Courtney Paulson, Relator v. General Nutrition Center, Inc., Department of Employment and Economic Development

Minnesota Court of Appeals August 31, 2015

Opinion

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA
IN COURT OF APPEALS
A15-0096

Courtney Paulson,
Relator,

vs.

General Nutrition Center, Inc.,
Respondent,

Department of Employment and Economic Development,
Respondent

Filed August 31, 2015
Affirmed
Chutich, Judge

Department of Employment and Economic Development
File No. 32574512-3

Courtney Paulson, Minneapolis, Minnesota (pro se relator)

General Nutrition Center, Inc., Pittsburgh, Pennsylvania (respondent)

Lee B. Nelson, Timothy C. Schepers, Minnesota Department of Employment and
Economic Development, St. Paul, Minnesota (for respondent department)

Considered and decided by Larkin, Presiding Judge; Ross, Judge; and Chutich,

Judge.
UNPUBLISHED OPINION

CHUTICH, Judge

Relator Courtney Paulson challenges an unemployment-law judge’s determination

that she is ineligible for unemployment benefits. Because substantial evidence supports

the unemployment-law judge’s conclusion that Paulson committed employment

misconduct, we affirm.

FACTS

Courtney Paulson began working for General Nutrition Center, Inc. (“GNC”) in

December 2011, and she was promoted to manager of her own store in April 2013. One

of Paulson’s key job responsibilities was counting certain products at the beginning and

end of each of her shifts; these counts are called “cycle counts.” Employees were not

allowed to use the previous night’s count for the next morning’s count. Falsifying a cycle

count was grounds for termination.

On April 1, 2014, GNC’s regional sales director visited Paulson’s store. Paulson

had not yet finished the cycle count, so she completed the form with the previous night’s

numbers. Paulson then showed the sales director the false cycle count because she did

not want to get in trouble. The sales director confronted Paulson about the cycle count,

and Paulson admitted that it was incorrect.

Between March 2014 and April 2014, Paulson also incorrectly processed 18 of her

own purchases. Paulson used an employee free sample coupon to try different flavors of

the same item, but the coupon only allowed employees to sample one item. Several times

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Paulson also used the “buy three get one free” promotion but gave herself the highest-

priced item for free instead of the lowest-priced item, as required by company policy.

An investigation began after corporate reports flagged Paulson’s store because of

the high number of manual price overrides. The regional sales director contacted the

regional loss prevention manager, and they interviewed Paulson about the price

overrides. The two reviewed individual transactions with Paulson. They also asked her

about the falsified cycle count. During this meeting, Paulson wrote a statement admitting

to the improper price overrides and the falsified cycle count. After the interview, Paulson

was told that she was suspended. Paulson learned the next week that she had been

terminated.

The Minnesota Department of Employment and Economic Development (the

department) initially determined that Paulson was eligible for unemployment benefits.

GNC appealed this determination, and a hearing was convened. Paulson, the regional

sales director, and the regional loss prevention manager all testified at the hearing.

The unemployment-law judge determined that Paulson was ineligible for

unemployment benefits. The judge noted that the parties did not dispute that Paulson

presented falsified documents to GNC by copying the cycle counts. The judge concluded

that GNC had the right to expect Paulson not to falsify those documents, and that

intentionally lying and showing the supervisor incorrect information was a serious

violation of GNC’s reasonable expectations.

The unemployment-law judge further concluded that GNC had the right to

reasonably expect that Paulson would not engage in conduct that would result in the

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company’s financial loss for her personal gain. Paulson intentionally violated this

expectation by overriding higher-priced items when ringing her personal “buy three get

one free” purchases and by redeeming employee free sample coupons for several flavors

of the same item.

Based on these findings, the unemployment-law judge determined that Paulson

was discharged for employment misconduct and therefore was ineligible for

unemployment benefits. Paulson requested reconsideration, and the unemployment-law

judge affirmed her decision. Paulson appealed by writ of certiorari.

DECISION

The purpose of the Minnesota Unemployment Insurance Program is to assist those

who become unemployed through no fault of their own.

Minn. Stat. § 268.03

, subd. 1

(2014). This court may affirm the decision of an unemployment-law judge or remand the

case for further proceedings; it may also reverse or modify the decision if the substantial

rights of the relator have been prejudiced because the findings, inferences, conclusion, or

decision is affected by an error of law or unsupported by substantial evidence in view of

the record as a whole.

Minn. Stat. § 268.105

, subd. 7(d) (2014).

       An employee discharged for employment misconduct is ineligible for

unemployment benefits.

Minn. Stat. § 268.095

, subd. 4(1) (2014).        “Employment

misconduct” is defined as “any intentional, negligent, or indifferent conduct . . . that

displays clearly . . . a serious violation of the standards of behavior the employer has the

right to reasonably expect of the employee.”

Id.,

 subd. 6(a) (2014). Conduct that was the

consequence of the employee’s inefficiency or inadvertence, however, is not employment


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misconduct.

Id.,

 subd. 6(b) (2014).    “As a general rule, refusing to abide by an

employer’s reasonable policies and requests amounts to disqualifying misconduct.”

Schmidgall v. FilmTec Corp.,

644 N.W.2d 801, 804

 (Minn. 2002).

         Employment misconduct presents a mixed question of fact and law: whether an

employee committed a particular act is a question of fact, and whether that act is

employment misconduct is a question of law. Skarhus v. Davanni’s Inc.,

721 N.W.2d 340, 344

 (Minn. App. 2006). An unemployment-law judge’s factual findings are viewed

in a light most favorable to the decision, and they will not be disturbed if the evidence

substantially sustains them.

Id.

 Credibility determinations are the exclusive province of

the unemployment-law judge.

Id. at 345

.

I.       Falsification of Company Documents

         Paulson first asserts that the unemployment-law judge’s finding that she falsified

company documents was unsupported by substantial evidence. This argument is without

merit.

         The unemployment-law judge found that Paulson intentionally falsified company

documents and showed the documents to the regional sales director. Substantial evidence

supports this finding. Paulson herself admitted at the hearing that she completed a

morning cycle count using the previous night’s figures. She also included this fact in her

written statement following the investigation. Based on these admissions, this finding is

supported by substantial evidence.

         Paulson further argues that the unemployment-law judge erred by determining that

this falsification was misconduct, but under established company policy, Paulson’s


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falsification was grounds for immediate termination from GNC.           The testimony

demonstrated that cycle counts are a “critical” tool employed by GNC.         Paulson’s

intentional falsification of the cycle count was a serious violation of the standards of

behavior that GNC had a right to reasonably expect, especially from a store manager.

See

Minn. Stat. § 268.095

, subd. 6(a)(1).

      Paulson claims that this act was not misconduct because she merely used poor

judgment. If judgment is required, a good-faith error in judgment is not employment

misconduct.

Minn. Stat. § 268.095

, subd. 6(b)(6). But no evidence presented here shows

that Paulson needed to make a judgment call; she simply panicked and filled in the cycle

count with the previous night’s numbers.        Furthermore, acts inconsistent with an

employee’s training or established procedure are not considered errors of judgment. See

Ress v. Abbott Nw. Hosp., Inc.,

448 N.W.2d 519, 525

 (Minn. 1989). The good-faith

judgment exception therefore does not apply.

      Because we conclude that this falsification was disqualifying employment

misconduct, we do not consider whether Paulson’s price overrides were also employment

misconduct.

II.   Credibility Determination

      Paulson finally claims that the unemployment-law judge erred by determining that

the GNC employees were more credible than she. We disagree.

      We defer to the unemployment-law judge’s credibility determinations when they

are supported by substantial evidence and the unemployment-law judge sets forth a valid

reason for crediting or discrediting the witness. See Ywswf v. Teleplan Wireless Servs.,


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Inc.,

726 N.W.2d 525, 533

 (Minn. App. 2007); see also

Minn. Stat. § 268.105

, subd.

1a(a) (2014) (stating that the unemployment-law judge must set out the reason for

crediting or discrediting testimony when the credibility “has a significant effect on the

outcome of a decision”).

       The unemployment-law judge credited the GNC employees’ testimonies because

they were “detailed, persuasive, reasonable, consistent, and described a more plausible

sequence of events.” These reasons meet the statutory requirement. See Ywswf,

726 N.W.2d at 533

 (noting that the level of detail and reasonableness are permissible factors

to consider in evaluating credibility). Our review also satisfies us that the record supports

these reasons.

       Affirmed.




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Reference

Status: Unpublished