2016 WL 6946909 (Mash. Pequot Ct. App.)
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Mashantucket Pequot Court of Appeals.
MASHANTUCKET PEQUOT GAMING ENTERPRISE.
Nov. 7, 2016.
Attorneys and Law Firms
M. John Strafaci, Esq., for the Plaintiff–Appellee.
Tawnii Cooper–Smith, Esq., for the Defendant–Appellant.
BY THE COURT: GREGORY BIGLER, Judge, THOMAS WEATHERS, Judge and ROBERT BLAESER, Judge.
GREGORY BIGLER, Judge.
*1 This appeal by the Defendant below, Mashantucket Pequot Gaming Enterprise, raises the issue of whether the inclusion of inactive discipline in the Board of Review Record destroyed the integrity of the review process. The Gaming Enterprise terminated the Plaintiff’s employment for violating the Gaming Enterprise’s Standards of Conduct (theft or appropriation of property of the Gaming Enterprise or the property of others) and a violation of the Gaming Enterprise’s Lost and Found Policy (which requires that a found slot redemption slip be turned over to security personnel.) The allegation was that a patron’s $81.50 redemption ticket was taken by the Plaintiff knowing it was not intended as a tip. The Plaintiff appealed his termination to a Board of Review which unanimously upheld the termination and concluded the Plaintiff violated the standards of conduct pertaining to misappropriation of property and the lost and abandoned property policy. The Trial Court, while finding the evidence supported the Board of Review’s decision, also found the inclusion of prior inactive discipline so fatally flawed the hearing process that reversal was required. Appeal to this Court, sitting en banc, followed.1 For the reasons discussed below, we reverse the Trial Court and affirm the decision of the Board of Review.
I. STANDARD OF REVIEW
Because the Trial Court did not make any factual findings but instead relied on the administrative record, our review of the Trial Court’s decision to reverse the Board of Review is de novo and the provisions of Title 8, as amended, apply to this appeal. Title 8 requires the court determine whether the Board’s Final Decision was appropriate by considering whether:
(1) There was a reasonable basis for the Board of Review’s consideration that the Employee did or did not violate the policies and/or procedures established by the Employer for the position held by the Employee;
(2) There was a reasonable basis to find that the Employer did or did not substantially comply with the policies and/or procedures regarding discipline;
(3) The Employee was given a description of the offense or conduct that was the basis for the Disciplinary Action and both parties were afforded a reasonable opportunity to present and refute evidence regarding the offense or conduct and/or evidence of aggravating or mitigating circumstances relating thereto;
(4) There was a reasonable basis for the Board of Review’s decision as to whether the form of discipline was or was not appropriate for the offense or conduct; and
(5) The Board of Review’s decision is in violation of tribal law or exceeds the Board’s authority under tribal law.
8 M.P.T.L. ch. 1 § 8(f).
We give deference to the Board of Review’s decision. See Mashantucket Pequot Gaming Enterprise v. McDuffee, 6 Mash.Rep. 147, 156 n. 5 (Mashantucket Pequot Trib.Ct.2014) (“The decision of the Board of Review must carry some weight; otherwise, the Board of Review hearing process would be rendered meaningless.”). We review “whether the Board of Review’s final decision (not management’s decision) was appropriate by considering whether there was a reasonable basis for the Board of Review’s decision (not management’s decision) as to the appropriateness of the form of discipline for the offense.” Id. at 153.
*2 “[A] ‘reasonable basis’ means a determination of whether there is substantial evidence in the record to support the findings of fact and conclusions drawn therefrom.” Walton v. Mashantucket Pequot Gaming Enterprise, 6 Mash.Rep. 20, 24 (Mashantucket Pequot Trib.Ct.2012).
Substantial evidence is more than a scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. The evidence must afford a substantial basis of fact from which the fact in issue can be reasonably inferred and it must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury. It is not necessary that such evidence be unequivocal, but rather that it support the [Board’s] findings.
Magee v. Mashantucket Pequot Gaming Enterprise, 4 Mash.App. 40, 53 (Mashantucket Pequot Ct.App.2007) (citations and quotation marks omitted).
“If substantial evidence exists, and if the [Board’s] conclusions are rational and reasonable, the reviewing court would find that the [Board] had a reasonable basis for concluding that the employee violated the policies or procedures established for the position held by the employee.” George v. Mashantucket Pequot Gaming Enterprise, 5 Mash.Rep. 322, 329 (Mashantucket Pequot Trib.Ct.2010) (citations and quotation marks omitted). “If substantial evidence does not exist, or if the [Board’s] conclusions are not reasonable or rational, the decision would constitute a clear error of judgment and the [Board] would not have a reasonable basis for concluding that the employee violated the policies or procedures of the Gaming Enterprise.” Id. at 329 (citations and quotation marks omitted).
“In determining whether or not substantial evidence exists, this Court’s review is limited to the Record and any briefs or oral argument provided by the parties. The Court may not substitute its own judgment for that of the Board of Review.” Mashantucket Pequot Gaming Enterprise v. Prentice, 6 Mash.Rep. 110, 112 (Mashantucket Pequot Trib.Ct.2013). “[J]udicial review of the administrative decision to suspend or terminate an employee at the Gaming Enterprise is extremely limited.” Johnson v. Mashantucket Pequot Gaming Enterprise, 1 Mash.App. 21, 27, 1 MPR 15 (Mashantucket Pequot Ct.App.1996) (citations and quotations marks omitted).
The Trial Court recited the following facts in support of its decision:
On the evening of May 2, 2012 the plaintiff was working as a bartender at the “HALO” Bar, located in the Pequot Casino. Video slot machines are inset into the surface of the bar so patrons can gamble while seated at the bar. A female patron was seated at the bar playing one of the video slot machines, and eventually moved over one seat to play an adjacent machine. She placed her purse on the surface of the bar between the two video machines. She also placed a paper voucher or receipt, sometimes called a redemption slip or ticket, next to her purse between the two machines. The amount printed on the redemption slip was $81.50.
*3 Trial Court Memorandum of Decision (hereinafter Decision) at 1–2. The Trial Court reviewed the video of the incident and noted that:
The plaintiff served the patron a beer and can be seen on the video reaching for, picking up and holding up the redemption slip. The plaintiff testified that he asked the patron if the voucher was hers and she responded “No, it’s all yours.” The plaintiff understood this to mean that she was offering the voucher to him as a tip.
Id. at 2. The Trial Court, in its Decision, described the scene in the video surveillance:
He [Plaintiff] is then seen looking at the slip and dropping it onto the counter below the bar. A few minutes later, the plaintiff broke a ten dollar bill for the patron into two five dollar bills. As she was leaving the bar area, the patron left one five dollar bill on the surface of the bar, presumably as a tip. The plaintiff placed the five-dollar bill into the tip bucket behind the bar.
Id. The Court also references the facts that:
The plaintiff testified that in his experience it is not unusual to receive large tips in the form of redemption slips from patrons who had good luck at the slots or table games. On those occasions, he does not immediately put the slip into the tip bucket, because sometimes a patron changes his or her mind, or their luck changes, and they want the slip back. For this reason, he waits until the end of his shift to put vouchers into the tip bucket and cash out, and that is what he did with this $81.50 voucher. Later, when employees processing the $81.50 redemption slip at the casino’s “Satellite Bank” became aware that it had been submitted as a tip, they reported it to the Security Department. Security personnel first reviewed the video and spoke to the plaintiff. About two weeks later, on May 18, 2012, the patron was interviewed. She had no direct recollection of the circumstances, but thought she may have “misplaced” a slot ticket. When the investigator asked her if she left a ticket at the HALO Bar, she responded “oh, that’s where I left it.” In a later interview, on May 23, 2012 the patron reported that she “was unsure of where or how she had misplaced the ticket, but knew it was missing.” When asked if she recalled any details of her conversation with the plaintiff, she responded, “no, not that I recall.”
Id. at 2–3. This incident resulted in the employee being terminated from his employment, which he appealed to the Board of Review, which set and held its hearing as required.
In apparent accordance with management’s prior practice with respect to Board of Review hearings, the Board was presented with the entire record by management along with any supplemental materials submitted by the Plaintiff. Prior to the commencement of the hearing, the Board reviewed all of the materials including the documents regarding alleged prior misconduct. This record, as presented to the Board, contained extensive documentation of alleged prior misconduct dating back to 1993. Record at 45–168. The Trial Court made special note of a copy of a “Settlement Agreement and Release” executed by the Plaintiff and the Gaming Enterprise pertaining to a previous attempt by the Gaming Enterprise to terminate the Plaintiff’s employment in 2005 for employee theft and dishonesty. Decision at 14, citing Record at 62. This Settlement Agreement and Release was a confidential agreement between the parties, and, according to the Interoffice Memorandum prepared by the Tribe’s legal counsel, Betsy Conway, Esq., the Gaming Enterprise agreed to change the termination to a suspension for violating policy with regard to “signing out a till.” (Plaintiff’s defense to his termination for theft in that matter was that another employee used his till and committed the offenses). Despite management rescinding Plaintiff’s termination in the previous proceeding, Defendant’s legal counsel at the Board of Review hearing raised all of these prior charges and argued Plaintiff did, in fact, commit theft on this prior occasion. Record at 221–222. Given that Plaintiff believed management would raise this issue at his Board hearing in this matter, he attempted to address the charges first during his opening testimony.
*4 The Board concluded the conduct occurred based upon the “video, John Flannerys [sic] testimony. Mr. Luond [sic] testimony proved not a credible source.” Record at IV. The Board then determined that termination was the appropriate sanction “because of past history and the current situation being reviewed.” Record at V. In arriving at its decision the Board considered the Plaintiff’s “past history, character, believability / credibility and video testimony / evidence.” Id. Thereafter the Plaintiff filed a timely appeal of the Board’s decision with the Trial Court.
Our task is three-fold. First, was the finding of the Board of Review that the Plaintiff violated the Gaming Enterprise’s standards of conduct, including theft and misappropriation of property (and violating the lost and abandoned property policy) properly supported? Second, was the form of discipline (i.e. termination) an appropriate sanction? Third, only if the answer is “yes” to the first two issues, does this Court then need to address whether the proceeding was so flawed by inclusion of prior history as to require reversal and reinstatement?
a. Was the Ticket Meant as a Tip?
First, this Court looks to the issue of whether there was a basis for finding the ticket was not meant as a tip. As noted above, it is not for the courts to substitute their judgement for that of the administrative body on the weight of the evidence or on questions of facts. See Prentice, supra. See also Barthelet v. Mashantucket Pequot Gaming Enterprise, 4 Mash.App. 8, 14 (Mashantucket Pequot Ct.App.2004); Eldred v. Mashantucket Pequot Gaming Enterprise, 4 Mash.App. 1, 3, 6 MPR 15 (Mashantucket Pequot Ct.App.2003). The theft charge arises from the employee’s retention of the patron’s slot redemption ticket. Under this analysis the first point for this consideration is that while the employee alleges the ticket was offered as a tip, the Board found it was not. Record at IV. Plaintiff asserts there was not sufficient evidence at the Board to support this finding primarily because the evidence offered was hearsay. However, as the Trial Court noted, at the administrative hearing the Board had the security video. Moreover, the witnesses who proffered the statements of the patron testified at the Board of Review hearing (as to the patron not giving the redemption ticket as a tip) “When [the investigator] asked if she left it as a tip for the bartender, the patron replied ‘Why would I leave that amount of money when I had already given him a tip for my beer?’ ” Record at 38.
Thus, the Plaintiff had an opportunity to cross-examine the investigators who offered the statements. Importantly, this Court has never held administrative hearings to the same hearsay standards as court proceedings: “It is well recognized that hearsay may constitute substantial evidence in the administrative context.” Magee, 4 Mash.App. at 52. “Hearsay statements are acceptable in an administrative appeal if found to be trustworthy.” Rentas v. Mashantucket Pequot Gaming Enterprise, 5 Mash.Rep. 431, 435 (Mashantucket Pequot Trib.Ct.2012) (emphasis added). Thus, the Trial Court was correct in finding at the Board level there was “substantial evidence to support the Board’s finding of fact that the slot redemption ticket was not intended by the patron to be a tip or a gift.” Decision at 12. This Court agrees and will not supplant the administrative finding. See Eldred, supra.
b. Did the Plaintiff Know the Ticket Was Lost or Stolen?
*5 We thus move to the second part of determining appropriateness of the Board’s findings—did Plaintiff know the ticket was lost or stolen? Both parties reference the video log of the evening in question. The security video, the Trial Court noted, showed the slot ticket was not left in easy reach of the Plaintiff and that he had to stretch to reach it. Decision at 11. The Trial Court also found the video showed the Plaintiff dropping the ticket on the counter beneath the surface of the bar, rather than placing it in the tip bucket with all his other tips. Id. Lastly, the Plaintiff was unable to explain why the patron would leave another $5.00 tip for a free beer shortly after leaving the $81.50 slot ticket as a tip. As the lower court found, the Record had sufficient evidence to support the Board’s finding of fact. The lower court limited this finding to the issue of the patron not intending the ticket to be a tip, but the same evidence supports a finding the Plaintiff knew the ticket was lost or stolen. Again, it is not whether the courts would hold the same as the Board but whether there was a reasonable basis for the finding of the Board. In this case, that level of evidence certainly existed before the Board.
c. Did Inclusion of Prior History in the Administrative Record Fatally Prejudice the Administrative Proceeding?
As we have found that the patron’s ticket was not meant as a tip and that Plaintiff knew the ticket was lost or stolen, we turn to the third issue. The crux of the appeal to this Court arises through the interpretation of 8 M.P.T.L. ch. 1 § 1, Employee Review Code—Definitions:
Unless otherwise required by the context, the following words and phrases shall be defined as follows:
e. “Board of Review Record” or “Record” means the evidence presented to the Board of Review. This Record shall include all Active Discipline and any other relevant material in the Employee’s personnel file. In connection with the determination required pursuant to § 8(f)(3) herein, the Record may include performance reviews, character witness statements, commendations, and other discipline.
(Emphasis added.) 8 M.P.T.L. ch. 1 § 1(a) defines Active Discipline as “[D]iscipline for the past 12 month period. In situations where identifiable similar policy violations, behavior issues, or performance problems consistently reoccur over a period of years, the Active Discipline may extend beyond the 12 month standard.”
Plaintiff asserts that as there were no active discipline as defined in 8 M.P.T.L. ch. 1 § 1(a), it was reversible error to include in the Board of Review Record all prior discipline found in his employee file. 8 M.P.T.L. ch. 1 § 8(f)—Hearing in subsection (f) directs that:
In reviewing an appeal, the court shall determine whether the Board of Review’s Final Decision was appropriate by considering whether:
(3) The Employee was given a description of the offense or conduct that was the basis for the Disciplinary Action and both parties were afforded a reasonable opportunity to present and refute evidence regarding the offense or conduct and/or evidence of aggravating or mitigating circumstances relating thereto[.]
*6 The Court must attempt to determine how these three subsections, § 1(e), § 1(a) and § 8(f)(3), work together. However, as § 1(e)—Record, requires the Record to include Active Discipline and pursuant to § 8(f)(3) the Record may include “other discipline,” there must be some distinction between the use of “active” and “other” discipline. Subsection 8(f)(3) contains two mandates: 1) the parties be allowed to prove or disprove the conduct; and 2) to show aggravating / mitigating evidence. The first goes to proving conduct and courts generally are reluctant to allow evidence of what one did in the past as a means of proving a current violation. However, once proven that an offense occurred it is not unreasonable to show this is a pattern of misconduct (or contrarily is an aberration) that deserves heightened punishment or leniency. If read in this light, perhaps, the differentiation of active and other discipline makes sense.
The lower court in a well-reasoned articulation of its understanding of the problem these definitions present wrote:
There can be little doubt that the inclusion of a large volume of materials regarding prior disciplinary actions in the record submitted to the Board of Review, as well as subjecting the Plaintiff to examination by the Gaming Enterprise representative about these incidents during the hearing, impacted the review process. The Board of Review could not have failed to be affected by the inclusion of these allegations, as evidenced by the explicit reference to the Plaintiff’s “past history” and “believability” and “character” as factors pertinent to its Final Decision. Applying the standard of review set out in Sherman, supra, the court finds that the inclusion of extensive references to prior disciplinary proceedings in the record of this case, exacerbated by detailed discussions of those proceedings during the testimony of the Plaintiff, demonstrates by clear and convincing evidence an error that was so manifest and substantiated as to destroy the integrity of the review process of this case.
Decision at 16–17. As noted above, this Court believes there is sufficient independent basis for the Board’s finding as to theft. Thus, the question is whether the Gaming Enterprise’s inclusion of the prior disciplines in the Record before the Board was of itself sufficient to destroy the hearing’s fairness. This Court will grant great latitude in administrative matters. However, this Court in Sherman v. Mashantucket Pequot Gaming Enterprise raised concerns about an administrative process that unfairly prejudices the employee contestant and destroys the integrity of the review proceeding. 5 Mash.App. 66 (Mashantucket Pequot Ct.App.2012). The Court, though, must also be concerned about requiring such a burdensome process that it creates an unmanageable administrative system for the Gaming Enterprise.
The lower court seemed to recognize this in its footnote 8 where it cited the Employee Review Code as requiring that the Board of Review Record “shall include all Active Discipline and any other relevant material in the Employee’s personnel file.” 8 M.P.T.L. ch. 1 § 1(e). The Trial Court noted there were no entries under the heading “Active Disciplinary Violations” in the charging document. The Trial Court also looked at the provision that provides when a mitigation determination is required pursuant to § 8(f)(3) herein, the Record “may include performance reviews, character witnesses statements, commendations and other discipline.” The Trial Court, like this Court, seemed to interpret this provision as “mitigation should come in if the Plaintiff is determined to violate the standards of conduct.” However, as the lower court found there was not substantial evidence to sustain the Board’s finding the standards of conduct were violated, the Trial Court did not see where a mitigation determination was “required” and thus the references to prior disciplinary proceedings were improper. Decision at n. 8.
*7 Turning to the specifics of this case, the Board’s written finding of Final Decision requires the Board at Finding # 7 to “[e]xplain what factors, evidence and/or testimony the Panel relied on to decide if the conduct occurred. Indicate which evidence and/or testimony the Panel found credible and which evidence and/or testimony the Panel found to be not credible.” Record at IV. The Panel answered “video, John Flannerys [sic] testimony. Mr. Luond [sic] testimony proved not a credible source.” Id. In its response the Panel did not, but could have, stated “prior history, reputation, etc.” This is illustrated by what the Panel in fact responded to in the Final Decision, paragraph 10 which requires the Panel to decide “[w]as the termination appropriate for the offense or conduct? Did the termination comply with the relevant disciplinary policies and procedures including the Disciplinary and Performance Improvement Policy? Explain why or why not.” Record at V. The Panel answered “yes because of past history and the current situation being reviewed.” Id. In determining if the punishment / termination was appropriate the Panel referenced past history, but in deciding if the conduct alleged actually occurred there was no mention of past history.
In Sherman we held that the inclusion of prior discipline must be shown by clear and convincing evidence to have been so manifest and substantial as to destroy the integrity of the review process. Sherman, 5 Mash.App. at 73. That is a high standard to meet and must pass harmless error review. In civil cases, the general test for harmless error is whether the error in the proceedings below was “more probable than not harmless.” Grossi v. Mashantucket Pequot Gaming Enterprise, 2 Mash.App. 19, at 21, 1 MPR 55, at *6 (Mashantucket Pequot Ct.App.1998) (citing Haddad v. Lockheed California Corp., 720 F.2d 1454, 1459 (9th Cir.1983)). In an administrative proceeding, the party appealing the agency decision has the burden of “establishing that there has been an erroneous ruling which was probably harmful to him.” Id. at 21, 1 MPR 55 (citing Pet v. Department of Health Services, 228 Conn. 651, 638 A.2d 6 (1994)).
Here the Plaintiff has failed to show that the Board of Review’s inclusion of prior discipline in the record, standing alone, led to an adverse finding by the Board of Review. Although the evidence in response to Final Decision, paragraph 10, shows the Board of Review appeared to be aware of the past discipline as a basis for justifying termination, there was no showing that it destroyed the integrity of the review process. Even without the prior discipline in the record, the statements of the patron that were presented and the video evidence would of itself have supported the decision of the Board of Review. We therefore conclude that the inclusion of the prior discipline did not unfairly taint the Board of Review’s review because it was harmless error.
See Order of Chief Judge Londregan, dated July 21, 2016 and new M.P.R.A.P. Rule 2(e). This new rule allows for a case to be transferred from a single judge to a three-judge panel on appeal.