Arizona Court of Appeals Decision Highlights Employer’s Burden of Proving Disqualification from Unemployment Benefits

The Arizona Court of Appeals recently issued an opinion overturning the Unemployment Insurance Appeals Board’s denial of unemployment benefits to an employee who was terminated for excessive tardiness. Importantly, the court ruled in favor of the employee because it found that the employer failed to prove that the employee’s tardiness constituted “willful or negligent misconduct,” as required under Arizona law. Even though the employer claimed the employee had violated its policies, the employer did not establish that the violation rose to a level of misconduct required to deny unemployment benefits. Norwood v. Arizona Department of Economic Security, No. 1 CA-UB 12-0129, Arizona Court of Appeals (May 23, 2013).

Lenita Norwood was employed as a lab technician by Women’s International Pharmacy, Inc. On April 26, 2011, Norwood was three minutes late to work and the company issued her a written warning providing that another late arrival would result in termination. The following day, Norwood again arrived three minutes late and, consistent with the warning, she was terminated for violating the company’s tardiness policy. The employer maintained that its tardiness policy was integral to the functioning of the pharmacy. Norwood claimed, however, that she was not reprimanded for over three years—despite being late to work on prior occasions.

Norwood applied for unemployment benefits, which were originally denied by the Arizona Department of Economic Security and the Appeals Board. Norwood appealed this decision to the Arizona Court of Appeals. The Court of Appeals reversed, explaining that the employer bears the burden of proving that the employee was discharged for “reasons that should disqualify her for unemployment benefits.” The employer failed to carry that burden here.

In order for an individual to be disqualified from receiving unemployment benefits, the misconduct must constitute “a material or substantial breach of the employee’s duties or obligations pursuant to the employment or contract of employment or which adversely affects a material or substantial interest of the employer.” See A.R.S. § 23-619.01. While the court noted that “repetition of tardiness” could constitute disqualifying misconduct, usually “limited incidents of slight tardiness” do not. In this case, the record indicated that the company tolerated Norwood’s tardiness for over three years and only documented the late arrivals on the two days in April 2011 following a change in management. The court explained that the employer failed to meet its burden to show that these two incidents constituted misconduct that affected its substantial and material interests. Therefore, the court reversed the Appeals Board’s determination and remanded for an award of benefits.