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decided: October 23, 1984.


Appeal from the Order of the Unemployment Compensation Board of Review in the case of In Re: Wayne R. Fusaro, No. B-208170.


John F. Cambest, Conway, Meyer & Cambest, for petitioner.

Michael D. Alsher, Associate Counsel, with him, Richard L. Cole, Jr., Chief Counsel, for respondent.

Judges Williams, Jr., Craig and Doyle, sitting as a panel of three. Opinion by Judge Doyle.

Author: Doyle

[ 85 Pa. Commw. Page 508]

Before this Court is an appeal by Wayne R. Fusaro (Petitioner) from a decision and order of the Unemployment Compensation Board of Review (Board) affirming a referee's decision to deny unemployment compensation benefits on the grounds that certain of his actions constituted willful misconduct pursuant to Section 402(e) of the Unemployment Compensation Law (Law).*fn1 Petitioner was employed by the Dollar Savings Bank (Bank) of Pittsburgh in August 1976 and, subsequently began working at the Bank's McKeesport branch in October of 1981. Petitioner was employed as a branch manager at the time of his termination. During Petitioner's period of employment he was subject to certain Bank procedures including the following:

     a) Check Cashing Procedure

1. If a check in an amount in excess of $1,000.00 is returned to a branch office for insufficient

[ 85 Pa. Commw. Page 509]

    funds, management shall notify branch administration.

2. Any check in excess of $250.00 shall not be put back through the check cashing system a second time without notification to branch administration.

     b) Legal Documents

1. No legal document as defined in the Operations Manual shall be handled without the approval of legal counsel for Dollar Savings Bank.

In November of 1981 a Ms. Karen Smith, who was not a regular bank customer, wished to cash a check for a large sum of money. The referee found that Petitioner, without seeking a legal opinion, had Ms. Smith's employer sign a third party guarantee document. Said document subsequently proved to be worthless. The referee also found that Petitioner permitted Ms. Smith to re-present dishonored checks without informing branch administration. Ms. Smith overdrew her account and the Bank sustained a loss of $104,000.

In cases of willful misconduct as defined in Section 402(e) the burden of proof rests with the employer. Lindsay v. Unemployment Compensation Board of Review, 56 Pa. Commonwealth Ct. 392, 424 A.2d 1014 (1981). Where, as here, the party with the burden of proof has prevailed below, this Court's scope of review is limited to determining whether an error of law has been committed or whether findings of fact are supported by substantial evidence on the record. Id.

Petitioner asserts that with respect to implementing the guarantee agreement, he violated no established policy because the agreement he initiated was

[ 85 Pa. Commw. Page 510]

    not specifically defined as a legal document under the Bank's written policy, which policy contains examples of legal documents. The purpose of a guarantee agreement is to define the legal rights and liabilities of third parties; indeed, Petitioner must have thought the instrument had legal significance; otherwise, he would not have executed it. Petitioner's belief that the document was legally binding serves to demonstrate his deliberate disregard of his employer's rules and, would therefore, constitute willful misconduct. Kentucky Fried Chicken of Altoona, Inc. v. Unemployment Compensation Board of Review, 10 Pa. Commonwealth Ct. 90, 97, 309 A.2d 165, 168 (1973). Although Petitioner contends his purpose was to protect the Bank's interest, a negligent act "which manifests culpability, wrongful intent, evil design, or intentional and substantial disregard for the employer's interests or the employee's duties" is sufficient to establish willful misconduct. Id. The record reveals that Petitioner himself testified that his reasons for undertaking the agreement were to accommodate Ms. Smith. Thus, we do not perceive his conduct to be a reasonable effort to protect the Bank's interest, as he maintains.

Petitioner next asserts that the referee's findings with respect to Petitioner's failure to follow check cashing procedures are not supported by substantial evidence.*fn2 Petitioner argues that the employer's failure to produce a memorandum purportedly initialed

[ 85 Pa. Commw. Page 511]

    by Petitioner, which memorandum directed subordinate employees to bypass check cashing procedures, renders the other testimony on this point incompetent. Petitioner alleges that without the memorandum there was not substantial testimony to show that he even knew that Ms. Smith overdrew her account. The record, however, contains the testimony of an employee who actually saw the memorandum in question, and, taken together with the testimony of that same employee that Petitioner gave other employees verbal instructions which were contradictory to Bank policy, competent evidence was adduced which supports the referee's findings. Those findings support the conclusion that Petitioner's conduct rose to the level of willful misconduct.

Finally, Petitioner contends that testimony by the employer's own witness indicates that from November of 1981 through February of 1982 there were sufficient balances in Ms. Smith's account to cover any single check presented by Ms. Smith. This, however, does not justify Petitioner's direction to his subordinates that the normal re-presentment procedures were to be circumvented in Ms. Smith's case. Having found substantial evidence of record that Petitioner violated Bank procedures without good reason, we affirm the Board's order.*fn3


Now, October 23, 1984, the decision of the Unemployment Compensation Board of Review in the above captioned matter, No. B-208170, dated July 21, 1982, is hereby affirmed.



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