IN THE COMMONWEALTH COURT OF PENNSYLVANIA

IN THE COMMONWEALTH COURT OF PENNSYLVANIA Lawrence P. Olster, : Petitioner : : v. : : Unemployment Compensation : Board of Review, : No. 763 C.D. 2012 Respondent : Submitted: October 5, 2012 BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McGINLEY FILED: November 13, 2012 Lawrence P. Olster (Claimant) challenges the order of the Unemployment Compensation Board of Review (Board) that reversed the referee s grant of benefits and determined that Claimant was ineligible to receive unemployment compensation benefits under Section 402(b) of the Unemployment Compensation Law (Law). 1 Claimant worked as a pharmacist for New Life Home Care, Inc. (Employer). His last day of work was September 28, 2011. Claimant applied for unemployment compensation benefits. The Unemployment Compensation Service Center found Claimant eligible for benefits. Employer appealed. 1 P.S. 802(e). Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43

At hearing before the referee, Mildred Marcial (Marcial), secretary receptionist for Employer, testified that Claimant told her that Mr. [Greg] Malia [CEO of Employer] (Malia) had suspended him for insubordination. Notes of Testimony, December 5, 2011, (N.T.) at 4; Reproduced Record (R.R.) at 15. Marcial explained that she believed that Claimant quit his job [b]ecause he had returned the keys back the next day at 10:30 a.m. N.T. at 4-5; R.R. at 15-16. Marcial explained: N.T. at 5; R.R. at 16. Mr. Olster stated that he was fired, and I had told him you were suspended for insubordination. He, himself, had told me that he was suspended, and he automatically said that means I m fired. And I told Larry no it doesn t, it means you re suspended for insubordination. And I told him... by returning the keys and not coming back, he claimed that he wasn t going to come back, that means that he s quitting.... Marcial further testified that Claimant wanted her to sign a letter which stated that Claimant was returning his keys because he was fired. Marcial refused. She typed a new letter which stated that Claimant was returning the keys to the pharmacy. N.T. at 5-6; R.R. at 16-17. Claimant denied that he quit his job. He testified, I was told to get out, I was insubordinate, I was stupid, and Mr. Malia, he kept telling me this on the phone, and he said get out you re fired. N.T. at 10; R.R. at 21. Claimant admitted that he was insubordinate because Malia wanted to commit medical insurance fraud: 2

N.T. at 11; R.R. at 22. First of all in the process of dealing with that we call human hemophilia factors. We got a call from a patient that they needed a refill, or a resupply of their medication. I would go to the vendors, I would order the product, because we never really had the product in stock, like on standby. So I would order the product, get the product in with the correct lot numbers, expiration dates, etcetera [sic]. I would process the prescription through the computer with the expiration dates and lot numbers, and then... we would have the billing person, the billing clerk, bill the patient s insurance; okay? Mr. Malia, he had no credit over the course of my time that I was there, he was slowly losing any credit that he was that they were giving him, that... vendors were allowing him, and everything was going to be cash... COD. And what he did was he wanted me to actually process the prescription and bill the insurance before I even had the product in stock. And that s a form and I called the State Board Pharmacy, and they told me that s a form of medical insurance fraud. So that s why I was insubordinate, because this would have jeopardize [sic] my pharmacist license where I would not be able to practice pharmacy. Claimant explained that it was not permissible to bill an insurance company for drugs that the pharmacy has not yet received or dispensed. Hemophilia drugs cost an average of $80,000 to $120,000.00 per order. N.T. at 11-12; R.R. at 22-23. 2 The referee affirmed and made the following relevant findings of fact: 2 Elliott Silkowski, a doctor of pharmacy and Claimant s predecessor with Employer, corroborated Claimant s testimony regarding the billing for pharmaceutical products. 3

3. There is a dispute between the parties concerning whether the claimant quit or was discharged. 4. The claimant contends he was discharged. 5. The employer contends that the claimant was initially suspended for an indefinite period of time and that the claimant quit the second day of the suspension. 6. The claimant did not quit his employment. 7. The claimant was suspended indefinitely by New Life Home Care CEO Greg Malia for alleged insubordination. The nature of the insubordination alleged was that Greg Malia directed the claimant to bill an insurance carrier for hemophilia drugs/plasma that had not yet been ordered or received at New Life Home Care Pharmacy..... 9. The claimant refused to comply with Greg Malia s order to bill the insurance company because to bill the insurance company in advance of placing and receiving the order for hemophilia drugs and/or plasma is contrary to the laws and regulations of the Commonwealth of Pennsylvania. 10. The claimant is a registered licensed pharmacist in the Commonwealth of Pennsylvania [and] is required to abide by all the rules and regulations for pharmacies as well as the applicable rules and/or regulations for billing insurance carriers for drugs and/or plasma. 11. The claimant had good cause for refusing to comply with Greg Malia s order because the order was contrary to Pennsylvania s law and/or regulations and would place the claimant s pharmacy license in jeopardy with the Commonwealth of Pennsylvania for violating the law and/or regulations. Referee s Decision, December 6, 2011, (Decision), Findings of Fact Nos. 3-7, and 9-11 at 1-2; R.R. at 7-8. 4

The referee determined: The referee notes there is a conflict between the claimant and the employer witnesses over whether or not the claimant was discharged or quit his employment. Having carefully considered the testimony presented, the referee finds and concludes that the claimant was suspended indefinitely and not recalled to work and accordingly the referee finds and concludes that Section 402(e) of the Pennsylvania Unemployment Compensation Law is the correct section of law to resolve this case. At hearing, the claimant testified credibly that the CEO of the New Life Home Care Greg Malia ordering the claimant to violate Pennsylvania law and/or regulations concerning the ordering of drugs in that Greg Malia wanted the claimant to bill the insurance carrier prior to the placing of the drug order so that the proceeds from the insurance company could be used to pay for the order. The claimant as well as a claimant witness testified credibly that to do so would be contrary to Pennsylvania s laws and regulations and accordingly the referee finds and concludes that the claimant had good cause for not complying with the CEO s directive because it would be a violation of state law and place the claimant s pharmacy license in jeopardy of suspension and/or revocation. Since the claimant had good cause for the actions that led to his suspension, benefits must be allowed under Section 402(e) of the Pennsylvania Unemployment Compensation Law. Decision at 2; R.R. at 8. By letter dated December 20, 2011, Employer appealed to the Board. In the letter, Marcial stated: The facts do not match the record of the hearing on December 5, 2011 on the same matter. Mr. Larry Olster was suspended for repeatedly placing calls to the President relating to previous notice that his hours were 5

being changed due to Larry s inability to fulfill all of his job duties. Larry was instructed by the JR [sic] Director that the decision was strictly an HR matter and he was to stop calling the President. Mr. Olster refused to accept part time in spite of his own admissions that he was unable to do much of what was in his job description. Mr. Olster was suspended for one day on September 28, 2011 due to harassing calls to the President and refusing to follow the HR director[ ]s instructions not to continue calling the corporate president. Letter from Mildred Marcial, December 20, 2011, at 1; R.R. at 9. The Board determined that Claimant was not discharged from his position with Employer. The Board determined that Claimant voluntarily quit without making a good faith effort to preserve his employment relationship and was ineligible for benefits under Section 402(b) of the Law, 43 P.S. 802(b). The facts, as found by the Board, are as follows: 1. The claimant was last employed as a full-time pharmacist by New Life Home Care Inc. from May 5, 2011, at a final rate of $43.00 per hour and his last day of work was September 28, 2011. 2. On September 28, 2011, the claimant was directed by the chief executive officer (CEO) via a phone conversation to process a prescription for a customer for a hemophilia drug and bill the insurance company; although the employer did not have the product in stock. 3. The employer would normally bill the insurance company $80,000 to $120,000 for the hemophilia drug. 4. The claimant was aware that the employer was having financial problems. 5. The claimant refused the CEO s directive because he felt that it was illegal to pre-bill a customer s insurance when the product was not in stock. 6

6. The CEO told the claimant that he was being insubordinate. 7. When the claimant ended the phone conversation, the claimant told the employer s secretary that the CEO has suspended him for insubordination. 8. The claimant that [sic] stated, I guess that means I m fired. 9. The secretary told the claimant that a suspension did not mean that he was fired and if he turned in his keys, he would be quitting. 10. The claimant subsequently contacted the Pennsylvania State Board of Pharmacy regarding the matter and understood that it was medical insurance fraud to bill for a prescription before the product was in stock. 11. The claimant did not want to jeopardize his pharmacist license and livelihood by following the CEO s directive. 12. The claimant finished out the remainder of his shift on September 28, 2011. 13. When the claimant left the workplace, the claimant felt that the CEO would call him during the evening of September 28, 2011, and they could come to an amicable solution in regard to the directive. 14. After the claimant arrived home, he decided that the CEO would not change his mind about the directive. 15. On September 29, 2011, at 10:30 a.m., the claimant arrived at the workplace to turn in his keys. 16. The claimant had drafted a letter stating that he was fired and gave it to the receptionist to sign. 17. The receptionist stated that she would not sign the letter because it was a lie as the claimant was suspended. 7

18. The receptionist typed another letter indicating that the claimant had turned in his keys on September 29, 2011, and the claimant and the receptionist signed the letter. 19. On September 29, 2011, the CEO sent the claimant a letter indicating that the claimant had turned in his keys but the employer was unsure of his intentions as he offered no resignation letter or indication that he was quitting his employment. 20. The employer asked the claimant to clarify his intentions. 21. The claimant did not respond to the CEO s letter. 22. The claimant quit his employment when he turned in his keys because he believed that the employer would not change his mind about the directive to bill for the prescription before it was in stock. Board Opinion, March 30, 2012, (Opinion), Findings of Fact Nos. 1-22 at 1-3; Reproduced Record (R.R.) at 3-5. The Board determined: There was conflicting testimony as to whether the claimant was discharged or voluntarily quit his employment. The parties were advised via the hearing notice that both Section 402(e) and 402(b) of the Law would be at issue. The Board resolves the conflicts in the testimony, in relevant part, in favor of the receptionist and finds her testimony to be credible that the claimant indicated he was suspended. While the claimant had good cause for refusing the employer s directive because he understood that he would be committing medical insurance fraud, and therefore would be eligible for benefits under Section 402(e) of the Law for the suspension, the claimant subsequently turned in his keys the next day and ended the employment relationship. 8

The Board rules under Section 402(b) of the Law accordingly..... The claimant established that after arriving home on his final day of work, he decided that the CEO would not change his mind about the directive to pre-bill for the product and therefore decided to turn in his keys the next day. The claimant failed to credibly establish that it would have been futile for him to have informed the employer of his conversation with the State Pharmacy Board to allow the employer to consider this issue. The Board notes that here claimant was suspended however, the final separation came when the claimant turned in his keys and clearly quit. The claimant did not make a good faith effort to preserve the employment relationship. The claimant s belief that the employer would not change his mind is clearly subjective. The claimant has not met his burden under Section 402(b) of the Law. Opinion, at 3; R.R. at 5. Claimant contends that the Board erred when it overturned the credibility determinations of the witnesses who testified before the referee and resolved contradictory testimony in favor of Employer where the Board did not take any new testimony but accepted new evidence from Employer. Claimant also contends that the Board erred when it overturned the referee s findings of fact because Employer never specifically challenged any of the referee s findings and added new evidence into the record without providing Claimant the opportunity to respond. 3 3 This Court s review in an unemployment compensation case is limited to a determination of whether constitutional rights were violated, errors of law were committed, or findings of fact were not supported by substantial evidence. Lee Hospital v. Unemployment Compensation Board of Review, 637 A.2d 695 (Pa. Cmwlth. 1994). 9

In unemployment compensation proceedings the Board is the ultimate fact-finding body empowered to resolve conflicts in evidence, to determine the credibility of witnesses, and to determine the weight to be accorded evidence. Unemployment Compensation Board of Review v. Wright, 347 A.2d 328 (Pa. Cmwlth. 1975). Findings of fact are conclusive upon review provided that the record, taken as a whole, provides substantial evidence to support the findings. Taylor v. Unemployment Compensation Board of Review, 474 Pa. 351, 378 A.2d 829 (1977). Whether a termination of employment is voluntary is a question of law subject to this Court s review. The failure of an employee to take all reasonable steps to preserve employment results in a voluntary termination. Westwood v. Unemployment Compensation Board of Review, 532 A.2d 1281 (Pa. Cmwlth. 1987). A claimant who alleges that she did not quit but was terminated bears the burden of proof. Malloy v. Unemployment Compensation Board of Review, 523 A.2d 834 (Pa. Cmwlth. 1987). An employee voluntarily terminating employment has the burden of proving that such termination was necessitous and compelling. The question of whether a claimant has a necessitous and compelling reason to terminate employment is a question of law reviewable by this Court. Willet v. Unemployment Compensation Board of Review, 429 A.2d 1282 (Pa. Cmwlth. 1981). Claimant is correct that Employer did not introduce any evidence to substantiate the alleged harassing calls to Employer s president. However, a review of the Board s opinion reveals that the Board made no findings regarding 10

the reasons for the suspension listed in the appeal letter. Instead, the Board exercised its prerogative as factfinder, reweighed the evidence and found Employer s witness, Marcial, more credible than Claimant regarding whether Employer suspended or discharged Claimant. The Board found Marcial s testimony before the referee credible regarding whether Employer suspended Claimant. The Board did not base its credibility determinations on Marcial s letter which referenced the alleged harassing telephone calls. The Board found that Employer suspended Claimant. The Board then found that Claimant quit his employment when he turned in his keys and did not make a good faith effort to preserve his employment relationship in that he failed to inform Employer that billing the insurance company for the drug before it was in stock was a violation of his duties as a pharmacist according to the State Board of Pharmacy. The Board reasoned that Claimant s belief that Malia would not pay attention to the information from the State Board of Pharmacy was pure speculation. There is nothing in the Board s opinion to support Claimant s contention that the Board relied on or even considered the information contained in the appeal letter to make its decision. Claimant also contends that the Board erred when it overturned the referee s findings of fact because Employer did not specifically challenge the findings and when it added new evidence into the record on appeal from the referee and denied Claimant the opportunity to respond. 11

In Merida v. Unemployment Compensation Board of Review, 543 A.2d 593 (Pa. Cmwlth. 1988), appeal dismissed as improvidently granted, 524 Pa. 249, 570 A.2d 1320 (1990), this Court determined the requirements for an appeal from a referee s decision to the Board: More pertinent are Board Regulation 101.102 (governing appeals to the Board) and Board Regulation 101.82 (governing information to be included in the appeal filed with the referee). 34 Pa.Code 101.102, 101.82. Regulation 101.102 states that information pertaining to an appeal to the Board shall conform to the provisions of... [ ] 101.82. Regulation 101.82 requires, inter alia, that the appealing party state [t]he reasons for the appeal. To hold that this requirement is satisfied by language such as I disagree or the decision was wrong is to emasculate this provision since it is readily apparent that one who appeals obviously would not agree with the result below. A losing party never does. Obviously then, what is sought by the referee or Board is some indication, however inartfully stated, of precisely what error(s) occurred and where the tribunal should focus its attention. (Emphasis in original). Merida, 543 A.2d at 595. Here, the appeal from the referee under the space designated Reasons for Disagreeing with the Determination and Filing this Appeal are, Employer stated, Claimant voluteerly [sic] quit. He was suspended for insobordination [sic] & failure to follow policy. He quit the next day. Petition for Appeal, October 31, 2011, at 1. Given that the referee determined that Claimant was discharged, Employer clearly appealed this determination on the basis that instead of 12

terminating Claimant, Claimant voluntarily quit. Employer s stated reason for its appeal satisfies Merida. 4 Accordingly, this Court affirms. BERNARD L. McGINLEY, Judge 4 Claimant refers to the letter from Marcial which was attached to the appeal form and argues that the Board should have found that no issue was raised on appeal because the letter referenced an alleged suspension for harassing calls but never was part of the record. This Court determined that the Board did not consider this letter. Claimant fails to acknowledge the appeal form itself on which Employer met the requirements of Merida. 13

IN THE COMMONWEALTH COURT OF PENNSYLVANIA Lawrence P. Olster, : Petitioner : : v. : : Unemployment Compensation : Board of Review, : No. 763 C.D. 2012 Respondent : O R D E R AND NOW, this 13th day of November, 2012, the order of the Unemployment Compensation Board of Review in the above-captioned matter is affirmed. BERNARD L. McGINLEY, Judge