false statements about his or her work.
Example - No Falsification of Work:
The claimant was employed as a telephone solicitor, earning an hourly wage plus bonuses. His job duties involved the soliciting of political contributions. His employer's performance policy held that four "false" pledges within a six-month period will result in an employee's termination. False pledges are commitments received by the solicitor which the quality control department is unable to confirm. The employer determined that the claimant submitted four false pledges and terminated him.
The claimant testified that he did not submit any false pledges. He contended that the individuals who had made the pledges could have changed their minds, and that was beyond his control.
The discharge was not for misconduct. There was no evidence that the claimant falsified his work. The individuals who made the pledges could have changed their minds.
Falsification of a time card can result in the claimant being paid for time that he or she was not at work. This is an attempt to misappropriate money from the employer in the form of wages he or she has not earned. If the claimant is discharged for failure to comply with the employer rule regarding time card, see Violation of Employer Rule, MC 485.
Example - Falsification of Time Card:
The claimant was hired to work in one of the food booths of a client of the employer. He was scheduled to work from 5 a.m. until 1:30 p.m. Monday through Friday. When he checked into the client's place of business, he went through the security office and signed a register showing the time that he was entering the place of work.
The claimant submitted time cards to the employer for each week and on all of the time cards he indicated that he reported to work at 5 a.m. and left at 1:30 p.m. His supervisor was present at the place of work on one occasion prior to 5 a.m. but did not observe the claimant to be at his work station. When he approved the time cards he noted that on the date, the claimant had indicated he reported to work at 5 a.m.
The employer then conducted an investigation by comparing the claimant's entries on the time cards with the sign-in sheets from the security office. It was found that the claimant on many occasions signed in after 5 a.m. On one occasion, there was a notation on the security log in sheet that the claimant reported to work at 7 a.m. Yet the claimant reported on the time card that he began work at 5 a.m. that day. The claimant was then discharged for falsification of time worked. The claimant felt that he was doing nothing wrong since he would get all his work done by 1:30 p.m.
The discharge was for misconduct. By falsifying the time worked, the claimant wilfully disregarded the employer's interest.
I. Falsification of Work Application
The act of making applications for employment carries with it the requirement that matters of proper concern to a prospective employer are open to its inquiry. When a claimant is discharged because he or she has wilfully recorded false information on the work application, the discharge is for misconduct if the following four conditions are met:
- The employer information requirement is reasonable and legal.
- The information is material to selection for the job.
- The false statement or representation must be wilful.
- The falsification tends to injure the employer's interests.
1. The Employer Information Requirement is Reasonable and Legal
It is the employer's right to establish job-related requirements and to seek the most qualified individual for the job. It is reasonable for the employer to seek information through application forms and interviews to help make selection and assignment decisions. However, the employer is constrained by law as to what information he or she can seek from the job applicant.
The California Fair Employment and Housing Act prohibits any non-job-related inquiry, either verbal or through the use of an application form, which directly or indirectly limits a person's employment opportunities because of race, color, religion, national origin, ancestry, medical condition (cancer related), physical handicap, marital status, sex, or age (40 plus). Thus questions about the applicant's race, color, religion, etc. would be illegal.
The law also prohibits, with a few exceptions, an employer from inquiring about arrests that did not result in convictions. Section 432.7(a) of the Labor Code provides in part:
No employer whether a public agency or private individual or corporation shall ask an applicant for employment to disclose, through any written form or verbally, information concerning an arrest which did not result in conviction.
Example - Inquiry About Arrest Record:
In P-B-241, the claimant was a serviceman for a security systems company. When the claimant applied for the job, he completed an initial employment application which asked if he was ever arrested. The claimant answered no. The application provided that any false statements would be grounds for immediate dismissal.
The claimant was hired and commenced his training as an inspector of burglar alarm systems. When applying for a clearance to obtain a bond, the claimant was confronted with an arrest record. In the process, he was instructed to inform his employer of a prior arrest. On informing his employer, the claimant was discharged. About six years ago, the claimant was arrested for tampering. The charges were dismissed after he completed a probationary period. The Board found the claimant eligible and stated:
Under Section 432.7 of the Labor Code, the employer had no right to inquire into the claimant's arrest record on the initial employment application. It follows that the claimant had no duty to reveal his arrest record at that time. After the initial application was filed by the claimant, the employer had an opportunity to inquire as to the claimant's arrest record, because the law does not prohibit questions regarding arrest records in the employment process following receipt of the initial application form.
The claimant did not withhold information from the employer or falsify answers concerning his arrest record after the initial application was filed. Under such circumstances, we cannot find the employer's request of the claimant to answer a question in an initial employment application to be the basis for establishing misconduct when such action is in violation of state law. If we were to find misconduct on such facts, we would be condoning such actions and seemingly approving violations of the law.
Whether a requirement for information is reasonable depends on the type of work in which the employer is engaged. For example, in businesses involving security or accountability for funds or the handling of money such as banking, an employer reasonably is expected to make inquiry concerning arrests which results in conviction for other than a minor offense. In order to be employed as a security guard, an individual must be registered for employment as a security guard by the California Department of Consumer Affairs. An application for registration as a security guard could be denied because of prior convictions. The same kind of information might be of little consequence to an employer hiring agricultural laborers to pick fruit on a piece work basis. Generally, knowledge of a record of prior convictions can be considered a proper safeguard to an employer in selecting employees for a majority of jobs. Therefore an inquiry about convictions would be reasonable, although claimants may hesitate to disclose such information because of its "chilling effect" on gaining employment.
Similarly, it is reasonable for an employer to inquire about the driving record of the job applicant in hiring drivers. If the claimant fails to disclose a bad driving record and is subsequently discharged because the insurance carrier will not cover the claimant under the employer's liability insurance, the discharge would be for misconduct.
When in doubt about the reasonableness of the employer requirement, the interviewer should contact the employer for explanation or call the concerned government agencies such as the Fair Employment and Housing for information.
2. The Information is Material to Selection for the Job
Information is material when it is needed to select qualified applicants. Material questions include not only arrest and conviction records as previously discussed but also such things as past work experience, education, physical condition and reasons for leaving prior employment.
Example - Falsification About Conviction:
The claimant worked as an analyzer of check orders for a firm which prints checks and other financial documents for banks. When the claimant filed his work application, he answered in the negative to the question whether he had ever been convicted of a crime, although he knew that the answer was incorrect. Subsequently, the employer discovered that the claimant had been previously convicted of welfare fraud, and further had been the subject of a bench warrant for a violation of probation. Because of the claimant's falsification of the work application, he was discharged. The employer contended that they had an excellent reputation, and if something should happen to cause the financial document to be stolen or copied, they would suffer irreversible financial loss.
The discharge was for misconduct. The claimant intentionally falsified his work application, and the information sought by the employer is material to the selection of the applicant for the job.
Example - Falsification About Education:
The claimant was hired as a senior tool engineer. The hiring was based upon a personal interview together with a written application filed by the claimant following the interview. In order to be interviewed for work as an engineer with the employer, it was necessary that applicants possess a college degree. The rate of pay given to employees was dependent upon the number of years of college education completed. The claimant was aware of the employer's policy in this matter. On both the interview and the written application, the claimant informed the employer that he possessed a college degree, and the claimant was hired and a commensurate wage was assigned to him. The claimant actually did not possess a college degree. The resulting discharge was for misconduct.
Example - Falsification of Reasons for Leaving Prior Work:
The claimant was employed as a sales associate for a department store. When she filled out the written application for employment, she was asked, among other things, whether she had ever been dismissed or asked to resign by any prior employers. She answered in the negative. She however named a previous employer on the application and stated she left that job in order to stay home with her son. In fact, she was discharged by that employer for alleged theft. When the fact was known, she was discharged by the last employer.
The discharge was for misconduct. The employer had a legitimate right in asking the claimant if he had been dismissed or asked to resign from any previous employment. This could have affected the employer's decision as to whether or not the claimant should be hired. Not only did the claimant fail to disclose the circumstances of her prior employment, but she falsely stated she had never been dismissed from any such employment.
3. The False Statement or Representation Must be Wilful
If the claimant knew at the time that the statement or misrepresentation made was not true or had no basis for believing that it was true, the claimant's actions can generally be regarded as wilful.
The guidelines provided above for determining whether false statements about coworkers, the employer, work and work record are wilful or not also apply here.
If there is no proof that the claimant wilfully makes false representation on his or her work application, the discharge is not for misconduct.
Example - No Falsification on Work Application:
In P-B-184, the claimant was hired as a production worker. In his application for employment, the claimant indicated that he had operated drill presses, lathes, punch presses, reamers, grinders, threaders, burrers and welding equipment. The claimant was first assigned to work on a drill press. His work on the machine was deemed unsatisfactory and after two days he was assigned to work involving the operation of a lathe. After working at this assignment for approximately two hours, he loaded a part incorrectly and wrecked a fixture which required several hours to rebuild. He was thereafter transferred to several successive jobs, but failed to meet the employer's standards. He was discharged after working there for about three weeks.
The employer evidently contended that the claimant had falsified his prior work experience in the application. The claimant testified that he correctly set forth his prior work experience in the application and that he put forth his best efforts to perform the work which he was assigned.
The Board found the claimant eligible and stated:
A review of the evidence in this matter does not indicate that the claimant misrepresented his prior experience when making application for work with the employer herein nor does it disclose in our opinion more than inefficiency or unsatisfactory performance on the part of the claimant...
4. The Falsification Tends to Injure the Employer's Interest
Usually if the claimant wilfully misstated the answer to a reasonable and material question on a work application, it tends to injure the employer's interests. The same may be true where the claimant only partially answered a question, since such actions inhibit a fair and objective selection process.