Marc A. Schwartz v. James Neely, Commissioner of Labor & Workforce Development of the State of Tennessee

IN THE COURT OF APPEALS OF TENNESSEE
AT MEMPHIS
January 23, 2008 Session

MARC A. SCHWARTZ v. JAMES NEELY, COMMISSIONER OF LABOR
& WORKFORCE DEVELOPMENT OF THE STATE OF TENNESSEE,
ET AL.

Direct Appeal from the Chancery Court for Shelby County
No. CH-07-0067 Walter E. Evans, Chancellor

No. W2007-01862-COA-R3-CV - Filed February 28, 2008

This appeal arises from the denial of Plaintiff’s claim for unemployment benefits by the Tennessee
Department of Labor and Workforce Development. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed; and
Remanded

DAVID R. FARMER , J., delivered the opinion of the court, in which ALAN E. HIGHERS, P.J., W.S., and
W. FRANK CRAWFORD , J., joined.

Dan Norwood and Jerry H. Schwartz, Memphis, Tennessee, for the appellant, Marc A. Schwartz.

Robert E. Cooper, Jr., Attorney General and Reporter, and Lauren S. Lamberth, Assistant Attorney
General, for the appellee, James Neely, Commissioner of Labor & Workforce Development of the
State of Tennessee.

Colby S. Morgan, Jr., Memphis, Tennessee, for the appellee, Federal Express Corporation.

MEMORANDUM OPINION1

This dispute concerns the denial of Plaintiff’s claim for unemployment benefits. The facts
giving rise to this case are largely undisputed. Beginning January 2002, Plaintiff Marc A. Schwartz

1
Rule 10 of the Rules of the Court of Appeals of Tennessee provides:

This Court, with the concurrence of all judges participating in the case, may affirm, reverse
or modify the actions of the trial court by memorandum opinion when a formal opinion would have
no precedential value. W hen a case is decided by memorandum opinion it shall be designated
“MEMORANDUM O PINION”, shall not be published, and shall not be cited or relied on for any
reason in any unrelated case.
(Mr. Schwartz) was employed as a ramp agent with Defendant Federal Express (“Fed Ex”). On
August 19, 2006, Mr. Schwartz was “partying” at the home of a friend, Martin Lichterman (Mr.
Lichterman), a former Fed Ex employee. At approximately 1:00 a.m., Mr. Lichterman asked Mr.
Schwartz for the personal cell phone number of Jason Fisher (Mr. Fisher), Mr. Schwartz’s manager
at Fed Ex. Mr. Schwartz provided Mr. Fisher’s telephone number, and Mr. Lichterman proceeded
to place an undisputedly rude, obscene and threatening message on Mr. Fisher’s voice mail. Mr.
Fisher retrieved the message at approximately 7:00 a.m. Mr. Fisher notified Fed Ex security. Mr.
Lichterman was identified as the caller and, when questioned, stated that he and Mr. Schwartz had
been drinking together when Mr. Lichterman placed the call. When Mr. Fisher questioned Mr.
Schwartz about the incident, Mr. Schwartz initially denied any knowledge. When Mr. Fisher told
Mr. Schwartz that he knew the call had been placed by Mr. Lichterman, and that Mr. Schwartz and
Mr. Lichterman had been together the previous evening, Mr. Schwartz admitted to providing Mr.
Fisher’s telephone number and to knowing about the phone call. Ultimately, Fed Ex terminated Mr.
Schwartz’s employment on August 23, 2006.

In September 2006, Mr. Schwartz filed a claim for unemployment benefits with the
Tennessee Department of Labor and Workforce Development (“the Department”). On his “claimant
separation worksheet,” Mr. Schwartz noted that he had been discharged for “violation of company
policy.” The Department denied Mr. Schwartz’s claim upon determining he had been terminated
for work-related misconduct and that, as a student at Southwest Tennessee Community College, he
was not available for full-time employment during working hours. Mr. Schwartz appealed the
Department’s decision to the Appeals Tribunal. Following a telephone hearing on November 14,
2006, the Appeals Tribunal determined Mr. Schwartz was available for work as required by
Tennessee Code Annotated § 50-7-302(a)(4). However, it affirmed the Department’s denial of
benefits based on work-related misconduct under Tennessee Code Annotated § 50-7-303(a)(2). Mr.
Schwartz appealed the Appeals Tribunal’s determination to the Board of Review, which affirmed.

Mr. Schwartz petitioned for review in the Chancery Court for Shelby County pursuant to
Tennessee Code Annotated § 50-7-304(i). The only issue presented for the trial court’s review was
whether the Mr. Schwartz’s claim for unemployment benefits was properly denied on the basis of
work-related misconduct under Tennessee Code Annotated § 50-7-303(a)(2). Following a hearing
on April 20, 2007, the trial court affirmed the decision of the Board of Review. Mr. Schwartz filed
a timely notice of appeal to this Court. We affirm.

Issue Presented

The issue as presented by Mr. Schwartz in his brief to this Court is:

Whether a current employee’s act of giving a former employee the phone number of
the current employee’s supervisor, where the supervisor is a known acquaintance of
the former employee, the current employee is off-duty and not on employer property
when he gives the former employee the supervisor’s number, and the former
employee uses the phone number to make an inappropriate phone call to the

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 supervisor, is misconduct connected with work that justifies denial of unemployment
benefits under Tennessee Code Annotated § 50-7-303(a)(2).

Standard of Review

Tennessee Code Annotated § 50-7-304(i)(2)-(3) provides the standard of review to be
utilized by the courts when reviewing the Board of Review’s determination. The code provides:

(2) The chancellor may affirm the decision of the board or the chancellor
may reverse, remand or modify the decision if the rights of the petitioner have been
prejudiced because the administrative findings, inferences, conclusions or decisions
are:
(A) In violation of constitutional or statutory provisions;
(B) In excess of the statutory authority of the agency;
(C) Made upon unlawful procedure;
(D) Arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion; or
(E) Unsupported by evidence that is both substantial and material in the light
of the entire record.

Tenn. Code Ann. § 50-7-304(i)(2)(2005 & Supp. 2007). The statute further states that “[n]o decision
of the board shall be reversed, remanded or modified by the chancellor, unless for errors that affect
the merits of the final decision of the board.” Tennessee Code Annotated § 50-7-304(i)(3)(2005 &
Supp. 2007). Accordingly, if there is substantial evidence in the record to support the determination
of the Board of Review, the Board’s determination is conclusive and the court’s review is confined
to questions of law. Ford v. Traughber, 813 S.W.2d 141, 144 (Tenn Ct. App. 1991)(citations
omitted). Substantial evidence is defined as “such relevant evidence as a reasonable mind might
accept to support a rational conclusion and such as to furnish a reasonably sound basis for the action
under consideration.” Id. (quoting Southern Ry. Co. v. State Bd. of Equalization, 682 S.W.2d 196,
199 (Tenn.1984) (citations omitted)). This Court must employ the same standard of review as the
trial court. Id.

Analysis

In his brief to this Court, Mr. Schwartz asserts that, as a matter of law, he did not engage in
employee misconduct merely by providing Mr. Fisher’s telephone number to Mr. Lichterman while
off duty and off Fed Ex property. He asserts that, although he does not dispute the propriety of his
termination from Fed Ex, there is no basis for the finding that his termination was “work-related”
for the purpose of Tennessee Code Annotated § 50-7-303. Mr. Schwartz’s argument, as we perceive
it, is that his admitted initial dishonesty when questioned by Mr. Fisher about the voice mail left by
Mr. Lichterman was not an element in Fed Ex’s decision to terminate his employment; that he was
terminated only for violating Fed Ex’s Acceptable Conduct Policy as applied to the threatening
phone call; that this violation and his dishonesty were merely an exercise in bad judgment; that the

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violation of the conduct policy does not constitute work-related misconduct; and that the
Department’s denial of his claim was not predicated on his dishonesty when initially questioned
about the incident. We disagree.

The August 23, 2006, letter to Mr. Schwartz terminating his employment for violation of
Acceptable Conduct Policy 2-5 states:

The investigative findings confirmed that you were involved in an incident of placing
a phone call to member of management and leaving and obscene and threatening
voicemail. Your inappropriate behavior and dishonesty when questioned about your
involvement is unacceptable.

Your contribution to this incident was a direct violation of the Acceptable Conduct
Policy 2-5. Therefore, your employment with FedEx is being terminated effective
August 23, 2006.

We must disagree with Mr. Schwartz’s assertion that the termination letter does not indicate
that his dishonesty when questioned about the phone call played no part in Fed Ex’s decision to
terminate his employment. Clearly, the dishonesty was part of the “incident” in its entirety. After
considering the entire incident, including Mr. Schwartz’s initial dishonesty when questioned by Mr.
Fisher, the Appeals Tribunal determined Mr. Schwartz was “guilty of work related misconduct as
defined by the statute because [he] violated the spirit of the employer’s policy regarding threats.”
Although we agree with Mr. Schwartz that the Appeals Tribunal did not explicitly include the word
“dishonesty” in its findings, which were adopted by the Board of Review, in light of the hearing
before the Appeals Tribunal and the entire record in this case, Mr. Schwartz’s dishonesty clearly was
an element in the consideration of his claim.

Assuming Mr. Schwartz’s only role in the placing of the threatening phone call to Mr. Fisher
was an error of judgment in providing Mr. Fisher’s cell phone number to Mr. Lichterman, Mr.
Schwartz’s dishonesty when questioned by his manager is clearly work-related misconduct. The
Appeals Tribunal arguably should have been more explicit in its finding with respect to this aspect
of Mr. Schwartz’s involvement in this “incident.” However, in light of the entire record in this case,
we find no “errors that affect the merits of the final decision of the board” as required for reversal
of the Board’s decision under Tennessee Code Annotated § 50-7-304(i)(3).

Holding

In light of the foregoing, the judgment of the trial court is affirmed. Costs of this appeal are
taxed to the Appellant, Marc A. Schwartz, and his surety, for which execution may issue if
necessary.

___________________________________
DAVID R. FARMER, JUDGE

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