                IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Israel Chestnut,                                :
                      Petitioner                :
                                                :   No. 202 C.D. 2019
               v.                               :
                                                :   Submitted: October 4, 2019
Unemployment Compensation                       :
Board of Review,                                :
                 Respondent                     :


BEFORE:        HONORABLE RENÉE COHN JUBELIRER, Judge
               HONORABLE PATRICIA A. McCULLOUGH, Judge
               HONORABLE ELLEN CEISLER, Judge


OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE McCULLOUGH                                                FILED: January 3, 2020


               Israel Chestnut (Claimant) petitions for review of the January 18, 2019
order of the Unemployment Compensation Board of Review (Board), which affirmed
the referee’s decision finding that he was ineligible for unemployment compensation
(UC) benefits pursuant to section 402(e) of the Unemployment Compensation Law
(Law).1
               Claimant was employed by the United States Department of Treasury,
specifically, the Internal Revenue Service (Employer and IRS), as a full-time Seasonal
Clerk until August 24, 2018. (Certified Record (C.R.), Item Nos. 2, 11, Finding of Fact
(F.F.) Nos. 1, 10.) On December 4, 2013, Employer suggested terminating Claimant

       1
         Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802(e).
In relevant part, section 402(e) states that an employee shall be ineligible for compensation for any
week in which his unemployment is due to willful misconduct connected with his work.
for his failure to file his 2011 income tax return and pay his 2011 federal income taxes
on time. (C.R. Item No. 11, F.F. No. 2.) Claimant entered into a Last Chance
Agreement on February 27, 2014, with Employer (LCA) and was suspended for 30
days. (C.R. Item No. 11, F.F. No. 3.) In the LCA, Claimant agreed that he would
refrain from engaging in any future tax-related misconduct, “such as failing to properly
and timely file and pay [his] federal income taxes,” and acknowledged that any further
tax-related misconduct would result in his proposed termination. (C.R. Item No. 11,
F.F. No. 4.) Four years later, on May 23, 2018, Employer notified Claimant that it
planned to discharge him because he failed to timely pay his 2015 federal income taxes.
(C.R. Item No. 11, F.F. No. 6.) Claimant was given 15 days to respond to the proposed
action. (C.R. Item No. 11.) In June of 2018, Claimant started retirement procedures.
(F.F. No. 8.) Claimant did not respond to the letter and was notified on August 16,
2018, that he would be terminated because he did not pay his 2015 federal income
taxes. (F.F. No. 9.) Claimant voluntarily resigned from employment, citing retirement,
on August 22, 2018. (F.F. No. 11.)
                Although Claimant maintains at the time of his termination that he had
already initiated retirement procedures, Employer argues that he was terminated for
misconduct. The referee noted that Claimant voluntarily resigned on August 22, 2018,
stating that he was retiring. (C.R. Item No. 11, F.F. No. 11.) However, the referee
found that although Claimant may have initiated retirement proceedings, he was
terminated effective August 24, 2018. (C.R. Item No. 11, F.F. No. 10.)
                On September 20, 2018, the local service center determined that Claimant
was ineligible for benefits under section 402(b) of the Law, 43 P.S. §802(b).2 (C.R.

      2
          Section 402(b) of the Law provides, in relevant part,




                                                  2
Item No. 4.) Claimant appealed the local service center’s determination on September
25, 2018. (C.R. Item No. 5.) A hearing was held before the referee on October 23,
2018, with respect to the following issues: (1) whether Claimant’s unemployment was
due to him voluntarily leaving work without a necessitous and compelling reason under
section 402(b) of the Law, 43 P.S. §802(b); (2) whether Claimant’s unemployment was
due to willful misconduct under section 402(e) of the Law, 43 P.S. §802(e); and (3)
whether Claimant was able and available for suitable work under section 401(d)(1), (2)
of the Law, 43 P.S. §801(d)(1), (2). (C.R. Item No. 10.) The referee conducted a
hearing at which Employer testified to the above facts.
              By decision mailed October 24, 2018, the referee affirmed but modified
the local service center’s determination. (C.R. Item No. 12.) More specifically, the
referee concluded that Claimant was ineligible under section 402(e) of the Law. Id.
The referee found that under Pennsylvania law, Claimant resigned in the face of
termination and, therefore, the separation should be treated as a discharge.         Id.
Consequently, the referee explained that because Claimant was discharged for
misconduct, i.e., violating his LCA, he was not entitled to UC benefits. Id. The referee
stated that, because Claimant did not dispute the testimony or evidence presented by
Employer, but remained silent, the testimony and evidence was deemed to be “an
admission.” Id. Therefore, he found that Employer had met its burden and that



              An employe shall be ineligible for compensation for any week --

              (b) In which his unemployment is due to voluntarily leaving work
              without cause of a necessitous and compelling nature, irrespective
              of whether or not such work is in “employment” as defined in this
              act.

43 P.S. §802(b).


                                               3
Claimant had failed to establish good cause for his actions and was therefore
appropriately terminated for willful misconduct. Id.
                 Claimant appealed the referee’s decision, arguing that Employer had not
shown his actions constituted willful misconduct. (C.R. Item Nos. 13, 15.) The Board
rejected this argument and affirmed the referee’s decision. (C.R. Item No. 16)
                                              Discussion
                 On appeal,3 Claimant raises one issue: whether the Board erred in finding
him ineligible for benefits under section 402(e) of the Law for willful misconduct.
Claimant argues that the Board’s decision was incorrect because Employer did not
meet its burden under section 402(e) of the Law to establish that his actions constituted
willful misconduct. As a corollary matter, Claimant states that his silence and failure
to deny the allegations in this case do not constitute an admission.
                 The issue of whether a claimant's conduct constituted willful misconduct
is a question of law fully reviewable by this Court. Klampfer v. Unemployment
Compensation Board of Review, 182 A.3d 495, 499 (Pa. Cwmlth. 2018) (citing
Ductmate Industries, Inc. v. Unemployment Compensation Board of Review, 949 A.2d
338 (Pa. Cmwlth. 2008)).4 Section 402(e) of the Law provides that an employee shall
be ineligible for compensation for any week


       3
          Our scope of review is limited to determining whether constitutional rights were violated,
whether the adjudication is in accordance with the law, and whether findings of fact are supported by
substantial evidence. Ellis v. Unemployment Compensation Board of Review, 59 A.3d 1159, 1162
n.2 (Pa. Cmwlth. 2013). “Substantial evidence is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Chartiers Community Mental Health and Retardation
Center v. Unemployment Compensation Board of Review, 134 A.3d 1165, 1170 n.2 (Pa. Cmwlth.
2016).

       4
           This Court has recently reiterated that




                                                     4
             [i]n which his unemployment is due to his discharge or
             temporary suspension from work for willful misconduct
             connected with his work, irrespective of whether or not
             such work is “employment” as defined in this act. . . .

43 P.S. §802(e). Although the statute does not define willful misconduct, this Court
has defined willful misconduct as:


             (1) wanton and willful disregard of an employer’s
             interests; (2) deliberate violation of rules; (3) disregard of
             the standards of behavior which an employer can
             rightfully expect from an employee; or[] (4) negligence
             showing an intentional disregard of the employer’s
             interests or the employee’s duties and obligations.




             It is well settled that the Board is the ultimate factfinder in
             unemployment compensation proceedings. Peak v. Unemployment
             Compensation Board of Review, . . . 501 A.2d 1383, 1385 ([Pa.]
             1985); Chapman [v. Unemployment Compensation Board of
             Review, 20 A.2d 603, 607 (Pa. Cmwlth. 2011)]; Chamoun v.
             Unemployment Compensation Board of Review, . . . 542 A.2d 207,
             208 ([Pa. Cmwlth.] 1988). Thus, issues of credibility are for the
             Board, and the Board may accept or reject a witness’s testimony
             whether or not it is corroborated by other evidence of record. Peak;
             Chamoun. The Board’s findings of fact are conclusive on appeal if
             the record, taken as a whole, contains substantial evidence to support
             them. Taylor v. Unemployment Compensation Board of Review, . .
             . 378 A.2d 829, 831 ([Pa.] 1977). Finally, this Court must examine
             the evidence in the light most favorable to the party that prevailed
             before the Board and give that party the benefit of all inferences that
             can be logically and reasonably drawn from the evidence.
             Chapman, 20 A.2d at 607.

Halloran v. Unemployment Compensation Board of Review, 188 A.3d 592, 597 (Pa. Cmwlth. 2018).



                                                 5
Waverly Heights, Ltd. v. Unemployment Compensation Board of Review, 173 A.3d
1224, 1228 (Pa. Cmwlth. 2017). However, “a negligent act alone does not constitute
willful misconduct; rather, the conduct must be of ‘an intentional and deliberate
nature.’” Fugh v. Unemployment Compensation Board of Review, 153 A.3d 1169, 1176
(Pa. Cmwlth. 2017) (quoting Grieb v. Unemployment Compensation Board of Review,
827 A.2d 422, 426 (Pa. 2003)). The employer bears the burden of establishing that it
discharged an employee for willful misconduct. Waverly Heights, 173 A.3d 1224,
1228 (quoting Adams v. Unemployment Compensation Board of Review, 56 A.3d 76,
78-79 (Pa. Cmwlth. 2012)).
             Here, Claimant wantonly and willfully disregarded Employer’s interests.
Employer is the IRS, the entity responsible for collecting federal income taxes, and has
a right to expect that its employees will timely file and pay their income taxes. Initially,
on December 4, 2013, Claimant was recommended for termination for failing to pay
or file his 2011 federal income taxes. This led to him being placed on the LCA on
February 27, 2014. The LCA explicitly reflected that claimant was to refrain from
engaging in any future tax-related misconduct including failing to pay or file his taxes
on time. Claimant engaged in such misconduct by failing to pay his 2015 federal
income taxes on time.
             Furthermore, this Court has found that the violation of a last chance
agreement rises to the level of willful misconduct. See, e.g., Guthrie v. Unemployment
Compensation Board of Review, 738 A.2d 518, 522 (Pa. Cmwlth. 1999) (affirming the
Board’s finding that the violation of a last chance agreement by the employee satisfied
the employer’s burden of proving willful misconduct); Walton v. Unemployment
Compensation Board of Review, 797 A.2d 437, 438 (Pa. Cmwlth. 2002) (finding that
failing to abide by a last chance agreement prohibiting the use of illegal drugs is willful



                                             6
misconduct);      Hartman v. Unemployment Compensation Board of Review (Pa.
Cmwlth., No. 1089 C.D. 2011, filed Apr. 5, 2012) (unreported) (concluding that the
violation of a last chance agreement for failing to be a model employee and adhere to
the employer’s standards of conduct constitutes willful misconduct); Gordon Terminal
Service Co. v. Unemployment Compensation Board of Review (Pa. Cmwlth., No. 2086
C.D. 2014, filed July 7, 2015) (unreported) (finding an employee ineligible for benefits
because of willful misconduct, where the employee was put on a last chance agreement
for tardiness and absenteeism and continued such behavior).5
              The instant matter is similar to the issues this Court encountered in Walton
and Guthrie. In Walton the employee was found to have marijuana in his system after
a drug test. 797 A.2d at 438. The employee entered into a last chance agreement
understanding that he was specifically prohibited from the use of illegal drugs and that
a positive test would result in his termination. Id. A later drug test showed that the
employee had tested positive for marijuana and, therefore, he was discharged for
violating the terms of the agreement. Id. This Court found that his violation of the
agreement constituted willful misconduct. Id. at 439.
              In Guthrie, the Board found that the employee’s conduct was governed by
a last chance agreement between him, his union, and the employer. 738 A.2d at 520.
Under the agreement, the employee was required to refrain from insubordination; if he
failed to refrain from such conduct, the first instance would result in a five-day
suspension and the second would result in termination. Id. The employee subsequently
was disrespectful toward his supervisor and was discharged for violating the



       5
        Gordon and Hartman are unreported opinions. Under section 414(a) of this Court’s Internal
Operating Procedures, an unreported opinion may be cited for its persuasive value. 210 Pa. Code
§69.414(a).


                                               7
agreement. Id. at 521. This Court concluded that the violation of the last chance
agreement was sufficient to establish willful misconduct. Id. at 522.
              In the present case, Claimant was put on the LCA for failing to pay and
file his 2011 income tax returns on time. Claimant was aware that he was precluded
from engaging in any more tax-related misconduct, such as failing to file or pay his
taxes on time. The record clearly establishes that Claimant failed to abide by the LCA
and was subsequently discharged. Similar to Guthrie and Walton, we conclude, here,
the Board did not err in concluding that Claimant committed willful misconduct
because he violated the LCA between him and Employer.
              Nevertheless, Claimant contends that the Board’s conclusion was not
supported by substantial evidence in the record. We disagree. Claimant contends that
“there is no evidence in the record to establish whether or not Claimant committed
willful misconduct. The only testimony is the vague allegation that Claimant’s ‘tax
issue’ was a violation of the alleged agreement from 2014.” (Claimant’s Br. at 13.)
However, the record clearly reflects two letters, sent on May 23, 2018,6 and August 16,
2018, respectively, which addressed misconduct. (C.R. Item No. 11.) The May letter
reflects that Claimant was expressly prohibited from engaging in other tax-related
misconduct, including failing to pay his taxes. Significantly, Claimant alleges that
“[he was] not clear what the tax-related issue was.” (C.R. Item No. 11, N.T. at 12.)
However, the May 23, 2018 letter clearly reprimanded him for failing to pay his 2015
federal income taxes. Additionally, in the same letter, Claimant was afforded the
opportunity to respond and take four hours of administrative time in order to secure
affidavits and prepare an answer. Claimant had the chance to respond and investigate
but decided not to do so. Despite any confusion that took place during the hearing, the

       6
          Claimant unequivocally acknowledges that he received the letter proposing his termination
for failure to follow the LCA. (C.R. Item No. 11, Notes of Testimony (N.T.) at 10.)


                                                8
letter unmistakably states that Claimant failed to pay his taxes. Furthermore, following
the receipt of these letters, Claimant began to initiate retirement proceedings in order
to better preserve his financial interests.7 Thus, the record supports the Board’s
conclusion.
               Accordingly, having found that the Board did not err in affirming and
adopting the referee’s decision, we affirm the Board’s order.8




                                                  ________________________________
                                                  PATRICIA A. McCULLOUGH, Judge




       7
          Claimant explained that he initiated retirement proceedings early because “the Agency
extracts a part of your retirement money if you are removed for termination,” and he wanted to leave
with as much of his retirement as he could have. (C.R. Item No. 11, N.T. 7-8.)

       8
          In light of our determination above that the record contains substantial evidence in support
of a finding of willful misconduct, we need not reach Claimant’s remaining argument with respect to
whether his silence constituted an admission.


                                                  9
             IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Israel Chestnut,                       :
                   Petitioner          :
                                       :    No. 202 C.D. 2019
             v.                        :
                                       :
Unemployment Compensation              :
Board of Review,                       :
                 Respondent            :


                                   ORDER


             AND NOW, this 3rd day of January, 2020, the January 18, 2019 order
of the Unemployment Compensation Board of Review affirming the referee’s
decision is affirmed.



                                           ________________________________
                                           PATRICIA A. McCULLOUGH, Judge
