Background
Hye Ja Choi worked as a part-time Japanese-speaking airport tour guide for Tachibana Enterprises, LLC from 2016 until she was terminated on March 30, 2020, at the outset of the COVID-19 pandemic. Tachibana opposed her unemployment claim, asserting she had been discharged for misconduct based on three incidents: her alleged refusal to sign an acknowledgment of a revised employee handbook, a February 17, 2020 complaint from an airport employee that Choi improperly attempted to route a passenger family through a TSA gold lane, and a February 20, 2020 complaint from Japan Airlines that Choi yelled at its staff on behalf of a tour group passenger.
The Department of Labor and Industrial Relations Employment Security Appeals Referees’ Office (“DLIR”) reversed an initial grant of benefits, finding all three incidents constituted misconduct under Hawaiʻi Administrative Rules § 12-5-51(c) that disqualified Choi from unemployment benefits. The Circuit Court of the First Circuit and the Intermediate Court of Appeals both affirmed. Choi, representing herself with limited English proficiency, sought certiorari, and the Supreme Court accepted the case.
A key factual dispute concerned the handbook acknowledgment: Tachibana set a January 31, 2020 deadline, but its own tour guide assistant manager did not email the Japanese-speaking guides until February 7–8, 2020 — after the deadline had already passed. Additionally, although Tachibana issued Choi a first written warning on March 16, 2020 and explicitly gave her until April 14, 2020 to sign, the company terminated her on March 30, 2020 — two weeks before its own stated deadline.
The Court’s Holding
The Supreme Court of Hawaiʻi unanimously vacated the decisions of the DLIR, circuit court, and ICA and remanded to the DLIR to calculate the unemployment benefits owed to Choi. The court held that Tachibana failed to meet its burden of proving that any of the three alleged incidents satisfied the definition of “misconduct” under HRS Chapter 383 and HAR § 12-5-51(c). Under that standard, misconduct requires actions showing a “wilful or wanton disregard of the employer’s interests” — a deliberately high bar that excludes isolated negligence, good-faith errors in judgment, and unsatisfactory conduct stemming from inability or incapacity.
On the handbook-signing incident, the court found the DLIR’s misconduct conclusion could not stand as a matter of law. The notification deadline had already lapsed before Choi was even informed of the requirement, the handbook itself instructed employees to ask supervisors about provisions they did not understand (exactly what Choi did), and Tachibana’s own written warning gave her until April 14, 2020 to comply — yet terminated her two weeks early without further process. The DLIR appeals officer’s finding that the warning told Choi to comply “as soon as possible” was “clearly erroneous” in light of the unambiguous April 14 deadline in the written warning itself. The court declined to find that the February 17 TSA gold lane incident or the February 20 Japan Airlines complaint — both disputed and each representing an isolated customer service interaction — rose to the level of wilful or wanton disregard required for a misconduct disqualification.
Key Takeaways
- The burden of proof rests on the employer to demonstrate that a claimant was discharged for misconduct; an employer’s characterization of incidents as “insubordination” or “unprofessional conduct” does not automatically satisfy that burden.
- An employer cannot establish a “refusal” to comply with a directive when its own internal delay caused the employee to miss the stated deadline, and cannot terminate for failing to meet a deadline it had extended in a formal written warning.
- Isolated customer service complaints — even if genuine — do not meet the “wilful or wanton disregard” threshold required for a misconduct disqualification under HAR § 12-5-51(c) absent evidence of deliberate, knowing violation of a known workplace standard.
- Hawaiʻi’s unemployment statute is to be liberally construed in favor of claimants, consistent with its “beneficent and humane purpose of relieving the stress of economic insecurity due to unemployment.”
Why It Matters
This decision reaffirms that Hawaiʻi’s misconduct disqualification is a demanding standard that employers cannot satisfy simply by cataloguing workplace friction or characterizing an employee’s behavior as insubordinate. Employers must show wilful or wanton disregard — not mere performance deficiencies or disputed service complaints. The ruling is especially significant for workers in tourism and hospitality, industries that saw catastrophic unemployment in Hawaiʻi at the onset of COVID-19, and signals that courts will scrutinize whether the factual record actually supports a misconduct finding rather than deferring wholesale to agency determinations.
For practitioners, the case illustrates several pitfalls for employers contesting unemployment claims: inconsistency between stated deadlines and termination timing, a progressive-discipline notice that explicitly extends a deadline, and the failure of the notification process itself — all undermined Tachibana’s position at every level of review. Defense counsel representing employees in agency proceedings should closely examine the employer’s own documents and disciplinary timeline, as internal inconsistencies can be dispositive on the misconduct question.