Mental States and "Misconduct": The Supreme Court of Missouri Interprets an Important Disqualification from Unemployment Benefits

By Stair, Brian | Missouri Law Review, Summer 2013 | Go to article overview

Mental States and "Misconduct": The Supreme Court of Missouri Interprets an Important Disqualification from Unemployment Benefits


Stair, Brian, Missouri Law Review


Fendler v. Hudson Services, 370 S.W.3d 585 (Mo. 2012) (en banc)

I. INTRODUCTION

Unemployment insurance has been part of America's social and economic tradition for several decades. (1) A significant increase in the number of unemployed Americans during the Great Depression led to the passage of the Social Security Act of 1935, which "established a system of state and federal unemployment insurance laws." (2) Stemming from Title IX of the Social Security Act, the Missouri Unemployment Compensation Law was enacted in 1937 (3) and imposed on employers a duty to pay taxes (contributions), beginning in January 1939, from which benefit payments would be made to qualified claimants. (4) Today, this set of unemployment insurance laws is known as Missouri Employment Security Law (MESL). (5)

In 2011, over 500,000 initial unemployment claims were filed with the Division of Employment Security (DES), a branch of the Missouri Department of Labor and Industrial Relations. (6) During that year, more than $710 million in unemployment insurance benefits were paid, and more than 42,000 appeals were filed following DES determinations. (7) In September 2012, Missouri had an unemployment rate of 6.9%, and more than 25,000 initial unemployment claims were filed in that month alone. (8) Overall, nearly 80,000 people received unemployment insurance benefits in September. (9)

Under MESL, claimants are disqualified from receiving unemployment benefits if they were terminated for "misconduct" connected with their work. (10) Although MESL provides a definition of what type of behavior constitutes "misconduct," (11) Missouri appellate courts review decisions regarding the granting and denial of unemployment benefits, (12) and these courts have provided judicial interpretations of this statutory definition. Obviously, such interpretations have a practical effect on who does and does not qualify for and receive unemployment insurance payments. Furthermore, the potential effects of these decisions have practical implications in the realm of public policy. (13)

Fendler v. Hudson Services features the Supreme Court of Missouri's first thorough discussion of section 288.030.1(23) and the Court's decision illustrates a development in Missouri appellate court interpretation of the statute's definition of "misconduct." (14) This Note describes that definitional development and addresses its potential effect on future disputes in which employers are seeking to prove that an employee's behavior constituted misconduct. Specifically, this Note focuses on how the Supreme Court of Missouri, by refusing to require a showing of "willfulness" to prove "misconduct," has further complicated the use of mental states in "misconduct" analysis and potentially broadened the scope of what qualifies as statutory "misconduct." Finally, this Note will identify a potential result of this broadened definition (15) and seek to show how this "Fendler effect" relates to two very important, competing public policy interests.

II. FACTS AND HOLDING

The DES is the state agency that is responsible for administering the unemployment insurance benefit and tax program. (16) The DES collects tax contributions from employers and distributes unemployment benefits to individuals who qualify under Missouri law. (17) Hudson Services (Hudson) is a company that provides various property management services, including commercial cleaning and security. (18) Hudson hired Carol Fendler in 1994, and by 2008, Fendler held the position of "operations assistant" in Hudson's housekeeping department. (19)

One of Fendler's official duties was to verify the number of hours worked by janitorial employees on a given shift when those workers failed to properly clock in and out of work. (20) Prior to July 2008, Fendler's supervisor allowed her to complete this verification by calling the janitorial employees and simply recording into the payroll system the total number of hours the employees said they worked. …

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