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Archive for April 5th, 2010

Employee Not Entitled to Unemployment for Gross Misconduct, Even If Following Orders

Monday, April 5th, 2010

According to a recent unpublished Appellate Division decision, an employee is not entitled to unemployment benefits where she engaged in gross misconduct, even if she did so at the direction of her employer. 

In Fore v. Board of Review, Docket No. A-0830-08T2 (App. Div. Apr. 5, 2010), the employee-nurse was terminated by Robert Wood Johnson University Hospital (the “Hospital”) after she admitted that she had made various notations and assessments on a patient’s chart, even though she had not actually seen that patient.   The employee acknowledged that standard nursing practices prohibited making notations without seeing a patient, that she recorded verbatim the doctor’s assessment of the patient, and that she simply did what she was instructed to do.  In this regard, she claimed that her actions were consistent with the procedure that was in place in the department.  She further testified that she had complained about this procedure to various supervisors, but that she was criticized if she did not complete the report as directed.

Despite this testimony, both the Board of Review and the Appellate Division held that the employee was not entitled to unemployment benefits.  Initially, the court noted that employees are not eligible for unemployment if they are terminated for “‘gross misconduct.”   Here, the employee created records which falsely indicated that the employee and Hospital had provided certain benefits; the Appellate Division held that this constituted gross misconduct, and possible criminal violations.

Thus, the primary issue before the court was whether the employee should be excused because she was following orders.  The Appellate Division found that there was ample evidence to support the Board of Review’s decision to deny the employee unemployment benefits: 

There is substantial evidence in the record to support the findings of the Appeal Tribunal and, in turn, of the Board of Review. The Tribunal added that claimant had her professional obligations not to follow improper or inappropriate instructions from people (including the chief radiation technician Foley) who were not nurses. The Appeal Tribunal also expressly added it did not “doubt that the claimant was told to complete the charts as she had been” or that her “workload was possibly too much for one person to handle.” It stated that “[n]one of that[,] however, relieves the claimant of the obligation to act in a manner consistent with her licensure,” or excuses the indication on medical records “that she had performed the assessments” which she had not.

Therefore, the record also includes sufficient evidence that claimant misrepresented that she performed professional assessments that she had not and, that by doing so, she violated a section of the New Jersey Code of Criminal Justice, N.J.S.A. 2C:21-4.1. There is no requirement or policy requiring a conviction to preclude unemployment benefits, cf. In Re Election Law Enforcement Comm’n, __ N.J. __ (2010) (use of campaign funds not proper to defend indictment for crime), and even if Robert Wood Johnson or its staff was not deceived or mislead, we can take notice that pain assessment reports can be reviewed to evaluate regulatory compliance and insurance recoveries.  Accordingly, the record supported the denial of benefits under N.J.S.A. 43:21-5(b) for “gross misconduct.”

After finding that there was substantial evidence of misconduct, the Appellate Division rejected the employee’s “Nuremberg Defense” that she was simply following improper — and potentially illegal — orders.

Were we to accept claimant’s argument that she should receive unemployment benefits when discharged for falsifying a report, or because she did not “deceive or mislead any person as to information . . . concerning the patient,” we would be permitting wrongdoing and suppressing the truth about misconduct by encouraging employers to retain wrongdoers who follow their supervisors’ unlawful commands——and would be acting inconsistent with public policy established in legislation such as the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8, and our common law jurisprudence. See, e.g., Tartaglia, supra, House v. Carter-Wallace, Inc., 232 N.J. Super. 42 (App. Div.), certif. denied, 117 N.J. 154 (1989). Stated differently, if we took the position advanced by appellant we would encourage employers to retain wrong doers as a means of avoiding unemployment compensation losses.

Finally, the court noted  that, while the employee was not entitled to unemployment benefits, she might be entitled to recover against the Hospital for alleged violations of the New Jersey Conscientious Employee Protection Act (“CEPA”), which prohibits employers from taking retaliatory action against employees who complain about violations of law or public policy.  See here for more information regarding CEPA.

Although the Appellate Division’s insistence on personal responsibility may be laudable, in practice it may put an employee in an untenable Catch-22.  An employee has the option of objecting to perceived illegal conduct but, if the complaint falls on deaf ears, the employee’s options are limited, and unpleasant.  1.  Continue to follow orders, with the understanding that the employee may be personally liable for illegal activity and, if then fired, not be able to receive unemployment benefits; 2. refuse to follow orders, and suffer potential retaliation, including ostracism and termination for insubordination; 3.  quit and try to find another job (which may be difficult in the current economic situation).  An employee who is facing potential retaliation or dismissal for raising concerns of illegal activity should therefore seriously consider consulting an attorney before the situation devolves into the one at issue in Fore.  

The employer in Fore may have also won a Pyrrhic victory.  Although it prevailed on the unemployment compensation dispute, it has received a judicial ruling that one of its employee engaged in potentially illegal conduct,  and it appears that it is facing a fairly substantial CEPA claim, with the employee claiming that the Hospital routinely directed her to routinely engage in this misconduct.  Further, the opinion indicates that the Hospital may have routinely and falsely billed insurance companies, and the government, for work that was not performed (possibly in violation of the False Claims Act, as well as other statutes).  In this regard, it is unclear exactly what happened to the employee’s complaints, and whether they were ever elevated and/or whether the Hospital ever investigated these issues.  As a result, the Hospital may have also put itself into a Catch-22: if they didn’t terminate the employee for improper activity, it may have looked like they endorsed the conduct; by terminating her, however, they may have bought a CEPA claim, as well as a judicial opinion publicizing potential illegal systemic activity.  This is  a strong reminder to employers to take complaints seriously, and to act on them promptly, in the hope of avoiding precisely this type of situation.

A copy of the Fore decision is available from the author, upon request.