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Tennessee Credit Union v. Wanda Powell

Court of Appeals of Tennessee, Nashville

June 19, 2019

TENNESSEE CREDIT UNION
v.
WANDA POWELL ET AL.

          Assigned on Briefs March 1, 2019

          Appeal from the Chancery Court for Davidson County No. 17-1158-III Ellen H. Lyle, Chancellor

         This is an appeal of an employer's Petition for Judicial Review, which challenged a ruling by the Tennessee Department of Labor and Workforce Development that the employer's former employee was entitled to unemployment benefits. The employer contended the employee was ineligible for benefits because she was terminated for "misconduct," as defined in the Tennessee Employment Security Act, for violating a policy known to the employee by using the employer's property for a non-business-related purpose. The Department found that the employee's frequent use of the employer's internal instant message system to "chat" with co-workers was an error in judgment or discretion but did not rise to the level of "misconduct," which Tenn. Code Ann. § 50-7-303(b)(3) defines as excluding "good faith errors in judgment or discretion." The chancery court affirmed the agency's decision. The employer appeals, contending the "good faith exception" never applies when an employee is discharged for violating an employer's policy or rule. The Department counters, insisting the good faith exception applies regardless of the employer's reason for termination. Construing the statute according to the natural, ordinary meaning of the language chosen by the legislature, we have determined that an employee's violation of an employer's policy that is due to good faith errors in judgment or discretion does not constitute "misconduct" as that term is defined in Tenn. Code Ann. § 50-7-303. Accordingly, we affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

          Charles Stephen Michels, II, and L. Gino Marchetti, Jr., Nashville, Tennessee, for the appellant, Tennessee Credit Union.

          Jeffrey O. Powell, Hendersonville, Tennessee, for the appellee, Wanda Powell.

          Herbert H. Slatery, III, Attorney General and Reporter, and Amber L. Seymour, Assistant Attorney General, Nashville, Tennessee, for the appellee, Tennessee Department of Labor & Workforce Development, and Wanda Powell.

          Frank G. Clement Jr., P.J., M.S., delivered the opinion of the Court, in which Thomas R. Frierson II and Kenny W. Armstrong, JJ., joined.

          OPINION

          FRANK G. CLEMENT JR., P.J., M.S.

         Factual and Procedural History

         Wanda Powell ("Ms. Powell") worked for the Tennessee Credit Union ("Employer") as a member services representative for five years until Employer terminated her employment on December 12, 2016, along with the employment of three other employees, for excessive, non-business-related use of Employer's recently installed instant message system.

         The instant message system was installed in July or August 2016 and was to be used by employees to communicate with each other regarding business matters. Employer had a long-standing Information System policy ("the Policy") that "employees should use any information system for business purposes only."

         In December 2016, an assistant branch manager noticed that Ms. Powell was using the instant message system frequently. The manager retrieved and provided Ms. Powell's messaging logs to Employer's human resources generalist, who provided the logs to Employer's Chief Executive Officer. After reviewing up to six of the approximately 35 pages of messages, the CEO decided to terminate Ms. Powell and the other three employees for excessively using the instant message system for non-business purposes.

         On January 8, 2017, Ms. Powell filed an application for unemployment benefits with the Tennessee Department of Labor and Workforce Development ("the Department"). On May 4, 2017, the Department issued a Disqualifying Separation Determination, finding that Ms. Powell did not qualify for unemployment benefits under Tenn. Code Ann. § 50-7-303. The Department explained that Ms. Powell's actions constituted work-related "misconduct" under § 303 because she was discharged for violating Employer's rule against improper internet usage.

         On May 19, 2017, Ms. Powell filed an appeal with the Department's Appeals Tribunal. Ms. Powell contended that Employer's stated reason for her discharge was false and pretext for retaliatory animus. In response, Employer filed, inter alia, a copy of the Policy, a transcript of the instant message conversations, and a copy of a previous reprimand Ms. Powell received for violating the Policy in October 2015 by using a company computer to browse the internet. The 2015 reprimand required a review of the Policy "with special attention to the Procedure and Restrictions section," which outlined "the proper usage of the [i]nternet"[1] and warned, "Any further violation will lead to termination." The Policy provided that "employees should use any information system for business purposes only." The Policy's Procedures and Restrictions section stated that it was "strictly forbidden to receive, send, publish, transmit, disseminate, republish, retransmit, store or redisseminate sexually-oriented messages, information or ...


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