WHITE WATER CONSTRUCTION, Inc., Respondent,
v.
STATE OF WASHINGTON EMPLOYMENT SECURITY DEPARTMENT, Appellant.
No. 37414-9-III
Court of Appeals of Washington, Division 3
January 19, 2021
UNPUBLISHED OPINION
FEARING, J.
This appeal raises questions surrounding judicial review of an administrative agency's findings of fact and concerning disqualification for unemployment compensation based on alleged employee misconduct. The superior court reversed a ruling of the Employment Security Department (ESD) commissioner that granted Fred Stevens unemployment benefits. Because substantial evidence supported one of the commissioner's rulings, we reverse the superior court. Because of the lack of an explicit finding on another important issue, we remand to the ESD commissioner to enter further findings of fact.
FACTS
We borrow our facts primarily from the administrative record. We emphasize the administrative law judge's (ALJ's) and the ESD commissioner's findings of fact and conclusions of law.
Beginning on August 6, 2018, Fred Stevens worked for respondent White Water Construction, Inc. as a construction foreman. Stevens completed time sheets pursuant to White Water's payroll policy.
On August 27, 2018, Fred Stevens injured his right hand while at work. The injury required surgery. After Stevens' surgery, he required time off work, and White Water Construction placed him on Kept-on-Salary (KOS) status. KOS allowed Stevens to continue to receive full pay regardless of the hours he worked or his temporary disability status. White Water did not require Stevens, while he was on KOS, to prepare time sheets. Stevens, with White Water's knowledge, opened an industrial insurance claim with the Department of Labor & Industries (DLI).
In mid-December 2018, Fred Stevens returned to work for White Water Construction and performed light duty. He did not always work full shifts, due to medical and physical therapy appointments.
On January 7, 2019, White Water Construction, while Fred Stevens remained on light duty, directed Stevens to resume submitting time sheets, including a sheet for the previous pay period, December 24, 2018 through January 6, 2019. According to Stevens, he did not understand the need to prepare time sheets because he remained on KOS while he worked light duty. Stevens attempted to clarify the procedure regarding his KOS status with his DLI case manager, but could not reach her. Stevens sought to ask White Water representatives about the direction to complete a time sheet, but neither the office manager nor the owner was present in the office. In the past, Stevens communicated with White Water's owner, Wayne Terry, via text messages. Stevens did not text Terry on this occasion.
According to Fred Stevens, when he completed the time sheet for December 24 to January 6, he was uncertain as to whether he remained on KOS, since no recent paperwork confirmed this status. Stevens also believed that White Water Construction would pay him for holidays, because, according to Stevens, Wayne Terry informed him that, "' I will pay you for the holidays.'" Administrative Record at 51, 53. Therefore, he inserted hours on the time sheet for holidays. He also incorporated time for hours he spent at physical therapy and placed those hours in parentheses. His completed time sheet read:
-
-
Date
Description
Hrs Worked
12/24
Xmas Eve 8-2
6.0 (+4.0)
12/25
Xmas day
10
12/26
8-5 ½ lunch
8.5 (+1.5)
12/27
sick day pay
10
12/31
New Years [sic] Eve
10
01/01
New Years [sic] Day
10
01/02
9 (+1)
01/03
9 (+1)
-
See AR at 69-70. Stevens believed that, if he provided erroneous information on his time sheet, White Water would correct the error.
Since 1984, White Water Construction had not paid employees for holidays unless they performed work on those days. At an evidentiary hearing, Wayne Terry denied telling Fred Stevens that the construction company would pay him for unworked holidays.
At 5:00 p.m. on January 9, 2019, Fred Stevens submitted his time sheet for December 24 to January 6. He expected to speak with Wayne Terry the following day about the sheet.
White Water's Office Manager, Jan Kopet, had prepared notes of when Fred Stevens arrived at and left work. Her notes reflected that Stevens worked the following hours:
-
-
-
Date
Hours Mr. Steven Actually Worked
12/24
6.0
12/25
0
12/26
4.25
12/27
0
12/31
8
01/01
0
01/02
8
01/03
8
-
-
See AR at 109-10. Jan Kopet compared her notes with Fred Stevens' completed time sheet and found that the two did not match.
Wayne Terry and Jan Kopet concluded that Fred Stevens fabricated his time sheet. On January 10, 2019, Wayne Terry fired Fred Stevens from White Water Construction employment for falsifying the time sheet.
After his termination from employment at White Water Construction, Fred Stevens applied for unemployment compensation with ESD. ESD initially granted the application and began payments to Stevens. ESD later denied Stevens' application after determining that Stevens falsified his time sheet and the falsification constituted misconduct that disqualified him from benefits. ESD issued a written determination letter, which denied Stevens future benefits and demanded repayment of $2, 690 in benefits received since January 6, 2019.
Fred Stevens appealed ESD's decision to the Office of Administrative Hearings. In response to the appeal, White Water Construction argued that Fred Stevens falsified his time sheets when he claimed hours that he had not worked for two holidays and when he claimed extra hours on work days beyond those he worked.
An administrative law judge conducted an evidentiary hearing. During the evidentiary hearing, Fred Stevens testified:
JUDGE BEEBE: And does anything limit your ability to accept a job, such as injury, illness, or childcare
MR. STEVENS: No.
JUDGE BEEBE: Are you available to work any hours that would be offered to you?
MR. STEVENS: Yes.
AR at 32.
Wayne Terry cross-examined Stevens at the hearing:
Q: [MR. TERRY] Yeah, I, uh, would like to ask him, um, if you had questions and you were only 20 steps away from the office, why did you not ask for clarification?
A: [MR. STEVENS] I believe that would be under the hostile environment that you created, I did not feel welcome or that I could proceed. I was waiting for L&I to respond, my caseworker, to my request for a callback.
AR at 56.
Wayne Terry testified during the evidentiary hearing:
MR. TERRY: Well, he [Fred Stevens]-it shows that he worked ten hours on New Year's Eve and ten hours on New Year's Day, and he showed that he worked nine hours on the 1st and nine hours, um, uh, on the 2nd and on the 3rd, and those are all false. Um, also, on the previous time sheet, which is, uh, Supplemental Page 58, um, on the 24th-uh, correction. On the 26th, he worked 4 hours and 15 minutes and claimed 8 and a half.
AR at 38.
Following the evidentiary hearing, the ALJ affirmed ESD's decision to deny Fred Stevens unemployment compensation. The ALJ determined, in a written order, that, although Stevens was able and available to work, White Water Construction discharged him for misconduct. The ALJ further ruled that Stevens did not qualify for a waiver of the overpayment and must repay the benefits he received. Fred Stevens submitted a petition for review of the ALJ's decision with the ESD commissioner.
During the ALJ hearing, Fred Stevens did not state that he was disabled. In Stevens' petition to the ESD commissioner, however, he sought release from the duty to return benefits received, while claiming:
Repayment of benefits received would cause an unfair hardship for me. I am now a disabled employee after being injured while working with this employer [White Water Construction]. I am an unemployed father who has sole custody of three teenaged children. There should be no overpayment in this case due to the financial burden this would place upon me.
AR at 136 (emphasis added). White Water Construction replied to the petition:
Additionally, Fred makes a statement. . . where his quote states that he is now a disabled employee after being injured while working with this employer... That is not a valid statement.
I [owner Wayne Terry] talked with Labor & Industries and it has never been established that he is 'disabled' from working with White Water Construction, Inc. As of June 11th, 2019, no paperwork has been received from L & I to substantiate any claim of 'disability'. They [sic] do show that he was injured-not disabled. Again, he was released on December 18, 2018 to be able to work without restrictions.
AR at 140 (boldface and underline in original).
The ESD commissioner issued a decision that adopted and augmented the ALJ's findings of fact and conclusions of law. The Commissioner agreed that Fred Stevens was able and available to work, but rejected the ALJ's conclusion that Stevens committed misconduct. Stevens instead, according to the commissioner, committed a mistake. The commissioner ruled that Fred Stevens was entitled to benefits and need not return any payments received. The ESD Commissioner entered the following findings of fact:
Findings of Fact Nos. 3 and 4 [of the ALJ] are adopted and are augmented. On August 27, 2018, while at work, the claimant's hand was injured. The employer was notified, and the claimant proceeded to an emergency room for medical attention. The claimant required surgery and was unable to work for...
