Background
Nancy M. Johnston worked as an office manager responsible for overseeing payroll. She often worked overtime and initially reported those hours on an overtime timecard. Her employer later instructed her to keep her own records so that she could receive compensatory time off, but subsequently told her that, as an hourly employee, she was ineligible for that compensatory time.
Believing that she had earned the time off, Johnston submitted a timecard falsely stating that she had worked on a day when she was absent. The Employment Department determined that she had been discharged for misconduct and was therefore disqualified from receiving unemployment benefits. Although Johnston prevailed before an administrative law judge, the Employment Appeals Board reversed and denied benefits.
The Court’s Holding
The Oregon Court of Appeals affirmed the EAB’s order. It declined to consider Johnston’s arguments that she consciously refused to comply with an unreasonable employer policy and that the employer’s allegedly unlawful conduct changed the behavior it could reasonably expect from employees. Those theories had not been presented during the administrative proceedings, and Johnston neither requested plain-error review nor identified an error that appeared plain.
The court also upheld the EAB’s conclusion that falsifying the timecard exceeded an isolated instance of poor judgment. A reasonable employer could find that a payroll manager breached the trust required by her position by misrepresenting her own hours, even if her frustration over uncompensated work was reasonable. Because the EAB found that the act made continued employment impossible, it was not separately required to find an irreparable breach of trust.
The EAB’s decision was supported by substantial evidence and substantial reason: Johnston held a position requiring a high degree of trust, falsified her own timecard, and attempted to deceive her employer about the falsification. Her understandable frustration did not make falsification a legally permissible remedy.
Key Takeaways
- Legal theories not raised before the ALJ or EAB generally are not preserved for judicial review, even when the claimant appeared pro se and prevailed before the ALJ.
- A payroll manager’s intentional falsification of her own timecard can make continued employment impossible and therefore exceed an isolated instance of poor judgment.
- Under OAR 471-030-0038(1)(d)(D), the EAB may find conduct exceeds poor judgment because it either creates an irreparable breach of trust or otherwise makes continued employment impossible; it need not establish both.
Why It Matters
The decision illustrates the importance of presenting all potentially applicable legal theories during unemployment-benefit proceedings. Success before an ALJ does not excuse a claimant from preserving arguments that later may become relevant before the EAB or on judicial review.
It also shows that an employee’s legitimate grievance with an employer does not necessarily prevent intentional dishonesty from constituting disqualifying misconduct, particularly when the employee occupies a trust-sensitive payroll position. The opinion is a nonprecedential memorandum opinion under ORAP 10.30 and may be cited only as that rule permits.