I respectfully dissent. In Leardis Smith v. Everett, 276 Ark. 430, 637 S.W.2d 537 (1982), the Employment Security Division denied unemployment benefits to Smith, holding that he was discharged for dishonesty. The Appeals Tribunal reversed, basing its decision on an affidavit of a customer which was submitted by the employer and the testimony of three witnesses. The Board of Review reversed based on the record and an additional affidavit. In that case, the Arkansas Supreme Court reversed this Court’s affirmance of the Board of Review decision. The Supreme Court stated:
Here, petitioner had no opportunity to subpoena and cross-examine adverse witnesses either at the hearing before the Appeals Tribunal or at the proceeding before the Board of Review. Although the notice informing him of the hearing date before the Appeals Tribunal stated that upon his request witnesses could be subpoenaed, at that time he did not know who the adverse witnesses would be. Petitioner did know who the adverse witnesses were by the time his case was reviewed by the Board of Review; however, he was informed by the Board that a second hearing would not be held and that only affidavits could be submitted.
It is clear that petitioner has not had an opportunity to subpoena and cross-examine witnesses as required by the above cited cases setting forth the minimum requirements for due process of law. Therefore, we reverse the Court of Appeals and remand to the Board of Review for a hearing consistent with this opinion pursuant to Ark. Stat. Ann. § 81-1107 (d) (7) (Repl. 1976).
The only factual distinction I can find between the case at bar and Leardis Smith v. Everett is that Mr. Farmer did not ask the Board of Review to remand the case for an additional hearing. Further, it is worth noting that Farmer apparently had no notice that affidavits would be submitted until he arrived at the hearing. He did not request a continuance so that he could obtain the presence of the witnesses, although the attorney for Allright did ask for a continuance so that Mr. Baldwin, the manager of Allright, could personally appear and testify. Although it is clear that the technical rules of evidence do not apply in administrative hearings, the majority, in effect, has held that because the appellant did not object to the hearsay testimony being admitted, nor did he request another hearing, he has waived any right to object to the affidavits being admitted into evidence. I think such a holding contrary to the holding of the Arkansas Supreme Court in Leardis Smith v. Everett, supra, and to the holdings of the United States Supreme Court in Richardson v. Perales, 402 U.S. 389 (1981), and Goldberg v. Kelly, 397 U.S. 254 (1970). In Perales, and the cases following it, the Court held that hearsay, in the form of doctor’s reports, could constitute substantial evidence. The Court held that Perales had waived his right to object by failing to exercise his right under Social Security regulations to request subpoenaes for the physicians. More importantly, the Court, in reviewing the evidence, mentioned several factors which it felt assured the reliability of the hearsay. Without detailing the factors which the United States Supreme Court considered, I believe it is important to note that Perales, in my opinion, stands for the proposition that the hearsay, if it is to constitute substantial evidence, must have some indicia of reliability.
In Goldberg, the United States Supreme Court held that a claimant must be given an opportunity to confront and cross-examine adverse witnesses prior to his welfare benefits being terminated.
In the case at bar, I find nothing to indicate the reliability of the affiants. Exhibit A is a letter, which is not notarized, from Daniel Baldwin, an employee of Allright, to the building engineer at Union National Bank, which informed the building engineer that Mr. Farmer had been terminated. Another exhibit is a letter from a Ms. O’Shields which indicates that an attendant named William was rude to her. There is nothing in this exhibit which identifies the appellant as the individual responsible. Exhibit B is an affidavit from a Mr. Eason, who identifies William Farmer as an individual who was rude to him in the parking deck. Exhibit C is an affidavit from Ms. O’Shields, which identifies William Farmer as an individual who was rude to her on a particular date. Exhibit 1 is an affidavit from Mr. Baldwin which indicates that he had received numerous complaints regarding Mr. Farmer. Ms. O’Shields’s affidavit is dated April 23, 1982, while her letter is dated February 11, 1982.1 find no explanation in the record as to the manner in which Ms. O’Shields found out the appellant’s identity between February 11, 1982 and the date she executed the affidavit. I am unable to find any evidence in the record to indicate how Mr. Eason obtained Mr. Farmer’s name during the interim between the date of the alleged misconduct, December, 1981, and the time he executed the affidavit on April 23, 1982.
I agree with the idea that hearsay may constitute substantial evidence, but I do not subscribe to the idea that we should presume the reliability of the hearsay.
The majority attempts to point out how hearsay evidence must be presented so as to protect the due process rights of the parties. First, says the majority, a party must know or have an opportunity to know what evidence is being considered. The appellant in the case at bar found out what evidence was going to be considered when he arrived at the hearing. The referee, and Allright’s attorney, recognized the hearsay character of the evidence and, because of the recognition of possible problems, Allright’s attorney requested a continuance, which was denied. I think the majority is on thin ice when it holds that the appellant was adequately informed of the evidence which was going to be considered by the Appeal Tribunal and the Board.
Secondly, the majority holds, in effect, that the appellant waived his right to object to the hearsay because he did not request another hearing. It should be noted that the appellant, as best he could, attempted to question Allright’s attorney regarding the specifics of the allegations contained in the affidavits. The attorney candidly stated that he had no knowledge whatsoever of the events referred to in the affidavits. The appellant did not say the magic words: “I object to the hearsay testimony because I cannot cross-examine the affiants, and therefore I request a continuance”, but it seems ludicrous to me to require that sort of formality on the part of the appellant, particularly in view of the relaxed application of the rules of evidence to administrative hearings.
In short, I think the majority opinion is totally contrary to Leardis Smith v. Everett, supra, and to the decision of the United States Supreme Court in Richardson v. Perales, supra. I believe the appellant was denied due process and I would reverse and remand the case for further proceedings which would afford the appellant a realistic, rather than an imagined, opportunity to cross-examine the persons whose complaints resulted in his dismissal and his denial of unemployment compensation benefits.
Further, I should note that I disagree with the majority’s implied criticism of the attorney for Allright. I am unable to find any basis whatsoever for the contention that the attorney testified. The colloquy between the referee and Mr. Davis is as follows:
REFEREE: Alright. Now Mr. Davis would you actually be testifying yourself?
DAVIS: Well, I understand this might be a problem. No sir, I do not. I don’t have personal knowledge of the incident itself. I have talked to Mr. Baldwin, of course, I realize that is hearsay and that might cause a problem, but as I say, he was called away this morning. If it would be more appropriate to ask for a continuance I am prepared to do that but I think that I have enough evidence with the affidavits of the employees and Mr. Baldwin himself. T.22
Later, prior to the administration of the oath to the claimant, the referee stated:
[REFEREE]:... Now, Mr. Davis, you say you will not be testifying?
DAVIS: Well, I would like to have the opportunity to.
REFEREE: Well, let’s go ahead and let you.
DAVIS: We’ll see if they will accept that as evidence. T.24
It appears clear to me that what happened was the attorney indicated that he would not be testifying, and that he wanted to go ahead and submit the affidavits and see if the Board would accept them as evidence. I simply find no basis to conclude that the attorney ever testified in the case. He did make statements to the referee regarding the affidavits in the form of argument, and he did attempt to respond to questions by the appellant, but I find no evidence that the oath was ever administered to him, or that he actually testified.
I respectfully dissent.
Cloninger and Glaze, JJ., join in this dissent.