Wells Fargo Alarm Services, Inc. v. Virginia Employment Commission

Citations: 482 S.E.2d 841; 24 Va. App. 377; 1997 Va. App. LEXIS 169Docket: Record 1051-96-2

Court: Court of Appeals of Virginia; March 25, 1997; Virginia; State Appellate Court

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Wells Fargo Alarm Services, Inc. appealed a trial judge's decision that upheld a ruling by the Virginia Employment Commission regarding the unemployment compensation claim of Claude H. Collier, a former employee. The key issues raised by Wells Fargo included: (1) the trial judge's affirmation of the commission's finding that Collier's actions did not amount to misconduct under Code § 60.2-618(2); (2) Wells Fargo's denial of condoning Collier's conduct; (3) the commission's refusal to allow additional evidence; and (4) the trial judge’s denial of a remand for a hearing on potential extrinsic fraud in the commission's decision. 

The background involves Collier, who was hired as a sales representative in 1991 and discharged in 1994 for not adhering to company policy. He filed for unemployment benefits, which were initially granted. Evidence revealed that Collier engaged in significant negotiations with Allied Signal, a prospective client, with full awareness and involvement of his branch manager. Collier testified that his manager advised on transaction structuring and communicated with the district sales manager, who subsequently approved the deal. The anticipated transaction was valued at $500,000, with a plan for $325,000 upfront and $40,000 annually. The court ultimately affirmed the trial judge's ruling in favor of Collier.

A purchase order was issued from Allied Signal to Wells Fargo, with Collier testifying that multiple supervisors, including the branch manager and the applications engineer, approved the transaction before his commission payment. Thomas N. Griffin, Wells Fargo's representative, indicated that significant transactions typically require higher-level awareness and approval. He noted that commissions for leases are generally higher, and the general manager must approve such commissions. Following inquiries from auditors, a meeting occurred where Collier and another employee were instructed to remain silent. Wells Fargo alleged that Collier misclassified the transaction, resulting in overpayments of $11,570 in commissions and $5,021 in bonuses. They claimed he violated company policy by using Allied Signal's purchase orders instead of Wells Fargo's contracts. The appeals examiner concluded that Collier did not misrepresent facts and that any misrepresentations originated from his superiors. The examiner affirmed Collier's eligibility for unemployment compensation. Wells Fargo's request for additional evidence was denied by the commission, which found that Collier acted under the oversight of his superiors and believed appropriate approvals were in place. Although the commission criticized Collier's silence at the legal meeting, it determined this did not constitute a breach of loyalty or misconduct. Wells Fargo's appeal to the circuit court was affirmed, leading to a further appeal to this Court.

Wells Fargo contended that the commission erred in determining that it did not prove Collier's misconduct. The court clarified that findings by the commission, supported by evidence and free from fraud, are conclusive, limiting the court's jurisdiction to legal questions. The standard of review is to view evidence favorably towards the commission's findings. Misconduct is defined as a deliberate violation of company rules that protect legitimate business interests or behavior that shows willful disregard for those interests. Wells Fargo claimed Collier violated policies by structuring a transaction as a lease and not using an approved contract. However, the commission found no evidence of specific policies violated by Collier. Evidence indicated that Collier reported to his branch manager during negotiations and followed their instructions. The transaction was also approved by the district sales manager. Therefore, even if there were policy violations, Collier’s actions were authorized by his superiors, and thus not misconduct. The commission's conclusion was supported by evidence showing that Collier was acting in Wells Fargo's interest as directed by management. Consequently, the court upheld the commission's decision. Regarding Wells Fargo's assertion that Collier did not prove the company condoned his actions, the court stated that since Wells Fargo failed to establish Collier's misconduct, the burden did not shift to him to provide evidence for mitigation, making the issue of condonation irrelevant.

Wells Fargo's request to reopen the record for additional evidence was denied by the commission, which found that the proposed evidence was not material and could have been presented during the initial hearing with due diligence. The commission referenced its regulations, which allow reopening only if new evidence is significant, could not have been presented previously, and is likely to alter the outcome, or if the existing record is inadequate for proper findings. Wells Fargo attempted to introduce documents related to a wage claim and evidence supporting its claim of discharge for cause, citing management structure issues and unavailability of key witnesses as reasons for not presenting this evidence earlier. The commission determined that the record was sufficient for making accurate findings and concluded that Wells Fargo did not exercise due diligence.

Additionally, Wells Fargo's claim of extrinsic fraud, based on allegations against Collier for concealing records and deceiving corporate officials, was found insufficient to establish a prima facie case by the trial judge. The judge noted that these issues had been thoroughly addressed in prior hearings, negating the need for a remand. The documents in question were accessible to Wells Fargo post-Collier's termination, undermining the claim of fraud. Consequently, the judgment was affirmed.