Kids & Teens Pediatrics of Dovre v. O'Brien and UIAB

• Court: Supreme Court of Delaware
• Decided: October 30, 2020
• Docket: 51, 2020
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

KIDS & TEENS PEDIATRICS OF § DOVER, § No. 51, 2020 § Appellant Below, § Court Below—Superior Court Appellant, § of the State of Delaware § v. § Civ. A. No. K19A-08-001 JJC § MARIE O’BRIEN and § UNEMPLOYMENT INSURANCE § APPEAL BOARD, § § Plaintiff Below, Appellee. §

Submitted: September 4, 2020 Decided: October 30, 2020

Before SEITZ, Chief Justice; VALIHURA and VAUGHN, Justices.

ORDER

After consideration of the parties’ briefs and the record in this case, it appears

to the Court that:

(1) The appellant, Kids & Teens Pediatrics of Dover (the “Employer”),

disputes the decision of the Unemployment Insurance Appeal Board (the “UIAB” or

the “Board”) that found that the appellee, Marie O’Brien, was not fired for just cause

and therefore was entitled to unemployment benefits. For the reasons stated below,

we affirm the Superior Court’s order affirming the Board’s decision.

(2) O’Brien worked for the Employer from September 16, 2018, through

March 27, 2019, when the Employer terminated her from her position as office manager. O’Brien sought unemployment benefits. On April 22, 2019, a claims

deputy determined that the Employer had discharged O’Brien for just cause because

of an incident relating to a missing office stamp, and that O’Brien therefore was

ineligible for unemployment benefits.1

(3) O’Brien appealed. Following a hearing, the appeals referee found that

O’Brien “was discharged without [warning] due to co-worker complaints and for the

missing office stamp.”2 Because the Employer did not provide O’Brien with an

unequivocal warning that put her “on clear notice that a repetition or continuation of

certain behavior may lead to dismissal,”3 the appeals referee determined that the

Employer had terminated O’Brien without just cause and that O’Brien therefore was

qualified to receive benefits.

(4) The Employer appealed to the UIAB, which held a hearing on July 10,

2019. Dr. Osama Hussein and Amal Fouad, the Employer’s owners, testified at the

hearing. Dr. Hussein testified that he and Fouad had engaged in several “sit-downs”

with O’Brien regarding her conduct around the office. He also focused on the

missing office stamp and described his review of a surveillance video that showed

that O’Brien knocked the stamp from her desk into a trash can while she was talking

on her cell phone. He said that it appeared that O’Brien saw what had happened but

1 Appendix to Opening Bief, at A005. 2 Id. at A008. 3 Id. at A009. 2 did nothing; he also said that after asking her about the stamp, he gave her a week to

try to locate it, but she took no action.

(5) Fouad testified regarding complaints that other employees had made

regarding O’Brien’s behavior toward them in the office and in front of a patient.

She testified that “[t]here was a long meeting to discuss [O’Brien’s] performance

but only a verbal warning was given.”4 O’Brien appeared at the hearing and stated

that she was not given even a verbal warning; she otherwise stood on the record.5

(6) The UIAB affirmed the appeals referee’s decision, concluding that

O’Brien’s termination was without just cause and that she was therefore qualified to

receive unemployment benefits. The Board wrote:

The problem below remains the problem here. Claimant was not warned before she was fired. There is no dispute that Claimant was not given a written warning before she was terminated. Under Delaware law, an employer’s obligation to show “just cause” also includes the burden to show “notice to the employee in the form of a final warning that further poor behavior or performance may lead to termination.” That evidence is missing here. The sole exception to this rule is when the willful or wanton misconduct is “sufficiently serious” such that no prior warning is required. The Board considers the question of what is “sufficiently serious” to be a question of fact. Based on the evidence presented, the Board concludes that Claimant’s alleged misconduct falls short of sufficiently serious willful and wanton misconduct such that she could be terminated for just cause without a prior warning. Employer presented no evidence that Claimant stole or willfully (or even recklessly) misplaced the stamp. Rather, the evidence shows that Claimant may have unwittingly knocked the stamp into the trash. Nor

4 Id. at A014. 5 Id. at A131. 3 did Employer’s generic evidence of poor performance and employee complaints show that Claimant’s alleged misconduct [rose] to the extraordinary level of “sufficiently serious” misconduct such that the Board can conclude no advance warning was necessary. Because Employer did not issue a prior written warning to Claimant before she was terminated, under Delaware law, the Board concludes that she was terminated without just cause.6

(7) On the day of the UIAB hearing, the Employer’s counsel, whom the

Employer had very recently retained, sent a letter to the Board requesting a rehearing

because a staff member had denied counsel access to the hearing when counsel

arrived two minutes late. The Board denied the request in a memorandum opinion

and decision that was mailed to the Employer on August 6, 2019.7 The notice of

appeal that the Employer filed, pro se, in the Superior Court on August 5, 2019, did

not identify the order denying rehearing as an order from which the Employer was

appealing, but it did state that one of the grounds for the appeal was that counsel had

been denied entry to the hearing. After filing the notice of appeal, the Employer

retained a different attorney, who filed an opening brief on the Employer’s behalf.

That brief recited facts relating to the denial of counsel’s entry to the hearing, but

did not make any arguments for reversal based on those facts. The reply brief filed

in the Superior Court cursorily argued that a party should not be punished for its

6 Id. at A015 (citations omitted). 7 Appendix to Answering Brief of UIAB, at B009-14. 4 attorney’s mistake absent a clear record of delay or willful contempt and a finding

that lesser sanctions would not suffice.

(8) In the Superior Court appeal, the Employer presented the following

arguments that are relevant to this appeal: (i) the UIAB’s decision was not supported

by substantial evidence because the UIAB failed to consider the Employer’s

evidence that O’Brien’s conduct was in violation of policies set forth in the

Employer’s employee handbook and that she received multiple warnings regarding

her behavior before her termination; (ii) the UIAB erroneously determined that the

Employer was required to give O’Brien a final, written warning before terminating

her, and that the final warning was required to provide O’Brien with notice that her

conduct, if continued, would lead to termination; (iii) O’Brien’s conduct was

sufficiently serious to justify termination without prior warning; and (iv) barring the

Employer’s counsel from the hearing before the Board erroneously punished the

Employer for the attorney’s mistake, without a clear record of delay or willful

contempt and a determination that lesser sanctions would not suffice.

(9) The Superior Court affirmed the UIAB’s decision.8 The court held that

the UIAB did not commit reversible error when the Board’s staff person denied the

Employer’s counsel access to the hearing because the Employer had not had counsel

in the earlier proceedings; the attorney had not made the Board aware of the

8 Kids & Teens Pediatrics of Dover v. O’Brien, 2020 WL 95849 (Del. Super. Ct. Jan. 8, 2020). 5 representation by entering an appearance or otherwise communicating with the

Board; and the Employer did not notify the Board during the hearing that it had an

attorney, that the attorney was not present, or that it desired an attorney. 9 The

Superior Court held that the UIAB correctly applied Delaware law requiring a final

warning to an employee before termination. The court also determined that the

record contained substantial evidence that the Employer had not given O’Brien a

final warning and that O’Brien’s conduct was not sufficiently serious to warrant

termination without a final warning.

(10) This appeal followed. The Employer argues that this Court should

reverse the Superior Court’s decision because (i) the Employer was denied due

process when its counsel was barred from attending the hearing; and (ii) the Superior

Court erroneously held that the Employer was required to provide O’Brien with a

final, written warning before termination.

(11) With respect to the Employer’s argument that it was denied due process

when the UIAB staff member prevented the Employer’s counsel from entering the

hearing room, we affirm on the basis of the Superior Court’s order dated January 8,

2020. The allegation that a Board staff member might have prevented counsel from

attending the hearing because of a two-minute delay in her arrival is concerning,

9 Despite the Employer’s cursory argument on this issue in the Superior Court, which it raised for the first time in the reply brief, the court undertook a thoughtful analysis of the potential due process implications and determined that the UIAB did not commit legal error. 6 especially in light of the ten-minute grace period afforded by the UIAB regulations.

But neither counsel nor the Employer notified the Board that the Employer had

retained counsel, nor does the transcript reflect that either of the principals of the

Employer who attended the hearing asked the members of the Board for a delay or

provided any indication to the members of the Board that they had retained counsel,

that counsel was unexpectedly missing, or that they lacked any evidence because it

was in counsel’s possession.

(12) The Employer also now argues that it was denied due process when the

UIAB staff member told Fouad and Dr. Hussein that they could not bring another

witness, an employee of the appellant, into the hearing. This issue was not raised in

the request for a rehearing or in the Superior Court appeal—nor did Fouad or Dr.

Hussein give the Board any indication that they had another witness who had been

denied entry—and we decline to consider it for the first time on appeal.10

(13) On the merits, the Employer argues that (i) Delaware law did not

require the Employer to give O’Brien a final, written warning before termination and

(ii) O’Brien’s conduct was sufficiently serious to warrant termination without a final

warning. We have carefully reviewed the record in this case and have concluded

that the Superior Court did not err in affirming the UIAB’s decision that O’Brien

10 DEL. SUPR. CT. R. 8. 7 was qualified to receive unemployment benefits because she was discharged without

just cause.

(14) An employee who is discharged for just cause is disqualified from

receiving unemployment benefits.11 As a general matter, there is just cause if an

employee commits a “willful or wanton act or pattern of conduct in violation of the

employer’s interest, the employee’s duties, or the employee’s expected standard of

conduct.”12 If an employer “consistently tolerates willful or wanton misconduct,”

then “the employer may not be justified in firing employees without first warning

them that their conduct no longer is acceptable.”13 The employer bears the burden

of proving by a preponderance of the evidence that it terminated the employee for

just cause.14

(15) This Court’s review of an appeal from the UIAB to the Superior Court

is limited to a determination of whether there is substantial evidence in the record to

support the UIAB’s findings and whether such findings are free from legal error.15

Substantial evidence is such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.16 Like the Superior Court, this Court considers the

record in the light most favorable to the party that prevailed in the UIAB

11 19 Del. C. § 3314(2); Murphy & Landon, P.A. v. Pernic, 121 A.3d 1215, 1222 (Del. 2015). 12 Avon Products, Inc. v. Wilson, 513 A.2d 1315, 1317 (Del. 1986). 13 Moeller v. Wilmington Sav. Fund Soc’y, 723 A.2d 1177, 1179 (Del. 1999). 14 Murphy & Landon, 121 A.3d at 1222. 15 Thompson v. Christiana Care Health Sys., 25 A.3d 778, 781-82 (Del. 2011). 16 Oceanport Indus., Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 899 (Del. 1994). 8 proceeding.17 Neither we nor the Superior Court weigh the evidence, determine

questions of credibility, or make our own factual findings.18

(16) Giving appropriate deference to the UIAB’s factual determinations and

considering the record in the light most favorable to O’Brien, we cannot conclude

that the Board erred in finding that the Employer failed to carry its burden of proving

that it terminated O’Brien for just cause. The Employer presented some evidence

that O’Brien engaged in inappropriate and unprofessional conduct, but the UIAB

reasonably found that O’Brien’s conduct “did not constitute such wilful or wanton

action as to furnish just cause for [her] dismissal” without warning.19 Moreover,

although no written warning was required, the Employer’s failure to issue a written

warning left it for the Board to weigh the conflicting oral testimony regarding

whether any warning was given. The record contains sufficient evidence to support

the Board’s determination that no warning was given, and the Superior Court

therefore did not err in affirming the Board’s conclusion that O’Brien was terminated

without just cause.20

17 Thompson, 25 A.3d at 782. 18 Id. 19 See Weaver v. Employment Sec. Comm’n, 274 A.2d 446, 447 (Del. 1971). 20 See Bouyer-Bello v. Unemployment Ins. Appeal Board, 2018 WL 3636231, at *2 (Del. July 30, 2018) (where the record contained sufficient evidence to support the UIAB’s findings, the Superior Court did not err by affirming the UIAB’s decision, because the “credibility of witnesses, the weight of their testimony, and the reasonable inferences to be drawn therefrom are for the UIAB to determine” (internal quotation omitted)). 9 NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior

Court is AFFIRMED.

BY THE COURT:

/s/ Karen L. Valihura Justice