168064602_e78568c4d7_zIn the closing days of its September term, the Illinois Supreme Court heard oral argument in Petrovic v. The Department of Employment Security, a case posing the question of exactly what has to be proven to trigger the exception to unemployment compensation for employees terminated for misconduct. Based upon the content and number of questions, the Court appeared skeptical of adopting a narrow construction of the exception. Our detailed summary of the underlying facts and lower court opinions in Petrovic is here.

The plaintiff in Petrovic was a tower planner for an airline. In 2012, she was terminating for allegedly facilitating a gift (a bottle of champagne) and a first class upgrade for a passenger without authorization. When the plaintiff filed a claim for unemployment benefits, her employer filed a protest, arguing that she had been terminated for violation of a “reasonable and known policy.” The claims adjudicator denied the request for benefits on the grounds that the employee had been terminated for misconduct. The referee affirmed the decision and the Board affirmed as well. The plaintiff then filed a petition for administrative review with the trial court. The trial court reversed the Board, but the Appellate Court reversed the trial court, finding that the Board’s decision had not been clearly erroneous.

Counsel for the plaintiff began the argument. She stated that the airline had fired her client because the customer had been found in first class. No rule had been violated, and no actual harm had been caused, so there was no basis for applying the exception. Counsel argued that the legislature had limited misconduct to a willful and deliberate violation of a reasonable policy with proof of harm to the employer. According to counsel, the Board held that something commonly accepted as wrong didn’t require a rule. That holding thwarts legislative intent. Counsel argued that although the common law definition of misconduct permitted unwritten rules, the legislature amended the statute and required a willful and deliberate violation. Justice Burke asked whether an employee had to be aware that he or she was violating a specific rule or policy. Counsel answered yes, and the same standard is inherent in the concept of a “reasonable” rule. Chief Justice Garman asked whether the plaintiff’s position required an express rule for every kind of misconduct. Counsel answered that the Act doesn’t require rules for all types of conduct, but it does limit disqualification to violation of known rules. The Chief Justice asked if that meant that an employee who did something dangerous couldn’t be fired unless there was a written rule. Counsel said that the employer could terminate the employee, but had to pay unemployment absent a written rule, unless the conduct violates the written law. Justice Thomas pointed out that the defendants claimed there was a rule requiring management approval for upgrades. Counsel disagreed, saying there was no evidence of that. The Board held that there was no need for an express rule, but the Appellate Court held that perhaps there was a rule. The plaintiff testified without contradiction that she was unaware of any rule. Justice Kilbride noted that the matter was up on administrative review, and asked what in the record established that there was no rule. Counsel again responded that there was no evidence of a rule about upgrades. Justice Kilbride pointed out that there was testimony about it at the hearing – how did the plaintiff characterize that testimony? Counsel answered that the testimony was not competent evidence, since the witness had no personal knowledge of what had happened. Justice Kilbride asked whether it was disputed that a flight attendant had actually made the accommodation. Counsel answered that there was no evidence on the issue; it was disputed whether the accommodation happened at all. The witness testified based on a post-flight report which could have been third or fourth hand information. Justice Kilbride asked whether there was any indication that the other employee involved had been disciplined. Counsel said no. Counsel pointed out that the Appellate Court had found that potential harm was sufficient, but that’s not what the statute says. Justice Burke asked whether two rules were cited in the plaintiff’s termination letter. Counsel answered that those rules weren’t mentioned at all in the hearing. Counsel closed by arguing that if potential harm was sufficient, every firing for cause would trigger the exception to unemployment benefits.

Counsel for the Department followed, arguing that the plain language of the Act doesn’t require either actual harm or an express rule. Justice Kilbride noted that the employer had made the request, but asked who had delivered the champagne gift. Counsel responded that catering had delivered it. Justice Kilbride asked who allowed the customer to remain in first class. Counsel answered that the evidence was unclear. Justice Kilbride asked, if the violation of the rule was placing the passenger in the upgraded seat and providing the champagne, how did the employee violate the rule? Counsel answered that she had arranged for those things to happen with no authority. Justice Burke asked whether the plaintiff had the authority to leave her position. Counsel said no, and the matter was included in the employer’s protest. Justice Thomas asked how an employee could commit a willful and deliberate violation of an unwritten rule. Counsel answered that there have always been implied rules. To require that every rule be express would be a great burden on employers. Justice Thomas again asked how an employee could willfully and deliberately violate an unwritten rule. Counsel answered that the employee’s testimony that she knew nothing about a rule wasn’t dispositive of the point. Justice Thomas suggested that the Department’s argument was that taking property was deliberate because any reasonable employee would have to know that the employer would object. Counsel agreed. Justice Karmeier asked whether the issue of potential harm was addressed during the hearing. Counsel answered that there was a discussion of actual versus non-speculative potential harm. Courts have said that speculative potential harm is not enough, but the potential harm wasn’t speculative here. Counsel concluded by arguing that the Department’s long-standing interpretation of the statute is that potential harm is sufficient.

In rebuttal, counsel for the employee argued that there was no evidence at all that she had given anything away. Justice Burke asked whether the employee had caused the catering department to bring the champagne to the plane. Counsel responded that she had asked if it was possible, and it did happen. Ultimately, the passenger didn’t want it, and returned it. Justice Thomas asked whether it would only matter if the champagne was delivered and used. Counsel said the issue only goes to harm. Justice Thomas asked whether the attempt to give away the champagne was breaking a rule. Counsel said there’s no evidence of any rule that the employee’s conduct could fit; the fact that the customer was found in first class doesn’t mean the employee gave away property. Counsel argued that her client merely asked questions – somebody else may have made an error. Justice Burke asked whether the employee’s status was sufficient for another person to assume she had authority to do this. Counsel said no, she wasn’t management. Justice Thomas asked again about the witness at the hearing who testified about the rule – was he testifying to his recollection, or reading something into the record. Counsel responded that the witness said he was looking at a report from passenger services. Justice Karmeier asked posed a hypothetical: if a pilot abandoned the cockpit during flight, and the co-pilot was asleep, but the autopilot made it through a problem, isn’t that potential harm? Counsel responded that harm didn’t have to be physical – it can be mental, physical or financial. It just can’t be theoretical.

We expect Petrovic to be decided in four to six months.

Image courtesy of Flickr by Ed Schipul (no changes).