Vermillion v. N.M. Dep't of Workforce Sols.

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JUSTIN VERMILLION, Petitioner-Respondent, v. NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS, Respondent-Petitioner and TRIAD NATIONAL SECURITY, LLC, Respondent-Petitioner.

No. A-1-CA-40199

Court of Appeals of New Mexico

June 24, 2024

Collections to this opinion/decision not affecting the outcome, at the Court's discretion, can occur up to tire time of publication with NM Compilation Commission. The Court will ensure that the electronic version of this opinion/decision is updated accordingly in Odyssey.

APPEAL FROM THE DISTRICT COURT OF LOS ALAMOS COUNTY Jason Lidyard District Court Judge

Michael Schwarz Santa Fe, NM for Respondent

Andrea Christman Rachael Rembold Albuquerque, NM Bardacke Allison LLP Justin Miller Cole Wilson for Petitioners

MEMORANDUM OPINION

GERALD E. BACA, JUDGE

{¶1} The New Mexico Department of Workforce Solutions (the Department) and Triad National Security, LLC (Triad) appeal the district court's reversal of the determination by the Department's Board of Review (the Board) that Justin Vermillion was ineligible for unemployment compensation benefits because he was discharged for misconduct. The Department and Triad argue that the district court erred when it concluded that the Board's determination was not supported by substantial evidence and was contrary to law. Agreeing with the Department and Triad, we affirm the decision of the Board and reverse the district court.

{¶2} Because this is an unpublished memorandum opinion written solely for the benefit of the parties, see State v. Gonzales, 1990-NMCA-040, ¶ 48, 110 N.M. 218, 794 P.2d 361, and the parties are familiar with the factual and procedural background of this case, we omit a background section and leave the discussion of the facts for our analysis of the issues.

DISCUSSION

I. Standard of Review^[1]

{¶3} We review an administrative order in the same manner "as the district court sitting in its appellate capacity, while at the same time determining whether the district court erred in the first appeal." Rio Grande Chapter of Sierra Club v. N.M. Mining Comm'n, 2003-NMSC-005, ¶ 16, 133 N.M. 97, 61 P.3d 806. We review the Board's decision to determine whether "(1) the board of review . . acted fraudulently, arbitrarily, or capriciously; (2) based upon the whole record on appeal, the decision of the board of review ... is not supported by substantial evidence; or (3) the action of the board of review . . . was outside the scope of authority of the agency." Rule l-077(J) NMRA; see Rule l-077(L). In this instance, the parties do not argue that the Board acted outside its scope or fraudulently. Therefore, our focus is on whether the Board's decision was supported by substantial evidence and whether it was arbitrary or capricious.

{¶4} "When reviewing administrative agency decisions courts will begin by looking at two interconnected factors: whether the decision presents a question of law, a question of fact, or some combination of the two; and whether the matter is within the agency's specialized field of expertise." Fitzhugh v. N.M. Dep't of Lab., 1996-NMSC-044, ¶ 21, 122 N.M. 173, 922 P.2d 555 (internal quotation marks and citation omitted). "If an agency decision is based upon the interpretation of a particular statute, the court will accord some deference to the agency's interpretation, especially if the legal question implicates agency expertise." Id. ¶ 22. "However, the court may always substitute its interpretation of the law for that of the agency's because it is the function of the courts to interpret the law." Id. (internal quotation marks and citation omitted). "If the court is addressing a question of fact, the court will accord greater deference to the agency's determination, especially if the factual issues concern matters in which the agency has specialized expertise." Id. (internal quotation marks and citation omitted).

{¶5} "When reviewing findings of fact made by an administrative agency we apply a whole record standard of review." Id. ¶ 23. "This means that we look not only at the evidence that is favorable, but also evidence that is unfavorable to the agency's determination." Id. Said another way, "[w]e may not exclusively rely upon a selected portion of the evidence, and disregard other convincing evidence, if it would be unreasonable to do so." Id.

{¶6} "The decision of the agency will be affirmed if it is supported by the applicable law and by substantial evidence in the record as a whole." Id. ¶ 24. '"Substantial evidence' is evidence that a reasonable mind would regard as adequate to support a conclusion." Id. "If the agency's factual findings are not supported by substantial evidence, the court may adopt its own findings and conclusions based upon the information in the agency's record." Id.

II. Misconduct in Unemployment Compensation Law

{¶7} Our Unemployment Compensation Law requires that an individual be disqualified from eligibility to receive benefits "if it is determined by the [Department] that the individual has been discharged for misconduct connected with the individual's employment." NMSA 1978, § 51-1-7(A)(2) (2011). While an employee's conduct may justify discharge from employment, "that same conduct may not rise to the level of 'misconduct' so as to justify the denial of unemployment benefits." Fitzhugh, 1996-NMSC-044, ¶ 39. "To constitute misconduct sufficient to deny benefits, the employee's violation must be evaluated in light of the purposes of the Unemployment Compensation Law, which include easing the burden of involuntary unemployment 'which now so often falls with crushing force upon the unemployed worker and his family.'" Id. (quoting NMSA 1978, § 51-1-3 (1936)). "Consistent with Section 51-1-3," New Mexico courts are to "construe[] the Unemployment Compensation Law liberally in favor of employees to afford them the benefits intended by law." Perez v. N.M. Dep't of Workforce Sols., 2015-NMSC-008, ¶ 12, 345 P.3d 330. For these reasons, our Supreme Court has recognized that "the statutory term 'misconduct' should not be given too broad a definition." Rodman v. N.M. Emp. Sec. Dep't, 1988-NMSC-089, ¶ 13, 107 N.M. 758, 764 P.2d 1316.

{¶8} With those principles in mind, our Supreme Court has held that '"[m]isconduct' is limited to conduct in which employees bring about their own unemployment by such callousness, and deliberate or wanton misbehavior that they have given up any reasonable expectation of receiving unemployment benefits." Fitzhugh, 1996-NMSC-044, ¶ 42. "The employee's actions may evince a wil[l]ful or wanton disregard of an employer's interests as is exemplified by deliberate violations of or indifference to the employer's reasonable expectations regarding standards of behavior." Id. "The employee's misconduct may demonstrate carelessness or negligence of such degree or recurrence so as to suggest equal culpability, wrongful intent, or evil design, or so as to reveal an intentional and substantial disregard of the employer's interests, or of the employee's duties and obligations to his employer." Id.

{¶9} "In evaluating whether the employee has given up any reasonable expectation of receiving unemployment benefits through conduct that evinces callousness, and deliberate or wanton misbehavior toward the employer's interests and expectations, we look to the 'totality of circumstances' of the case." Id. ¶ 43. "Relevant 'circumstances' can include the employee's past conduct, previous reprimands by the employer, the worker's knowledge of the employer's expectations, the reasonableness of those expectations, and the presence of any mitigating factors." Id. Accordingly, it was Triad's burden to demonstrate "that, under the totality of the circumstances of this case, the violation of a company rule constitute[d] 'misconduct' sufficient to disqualify [Vermillion] from unemployment compensation benefits." Id. ¶ 44.

{¶10} Because "[m]isconduct is a question of fact to be determined from all the attendant circumstances," Sanchez v. N.M. Dep't of Lab., 1990-NMSC-016, ¶ 17, 109 N.M. 447, 786 P.2d 674, we begin by setting out the findings of the Board.

III. The Board's Findings

{¶11} Based on the record before it, the Board made the following findings.

{¶12} While employed by Triad as a Cyber Counterintelligence Officer, Vermillion met a woman on an online dating application and started a relationship with her. Vermillion regularly communicated with the woman from May 2020 through June 2020. In June 2020, Vermillion escalated his interactions with the woman to in-person meetings. In July 2020, Vermillion's interactions with the woman escalated to an intimate relationship. Through Vermillion's interactions with the woman, he identified her as a foreign national from a sensitive country. While engaged in these interactions with the woman, Vermillion knew or at least suspected that there was reason to be concerned about the appropriateness of his relationship with the woman because he initiated an investigation into her background.

{¶13} Triad has a policy requiring the reporting of any personal or professional relationship with a foreign national from a sensitive country. Additionally, Triad has multiple policies defining conflicts of interest and prohibiting any actions that could even be perceived as a conflict. Based on his position with Triad, Vermillion had a heightened responsibility to be aware of the policies and his circumstances. Vermillion was aware of the policies, but he alleged that none were clear in defining "personal relationship." It is unreasonable to assert that the relationship between Vermillion and the woman was not a "personal relationship."

{¶14} Due to his position with Triad and the high-level security clearances he held, Vermillion had...