                  IN THE SUPREME COURT OF MISSISSIPPI

                          NO. 2004-CC-00663-SCT

GARY W. PANNELL

v.

TOMBIGBEE RIVER VALLEY WATER
MANAGEMENT DISTRICT


DATE OF JUDGMENT:                06/26/2003
TRIAL JUDGE:                     HON. THOMAS J. GARDNER, III
COURT FROM WHICH APPEALED:       LEE COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT:          JIM WAIDE
ATTORNEY FOR APPELLEE:           HENRY J. APPLEWHITE
NATURE OF THE CASE:              CIVIL - STATE BOARDS AND AGENCIES
DISPOSITION:                     AFFIRMED - 06/16/2005
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

                         CONSOLIDATED WITH
                         NO. 2004-CC-01368-SCT

TOMBIGBEE RIVER          VALLEY     WATER
MANAGEMENT DISTRICT

v.

MISSISSIPPI EMPLOYMENT SECURITY
COMMISSION AND GARY W. PANNELL

DATE OF JUDGMENT:                06/25/2004
TRIAL JUDGE:                     HON. PAUL S. FUNDERBURK
COURT FROM WHICH APPEALED:       LEE COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT:          HENRY J. APPLEWHITE
ATTORNEYS FOR APPELLEES:         ALBERT BOZEMAN WHITE
                                 JIM WAIDE
NATURE OF THE CASE:              CIVIL - STATE BOARDS AND AGENCIES
DISPOSITION:                     REVERSED AND RENDERED - 06/16/2005
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

        EN BANC.

        CARLSON, JUSTICE, FOR THE COURT:

¶1.     The Tombigbee River Valley Water Management District (“District”) terminated Gary

W. Pannell’s employment following an investigation by District Director Jimmie Mills.

Pannell appealed to the Employee Appeals Board (EAB) where the hearing officer found that

there was no just cause for the District to terminate Pannell. The District appealed to the full

EAB which affirmed the finding of the hearing officer and affirmed Pannell’s reinstatement.

The District then filed a petition for writ of certiorari requesting that the circuit court review

the decision of the EAB. The Lee County Circuit Court granted the petition and reversed the

EAB decision, finding it arbitrary and capricious, against the overwhelming weight of the

evidence, and erroneous as a matter of law. Pannell timely filed his appeal to this Court.

¶2.     After Pannell was terminated by the District, he filed for unemployment compensation

benefits with the Mississippi Employment Security Commission (“Commission”). The

Commission awarded Pannell unemployment compensation benefits finding that the District

failed to prove that Pannell’s actions rose to the level of misconduct. The District appealed,

and the Board of Review affirmed the Referee’s decision granting benefits. The District then

appealed to the Lee County Circuit Court which also affirmed the findings and judgment of the

Commission. The District timely appealed to this Court, and the two cases have been

consolidated.




                                                    2
                                               FACTS

¶3.     Gary W. Pannell was an employee of the District for approximately four and one-half

years. He worked as a top-heavy equipment operator until his termination on March 31, 2002.

In January 2000, Pannell filed several grievances against his supervisors at the District. Pannell

alleged that Tommy Jaggers, Facilities Maintenance Superintendent, had allowed an acetylene

bomb to discharge within the walls of a government facility. Pannell also accused his

immediate supervisor, Harold West, of unsafe work. Finally in September 2001, Pannell filed

a grievance against Maintenance Director Mike Phillips, alleging that Phillips had climbed on

a crane while in use and had cursed and berated Pannell.

¶4.     Following an investigation into Pannell’s grievances, District Director Mills discovered

several violations by Pannell. On behalf of the District, Mills issued two written reprimands

on February 13, 2002, and one pre-termination notice to Pannell on March 13, 2002. The first

reprimand alleged Pannell took “pictures of co-workers and/or of work performed or of work

being performed by the Tombigbee River Valley Water Management District during normal

work hours. . . .” The incidents were alleged to have occurred in April, August and September

2001. The second reprimand alleged that Pannell refused “to idle the dragline/crane after being

told to do so during normal work hours while [] employed. . . .” The incidents were also alleged

to have occurred in April, August and September 2001.

¶5.     Pursuant to the pre-termination notice, a hearing was conducted on March 19, 2002.

After the hearing, the District notified Pannell that his employment would be terminated

effective   March 31,     2002.   The    District determined that Pannell’s “operation of the

dragline/crane [was] a danger to the safety and lives of co-workers. . . .”     The District also


                                                  3
found that Pannell’s conduct constituted a “pattern of dangerous operation.” The specific

findings of the District were as follows:

        1. Improperly starting and running the dragline/crane too fast and/or of raising
        the hammer much higher than necessary in driving piling on projects such as the
        Hale’s Quarters Bridge Project in Monroe County on April 26, 2001, the
        County Road 560 Bridge Project in Alcorn County in late August and early
        September 2001, and/or at other times;
        2. Dropping leads and/or dropping pilings on projects such as the Mantachie
        Creek Bridge #041 Project in Itawamba County on April 28, 2000, on the Lyle
        Leggett Bridge Project in Kemper County on May 8, 2000, at the Sam Cole
        Bridge Project in Kemper County on May 10, 2000, on the County Road 560
        Bridge Project in Alcorn County on August 29, 2001 and/or at other times;
        and/or
        3. Sleeping or otherwise not paying attention while in the driver’s seat of the
        dragline/crane and having to be waked up on projects such as the Hale’s Quarters
        Bridge Project in Monroe County on April 27, 2001 and/or at other times.

¶6.     Pannell filed an appeal of the District’s issuance of the reprimands and an appeal of the

District’s decision to terminate his employment. Both appeals were consolidated and were

heard by EAB Hearing Officer Falton O. Mason, Jr., on June 28, 2002. On July 10, 2002, Judge

Mason issued an order overruling and denying the reprimands issued by the District and

reinstating Pannell as an employee of the District.

¶7.     After hearing testimony from several witnesses, Judge Mason determined that:

                The testimony and facts clearly reflect that during the four and one-half
        years that the Appealing Party has been operating the dragline/crane, there has
        been no injury to any person, nor has there been any reports filed stating that he
        has endangered anyone in any way. During his employment, he has never
        received a performance appraisal; and his immediate supervisor testified that he
        was not aware that he was supposed to have one, a clear violation by the
        Responding Party of one of the rules of the State Personnel Board.
                The testimony also reflects that the charges against the Appealing Party
        were brought only after he filed a grievance against his immediate supervisor,
        for using profanity at him. The testimony from Jimmie Mills, the Director, was
        that when he began investigating the grievance, other employees just opened up
        to him. It is significant that with respect to the investigation of the use of


                                                      4
        profanity, the response was that he found the complaints to be without merit, yet
        almost immediately a number of charges were brought against the Appealing
        Party.
                 The Hearing Officer having heard the testimony of the employees stating
        that in their opinion the Appealing Party was an unsafe dragline/crane operator;
        however, there was [sic] no reports of the incidents they testified to, nor did
        they indicate they made a complaint that they felt their lives were in any danger.
        On the occasions wherein they state the lead or piling were dropped, they did not
        state or complain to anyone that they felt they were in danger.

Therefore, Judge Mason found that Pannell had met his burden of proof and should be

reinstated to his previous position with all benefits and back pay. The District appealed to the

full EAB which issued an Order on October 31, 2002, affirming the Hearing Officer’s decision

to reinstate Pannell.

¶8.     On November 18, 2002, the District filed a petition for writ of certiorari with the

Circuit Court of Lee County. The petition was granted by Circuit Judge Thomas J. Gardner, III.

After accepting briefs from both parties, the circuit court issued its Opinion and Final Order

reversing the EAB on the grounds that the EAB’s decision to reinstate Pannell was arbitrary

and capricious and was not supported by substantial evidence.

¶9.     After his termination, Pannell filed for unemployment benefits. A Claims Examiner

initially investigated Pannell’s application by interviewing Mills and Pannell. The District also

submitted a response to a questionnaire. Based upon the interviews and the District’s response,

the Claims Examiner awarded Pannell benefits finding that the District failed to prove

misconduct. The         District appealed the Claims Examiner’s finding to the Mississippi

Employment Security Commission Board of Review, and a hearing was held before Appeals

Referee Danny C. Timmons. After considering the testimony and exhibits presented, Timmons

found that the District terminated Pannell for poor work performance and unsafe work habits.


                                                 5
However, Timmons found that Pannell had received no formal warnings or reprimands

regarding his quality of work or safety prior to a grievance filed by Pannell September 2001.

Timmons further found that although Pannell admitted his work was dangerous, Pannell also

testified that he was never made aware that “his actions were being considered by his employer

to be acts of gross negligence or in violation of any set of safety policies.” Timmons

concluded that he did not find that “the claimant was terminated for any specific incident nor

did the claimant receive any type of disciplinary actions from his employer as outlined in the

company’s policies and procedures prior to the date of termination of employment.”

Therefore, Timmons found that Pannell’s actions did not rise to the level of misconduct as

required to deny the award of benefits.

¶10.    The District appealed the findings of the referee. The Board of Review, after fully

reviewing the findings of the referee, affirmed the award of benefits to Pannell. On August 7,

2003, the District appealed the award to the Lee County Circuit Court where Circuit Judge

Paul S. Funderburk affirmed the award of benefits. The District timely appealed to this Court.

                                            ANALYSIS

¶11.    The standard of review governing an appeal from a decision of an administrative agency

is that of substantial evidence. Walters v. Miss. Dep't of Econ. & Cmty. Dev., 768 So.2d 893,

895 (Miss. 2000) (citing Holloway v. Prassell Enters., Inc., 348 So.2d 771, 773 (Miss.

1977)). Pursuant to Miss. Code Ann. § 25-9-132 (Rev. 2003), the statutory scope of judicial

review of an employee appeals board decision is:

        (2) The scope of review of the circuit court in such cases shall be limited to
        review of the record made before the employee appeals board or hearing officer



                                                   6
         to determine if the action of the employee appeals board is unlawful for the
         reason that it was:
                 (a) Not supported by substantial evidence;
                 (b) Arbitrary or capricious; or
                 (c) In violation of some statutory or constitutional right of the
                 employee.

         These factors which govern the standard of review for agency decisions are the
         only grounds for overturning an agency's action; otherwise the agency's
         determination must remain undisturbed. Walters, 768 So.2d at 897; Miss. Dep't
         of Envtl. Quality v. Weems, 653 So.2d 266, 273 (Miss. 1995). This Court must
         often determine whether a circuit court has exceeded its authority in overturning
         an agency action, and we proceed aware that “a rebuttable presumption exists in
         favor of the action of the agency, and the burden of proof is on the party
         challenging an agency's action.” Publ. Employees' Ret. Sys. v. Shurden, 822
         So.2d 258, 263 (Miss. 2002); Pub. Employees' Ret. Sys. v. Dishmon, 797
         So.2d 888, 893 (Miss. 2001). Where that authority has been exceeded, this
         Court will not hesitate to reverse and reinstate the agency's order. Miss.
         Comm'n on Envtl. Quality v. Chickasaw County Bd. of Supervisors, 621 So.2d
         1211, 1215 (Miss. 1993).

Miss. Transp. Comm’n v. Anson, 879 So. 2d 958, 963 (Miss. 2004). If an administrative

agency’s decision is not based on substantial evidence, this Court will find the decision to be

arbitrary and capricious. Pub. Employees' Ret. Sys. v. Marquez, 774 So.2d 421, 425 (Miss.

2000).

¶12.     Miss. Code Ann. § 71-5-513(A)(1)(b) (Rev. 2000) provides that an individual may be

disqualified for unemployment benefits if he was discharged “for misconduct connected with

his work.” However, the employer has the “burden of showing by ‘substantial, clear, and

convincing evidence’ that the former employee’s conduct warrants disqualification from

eligibility for benefits.” City of Clarksdale v. Miss. Employment Sec. Comm'n, 699 So.2d

578, 580 (Miss. 1997) (quoting Foster v. Miss. Employment Sec. Comm'n, 632 So.2d 926,

927 (Miss. 1994)).


                                                7
        I. Termination

                 A. Substantial Evidence

¶13.    Regarding the Group III allegations of “Acts of Conduct”, the District alleged three

separate offenses: (1) improperly starting and running the dragline too fast and raising the

hammer too high, (2) dropping leads or pilings, and (3) sleeping or otherwise not paying

attention while in the operator’s seat of the dragline.

¶14.    As to the allegations of improperly starting and running the dragline too fast and raising

the hammer to high, the circuit court found that:

        Harold West, Tommy Jaggers, Mike Phillips and Dale Franks all testified that
        Pannell began the pile driving with the dragline operating too fast and that the
        hammer was too high thus creating a dangerous situation. There was testimony
        of specific instances of dangerous operation on particular jobs being ones in
        Kemper County in May 2000, T. 200-04, in Monroe County in April 2001, T.
        159-61, 254-57, in Alcorn County in August or September 2001, T. 258, 296,
        and on other occasions, T. 209-10. Pannell’s only evidence on this point was
        that the dragline could not be operated at a slower speed and to do so would not
        be safe, T. 350-51, and Pannell did not testify as to any particular job.

¶15.    The District witnesses also testified to several instances of Pannell’s dropping pilings

or leads. Pannell’s only rebuttal concerned the Alcorn County job where he testified that it had

been raining. The District also introduced a video tape, which included sound effects, along

with photographs of the dragline being operated by Harold West. These exhibits illustrated how

pilings were started and what could happen if the pilings were deep enough to raise the hammer

and speed up the engine. West also testified that the conditions of the ground where men were

guiding the piling or giving hand signals were often muddy and wet, near slopes or banks, with

the lead, piling and hammer suspended on cables. If something were to happen with the lead,




                                                      8
the men would be unable to act quickly in order to move out of the way of a falling lead or

piling.

¶16.      Tommy Jaggers testified that Pannell went to sleep while the dragline was holding

bridge components and while men were working underneath the bridge in Kemper County.

Jaggers further testified that upon being awakened, Pannell was disoriented and dangerously

jerked the cables. Dale Franks testified that Pannell also fell asleep while working on the

Monroe County job. When Pannell was asked to put slack in the cables, Franks testified that

he appeared dazed. Pannell admitted to sleeping while on the job in the operator’s seat of the

dragline. Pannell testified it was common practice for employees to sleep on the job if they

were not performing a specific task at the time. Pannell also stated that he would not have a

sharp eye for dangerous situations if he were asleep while in the operator’s seat of the dragline.

¶17.      Jim Rutherford, who testified on behalf of Pannell, stated that Pannell was a safe

dragline operator. However, Rutherford could not testify to the specific instances alleged by

the District because he quit working for the District in April 1999.

¶18.      The District also alleged two acts of insubordination: (1) the unauthorized taking of

pictures and (2) the refusal to listen to his supervisors regarding the proper use of the dragline.

Pannell testified that he took the pictures for safety reasons; however, he admitted that the

pictures were not authorized by the District. Dale Franks testified that Pannell got off of the

dragline while it was running in order to take the pictures. Franks testified that this action by

Pannell caused unexpected delays in the project and was unnecessarily dangerous. Harold West

testified that during the Monroe County job, he informed Pannell three separate times to

properly idle the dragline, but Pannell refused to do so. Mike Phillips testified that when he


                                                     9
arrived at the same project, Pannell was still running the dragline too fast. Pannell idled the

dragline down, but Phillips testified that he soon began running the dragline too fast again.

Franks and Jaggers also offered testimony that Pannell ran the dragline too fast on other jobs.

¶19.    After fully reviewing all of the evidence presented to it, the circuit court found that as

to the three separate instances alleging “Acts of Conduct,” the evidence was “overwhelmingly

in favor of the Tombigbee District that Pannell did commit these offenses.” As to the two

separate allegations of insubordination, the circuit court found that the “overwhelming weight

of the credible evidence supports the actions taken by the Tombigbee District.” The circuit

court further found that:

        The Hearing Officer and the Full Employee Appeals Board found that is was “.
        . .a clear violation by the Responding Party of one of the rules fo the State
        Personnel Board” that Pannell had not been given the required annual
        performance appraisals by the Tombigbee District. While this court certainly
        does not condone that failure to comply, this court also finds that this one
        failure by the Tombigbee District was a large factor causing the Hearing Officer
        and the Full Employee Appeals Board to reverse the termination of Pannell and
        to reinstate his employment with the Tombigbee District. In the case of Young
        v. Mississippi State Tax Com’n, 635 So. 2d 869 (Miss. 1994), the Employee
        Appeals Board similarly expressed concern that the Tax Commission had not
        given a terminated employee the required performance appraisal. In Young, the
        Supreme Court held that as a matter of law the Employee Appeals Board could
        not reverse the termination of an employee by the Tax Commission on the
        ground that the Tax Commission did not have a “performance plan.” 635 So. 2d
        at 873. The terms “may attempt to correct unacceptable behavior” prior to taking
        formal disciplinary action “whenever practical” were the key provisions
        concerning the discipline of employees by a state agency. Id. 872-73. Those
        same key provisions are likewise contained in the relevant Mississippi State
        Employee Handbook, July 2001, Section 10. Under the ruling of Young, the
        Hearing Officer’s Order as affirmed by the Full Employee Appeals Board Order
        are erroneous as a matter of law and should be reversed.

(emphasis in original).




                                               10
¶20.    We find that the circuit court was eminently correct in its findings in that there was

substantial evidence of the actions complained of by the District and that Pannell failed in

proving that the District acted arbitrarily and capriciously so as to entitle him to be reinstated.

We also find that the EAB based its decision erroneously on the fact that Pannell had not be

given a performance evaluation. Therefore, Judge Gardner correctly reversed the orders of the

EAB and reinstated the decision by the District to terminate Gary Pannell.

                B. Arbitrary and Capricious

¶21.    We have noted:

        If an agency's decision is supported by substantial evidence, then it is not
        arbitrary or capricious. Miss. Bureau of Narcotics v. Stacy, 817 So.2d 523,
        526 (Miss. 2002). This Court has said that the terms “arbitrary” and “capricious”
        are open-textured and not susceptible to precise definition or mechanical
        application.” Miss. State Dep't of Health v. Southwest Miss. Reg'l Med. Ctr.,
        580 So.2d 1238, 1240 (Miss. 1991). Moreover, an act is capricious when it is
        “done without reason, in a whimsical manner, implying either a lack of
        understanding of or a disregard for the surrounding facts and settled controlling
        principles.” Id.

Anson, 879 So. 2d at 964. Although the EAB had the opportunity to observe the demeanor of

the witnesses which testified in the case subjudice, we have previously held that the District’s

decision to terminate Pannell was based upon substantial evidence. Therefore, we find that the

EAB acted arbitrarily and capriciously in reversing the decision of the District and reinstating

Pannell to his previous employment.

¶22.    After correctly determining that it was not the trier of fact in the present case, the Lee

County Circuit Court found pursuant to Mississippi precedent that it had a duty to review the

proceedings before it in the following manner:




                                                  11
        (a) The record as a whole, including the transcript, exhibits, and all other matters
        before the Employees Appeal Board including the findings should be reviewed
        by this court.
        (b) As two state agencies are involved, the findings, and actions taken, by the
        Tombigbee District, the responding or employing agency, are entitled to a
        presumption of correctness, Mississippi Department of Corrections v. Harris,
        831 So. 2d 1190, 1192 (Miss. Ct. App. 2002)
        (c) In order to meet that burden of proof before the Employee Appeals Board,
        Pannell must prove that the actions taken by the Tombigbee District were
        arbitrary, capricious, and against the overwhelming weight of the evidence and
        that he is entitled to reinstatement, Harris, 831 So. 2d at 1193 and E.A.B. Rule
        21(B) (July 2001).
        (d) Pannell, as the aggrieved employee, had the burden of proof before the
        Employee Appeals Board that the actions complained of by the Tombigbee
        District did not occur and that the alleged reasons for dismissal are not true,
        Walters v. Mississippi Department of Economic and Community
        Development, 768 So. 2d 893, (Miss. 2000); Harris, 831 So. 2d at 1193;
        E.A.B. Rule 21(C) (July 2001); and Miss. Code Ann. § 25-9-127.
        (e) If there is substantial evidence of the actions complained of by the
        Tombigbee District, such as at least one Group III offense or two Group II
        offenses which permit the agency to terminate Pannell, the Employee Appeals
        Board can not alter the agency’s decision to terminate Pannell as the employing
        agency “. . . acted in accordance with the published policies, rules and
        regulations. . .” Harris, 831 So. 2d at 1193 and E.A.B. Rule 24(B) (July 2001).

(emphasis in original). Because the circuit court, after fully reviewing the decision of the EAB,

correctly determined that the EAB’s decision was not supported by substantial evidence and

was, therefore, arbitrary and capricious, we affirm the circuit court’s reversal of the Order of

the EAB and its reinstatement of the District’s termination of Gary Pannell’s employment.

        II. Unemployment Benefits

¶23.    In Wheeler v. Arriola, 408 So. 2d 1381 (Miss. 1982), this Court adopted the following

definition of “misconduct”:

        conduct evincing such willful and wanton disregard of the employer's interest
        as is found in deliberate violations or disregard of standards of behavior which
        the employer has the right to expect from his employee. Also, carelessness and
        negligence of such degree, or recurrence thereof, as to manifest culpability,

                                                  12
        wrongful intent or evil design, and showing an intentional or substantial
        disregard of the employer's interest or of the employee's duties and obligations
        to his employer, came within the term. Mere inefficiency, unsatisfactory
        conduct, failure in good performance as the result of inability or incapacity, or
        inadvertences and ordinary negligence in isolated incidents, and good faith
        errors in judgment or discretion were not considered “misconduct” within the
        meaning of the statute.

Id. at 1383. If there does not appear to be any willful or wanton conduct or where the employee

has attempted in good faith to perform satisfactorily, this Court has refused to find

misconduct.

¶24.    Pannell argues that there was substantial evidence for the Referee’s finding that

Pannell’s employment with the District was terminated was due to his filing of a grievance

against his superior, not due to his performance as a dragline operator. Pannell testified before

the Referee that in the four and one-half years that he had been an employee of the District,

he had never been given any formal warnings concerning his performance until after his

grievances were filed. Pannell denied that he had done anything wrong in the operation of the

crane and explained that the particular crane in question had worn brakes which caused the

hammer to be erratic. Pannell also testified that he denied all charges made by the District that

he dropped any leads or pilings, and he stated that he had made official reports that the brakes

needed to be repaired. Pannell further testified that he did not willfully disregard any directions

from his superiors regarding operation of the dragline.

¶25.    Tommy Jaggers, a witness for the District, testified that Pannell intentionally operated

the dragline in a manner which caused problems for the other workers and the company.

Harold West, Pannell’s immediate supervisor, testified that Pannell dropped leads and pilings,

the result of which could have caused great injury to other employees. West stated that he


                                                   13
corrected Pannell’s operation of the crane to the best of his ability. West further testified that

he also asked Pannell several times to decrease the speed at which he was operating the

machine, but Pannell refused to do so.

¶26.    Mike Phillips, the general supervisor, also testified that Pannell willfully disobeyed

orders and ran the crane at an improper speed. After repeatedly being told how to operate the

machine, Pannell idled the machine so far down that it would not work, causing Phillips to get

into the cab of the crane and physically instruct Pannell on the proper operation. Other

witnesses testified to numerous incidences where Pannell operated the crane at an improper

speed after being instructed to slow the machine down. There was also testimony that Pannell

slept on the job after being instructed not to do so. Pannell admitted to sleeping on the job, but

he denied ever being told not to.

¶27.    In Shannon Engineering & Constr., Inc. v. Mississippi Employment Sec. Comm’n,

549 So. 2d 446 (Miss. 1989), this Court held that “insubordination” was included within the

scope of “misconduct” under Miss. Code Ann. § 71-5-513 warranting a denial of

unemployment benefits. In Shannon, we defined “insubordination” as a “constant or continuing

intentional refusal to obey a direct or implied order, reasonable in nature, and given by and with

proper authority.” 549 So. 2d at 449 (quoting Sims v. Bd. of Trustees, Holly Springs Mun.

Separate School Dist., 414 So.2d 431, 435 (Miss. 1982)). Several incidences of

insubordination were presented to the Referee; however, the Referee chose to place greater

weight on the fact that these incidences were not officially reported until an investigation was

conducted as a result of grievances filed by Pannell.




                                                   14
       [T]he referee does not find that the claimant was terminated for any specific
       incident nor did the claimant receive any type of disciplinary actions from his
       employer as outlined in the company’s policies and procedures prior to the date
       of termination of employment. The referee does not find that the claimant’s
       actions would rise to the level of misconduct as that term is used in the law and
       therefore, affirms the decision of the claims examiner.

¶28.   Upon a thorough review of the record, we find that the District met its burden of proof

by clear and convincing evidence that Pannell’s conduct warranted disqualification of

unemployment benefits. Several District employees testified that Pannell continued to operate

machinery at dangerous speeds after repeatedly refusing to heed warnings by his superiors of

his improper use of the machinery. Pannell’s only excuse for his conduct was that the

machinery was in disrepair.

¶29.   As stated previously, this Court has held in Young v. Mississippi State Tax Comm’n,

635 So. 2d 869 (Miss. 1994), that it was improper for the EAB to reverse a termination on the

grounds that the employer had failed to take formal disciplinary action. Likewise, we find it

improper to award unemployment benefits on the sole grounds that formal disciplinary action

was not taken prior to the employee’s termination. There is substantial evidence in the record

that Pannell was verbally warned several times of his improper conduct regarding his operation

of machinery. He was corrected by his immediate supervisor, and he was corrected by his

general supervisor.     We find that the decision of the Mississippi Employment Security

Commission to award unemployment benefits to Gary Pannell was arbitrary and capricious and

against the overwhelming weight of the evidence. Therefore, we reverse the circuit court’s

affirmance of the Commission’s award of unemployment benefits to Gary Pannell.
                                         CONCLUSION




                                                15
¶30.   The Lee County Circuit Court was correct in finding the Employee Appeals Board’s

decision to reinstate Gary Pannell’s employment with the Tombigbee River Valley Water

Management District was arbitrary and capricious and against the overwhelming weight of the

evidence. Therefore, we affirm the circuit court’s judgment reversing the EAB decision and

reinstating the District’s termination of Gary Pannell’s employment. However, the Lee County

Circuit Court improperly affirmed the Mississippi Employment Security Commission’s award

of unemployment benefits to Gary Pannell. Finding that the Commission’s decision was

arbitrary and capricious and against the overwhelming weight of the evidence, we reverse the

circuit court’s judgment and the Commission’s judgment, and we render judgment here denying

the unemployment compensation benefits claim of Gary W. Pannell.

¶31. CAUSE NO. 2004-CC-00663-SCT IS AFFIRMED.                                 CAUSE NO.
2004-CC-01368-SCT IS REVERSED AND RENDERED.

     SMITH, C.J., WALLER, P.J., DICKINSON AND RANDOLPH, JJ., CONCUR.
GRAVES, J., CONCURS IN PART AND DISSENTS IN PART WITHOUT SEPARATE
WRITTEN OPINION. EASLEY, J., DISSENTS WITHOUT SEPARATE WRITTEN
OPINION. COBB, P.J., AND DIAZ, J., NOT PARTICIPATING.




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