by Geoffrey K. Cummings, Esq.

Employers who are frustrated by decisions of the Maine Unemployment Insurance Commission awarding benefits to employees discharged for apparent misconduct will be heartened by a recent Maine Supreme Court decision.  The matter involved a production worker at Bath Iron Works (“BIW”) who was discharged after being discovered in a room where marijuana was present.  The Commission found that the discharge was attributable to an unresolved dispute concerning a possible return to work arising out of the employee’s union contract, not to the marijuana incident.  In a rare reversal of a Commission decision, the Supreme Court found that the claimant was discharged for misconduct connected with his employment and was not entitled to unemployment benefits.

The claimant’s saga began on April 4, 2003, when BIW supervisors discovered him and four others in a small room with marijuana and marijuana smoke.  BIW had a policy prohibiting drug use or possession which provided for discipline “up to and including discharge.”  The claimant was asked on the same day he was discovered in the room to submit to a drug test.  He refused and, accordingly, was placed on suspension.  An investigation was conducted and BIW terminated his employment on April 14.  The claimant’s labor union then entered into negotiations with the employer for a last chance agreement to bring the claimant back to work.  Representatives of the union and BIW reached an initial agreement, but the parties could not reach accord on the final details.   

The Commission decided that BIW did not actually discharge the claimant until May 5, the date on which negotiations on the details of the last chance agreement broke down.  The Commission, however, had also made a factual determination that the claimant had violated BIW’s drug policy.  The Commission found that the claimant did not violate any rules at or immediately before the date in May which the Commission had adopted as the termination date. The Commission attributed the firing to the employer’s failure to agree “with the terms of last chance agreement it had negotiated previously.”

In its discussion of the case, the Maine Supreme Court addressed the standards for vacation of an administrative decision.  Such decisions may not be allowed to stand where, among other things, a commission’s findings or conclusions are unsupported by substantial evidence.  The Court  further noted that the employer had the burden on appeal to demonstrate that the Commission was compelled, based on the record before it, to find that the Claimant was discharged for misconduct. 

The Court found that Bath Iron Works had met its burden.  It ruled that was no evidence on the record to support the Commission’s finding that the claimant was terminated only after negotiations to return him to work collapsed.  It found that the evidence showed that the discharge occurred earlier, on April 14.  That evidence included a number of documents, as well as the fact that the claimant first applied for unemployment benefits on April 19.  There was no substantial evidence in the record to support the Commission’s finding that the discharge date was May 5, when negotiations to return the claimant to work were terminated.

The Supreme Court relied heavily on a detailed analysis of the testimony and exhibits offered at the hearing before the Unemployment Insurance Commission.  The Court found that the extensive evidentiary record created by the employer compelled a finding in the employer’s favor.  In reviewing administrative decisions, the Maine Supreme Court frequently notes the fact that it may not substitute its own judgment for that of  a board or commission.  If the evidentiary record is adequate to support an administrative decision, the Supreme Court is bound to uphold it.  In this case, however, the evidentiary record amassed by the employer made it clear to the Court that there was no support for the Commission’s finding.  Bath Iron Works additionally argued that the Commission’s decision to review and evaluate the post termination conduct between the employer and the claimant’s union concerning a possible last chance agreement was ultra vires and was also preempted by federal law.  Because the Court found that the evidence compelled a decision in favor of the employer, did not reach the employer’s additional legal arguments. 

Bath Iron Works was represented by Preti Flaherty.  The case is Bath Iron Works Corp. v. Unemployment Insurance Commission, 2005 ME 54.