Department of Labor v. Boardley

MEREDITH, J. Henry S. Boardley, appellee, applied for unemployment benefits after he was fired by his employer, Dimensions Health Corporation (“Dimensions”), for threatening a supervisor. When Dimensions contested Boardley’s request for benefits, the Department of Labor, Licensing and Regulation (“DLLR”), appellant, held a hearing. The hearing examiner found that Boardley had been terminated for “gross misconduct,” as defined in Md.Code (1991,1999 Rep. Vol.), Labor and Employment Article (“L.E.”), § 8-1002, and denied Boardley’s request for unemployment benefits.

The DLLR Board of Appeals affirmed the hearing examiner’s findings of fact and the decision to deny Boardley benefits. Boardley petitioned the Circuit Court for Prince George’s County for judicial review. The circuit court reversed the DLLR’s decision to deny Boardley unemployment benefits and remanded the case to the agency for further proceedings. DLLR noted a timely appeal and presents the following issue for our review: Did the circuit court err in remanding the case where it made its own findings of fact and failed to determine whether substantial evidence existed to support the Board’s decision that the Claimant’s termination of employment was for gross misconduct? ⁴⁰⁸ For the reasons set forth below, we shall reverse the judgment of the circuit court and remand the case to the circuit court with directions to affirm the administrative decision.

BACKGROUND The record reflects that Boardley filed a claim for unemployment benefits after his employment was terminated by Dimensions on March 21, 2003. A claims specialist for the DLLR Office of Unemployment Insurance initially concluded that “insufficient information has been presented to show that the claimant’s actions constituted misconduct in connection with the work. As a result, it is determined that the circumstances surrounding the separation do not warrant a disqualification under Section 8-1002 or 8-1003 of the Maryland Unemployment Insurance Law.” Dimensions appealed the allowance of benefits. 1 DLLR sent Boardley and Dimensions notices indicating the time and place of the appeal hearing, and informing the parties that “[t]his hearing is the last step at which either the claimant or the employer has the absolute right to present evidence.” The notice also advised the parties: “If a[p]ostponement of the hearing is needed, the request must be received in writing at the Appeals Division at least three ⁴⁰⁹ working days before the date of the hearing. A postponement will be granted if it is determined there is good cause.” The appeal was heard by a hearing examiner on July 2, 2003.

Because Boardley failed to appear at the hearing, and he had not requested a postponement in writing, the hearing examiner conducted the hearing in Boardley’s absence. On July 15, 2003, the hearing examiner issued an “Unemployment Insurance Appeals Decision,” in which the hearing examiner concluded: “[T]he claimant was discharged for gross misconduct connected with the work within the meaning of [L.E. § ] 8-I002(a)(l)(i).” 2 The hearing examiner made the following findings of fact: On the claimant’s last day of work for the employer of record, the claimant was upset regarding direction given to him by a supervisor, Robert Dillon. The claimant exited Mr. Dillon’s office and approached another supervisor, Mr. Edward O’Reilly. The claimant then got within inches of ⁴¹⁰ Mr. O’Reilly and began yelling at him.

The claimant’s statements to Mr. O’Reilly included the following: “You’re the cause of this, you fucker!”; “I’m not finished with you, you fucker!”; “I’ll get you, you fucker!”; “I haven’t even started to fuck with you yet.” Based upon this incident, for which the claimant did not have a legitimate cause for being so angry with Mr. O’Reilly, the claimant was discharged (Employer Exhibit No. 4). The claimant’s behavior violated company policy (Employer Exhibit No. 3). In addition, the claimant had been warned regarding such behavior in the past (Employer Exhibit No. 1). The hearing examiner noted that “the claimant failed to appear for this hearing and, therefore, presented no evidence to contradict the credible evidence presented by the employer.” Pursuant to L.E. § 8-510, Boardley appealed the hearing examiner’s decision to the DLLR Board of Appeals.

In his appeal notice dated July 21, 2003, Boardley stated, “I[,] Henry S. Boardley[,] wish to appeal the decision regarding my unemployment compensation.” Additionally, Boardley attached to his appeal notice various commendations for past good service, as well as a letter to the Board that stated: This is additional] evidence: Mr. O’Reilly was not my supervisor he just wanted to keep the harassment up. Mr. Robert Dillon he had only been with the company two weeks if Mr. O’Reilly used Dillon which Mr. Dillon admitted to me, to keep the harassment up [to] try to make me look bad. My Supervisor at the time was Mr. Louis Proctor he can be reached at ... also [m]y union rep Mr. Geo Smith can also tell you how I’ve been pick[ed] on by Mr. O’Reilly an how many meetings we had with me and Mr. Woody Brower the Director of Maintenance. Mr. Geo Smith can be reached at ... and Mis.

Franice McRae will tell you about Mr. 0[’]Reilly also.” ⁴¹¹ With respect to the events that gave rise to the termination, Boardley also attached a statement summarizing his recollection as to what occurred. He stated, in part: On that March 21, 2003 day, Ed and I exchanged words loudly (in the maint. shop) because he had walked up on me and stood very close to me verbally harassing me about “what are you going to do now. Threaten me”. I did respond that I would fix him (with legal actions) because I have been seeking counciling [sic] thru my attorney about the type of treatment that I’ve been suffering at my employment, I did not make any physical threatening remarks to anyone.

Mr. O’Reilly has also threatened to get my co-worker (Tyrone Wolridge) and an engineer in the power plant and he has mentioned this to some of the guys in the shop as well. But as he told me on that day (03-31-03) as we exchanged words, “I’m the boss; I’m corporate now”. During the dicillinary [sic] hearing, Mr. Barksdoll stated that two employees were witnesses and had made claim of my having said words of threat but attached is a copy of the statement made by one of those employees. I believe the relationship between O’Reilly and Barksdoll helped to precipitate this disciplinary action against me.

The written statement Boardley referred to as being attached was from witness Mike Hall, and said: I was sitting at my desk at lunch. The door to Bob Dillion’s (sic) office was closed. The door opened, Henry Boardley came out stopped and turned back towards the door and started yelling. Henry then turned away and took a few steps, stopped, and came back yelling some more.

I turned up my radio. It was then I saw Eddie O’Reilly standing next to Henry and I thought Eddie was ready to restrain Henry if Henry charged Bob Dillion (sic). I do not know what words were being said as it was not any of my business and I was listening to the radio. Boardley filed nothing with the Board of Appeals that mentioned any reason for missing the hearing conducted by ⁴¹² the hearing examiner.

Nor did he mention in the documents he filed with the Board of Appeals that he had made an oral request for a postponement of the hearing examiner’s hearing, or that he had attempted to attend the hearing by calling in on the telephone. The additional information Boardley presented to the Board of Appeals did not undermine the key findings of fact made by the hearing examiner regarding Boardley threatening a supervisor. In essence, Boardley admitted that he had had a loud confrontation with one of Dimensions’s supervisory employees, even though, in Boardley’s view, he was justified in acting as he did because he was provoked or set up. The Board of Appeals elected not to hold another hearing, but instead, considered the appeal on the record and issued the final ruling in this matter: Upon review of the record in this case, the Board of Appeals adopts the findings of fact and conclusions of law of the Hearing Examiner.

On October 7, 2003, Boardley filed a petition for judicial review in the circuit court. In his petition, Boardley stated, “The Petitioner was not party to the agency proceeding. Case was made on [untruths]; I was not at [the] hearings; I am providing documents 13 pages for reviewing.” Boardley attached the same documents he had submitted to the Board of Appeals with his notice of appeal. On October 29, 2003, DLLR indicated that it would participate in the judicial review proceeding.

On January 7, 2004, Boardley filed a document that presumably served as his supporting memorandum required by Maryland Rule 7-207. It stated: I think Agency’s decision wrong[:] 1. ) I was never at any of hearings to speak[.] 2. ) Some of people at hearing’s I have never seen or heard of[.] 3. ) Main reason is their were lot of untrue things told[.][I]f hearing examiner would ha[ve] read my testimony and ⁴¹³ check with union reps [,] they would know how long Mr. O’Reilly had been harassing me over a 18 month time. [Emphasis in original.] In response, DLLR filed a memorandum urging the court to affirm the agency’s decision. At the circuit court hearing on July 9, 2004, because the circuit court had misdirected the hearing notice, no one appeared on behalf of the agency. The hearing judge asked Boardley, “Why didn’t you appear at the hearing [before the hearing examiner]?” In response, Boardley stated, “I have kidney disease now and [edema].

I was in the hospital, the VA hospital.” Boardley elaborated: I called down to the Department of Labor. The lady said, there was some ward office where they had the hearing. She said well they were having the,.hearing and there was no way I could get in touch with the hearing examiner. And they told that she couldn’t get in touch with the hearing examiner.

And I asked her why. She said because they are in this little room and there is no telephone. The circuit court judge responded to Boardley: Well, the best I’m going to be able to do for you, sir, and since the Attorney General hasn’t shown up, I don’t have any problem with it. I can remand the action back to the agency for — to the Department of Labor, Licensing and Regulation.

I can remand it back there for [a] hearing seeing that you were not present at the hearing and the Attorney General isn’t present here today. And that’s the best I can do for you. The court then directed the clerk: Do a docket entry that the action is remanded back to the Department of Labor, Licensing and Regulation for further proceedings. And just to do a little memo that because the defendant was hospitalized at the time of the hearing, was unable to reach the hearing — called the hearing examiner but was not able to reach hearing examiner directly, and because the Attorney General was not here today at this hearing, that it would be appropriate to remand it [for] ⁴¹⁴ further proceedings in which the Petitioner, Mr. Boardley, can participate.

The circuit court entered an order dated July 7, 2004, that stated: This Court made a finding of fact that Appellant Henry S. Boardley was in the hospital on July 2, 2003, and that he made a good faith effort to convey this information to the Hearing Examiner by telephone, but was not able to reach the Hearing Examiner. Therefore, because the Appellant was in the hospital on July 2, 2003, and made a good faith but unsuccessful attempt to contact the Hearing Examiner, and because the Attorney General failed to appear for this July 9, 2004[,] hearing, it is hereby ORDERED, this 9th of July 2004, by the Circuit Court for Prince George’s County, that this case is remanded back to Department of Labor, Licensing & Regulations Board of Appeals for further proceedings in which Appellant Boardley can participate. DISCUSSION DLLR asks this Court to reverse the circuit court’s decision because the “circuit court’s remand was improper where it made its own finding of fact on an issue that was not properly before it and without first deciding whether or not the Board’s decision regarding [Boardley’s] termination for gross misconduct was supported by substantial evidence.” We agree the circuit court was in error to order a remand for further proceedings. The circuit court found reversible error in the hearing examiner’s failure to grant Boardley either a postponement or the right to attend via telephone, even though no such request appears in the record.

The circuit court concluded, in essence, that the Board of Appeals committed reversible error in failing to find that Boardley’s hospitalization entitled him to a new hearing even though Boardley never advised the Board of Appeals of the reason he did not appear before the hearing examiner. In basing its decision to remand the case ⁴¹⁵ on excuses never properly raised before the agency, the circuit court erred. It is the function of the reviewing court to review only the materials that were in the record before the agency at the time it made its final decision. Chertkof v. Dep’t of Nat Resources, 43 Md.App. 10, 17 , 402 A.2d 1315 (1979).

As Chief Judge Bell stated in Dept. of Health v. Campbell, 364 Md. 108, 123 , 771 A.2d 1051 (2001): [I]t is the final decision of the final decision maker at the administrative level, not that of the reviewing court, that is subject to judicial review. Accordingly, the reviewing court, restricted to the record made before the administrative agency, see Cicala v. Disability Review Bd. for Prince George’s County, 288 Md. 254, 260 , 418 A.2d 205, 209 (1980), may not pass upon issues presented to it for the first time on judicial review and that are not encompassed in the final decision of the administrative agency. Stated differently, an appellate court will review an adjudicatory agency decision solely on the grounds relied upon by the agency. Accord Schwartz v. Maryland Department of Natural Resources, 385 Md. 534, 553-55 , 870 A.2d 168 (2005) (“a reviewing court ordinarily ‘ “may not pass upon issues presented to it for the first time on judicial review....”’ ”); Brodie v. Motor Vehicle Administration, 367 Md. 1, 3-4 , 785 A.2d 747 (2001) (“Since Brodie’s entire challenge to the administrative decision was based on an issue not raised before the agency, the circuit court should have affirmed the administrative decision without reaching the issue.”) In support of his petition for judicial review, Boardley suggested that DLLR’s decision should be reversed because he did not take part in the hearing before the hearing examiner.

There is nothing in the record from the agency to show that Boardley raised this issue with the Board of Appeals. The record clearly reflects that, when Boardley appealed to the Board of Appeals, he made no mention of any facts that might have persuaded the Board of Appeals that he had good cause for missing the hearing before the hearing examiner. ⁴¹⁶ He failed to bring to the attention of the Board of Appeals his contentions about being hospitalized and making an unsuccessful effort to attend by telephone. As a result, the Board of Appeals did not have any opportunity to consider this issue prior to the time it adopted the hearing examiner’s decision as the final decision of the agency. Consequently, when the case was being reviewed by the circuit court, the reviewing judge was precluded from considering this new issue in the course of the circuit court’s review of the Board of Appeals decision.

The circuit court, however, not only considered this issue, but based its decision to remand the case for further proceedings on the fact that Boardley had not participated in the hearing conducted by the hearing examiner. As this Court noted in Dept. of Labor, Licensing and Regulation v. Woodie, 128 Md.App. 398, 409-10 , 738 A.2d 334 (1999), the Administrative Procedure Act does not apply to unemployment insurance proceedings, Md.Code, State Government Article, § 10-203(a)(5). Judicial review in such cases is governed by L.E. § 8-512(d), which contains no express authority to remand a case. Section 8-512(d) provides: Scope of review. — In a judicial proceeding under this section, findings of fact of the Board of Appeals are conclusive and the jurisdiction of the court is confined to questions of law if: (1) findings of fact are supported by evidence that is competent, material, and substantial in view of the entire record; and (2) there is no fraud.

With respect to § 8-512(d), the Court of Appeals said in Department of Labor, Licensing and Regulation v. Hider, 349 Md. 71, 77-78 , 706 A.2d 1073 (1998): Under this statute, the reviewing court shall determine only: “(1) the legality of the decision and (2) whether there was substantial evidence from the record as a whole to support the decision.” Baltimore Lutheran High Sch. Ass’n v. Employment Sec. Admin., 302 Md. 649, 662 , 490 ⁴¹⁷ A.2d 701, 708 (1985). The reviewing court may not reject a decision of the Board supported by substantial evidence unless that decision is wrong as a matter of law. See Department of Econ. & Employment Dev. v. Propper, 108 Md.App. 595, 604 , 673 A.2d 713, 717 (1996).

The test for determining whether the Board’s findings of fact are supported by substantial evidence is whether reasoning minds could reach the same conclusion from the facts relied upon by the Board. See Baltimore Lutheran, 302 Md. at 661-62 , 490 A.2d at 708 . In Employment Security Board of Maryland v. LeCates, 218 Md. 202, 207 , 145 A.2d 840 (1958), another case involving judicial review of an unemployment insurance claim, the Court of Appeals described the limited scope of review as follows: In unemployment compensation cases we have consistently held, as the law requires, that the findings of the Board as to the facts are conclusive, if there is evidence to support such findings. The court’s jurisdiction, in such cases, is specifically limited to questions of law. [Citations omitted.] In stating the material facts, the court should state as facts such evidence as is most favorable to the findings of the Board. [Citations omitted.] Moreover, in reviewing the facts, a court is confined to determining whether there is evidence to support the findings of the Board, and in the absence of fraud, that finding, as stated above, is conclusive.

Accord Watkins v. Employment Security Administration, 266 Md. 223, 224-25 , 292 A.2d 653 (1972). In Woodie, 128 Md.App. at 406-07 , 738 A.2d 334 , after noting the need for a streamlined process to handle the large number of unemployment insurance disputes, this Court observed that “unemployment insurance law is silent on the issue of remands.” In Woodie , the circuit court had made no analysis of whether the record contained substantial evidence to support the decision of the agency “before deciding to remand for what it termed a