COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Frank and Humphreys
Argued at Salem, Virginia
JENNIFER G. FRANCIS
OPINION BY
v. Record No. 0827-11-3 JUDGE ROBERT J. HUMPHREYS
NOVEMBER 29, 2011
VIRGINIA EMPLOYMENT COMMISSION AND
WAL MART ASSOCIATES, INC.
FROM THE CIRCUIT COURT OF CAMPBELL COUNTY
John T. Cook, Judge
Greg Hairston (Caroline Klosko; Virginia Legal Aid Society, Inc., on
brief), for appellant.
Elizabeth B. Peay, Assistant Attorney General (Kenneth T.
Cuccinelli, II, Attorney General, on brief), for appellee Virginia
Employment Commission.
No brief or argument for appellee Wal Mart Associates, Inc.
Jennifer G. Francis (“Francis”) appeals a ruling from the Circuit Court for Campbell
County (“circuit court”), dated March 25, 2011, affirming a decision from the Virginia
Employment Commission (“VEC”), entered May 6, 2009, that disqualified Francis from
receiving unemployment compensation benefits under the Unemployment Benefits Act (“the
Act”). Specifically, Francis alleges the circuit court erred in affirming the VEC’s ruling that
Francis was terminated from her employment at Wal-Mart for “misconduct connected with” her
work. For the following reasons, we affirm the decision of the VEC.
I. Background
The facts are not in dispute. Francis was employed from June 8, 2006 to April 22, 2008,
as a merchandising supervisor in the health and beauty department at Wal-Mart, earning $8.35
per hour. Francis’s job duties included making price changes on merchandise and stocking
shelves. Francis also supervised two associates, and, on occasion, she was required to operate
the cash register. Francis did not have any problems at Wal-Mart prior to April 22, 2008, and
had never been disciplined at work.
On April 22, 2008, Francis informed Wal-Mart that she was going to be charged with two
felony counts of welfare fraud. Wal-Mart suspended Francis’s employment pending the
outcome of the case and informed Francis that if she was found guilty of the charges, her
employment with Wal-Mart would be terminated. Wal-Mart also gave Francis the option of
resigning her employment so it would be easier to get another job. On May 26, 2008, Francis
notified Wal-Mart that she had decided to plead guilty to the charges and, as a result, Francis
submitted her resignation in lieu of termination. Francis ultimately received a suspended
sentence and probation as a result of her convictions.
Francis filed a claim for unemployment benefits with the VEC on May 27, 2008. A
claims deputy denied her claim on June 18, 2008, and Francis appealed. The appeals examiner
conducted a telephonic hearing on September 18, 2008. At the hearing, Francis’s immediate
supervisor, Jennifer Campbell, confirmed that Francis would have been terminated had she not
resigned, and explained that Francis violated Wal-Mart’s code of ethics when she committed
welfare fraud. Campbell stated that “fraud in itself is related to retail, because retail deals with
dollars, it deals with paperwork dollars, it deals with physical dollars and merchandise.”
Campbell also admitted, however, that she would never have known about the charges against
Francis had Francis not told her about them herself.
Lisa Radcliff, a store manager at Wal-Mart, admitted she had not received any
complaints over Francis’s job performance, but she confirmed that Francis’s act of committing
welfare fraud violated Wal-Mart’s code of ethics. Radcliff specifically referenced a “financial
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integrity” clause from Wal-Mart’s code of ethics that requires “honest and accurate recording
and reporting of financial information . . . in order for that Associate to make responsible
decisions.” Wal-Mart did not provide a copy of the entire policy for review.
Upon the conclusion of all the testimony, Francis argued to the appeals examiner that the
financial integrity clause in Wal-Mart’s code of ethics is “talking about reporting information at
Wal-Mart” and speculated “if she would have falsely reported something . . . her financial
information at Wal-Mart . . . then that’s what it would have applied [to].” Francis argued that the
policy “has nothing to do with what she did, welfare fraud. It had nothing to do with her job at
Wal-Mart.” Francis stressed that her supervisors would, in fact, never have known about the
charges had she not told them herself and concluded that her misdeeds were “not connected with
work.”
The appeals examiner disagreed with Francis and denied benefits. Francis then appealed
to a special examiner. By order entered May 6, 2009, the special examiner affirmed the appeals
examiner and disqualified Francis from receipt of unemployment benefits. The special examiner
concluded,
[Wal-Mart] has presented sufficient evidence to establish a
reasonable nexus between [Francis’s] job duties and
responsibilities and the misconduct. [Francis] pled guilty to and
was convicted of felony welfare fraud, a crime of moral turpitude.
The evidence also established that [Francis’s] job duties and
responsibilities required her to, among other things, operate the
cash register for the employer, which placed her in a fiduciary
capacity, and a position of trust with the employer.
Francis appealed the matter to the circuit court.
The circuit court held a hearing on March 25, 2011, and “after considering the authorities
and arguments of counsel,” affirmed the VEC’s decision.
Francis timely noted her appeal to this Court.
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II. Analysis
The sole question on appeal is whether the circuit court erred in affirming the VEC’s
finding that Francis was terminated from her employment for misconduct “connected with
work.” 1
In cases that originated in the VEC, we, “[l]ike the circuit court,” must “‘consider the
evidence in the light most favorable to the finding by the Commission.’” Williamson v. Va.
Empl. Comm’n & Mills Heating & Air Conditioning, Inc., 56 Va. App. 14, 17, 690 S.E.2d 304,
305 (2010) (quoting Wells Fargo Alarm Servs. v. Va. Empl. Comm’n, 24 Va. App. 377, 383,
482 S.E.2d 841, 844 (1997)). “‘If the commission’s findings [of fact] are supported by the
evidence, they are binding on appeal.’” Id. (quoting McNamara v. Va. Empl. Comm’n, 54
Va. App. 616, 624, 681 S.E.2d 67, 70 (2009)). In other words, where the Commission’s findings
of fact are supported by the evidence, “they are conclusive on appeal and our jurisdiction is
limited to questions of law.” Kennedy’s Piggly Wiggly Stores, Inc. v. Cooper, 14 Va. App. 701,
704, 419 S.E.2d 278, 280 (1992) (citing Israel v. Virginia Employment Comm’n, 7 Va. App.
169, 172, 372 S.E.2d 207, 209 (1988)). In cases where the facts are not in dispute, the only
question this Court must decide is whether the Commission’s findings of fact “are sufficient, as a
matter of law, to constitute misconduct.” Id. at 704, 419 S.E.2d at 280.
Under the Act, “‘[t]he legislature intended unemployment benefits to be paid only to
those who find themselves unemployed without fault on their part.’” Va. Empl. Comm’n v.
Cmty. Alternatives, Inc., 57 Va. App. 700, 704, 705 S.E.2d 530, 532-33 (2011) (quoting Va.
Emp’t Comm’n v. Trent, 55 Va. App. 560, 568, 687 S.E.2d 99, 103 (2010)). Nevertheless, since
1
According to the VEC, “[i]n cases where an employee is given the option of resigning
or being discharged, and chooses to resign, the commission has consistently held that the
separation from employment is involuntary and the merits of the case should be considered under
[Code] § 60.2-618(2).” VEC does not dispute the fact that Francis’s separation from
employment was involuntary.
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the Act is remedial in its purpose, id. at 708, 419 S.E.2d at 282 (citing Israel, 7 Va. App. at 172,
372 S.E.2d at 209), “[e]ven employees who are fired for what the employer considers good cause
may be entitled to unemployment compensation,” Blake v. Hercules, Inc., 4 Va. App. 270, 273,
356 S.E.2d 453, 455 (1987). Thus, “‘the statutory term “misconduct” should . . . be construed in
a manner least favorable to working a forfeiture so as to minimize the penal character of the
provision by excluding cases not clearly intended to be within the exception.’” Piggly Wiggly,
14 Va. App. at 707-08, 419 S.E.2d at 282 (quoting 76 Am. Jur. 2d, Unemployment
Compensation § 77 (1992)).
“‘Furthering this policy goal, Code § 60.2-618(2)(a) 2 prohibits benefits if the
Commission finds such individual is unemployed because he has been discharged for misconduct
connected with his work.’” Cmty. Alternatives, 57 Va. App. at 704, 705 S.E.2d at 532-33
(quoting Trent, 55 Va. App. at 568, 687 S.E.2d at 103).
[A]n employee is guilty of “misconduct connected with his work”
when he deliberately violates a company rule reasonably designed
to protect the legitimate business interests of his employer, or
when his acts or omissions are of such a nature or so recurrent as to
manifest a willful disregard of those interests and the duties and
obligations he owes his employer.
2
Code § 60.2-618 provides:
An individual shall be disqualified for benefits upon separation
from the last employing unit for whom he has worked 30 days or
240 hours or from any subsequent employing unit:
* * * * * * *
2. a. For any week benefits are claimed until he has performed
services for an employer (i) during 30 days, whether or not such
days are consecutive, or (ii) for 240 hours, and subsequently
becomes totally or partially separated from such employment, if
the Commission finds such individual is unemployed because he
has been discharged for misconduct connected with his work.
(Emphasis added.)
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Branch v. Virginia Employment Commission, 219 Va. 609, 611, 249 S.E.2d 180, 182 (1978)
(emphasis in original). “‘The Branch definition of misconduct has two prongs.’” Piggly
Wiggly, 14 Va. App. at 705, 419 S.E.2d at 281 (quoting Israel, 7 Va. App. at 173, 372 S.E.2d at
209). “The first prong defines misconduct as a deliberate violation of a company rule.” Id. at
705, 419 S.E.2d at 281. “[T]he second prong contemplates actions or omissions of such a nature
or so recurrent as to manifest a willful disregard of the employer’s interests and the duties and
obligations the employee owes the employer.” Id. “A forfeiture of benefits will be upheld only
where the facts clearly demonstrate ‘misconduct,’” id. at 707, 419 S.E.2d at 282, and “[t]he
employer bears the burden of proving [that] misconduct,” id. at 705, 419 S.E.2d at 280. Once
that burden is met, the employee is disqualified for benefits “‘[a]bsent circumstances in
mitigation’” of his conduct. Id. (quoting Branch, 219 Va. at 611-12, 249 S.E.2d at 182). “‘The
burden of proving mitigating circumstances rests upon the employee.’” Id. at 705, 419 S.E.2d at
280-81 (quoting Branch, 219 Va. at 611-12, 249 S.E.2d at 182).
Francis does not dispute the validity of Wal-Mart’s decision to terminate her employment
for committing welfare fraud; rather, the issue in this case is Francis’s ability, upon her
discharge, to receive unemployment benefits. In other words, Francis does not deny that she
committed misconduct; she merely alleges her misconduct was not in any way “connected with
her work.” We disagree with Francis and find that her actions meet the definition of misconduct
under the second prong of the Branch test. Indeed, the record shows that Francis worked at
Wal-Mart from June 8, 2006 to April 22, 2008, as a merchandising supervisor in the health and
beauty department at Wal-Mart, earning $8.35 per hour. Francis’s job duties included making
price changes on merchandise and stocking shelves. Francis also supervised two associates, and
on occasion, she was required to operate the cash register. Jennifer Campbell testified that
Francis’s job “deals with dollars, it deals with paperwork dollars, it deals with physical dollars
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and merchandise.” Thus, as the VEC found, Francis’s job duties and responsibilities “placed her
in a fiduciary capacity and a position of trust” with Wal-Mart.
Although Francis did not create any problems at Wal-Mart prior to April 22, 2008 and
although she had never been disciplined at work, the fact remains that in her employment at
Wal-Mart she was in a position of trust, and welfare fraud is a crime of moral turpitude. It
follows that Francis’s actions in committing welfare fraud placed her in a position of distrust
and, by extension, manifested a willful disregard of Wal-Mart’s interests and the duties and
obligations Francis owed her employer. The fact that Francis herself found it necessary to report
the pending charges to Wal-Mart suggests she knew her activities outside of employment had a
bearing on Wal-Mart’s interests. We, thus, agree with the VEC and the circuit court that
Wal-Mart carried its burden of proving that Francis’s misconduct was connected with her work,
and Francis has failed to prove any mitigating circumstances justifying receipt of unemployment
compensation.
In sum, the circuit court did not err in affirming the VEC’s finding that Francis’s
misconduct was connected with her work, and its decision that she should be denied benefits
under the Act is, therefore, affirmed.
Affirmed.
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