Franklin Collection Service, Inc. v. Mississippi Department of Employment Security

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2014-CC-01445-COA

FRANKLIN COLLECTION SERVICE, INC. APPELLANT

v.

MISSISSIPPI DEPARTMENT OF APPELLEES
EMPLOYMENT SECURITY AND ELIZABETH
THOMAS

DATE OF JUDGMENT: 09/04/2014
TRIAL JUDGE: HON. JAMES LAMAR ROBERTS JR.
COURT FROM WHICH APPEALED: LEE COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT: MICHAEL D. CHASE
ATTORNEYS FOR APPELLEES: ALBERT B. WHITE
LEANNE FRANKLIN BRADY
ELIZABETH THOMAS (PRO SE)
NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES
TRIAL COURT DISPOSITION: AFFIRMED DECISION OF THE
MISSISSIPPI DEPARTMENT OF
EMPLOYMENT SECURITY’S BOARD OF
REVIEW
DISPOSITION: AFFIRMED - 12/15/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

BEFORE GRIFFIS, P.J., MAXWELL AND JAMES, JJ.

MAXWELL, J., FOR THE COURT:

¶1. When the Mississippi Department of Employment Security’s Board of Review

justifies its factual findings with evidence, those findings shall be conclusive.1 And when

the Board’s factual findings are conclusive, our appellate review focuses solely on questions

1
Jackson Cnty. Bd. of Sup’rs v. Miss. Emp’t Sec. Comm’n, 129 So. 3d 178, 183 (¶13)
(Miss. 2013) (citing Miss. Code Ann. § 71-5-531 (Rev. 2011)).
of law.2

¶2. In this unemployment-benefits case, the Board found Franklin Collection Services,

Inc. employee Elizabeth Thomas’s productivity was low, so Franklin was justified in

terminating Thomas. But the Board found Thomas’s low productivity did not amount to

misconduct. So she was not disqualified from receiving unemployment benefits.

¶3. After review, we find the Board supported its decision that Thomas did not commit

disqualifying misconduct with substantial evidence. Because of this conclusive finding, our

review is strictly limited to deciding whether the Board used the correct legal standard for

determining employee misconduct. After review, we find it did. Therefore, we affirm.

Background Facts and Procedural History

I. Thomas’s Employment with Franklin

¶4. Thomas started working at Franklin in April 2012. She was originally hired as a

collector. But when this position proved too difficult for her, rather then terminating

Thomas, Franklin demoted her to “sorter.” As a sorter, Thomas was tasked with calling

debtors. And when she got a debtor on the line, she was to transfer the debtor to a collector.

Thomas was expected to make twenty-five transfers a day. She was also supposed to write

100 collection letters, which the company referred to as “GZs.”3

¶5. According to Franklin, Thomas was not keeping up with this schedule, prompting a

2
Id.
3
Apparently, “GZ” is not short for anything. Rather, it is simply what Franklin calls
this type of correspondence.

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written warning in April 2013. Then, in July 2013, there were several days where Thomas

transferred little to no calls to collectors and wrote a scant amount of GZs. After giving

Thomas a verbal warning at the beginning of the week, Franklin terminated her on Friday,

July 26, citing her “lack of production” and failure “to turn the situation around.”

¶6. Thomas sought unemployment benefits from the Mississippi Department of

Employment Security (MDES). Initially, MDES deemed her disqualified to receive benefits

because she had been discharged due to misconduct connected with work. See Miss. Code

Ann. § 71-5-513(A)(1)(b) (Supp. 2015).4

II. Administrative Hearing

¶7. Thomas appealed and was granted a telephonic administrative hearing. At this

hearing, Julie Johnson, vice-president of portfolio management, testified for Franklin.

Johnson was the one who had told Thomas she was fired. According to Johnson, Thomas

“was not doing anything during work.” Thomas had established a pattern of being paid for

eight hours of work, when she only worked two to three hours during her shift. For example,

on July 9, Thomas only worked on eight accounts. And on July 25, Thomas clocked in nine

4
Under section 71-5-513(A)(1)(b):

An individual shall be disqualified for benefits . . . [f]or the week, or fraction
thereof, which immediately follows the day on which he was discharged for
misconduct connected with his work, if so found by the department, and for
each week thereafter until he has earned remuneration for personal services
performed for an employer, as in this chapter defined, equal to not less than
eight (8) times his weekly benefit amount, as determined in each case.

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hours, but only spent 3.7 “on the dialer,” trying to call debtors. When asked by the

administrative judge (AJ) what Thomas was doing instead, Johnson said Thomas was at her

work station, but there was “a lot of talking going on.” Johnson said she had tried to talk to

Thomas about “wasting a lot of time” at work.

¶8. Thomas also testified. She admitted she had been discharged for not keeping up with

production—and that Franklin had talked to her about it. But Thomas pointed out most of

the corrective-action forms in her employment file stemmed from her past job as a collector.

Thomas had only been given one written warning as a sorter. Thomas told the AJ, “I felt like

I did my job.” Thomas explained that, if she was not on the dialer, she was writing GZs.

Thomas admitted there were days when she only transferred one or two calls. But she said

there had been problems with wrong phone numbers and disconnected phone lines. Thomas

remembered just one day when she wrote only fifty GZs—but her time was spent updating

accounts that day. Thomas claimed she was not the only employee who struggled with low

production. So it was unfair that Franklin singled her out.

¶9. The AJ asked Thomas about talking during work. Thomas insisted Franklin had a

social atmosphere where employees sat together. And there were no rules prohibiting

talking. Thomas impressed on the AJ that she had tried to be a good employee. She felt she

did her job to the best of her ability.

¶10. In rebuttal, Johnson pointed out Franklin would have credited Thomas for calling a

number that had been disconnected. She closed by saying Thomas had been fired because

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of her “unwillingness to do her job.”

¶11. After this hearing, the AJ issued an opinion awarding Thomas benefits. Franklin had

proved Thomas failed to meet her quotas, justifying her termination. But that is all it

proved—low productivity. Beyond showing Thomas “may have socialized too much,”

Franklin had no evidence Thomas’s low productivity was accompanied by the type of willful

or wanton acts or omissions necessary to meet the definition of “misconduct.” See Wheeler

v. Arriola, 408 So. 2d 1381, 1383 (Miss. 1982).

III. Appeals

¶12. Franklin appealed to MDES’s Board of Review. After review, the Board adopted the

AJ’s findings of facts and opinion. Franklin then appealed to the Lee County Circuit Court,

which affirmed the Board’s decision. Franklin now appeals to this court, challenging the

Board’s finding that Thomas was not discharged for misconduct connected to her work.

Discussion

I. Review of an Agency Decision

¶13. Franklin faces an uphill battle on appeal. “[A] rebuttable presumption exists in favor

of the administrative agency[,]” so Franklin “has the burden of proving otherwise.” Jackson

Cnty. Bd. of Sup’rs v. Miss. Emp’t Sec. Comm’n, 129 So. 3d 178, 183 (¶13) (Miss. 2013)

(quoting Miss. Emp’t Sec. Comm’n v. Harris, 672 So. 2d 739, 743 (Miss. 1996)). “All levels

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of judicial review focus on the decision of the [MDES5] Board of Review, as that is the final

decision of the agency.” Id. (citing Miss. Code Ann. § 71-5-531 (Supp. 2015)). “[T]he

findings of the Board of Review as to the facts, if supported by evidence and in the absence

of fraud, shall be conclusive, and the jurisdiction of said court shall be confined to questions

of law.” Id.

II. Finding of Fact, Not Question of Law

¶14. With this standard in mind, Franklin frames its first argument as a question of law.

It argues the Board made a legal error by concluding low productivity cannot be considered

disqualifying misconduct, even when such low productivity resulted from a lack of effort.

However, this argument assumes Franklin proved Thomas’s low productivity resulted from

her lack of effort. But this is not what the Board found.

¶15. In her findings of fact, which the Board adopted, the AJ did find Thomas failed to

meet her required quotas. But the AJ did not find Thomas’s failures were attributable to a

lack of effort. At most, Franklin had proven Thomas “may have socialized too much.” But

the AJ found this evidence was insufficient to prove willful and wanton behavior rising to

the level of misconduct, as defined in Wheeler, 408 So. 2d at 1383.

¶16. According to Wheeler, “[m]ere inefficiency, unsatisfactory conduct, failure in good

performance as the result of inability or incapacity, or inadvertences and ordinary negligence

5
The Mississippi Department of Employment Security was formerly known as the
Mississippi Employment Security Commission and is often still referred to by that name.

6
in isolated incidents, and good faith errors in judgment or discretion [are] not considered

‘misconduct’ within the meaning of the statute.” Id.; see, e.g., Miss. Emp’t Sec. Comm’n v.

Johnson, 9 So. 3d 1170, 1174 (¶11) (Miss. Ct. App. 2009) (finding a receptionist’s “failure

to complete [her] work projects [was] the result of simple inability, inefficiency, lack of

training, and/or inexperience”—not misconduct). Instead, “misconduct” is “conduct

evincing such willful and wanton disregard of the employer’s interest as is found in

deliberate violations or disregard of standards of behavior which the employer has the right

to expect from his employee.” Wheeler, 408 So. 2d at 1383; see e.g., Reeves v. Miss. Emp’t

Sec. Comm’n, 806 So. 2d 1178, 1179 (¶7) (Miss. Ct. App. 2002) (finding a metal fabricator

who refused to clean up parts he burnt, after being expressly asked to do so by his supervisor,

was terminated for misconduct). “[C]arelessness and negligence of such degree, or

recurrence thereof, as to manifest culpability, wrongful intent or evil design, and showing an

intentional or substantial disregard of the employer’s interest or of the employee’s duties and

obligations to his employer . . . [also fall] within the term.” Id.

¶17. In concluding Thomas was not terminated for misconduct, the AJ and Board applied

the correct legal definition of misconduct. But the AJ and Board simply found, as a factual

matter, Franklin failed to meet its “burden of proving misconduct by substantial, clear, and

convincing evidence.” Jackson Cnty. Bd. of Sup’rs, 129 So. 3d at 183 (¶12) (citing Miss.

Code Ann. § 71-5-513(A)(1)(c); Foster v. Miss. Emp’t Sec. Comm’n, 632 So. 2d 926, 927

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(Miss. 1994)).6 So Franklin’s real problem with the Board’s decision has to do with its

finding of fact, not its conclusion of law.

III. Substantial Evidence Supporting the Board’s Decision

¶18. Mississippi law directs we approach this finding of fact deferentially. “Under our

standard of review, even if there is evidence which would have supported a different result,

we will not disturb a decision of the [Board] that is supported by substantial evidence.” Id.

at 184 (¶16).

¶19. While perhaps not quite as clear and convincing as Franklin suggests, we do recognize

Franklin presented evidence supporting its position that Thomas willfully disregarded her

employer’s interest by not doing her job. But Thomas countered Franklin’s evidence. She

testified she had always worked to the best of her ability, and factors outside of her control

had contributed to her missing her quotas. And the Board was obviously swayed to some

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On appeal, Franklin contends the employer’s evidentiary burden should be
downgraded from clear and convincing evidence of misconduct to a mere preponderance
because section 71-5-513(A)(1)(c) is silent about the matter. But our supreme court has
been clear and consistent on this issue for a quarter century. In 1989, the supreme court,
keeping in mind the public policy of Mississippi’s unemployment-benefits statutes, held
“that in unemployment compensation cases, the employer bears the burden to prove by
substantial, clear, and convincing evidence that a former employee’s conduct warrants
disqualification of benefits.” Shannon Eng’g & Constr., Inc. v. Miss. Emp’t Sec. Comm’n,
549 So. 2d 446, 450 (Miss. 1989). And even after subsection (A)(1)(c) was added to section
71-5-513, the supreme court has not waivered from this standard. As recently as 2013, the
supreme court reiterated “[t]he employer bears the burden of proving misconduct by
substantial, clear, and convincing evidence[,]” which “requires proof beyond a mere
preponderance of the evidence.” Jackson Cnty. Bd. of Sup’rs, 129 So. 3d at 183 (¶12)
(citing Shannon Eng’g & Const., 549 So. 2d at 450 n.1).

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extent by her testimony.

¶20. While we certainly may have weighed this evidence differently than the Board, our

role is not to reevaluate the evidence to ask if Thomas’s low productivity resulted from

misconduct. See id. at 183-84 (¶¶15-16). Rather, we ask—Is the Board’s finding of no

misconduct supported by substantial evidence? See id. And after review, we find it is. The

Board supported its decision with substantial evidence, namely, the testimony of Thomas,

whose credibility was a matter for the Board—not this court—to decide. See id. at 183 (¶15).

And “[w]here there is substantial evidence, an agency’s fact finding must be allowed to stand

even though there might be room for disagreement on that issue.” Id. (citations omitted).

¶21. “An employee’s conduct may constitute grounds for termination, yet be insufficient

to constitute misconduct disqualifying the claimant from unemployment benefits.” Id. at

(¶11). The Board found Thomas’s low production justified termination—but not

disqualification from unemployment benefits. As the Board supported its decision with

substantial evidence, we must defer to this decision as conclusive.

IV. No Violation of a Uniformly Enforced Rule

¶22. Franklin alternatively argues the Board erred in applying the “uniformly enforced

rule” principle. Violating an employer’s rule, which is known (actually or constructively),

reasonably related to the job, and fairly and consistently enforced, is another way for an

employee to commit disqualifying conduct under section 71-5-513(A)(1)(b). See MDES

Reg. 308.00.

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¶23. In her decision, the AJ found Franklin presented “no evidence of a violation of a

uniformly enforced rule.” While Johnson had “indicated that [Thomas] may have socialized

too much,” Franklin had “no rule against talking and all of they employees talked while they

worked.” On appeal, Franklin agrees, insisting “it did not terminate Ms. Thomas for

disobeying a rule, but rather for failing to perform the duties for which she was hired.” So

we fail to see how the Board could have possibly erred in agreeing with the AJ—and

Franklin—that there was no evidence Thomas was discharged for violating an employer rule.

¶24. THE JUDGMENT OF THE LEE COUNTY CIRCUIT COURT IS AFFIRMED.

LEE, C.J., IRVING AND GRIFFIS, P.JJ., ISHEE, CARLTON, FAIR, JAMES
AND WILSON, JJ., CONCUR. BARNES, J., NOT PARTICIPATING.

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