December 4, 1985
BETTY A. SPENCER, PETITIONER
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT
Appeal from PETITION FOR REVIEW Court
Edward M. Pulaski, Esq., LEGAL SERVICES OF NORTHEASTERN PENNSYLVANIA, INC., Wilkes-Barre, Pa. 18701 for Petitioner.
Charles Hasson, Esq., Michael Alsher, Esq., Harrisburg, Pa. 17120 for Respondent.
Before Hon. James Crumlish, Jr., Pres. Judge; Hon. Theodore O. Rogers; Hon. John A. MacPhail; Hon. Joseph T. Doyle; Hon. Francis A. Barry; Hon. James Gardner Colins; Hon. Madaline Palladino concurring. Judge Macphail, Dissenting; Jd. Doyle Join IN This Dissent
Betty A. Spencer (Claimant) appeals from a decision of the Unemployment Compensation Board of Review (Board) which reversed a referee's decision and denied benefits pursuant to Section 402(e) of the Unemployment Compensation Law (Law).*fn1 For the reasons set forth below, we vacate and remand for additional findings of fact.
Claimant was employed by the Cross Mountain View Guest Home (Employer) as a nurse's aide from October 30, 1982 to November 7, 1982. Claimant was discharged because she refused to work in the kitchen, cooking food for the Employer's paying guests. The referee found that, at the time she was hired, Claimant and the Employer agreed that Claimant would not be required to perform any cooking duties. The referee held that it was not willful misconduct for Claimant to refuse to perform work which the Employer had previously agreed she would not have to do, and granted benefits.
The Board, without taking any additional testimony or evidence, found that the Employer had told Claimant that her duties would involve working in the kitchen on some days, and that Claimant was aware of these duties when she accepted the job. Based on these findings, the Board concluded that Claimant's refusal to cook constituted willful misconduct, which rendered her ineligible for benefits.
The sole basis for the Board's reversal of the referee's decision was the Board's determination that the Employer's testimony concerning the stated terms of Claimant's employment was more credible than the testimony of Claimant, although the referee had accepted Claimant's testimony. The issue presented in this appeal is whether a credibility determination between conflicting testimony, made by a referee who sees and hears the witnesses, may be reversed by the Board only because the Board finds the testimony rejected by the referee to be more credible than the testimony accepted by the referee.
The responsibilities of the referee are set forth in Section 502, 43 P.S. § 822, which states:
Decision of referee; further appeals and reviews
Where an appeal from the determination or revised determination, as the case may be, of the department is taken, a referee shall, after affording the parties and the department reasonable opportunity for a fair hearing, affirm, modify, or reverse such findings of fact and the determination or revised determination, as the case may be, of the department as to him shall appear just and proper.
The statutory language governing the functions of the Board is contained in Section 504 of the Law, 43 P.S. § 824, which provides:
Powers of board over claims
The board shall have power, on its own motion, or on appeal, to remove, transfer, or review any claim pending before, or decided by, a referee, and in any such case and in cases where a further appeal is allowed by the board from the decision of a referee, may affirm, modify, or reverse the determination or revised determination, as the case may be, of the department or referee on the basis of the evidence previously submitted in the case, or direct the taking of additional evidence.
Although this section does not specifically state that the Board is the ultimate finder of fact, the Board's ability to reverse a referee's determination on the basis of evidence previously submitted in the case led this Court to conclude that it is the Board, not the referee, which is the ultimate factfinder.
On appeal from the Board, this Court's scope of review is to determine whether the decision is in violation of the constitutional rights of Claimant, is not in accordance with the law, or whether any finding of fact made by the Board and necessary to support its decision is not supported by substantial evidence. 2 Pa. C.S. § 704. In an unemployment compensation case the findings of fact are conclusive on appeal so long as the record, taken as a whole, contains substantial evidence to support those findings. Taylor v. Unemployment Compensation Board of Review, 474 Pa. 351, 378 A.2d 829 (1977). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. It must be more than a mere scintilla creating suspicion of the existence of fact. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474 (1951); Criswell v. Unemployment Compensation Board of Review, 38 Pa. Commonwealth Ct. 444, 393 A.2d 1071 (1978).
This Court has held that the existence of conflicting testimony does not mean that there is not substantial evidence to support the findings of fact. Criswell. The problem presented with conflicting evidence is that a finding of fact accepting either of the conflicting positions would be supported by evidence in the record. The consideration presented in the case at bar is whether the Board should defer to the referee's choice of credible testimony.
Claimant argues that the Board should not be permitted to modify or reverse findings of the referee which are founded upon credibility determinations. This argument is premised on the fact that it is the referee who has the opportunity to observe the demeanor of the witnesses and to draw inferences from the testimony based on factors not reducible to paper, e.g., facial expression or intonation, which enable the referee to determine the truthfulness of the witness. The Board does not have the benefit of such observation, having before it only the transcript of the testimony.
Claimant relies primarily upon our Supreme Court's decision in Treon v. Unemployment Compensation Board of Review, 499 Pa. 455, 453 A.2d 960 (1982). Claimant contends that Treon abolishes the idea that the Board is the ultimate finder of fact. We disagree. Treon held that the Board may not disregard findings made by the referee which are based upon consistent and uncontradicted testimony without stating its reasons for doing so. The rationale for this holding was that the referee had listened to the testimony of the only witness, observed his demeanor, and had made findings of fact based upon that uncontradicted testimony. Id. at 461, 453 A.2d at 962. The Treon Court stated that the Board had the right to disbelieve testimony even if uncontradicted, but did not have the right to arbitrarily and capriciously disregard findings of the referee based on that testimony. Id.
We believe that Treon limits the ability of the Board to ignore a referee's credibility determination. Therefore, we will evaluate the actions of the Board in the instant case in light of the concerns of our Supreme Court, as enunciated in Treon,*fn2 and in view of the approach to substantial evidence review utilized in the federal court system.
The approach used in the federal administrative system is instructive, because the scope of review is the same. See 5 U.S.C. § 706. In an administrative agency appeal the administrative law judge (ALJ) is the tribunal that conducts hearings, corresponding to the referee's position in unemployment compensation cases. The findings made by the ALJ are treated as part of the record, and must be accorded great deference when issues of credibility may be dispositive of the case. Universal Camera. Reviewing courts will find federal agency decisions unsupported by substantial evidence when they hinge on assessments of credibility contrary to those made by the ALJ who heard the witnesses. Moore v. Ross, 687 F.2d 604 (2d Cir. 1982), cert. denied, 459 U.S. 1115, 103 S. Ct. 750 (1983). A Board is able to overrule an ALJ's findings crediting or discrediting a witness's testimony if those findings are in conflict with strong inferences from documentary evidence, from undisputed facts in the record, or from other evidence credited by the ALJ. Moore v. Ross, 687 F.2d at 607. Substantial evidence review of this type protects against the danger that ultimate administrative fact finders, who have not heard the witnesses testify, will arbitrarily reverse the credibility findings of ALJ's who have heard the testimony. The ALJ's decision is a significant factor to be considered by the reviewing court when it assesses the substantiality of evidence supporting an agency decision. Id. at 609.
Like the federal court's scope of review, our substantial evidence test is based on the record as a whole. Taylor. In order to determine the substantiality of evidence, a reviewing court must take into account whatever in the record fairly detracts from its weight.*fn3 The referee's decision is as much a part of the record as the testimony. This does not mean that a referee's findings are to be given more "evidentiary" weight than they reasonably deserve. We intend only to recognize that evidence supporting a finding of the Board may be less than substantial when the referee has viewed it and drawn a contrary conclusion. The Board is still free to overrule a referee's findings crediting or discrediting a witness's testimony, if the Board can specify factors which undermine the referee's conclusion. Cf. Treon. We will accord special deference to the determination of the referee who sees the witnesses and hears them testify. While we do not hold that the Board is bound by the referee's credibility determination, the probative weight which may properly be given to testimony is severely reduced when an impartial referee who has observed the witnesses has drawn different conclusions.
Our decision is based in part on the discussion of the Court of Appeals for the Second Circuit in Moore v. Ross. That case involved a challenge to the procedure used by New York State Unemployment Compensation authorities, which, as in Pennsylvania, treated the Unemployment Compensation Board as the ultimate finder of fact. The Court in Moore v. Ross strongly intimated that utilization of the federal substantial evidence test by New York Courts reviewing unemployment compensation determinations would insure against due process violations which might occur if a Board, reviewing a paper record, reversed a referee on credibility without some articulated rational reason for doing so.
We hold, therefore, that when a referee has discredited testimonial evidence, either expressly or by implication,*fn4 the Board must indicate its reasons for overturning the referee's finding on credibility. The Board must, in its decision, point to documentary or other testimonial evidence which supports the testimony discredited by the referee, or to specific inconsistencies within the testimony accepted by the referee which would justify rejecting the referee's findings. To the extent that prior cases of this Court are inconsistent with our holding herein, they are overruled.
Applying this substantial evidence review to the case at bar, we must overrule the Board's finding that the Employer informed Claimant at the time she was hired that her duties would include working in the kitchen as a cook. The record contains conflicting testimony on this issue, and the referee chose to accept Claimant's version as more credible than the Employer's version. The record contains no other evidence which supports the Board's acceptance of the Employer's testimony, undermines Claimant's testimony, or provides the Board with reason to disregard the referee's credibility determination. The referee's refusal to accept the Employer's testimony diminishes its weight, and without other evidence to corroborate or support a finding based on the Employer's testimony, we must reject such a finding as not supported by substantial evidence.
Our inquiry is not ended at this point. Although Claimant's agreement at the time she was hired did not include kitchen duties, her refusal to perform those additional duties may still constitute willful misconduct if the Employer's request was reasonable and Claimant did not have good cause to refuse. See Kretsch v. Unemployment Compensation Board of Review, 83 Pa. Commonwealth Ct. 169, 476 A.2d 1004 (1984). Because the Board did not make specific findings on Claimant's job duties, we cannot decide whether, as a matter of law, the Employer's request that Claimant work in the kitchen was reasonable. We must remand for findings of fact to support a decision on this issue.
Therefore, because findings number three and four of the Board are not supported by substantial evidence, we vacate the decision of the Board, and remand for further findings on Claimant's job duties, and on the duties of other similarly placed employees. The Board is also directed to resolve the question of whether the Employer's request that Claimant perform additional duties was reasonable, and whether Claimant's refusal of those duties, under the circumstances, constituted willful misconduct.
O R D E R
AND NOW, December 4, 1985 the decision of the Unemployment Compensation Board of Review No. B-215828, dated March 11, 1983, is vacated and the matter is remanded for further proceedings in accordance with the foregoing opinion.
I respectfully dissent.
It appears to me that the majority is extending the holding of our Supreme Court in Treon v. Unemployment Compensation Board of Review, 499 Pa. 455, 453 A.2d 960 (1982), without cause or necessity for doing so and is imposing a difficult task upon this Court in future cases where the Board finds facts different from those of the referee. The majority states
We will accord special deference to the determination of the referee who sees the witnesses and hears them testify. While we do not hold that the Board is bound by the referee's credibility determination, the probative weight which may properly be given to testimony is severely reduced when an impartial referee who has observed the witnesses has drawn different conclusions.
Spencer v. Unemployment Compensation Board of Revi ew, (No. 972 C.D. 1983, filed December 4, 1985, slip op. at 7. In reaching this conclusion, the majority refers to and adopts the analysis set forth in Moore v. Ross, 687 F.2d 604 (2d Cir. 1982), cert. denied, U.S. 103 S. Ct. 750 (1983). My reading of Moore would indicate that the Court there held that the Board's reversal of the factfinder's assessment of "testimonial credibility" is not a violation of the Claimant's due process rights. The Court also cited several cases decided within its own jurisdiction for the principle that credibility determinations are questions of fact within the Board's province.
This Court has held on many occasions that in unemployment compensation cases, the Board is the ultimate factfinder, and I do not view Treon as contrary to that view; consequently, I can see no reason to change it.
One practical problem with the result reached by the majority is that the unemployment compensation referees, sometimes as a matter of necessity but more often as a matter of convenience, conduct telephonic hearings. Where this occurs, how would this Court apply the "special deference" rule or would it apply at all? Another matter which concerns me is how will this Court be able to determine whether a referee's credibility determination was based upon his view of the demeanor of a witness?
In summary, I would not disturb this Court's historic position in this area of the law as refined by Treon, and would affirm the Board's decision in the instant case.
Judge Doyle joins in this dissent.