Background
Carol Greenhouse worked as an innkeeper for Sleepy Hollow Inn Ski and Bike LLC, a family-owned inn managed by Sandra Enman and her children Eli Enman and Molly Peters, from June 2022 to January 2025. She was directly supervised by Eli Enman, who gave her overwhelmingly positive feedback, though supervisory duties overlapped with other family members. Sandra Enman maintained separate dissatisfaction with Greenhouse’s performance, citing issues such as inadequate flower maintenance, deficient cleaning, poor food catering, and taking vacation at inconvenient times. Greenhouse was never given written performance evaluations, verbal warnings, or notice that her job was at risk.
Employer terminated Greenhouse following two specific events: she took a personal vacation in January during a busy period — after notifying Eli Enman, who did not object, and arranging substitute coverage — and she declined to provide employer with past hours data in connection with a Department of Labor inquiry into her unemployment claim. After her termination, Greenhouse applied for unemployment benefits. The Employment Security Board, adopting the administrative law judge’s findings, determined she was eligible because her discharge did not constitute employment-related misconduct under Vermont law.
Sleepy Hollow appealed to the Vermont Supreme Court, arguing the Board erred in finding it failed to meet its burden of proving misconduct. Employer also raised procedural objections — that the ALJ proceeded without key witness Eli Enman and refused to admit text and email evidence — but those arguments had not been raised before the Board and were therefore unpreserved.
The Court’s Holding
The Vermont Supreme Court affirmed the Board’s decision. Under 21 V.S.A. § 1344(a)(1)(A), an employee is disqualified from unemployment benefits only if discharged for misconduct connected with her work — defined as a “substantial disregard of the employer’s interest, either wilful or culpably negligent.” The burden of proving disqualifying misconduct rests on the employer. The Court found ample support in the record for the Board’s conclusion that Sleepy Hollow did not meet that burden.
The Court rejected the employer’s argument that the Board improperly focused on the absence of warnings. While warnings are not a legal prerequisite for a misconduct finding, the Court confirmed they are relevant to whether a claimant’s conduct was willful or amounted to intentional disregard of the employer’s interests. Here, Greenhouse received no warnings, faced no clear written or oral policies, and operated under conflicting instructions from different members of the Enman family. Her vacation was taken with at least tacit supervisory approval, and her refusal to supply hours data was reasonable given that the Department of Labor had specifically requested it from the employer for comparison purposes.
The Court also declined to reach the employer’s unpreserved procedural arguments — that the hearing should have been postponed for Eli Enman’s absence and that additional documentary evidence should have been admitted — because employer failed to raise those objections before the ALJ. The Court affirmed on all grounds.
Key Takeaways
- An employer bears the burden of proving that a discharged employee’s conduct rises to the level of “substantial disregard” — willful or culpably negligent — of the employer’s interests to disqualify the employee from unemployment benefits; poor performance, mistakes, and errors in judgment do not suffice.
- Although written warnings are not legally required to support a misconduct finding, their absence is relevant evidence that the claimant’s conduct was not willful, particularly where the employer also lacked clear workplace policies.
- Conflicting directions from multiple supervisors undercuts an employer’s insubordination argument, as employees cannot be held to standards that were never clearly communicated.
- Procedural objections to ALJ proceedings — such as objecting to a hearing proceeding without a key witness or seeking admission of additional evidence — must be raised before the agency or they are forfeited on appeal.
Why It Matters
This decision reinforces that Vermont’s unemployment compensation system is construed broadly in favor of claimants, consistent with its remedial purposes. Employers seeking to deny benefits on misconduct grounds must do more than catalog performance deficiencies; they must demonstrate conduct that is genuinely willful or culpably negligent. The absence of documented policies, written warnings, or clear expectations will significantly undermine a misconduct claim, even where an employer had legitimate dissatisfaction with an employee’s work.
For Vermont employers, the case is a practical reminder that good documentation and clear communication of workplace expectations are not merely best practices — they are potentially determinative in unemployment proceedings. For employment lawyers advising either side, the decision also highlights the importance of preserving procedural objections at the agency level, as failure to do so will foreclose those arguments on appeal regardless of their merit.