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Henderson v. Unemployment Compensation Board of Review

Commonwealth Court of Pennsylvania

October 8, 2013

Sandra L. Henderson, Petitioner
Unemployment Compensation Board of Review, Respondent

Submitted: April 19, 2013




Petitioner Sandra L. Henderson (Claimant) petitions for review of an order of the Unemployment Compensation Board of Review (Board). The Board affirmed the Altoona UC Service Center's (Service Center) determination, which denied Claimant unemployment compensation benefits pursuant to Section 402(e) of the Unemployment Compensation Law (Law), [1] based on willful misconduct. For the reasons set forth below, we affirm.


Claimant filed for unemployment compensation benefits subsequent to her discharge from employment as an Unemployment Compensation Referee with the Pennsylvania Department of Labor and Industry (Employer or Department). The Service Center determined that Claimant was ineligible for unemployment compensation benefits under Section 402(e) of the Law. (Certified Record (C.R.), Item No. 4.) Claimant appealed the determination, and, because Claimant was a former referee, the Board assumed jurisdiction over the appeal pursuant to Section 504 of the Law.[2] The Board assigned a hearing officer to hold an evidentiary hearing and to certify the record to the Board for review.

Before the hearing officer, Employer presented the testimony of Janice Cohen, Employer's Appeals Program Manager; Rachel Eaton, Employer's Human Resources Analyst; and Amy Huffman, a former claimant who previously appeared before Claimant. Claimant presented the testimony of Rose Betti, a former referee and Claimant's union representative. Claimant also testified on her own behalf.

Ms. Cohen testified to the existence of Employer's Code of Conduct, specifically Canon 3, which provides that referees may not initiate or consider ex parte communications. (C.R., Item No. 19 at 49.) Ms. Cohen, who attended referee training at the same time as Claimant, testified that she received Employer's Code of Conduct at the initial three week training session. (Id. at 49-50.) Ms. Cohen also testified that referees are instructed during training to go on the record before answering parties' questions. (Id. at 50.) Ms. Cohen testified that she initiated the investigation against Claimant after Claimant requested overtime that Ms. Cohen did not believe was justified. (Id. at 51.)

Ms. Cohen testified that when Claimant requested overtime a second time, Ms. Cohen checked Claimant's schedule again to verify that overtime was warranted and noticed several appeal withdrawals, one of which was by Malak Labeeb. (Id. at 52-53.) Ms. Cohen testified that, after further investigation, she discovered an accidently recorded off-the-record conversation between Claimant and Mr. Labeeb. (Id. at 54.) Ms. Cohen testified that Claimant did not follow proper procedure when speaking to Mr. Labeeb, because Claimant never officially went on the record. (Id. at 60.)

Ms. Cohen testified that she subsequently contacted several other claimants who withdrew their appeals after being scheduled for hearings before Claimant. (Id. at 62.) Ms. Cohen testified that she spoke with Amy Huffman, who informed Ms. Cohen that Claimant encouraged her to withdraw her appeal, and Claimant never went on the record at her hearing. (Id.)

Ms. Cohen also testified that Claimant's employment was terminated because she engaged in ex parte communications and encouraged claimants to withdraw their appeals without having a hearing in violation of Employer's Code of Conduct and the claimants' due process rights. (Id. at 51, 66, 89-90.) Ms. Cohen testified about the procedure referees must follow in order to hold pre-hearing conferences, which requires referees to go on the record if testimony is given. (Id. at 156.) Ms. Cohen testified that Claimant was trained on due process and pre-hearing conference procedures. (Id. at 91, 157.)

Ms. Huffman testified that she was scheduled to attend a hearing before Claimant on a non-fault overpayment. (Id. at 25.) Ms. Huffman testified that she planned to address two issues in her hearing: (1) whether she filed her appeal in a timely manner, and (2) whether she qualified for financial hardship. (Id. at 26.) Ms. Huffman testified that when she went before Claimant, Claimant never turned on the recorder and instead asked Ms. Huffman why she was there. (Id.) Ms. Huffman testified that Claimant informed her that her appeal was untimely, there was nothing that Claimant could do, and thus it would be a waste of their time to hold a hearing. (Id. at 26-27.) Ms. Huffman further testified that Claimant never allowed her to testify as to why her appeal was untimely or why she qualified for financial hardship. (Id. at 27.) Ms. Huffman testified that she withdrew her appeal because Claimant told her to do so. (Id. at 28.) Ms. Huffman also testified that Ms. Cohen contacted her to ask why her hearing was not held, which led to her filling out a witness statement and filing another appeal. (Id. at 28-29.)

Ms. Eaton testified that she became involved in the investigation after Ms. Cohen contacted her. (Id. at 95.) Ms. Eaton testified to the following timeline of events regarding Employer's administrative process for investigating misconduct. Employer commenced its investigation of Claimant on May 5, 2011, when Ms. Cohen began to investigate Claimant's hearings after she noticed an issue with Claimant's overtime requests. (Id. at 97.) Ms. Eaton testified that on June 20, 2011, Employer held a fact-finding conference, after which Claimant and her union representative asked for additional time to respond to issues raised at the fact-finding conference. (Id. at 98.) Ms. Eaton testified that Ms. Cohen contacted Ms. Huffman and received a written witness statement from Ms. Huffman on July 11, 2011. (Id. at "Employer's Ex. 5.") Ms. Eaton testified that Claimant provided Employer with a seven-to-eight page, single-spaced response to the fact-finding conference on July 22, 2011. (Id. at 99.) Ms. Eaton testified that Employer then commenced an investigation of the allegations Claimant made in her response. (Id.) Ms. Eaton testified that it took her a month to investigate these allegations. (Id.)

Ms. Eaton also testified that both she and her supervisor were on vacation for a combined total of three and a half weeks after receiving Claimant's response. (Id.) Employer's investigation concluded in September 2011, and Employer terminated Claimant's employment on September 23, 2011. (Id. at "Employer's Ex. 9.") Ms. Eaton also testified that Employer's administrative process for investigating suspected misconduct involves investigating the relevant documents and facts and holding a fact-finding conference. (Id. at 108.) Ms. Eaton explained that Claimant was permitted to return to work, but her work was closely monitored. (Id.) Ms. Eaton testified that the decision to terminate Claimant was a collaborative decision made by her and her supervisors. (Id. at 106.)

In response, Claimant testified that she conducted pre-hearing conferences with parties, specifically describing her version of a pre-hearing conference as one where referees explain to the parties what will happen at the hearing. (Id. at 113.) Claimant also testified that she was unaware of the rule requiring that pre-hearing conferences of this nature be recorded. (Id.) Claimant testified that during the fact-finding conference, she answered questions about overtime, internet usage, and cases where there was no record and the parties withdrew their appeals. (Id. at 119.) Claimant testified that, when she met with Ms. Huffman, she did not tell Ms. Huffman to withdraw her appeal or that it was a waste of time to hold a hearing. (Id. at 120.) Claimant testified that her understanding of ex parte is "when there are two parties to a hearing and [she] has communications about the substance of the issues in the case with one party and the other party is not there and has not been notified." (Id. at 122.) Claimant admitted that the Department is a standing party in every proceeding. (Id. at 128.) Claimant also testified that she is aware that the General Rules of Administrative Practice and Procedure, 1 Pa. Code §§ 31.1-35.251, require that notice of a pre-hearing conference be given, and that she did not give notice. (Id. at 129.) Claimant testified that it is common referee practice to hold informal pre-hearing conferences, but notice is not given because of the conferences' informal nature. (Id. at 130.) Claimant also admitted that the law allows a party to a non-fault hearing to offer testimony, and, similarly, a party who files an untimely appeal can offer testimony as to why the appeal was untimely. (Id. at 133.) Claimant testified that the only reason she spoke to parties prior to a hearing was to explain the issues to them. (Id. at 135.)

Claimant's witness, Ms. Betti, an appeals referee and union representative, testified that when she is asked a question by a claimant before the hearing she answers it, particularly in non-fault overpayment hearings. (Id. at 142.) Ms. Betti clarified that she never had an ex parte communication with a party where she urged the party to withdraw an appeal. (Id. at 147.) Ms. Betti admitted that in one-party hearings, she has had conversations about the substantive issues off the record, usually when a claimant asks a question. (Id. at 148.)

Following the hearing, the Board issued a decision, which affirmed the Service Center's determination denying unemployment compensation benefits pursuant to Section 402(e) of the Law. The Board made the following relevant findings:

2. The employer maintains a Code of Conduct for Pennsylvania Unemployment Compensation Referees (Code of Conduct) (Exhibit E-1) that provides that appeals Referees "shall accord to all persons who are legally interested in a proceeding or their lawyer, a full right to be heard according to law and, except as authorized by the law, shall neither initiate nor consider ex parte or other communications made to the Referee outside the presence of the parties as to substantive matters concerning a pending proceeding or claim." . . . .
4. The employer at orientation training provided the claimant with the Code of Conduct and trained her on it.
5. It is not uncommon for a Referee to explain issues to a party prior to a hearing when questioned by a party in a one-party hearing.

. . . .

7. Upon further investigation, the program manager found a recording from a hearing on May 5, 2011. After the hearing concluded, the claimant forgot to turn off the recorder and it recorded a fifteen-minute personal telephone conversation of the claimant. The recorder then recorded the claimant calling in Malak M. Labeeb for his scheduled hearing.
8. The claimant told Mr. Labeeb that an overpayment determination had become final, that there was nothing she could do about it, and that he would not have to pay it back unless he received future benefits. The recording suddenly ended.
9. The claimant did not begin an official hearing.
10. Mr. Labeeb eventually withdrew his appeal. . . . .
14.On June 23, 2011, Amy Huffman appeared for hearings scheduled in front of the claimant on her appeals of two separate determinations

. . . . .

17. The claimant looked through Ms. Huffman's file and told her that her appeal to the first determination was late and that she should withdraw the appeal. The claimant did not allow Ms. Huffman to offer a reason, on or off the record, for her late appeal.
18. The claimant then told Ms. Huffman that she was overpaid benefits and that, because she was receiving UC benefits, she had to repay the overpayment. The claimant told Ms. Huffman that it would be a waste of their time to hold a hearing and that she should withdraw the appeal.

. . . .

23. On June 30, 2011, the employer conducted a fact-finding conference in which the claimant was questioned.
24. The claimant was permitted to return to work and file a written response. The employer ...

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