Richards v. Employment Security Bd. of Review

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NOT DESIGNATED FOR PUBLICATION

No. 118,618

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

LUKE MICHAEL RICHARDS,
Appellant,

v.

EMPLOYMENT SECURITY BOARD OF REVIEW, CECELIA RESNIK, Executive Secretary, and
RILEY COUNTY LAW ENFORCEMENT AGENCY,
Appellees.


MEMORANDUM OPINION

Appeal from Riley District Court; MERYL D. WILSON, judge. Opinion filed August 10, 2018.
Affirmed.

Paul Shipp, of Kansas Legal Services, for appellant.

Justin McFarland, special assistant attorney general, of Kansas Department of Labor, for
appellees.

Before MCANANY, P.J., PIERRON, J., and WALKER, S.J.

PER CURIAM: The Riley County Law Enforcement Agency (RCLEA) fired Luke
Michael Richards after he threatened his coworker. A Kansas Department of Labor
(KDOL) examiner denied his request for unemployment benefits, finding Richards was
ineligible because he was fired for misconduct. An appeals referee for the Employment
Board of Review (Board) upheld the finding of ineligibility. The Board and the district
court both affirmed. Because we find that Richards' appeal from the district court lacks
merit, we affirm the denial of unemployment benefits.

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FACTS

Richards worked for RCLEA as a corrections officer. RCLEA fired him after
finding he had committed improper conduct during a prisoner transport. Police Service
Aide Sarah Hagerty reported that she and Richards were driving four inmates to Riley
County District Court. During the drive, Richards told Hagerty about his wife's most
recent suicide attempt. Richards also said he had held a loaded gun to his head the
previous day. Hagerty stated Richards then told her, "'[I]f you tell anyone this, I will
fucking kill you.'"

Hagerty did not tell anyone about the incident until the next day, when she
mentioned it to two other corrections officers. Those officers took Hagerty to their
supervisor's office to report it. Hagerty later told an internal affairs officer that she was
not sure what Richards was capable of. Hagerty's report led to RCLEA firing Richards.

After being fired, Richards filed a claim for unemployment benefits. In response to
a request for information, RCLEA told the KDOL that it had fired Richards for
threatening a coworker. A KDOL examiner denied Richards benefits, finding RCLEA
discharged Richards for misconduct connected to his work. Richards appealed the
examiner's decision.

An appeals referee for the Board held a telephone hearing on Richards' appeal.
Hagerty was not there to testify. Instead, Christine Robinson, Human Resources
Coordinator, recounted Hagerty's statement. Robinson also testified that Richards had
never received a warning for similar conduct before. She stated that Richards was
familiar with RCLEA's policies about the agency code of conduct, courtesy, and his duty
not to discredit the agency. She said Richards also had signed a sheet saying he had read
each section of the policy manual.

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Robinson explained that the Director of the Riley County Police Department,
Bradley Schoen, ultimately made the decision to fire Richards, so she could not speak to
his reasons for doing so. She added, however, that both an administrative and criminal
investigation had concluded that the incident did happen. And while the county attorney
had declined to prosecute, that was not relevant for employment purposes. Robinson
stated that the RCLEA could not overlook the circumstances because it could result in
public distrust of the agency.

Captain Kurt Moldrup, the Jail Division Commander, testified that he reported the
incident to Schoen, who started an administrative and criminal investigation. Moldrup did
not oversee either investigation. Even so, he knew the criminal investigation had been
sent to the county attorney, who decided not to prosecute. He also knew the
administrative investigation found Richards had violated the policy on unprofessional
conduct and courtesy. Under this policy, "[d]epartment members will not engage in any
conduct that might discredit the members or the department, whether on duty or off
duty." According to Moldrup, all employees must review RCLEA policies upon being
hired and attend an orientation class about these policies.

Moldrup believed Richards had admitted threatening Hagerty. He later clarified
that Richards said he did not remember if the conversation happened, but he did not think
Hagerty was lying. Thus, he concluded that if Hagerty said it happened, then it probably
did happen.

Moldrup said that Schoen ultimately made the decision to fire Richards. Moldrup
was at the hearing and presumed Schoen fired Richards because of the seriousness of the
threat and "the instability of the situation." Moldrup added that Richards was a
probationary employee, so Schoen could fire him at any time at Schoen's discretion. He
also noted that Richards violated another policy by talking about the investigation with
another corrections officer through a text message while the investigation was ongoing.
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Richards also testified at the hearing. He said he did not remember much of that
day because his week had gone poorly. Much of what he knew about the incident came
from what investigators had told him. Contrary to what Moldrup had said, Richards
stated he did not admit to threatening Hagerty. Instead, he said the only way Hagerty
could have known about Richards' wife's suicide attempt was if Richards had said
something. Richards could not recall the conversation he had with Hagerty, but he
normally was not the kind of person to threaten someone, so he did not think he had done
so. He believed Hagerty had simply been talking with her coworkers about how Richards
was depressed and suicidal, and Hagerty just elaborated on the story.

Richards said he was aware of the unprofessional conduct policy, and he was told
he was fired for improper conduct. He believed, however, that his transgender status
affected his termination. According to Richards, he had never received a bad performance
review until he started hormones. Robinson denied that Richards' transgender status had
anything to do with the decision to fire him.

Richards also submitted the report from his criminal investigation as evidence. In
that report, Hagerty told investigators that Richards did not sound like he was joking
when he threatened her. The detective for the criminal investigation also interviewed the
inmates riding with Richards and Hagerty that day, who all said it would have been
virtually impossible for them to have overheard any conversation between the two.
Finally, the detective interviewed Richards, who said Richards did not recall the
conversation but adamantly denied making the threat. Richards added that if he did make
the threat, he did not mean it. The detective concluded that the incident likely occurred
and recommended the case be sent to the county attorney.

The RCLEA also submitted around 50 pages of documentation, including portions
of its policy manual covering unprofessional conduct and the administrative investigation
report. In the report, Richards confirmed that he had held a loaded gun to his head the day
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before the incident because he was suicidal. He told the investigator that he did not
remember the conversation with Hagerty, but the threat did not seem like something he
would say. He also admitted to yelling at an inmate after court that day.

After the hearing, the appeals referee affirmed the examiner's decision, finding:

"In this case, the claimant reasonably owed his employer a duty to interact with his
colleagues in a reasoned and dignified manner as a condition of his employment. He
violated that duty November 7, 2016 when he threatened to physically harm his
coworker. Hagerty did not threaten physical violence against the claimant at any point
and the claimant escalated the situation when he stated, '. . . and Hagerty if you tell
anyone that I will fucking kill you.' This statement expresses intent to cause grave
physical harm against his colleague. The claimant does not recall making the statement,
but does not deny making it. Here, the claimant's behavior constitutes misconduct."

The referee also rejected Richards' claim that his transgender status affected Schoen's
decision, noting Robinson had denied it.

Richards appealed the appeals referee's decision to the Board. The record indicates
that the Board held no hearing and received no additional testimony. The Board affirmed
the referee's decision and adopted its findings of fact. The Board stated it "agrees with the
previous decision made by the Referee."

Richards then petitioned for judicial review. He argued RCLEA had failed to meet
its burden of proof that he violated a duty owed to his employer and that the RCLEA was
unfairly and inconsistently enforcing policies against him because of his transgender
status. He also filed a memorandum in support of his appeal, arguing the appeals referee
had relied on uncorroborated hearsay in making her findings, in violation of K.A.R. 48-1-
4(a)(3) (2017 Supp.).

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The district court affirmed the Board's finding, holding it was supported by
substantial competent evidence. The court explained, "[Richards] never objected to the
introduction of hearsay documents and in fact relied upon the detective's investigative
report in [Richards'] appeal to the referee. Even if [Richards] had objected, the hearsay
evidence was not the only evidence presented."

Richards has timely appealed from the district court's decision.

ANALYSIS

On appeal, Richards argues substantial evidence does not support the appeals
referee's and Board's finding that he committed misconduct. He identifies several errors
he claims were made in reaching this conclusion. First, Richards contends the finding is
based on uncorroborated hearsay in violation of K.A.R. 48-1-4(a)(3) (2017 Supp.). He
also asserts substantial evidence does not support the findings that (1) he violated his
employer's policy or a duty owed to his employer, (2) he was fired because of the threat
he made to Hagerty, and (3) RCLEA fairly and consistently applied its policy on
unprofessional conduct. Finally, Richards argues he qualifies for one of the statutory
exceptions to the rule that employees discharged for misconduct may not receive
unemployment benefits.

The Board does not specifically respond to most of Richards' arguments. Instead,
the Board generally argues the record shows by a preponderance of the evidence that
Richards committed misconduct. It adds that Richards has not shown he qualifies for a
statutory exception.

Disputes relating to the award or denial of unemployment compensation are
subject to review under the Kansas Judicial Review Act (KJRA). Norris v. Kansas
Employment Security Bd. of Review, 303 Kan. 834, 837-38, 367 P.3d 1252 (2016). The
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KJRA defines the scope of judicial review of state agency actions unless the statute
specifically exempts the agency. K.S.A. 2017 Supp. 77-603(a); Ryser v. Kansas Bd. of
Healing Arts, 295 Kan. 452, 458, 284 P.3d 337 (2012). This court exercises the same
statutorily limited review of the agency's action as does the district court, as though the
appeal had been made directly to the appellate court. Kansas Dept. of Revenue v. Powell,
290 Kan. 564, 567, 232 P.3d 856 (2010). On appeal, the burden of proving the invalidity
of the agency action rests on the party asserting that invalidity. K.S.A. 2017 Supp. 77-
621(a)(1); In re Equalization Appeal of Wagner, 304 Kan. 587, 597, 372 P.3d 1226
(2016).

The KJRA outlines eight circumstances under which this court may grant relief.
K.S.A. 2017 Supp. 77-621(c). Richards argues that substantial evidence does not support
the appeals referee's fact-findings, which the Board adopted. See K.S.A. 2017 Supp. 77-
621(c)(7). When reviewing a challenge to an agency's factual findings, this court must
determine whether substantial competent evidence supports the findings in light of the
record as a whole. See K.S.A. 2017 Supp. 77-621(c)(7). "This analysis requires the court
to (1) review evidence both supporting and contradicting the agency's findings; (2)
examine the presiding officer's credibility determination, if any; and (3) review the
agency's explanation as to why the evidence supports its findings. [Citations omitted.]"
Williams v. Petromark Drilling, 299 Kan. 792, 795, 326 P.3d 1057 (2014); see also
K.S.A. 2017 Supp. 77-621(d). Substantial evidence is such legal and relevant evidence as
a reasonable person might accept as sufficient to support a conclusion. Gannon v. State,
298 Kan. 1107, 1175, 319 P.3d 1196 (2014). In reviewing the evidence, we do not
reweigh the evidence or engage in de novo review. K.S.A. 2017 Supp. 77-621(d).

If an employer fires an employee for misconduct related to his or her work, that
employee is ineligible for unemployment benefits. K.S.A. 2017 Supp. 44-706(b). K.S.A.
2017 Supp. 44-706(b)(1) defines misconduct as

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"a violation of a duty or obligation reasonably owed the employer as a condition of
employment including, but not limited to, a violation of a company rule, including a
safety rule, if: (A) The individual knew or should have known about the rule; (B) the rule
was lawful and reasonably related to the job; and (C) the rule was fairly and consistently
enforced."

A single incident of misconduct may disqualify an individual from receiving benefits.
Helmick v. Kansas Employment Security Bd. of Review, 17 Kan. App. 2d 444, 446, 839
P.2d 49 (1992). The employer bears the burden of proving misconduct by a
preponderance of the evidence. Farmland Foods, Inc. v. Abendroth, 225 Kan. 742, 744,
594 P.2d 184 (1979). This standard requires a showing that "'a fact is more probably true
than not true.' [Citation omitted.]" Gannon, 298 Kan. at 1124.

In its brief, the Board argues that Richards committed misconduct by holding a
gun to his head while off duty and discussing the ongoing investigation with a coworker
in violation of an order not to do so. But the appeals referee found only that Richards
committed misconduct by threatening Hagerty. Because this court does not make fact-
findings or engage in de novo review, the only misconduct on review for this appeal is
Richards' alleged threat.

Uncorroborated hearsay

Richards first argues that the appeals referee—and the Board that adopted the
referee's findings—relied only on uncorroborated hearsay when the referee found that
Richards threatened Hagerty. K.A.R. 48-1-4 (2017 Supp.) governs the conduct of the
hearing before the referee. Under that regulation, "[t]he referee shall receive evidence
logically tending to prove or disprove a given fact in issue." K.A.R. 48-1-4(a)(2) (2017
Supp.). Hearsay evidence is admissible "but carries less weight than direct evidence and
shall not be persuasive if the other party contests its admissibility." K.A.R. 48-1-4(a)(2)
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(2017 Supp.). While hearsay evidence is admissible, "[u]ncorroborated hearsay evidence
shall not solely support a finding of fact or decision." K.A.R. 48-1-4(a)(3) (2017 Supp.).

Although neither party has directly raised this omission on appeal, we note that
Richards did not specifically argue that the appeals referee relied on uncorroborated
hearsay in violation of K.A.R. 48-1-4 (2017 Supp.) before reaching the district court
level. Generally, a party may not raise on appeal an issue not raised before the
administrative hearing officer. Mid-West Painting, Inc. v. State Employment Security Bd.
of Review, 26 Kan. App. 2d 266, 269, 984 P.2d 146 (1999). In his appeal to the Board,
however, Richards did argue that there was no evidence to support the referee's findings
because "[h]earsay . . . is not evidence." Nonetheless, we are inclined to consider this
issue despite the appellant's inartful way of raising the argument, particularly because
Richards appealed to the Board pro se.

Richards points out that Hagerty was the only one who heard Richards make a
threat, and Hagerty did not testify at the hearing. But while Hagerty's statement was
hearsay, it was not totally uncorroborated, and it was not the only evidence presented at
the hearing. Richards testified that he could not remember having the conversation with
Hagerty, but he admitted it must have happened. He acknowledged this is the only way
Hagerty could have known about his wife's suicide attempt and that he had held a gun to
his head. And while Richards did not admit threatening Hagerty, he also did not deny it.
He only stated he did not believe he did it because it did not seem like something he
would do.

Finally, Richards admitted into evidence the criminal investigation report, which
included Hagerty's statement as well as the detective's conclusion that the incident likely
occurred. The appeals referee therefore did not rely solely on uncorroborated hearsay in
reaching a decision, though it would have been better practice for Hagerty to have
testified at the hearing.
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Violation of a policy or duty

Richards also contends that (1) RCLEA failed to prove he violated its policy on
unprofessional conduct and (2) substantial evidence does not support the appeals referee's
finding that Richards owed his employer a duty to interact with his coworkers in a
reasoned and dignified manner. As for the RCLEA's unprofessional conduct policy,
Richards states: "[RCLEA] offered no evidence that a private, personal conversation
between two coworkers in the privacy of a transport van, which was not heard by anyone
else might discredit the department, and it is not at all apparent why this might be the
case."

This argument is not persuasive. While the conversation between Hagerty and
Richards was originally private, the record shows it did not stay that way, and Hagerty
was concerned about what Richards could do. Additionally, Richards' conduct could have
led to criminal charges, which would have certainly discredited the RCLEA. In fact,
Robinson testified that if the RCLEA overlooked this incident, it could result in public
distrust of the agency.

As for Richards' duty to act in a reasoned and dignified manner, RCLEA produced
evidence of its policy on unprofessional conduct as well as evidence that Richards was
aware of this policy. An employee would need to act in a reasoned and dignified manner
to avoid discrediting RCLEA or its employees. And even if there is no evidence to
support this finding, the appeals referee also stated in the fact-findings that Richards had
violated RCLEA's unprofessional conduct policy. Thus, substantial evidence supports the
referee's finding that Richards violated a duty owed to his employer.




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Reason for firing

Richards next argues that RCLEA produced no evidence that it fired Richards only
because of the threat he made to Hagerty. He notes that Schoen was ultimately
responsible for the decision to fire Richards, and Schoen did not testify at the hearing.
Neither Robinson nor Moldrup could say for sure why Schoen had decided to fire
Richards. Richards adds that his pretermination hearing notice stated the hearing was
about performance issues and violations of RCLEA policies.

While Schoen did not testify at the appeals referee hearing, other evidence in the
record shows the RCLEA fired Hagerty as a result of the threat he made. The record
contains the final disposition of Richards' internal affairs investigation. That document
shows Schoen found Richards had violated policies about unprofessional conduct,
courtesy, and lawful order, and recommended dismissal for all three violations. RCLEA
also informed KDOL that it fired Hagerty because he threatened a coworker. And while
Moldrup could not testify about why Schoen decided to fire Richards, he was present at
the hearing and could presume the reason was the threat Richards made to Hagerty.
Finally, Richards testified he was told he was fired for improper conduct.

Richards cites Sabatino v. Employment Security Bd. of Review, No. 116,322, 2017
WL 2212116 (Kan. App. 2017) (unpublished opinion), to support his argument that "it is
inappropriate for this court or any court to speculate or divine a reason for [Richards']
firing that the employer did not offer." In Sabatino, the employer originally fired the
employee for insubordination and inefficiency, but the parties later stipulated that the
employee was fired only for inefficiency. Despite the stipulation, the Board found that
the employee was fired for misconduct. This court reversed, finding the Board could not
ignore the stipulation and substantial competent evidence did not support its finding.
2017 WL 2212116, at *7.

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Sabatino does not help Richards. Here, the parties have not stipulated to a cause
for Richards' firing. And RCLEA presented Richards' threat as the primary reason it fired
him. The Board thus did not find RCLEA fired Richards for a reason other than the one
RCLEA offered.

Fairly and consistently applied

Richards also argues that RCLEA failed to show it fairly and consistently enforced
its unprofessional conduct rule. He points to his testimony that he believed his
transgender status influenced RCLEA's decision to fire him. The appeals referee rejected
this claim, however, noting that Robinson denied that Richards' transgender status had
anything to do with the decision to fire him. And while Richards testified he had never
received a bad performance review before he began transitioning, RCLEA did not fire
Richards for bad performance. As the referee stated, Richards physically threatened a
coworker, which violated the unprofessional conduct policy. See Rhodenbaugh v. Kansas
Employment Sec. Bd. of Review, 52 Kan. App. 2d 621, 633, 372 P.3d 1252 (2016)
(finding nothing in record shows employer failed to enforce rule fairly and consistently).

Statutory exceptions

Finally, Richards argues he still qualifies for unemployment benefits because he
meets a statutory exception to the general rule on discharge for misconduct. As he points
out, an individual "shall not be disqualified" from unemployment benefits if the
individual was making a good-faith effort to do the assigned work but was discharged
because of "isolated instances of ordinary negligence" or "good-faith errors in judgment
or discretion." K.S.A. 2017 Supp. 44-706(b)(4)(B)(iii) and (iv). He argues the appeals
referee should have found he still qualified for benefits under these exceptions.

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Richards did not raise this argument in his petition for judicial review, so this
court lacks jurisdiction over it. See Kingsley v. Kansas Dept. of Revenue, 288 Kan. 390,
397, 204 P.3d 562 (2009). That said, this argument lacks merit. Richards does not explain
how threatening a coworker with physical harm occurred as part of a good-faith effort to
do his assigned work, nor is it clear how it would be.

CONCLUSION

In conclusion, substantial evidence supports the finding that Richards committed
misconduct by physically threatening a coworker. Richards also does not qualify for a
statutory exception which would allow him to collect unemployment benefits despite
being discharged for misconduct.

Affirmed.