February 16, 1990
SYLVIA J. LONG, PETITIONER
DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, RESPONDENT. POTOMAC ELECTRIC POWER COMPANY, INTERVENOR
Petition for Review of a Decision of the District of Columbia Department of Employment Services.
Before Rogers, Chief Judge, Steadman and Farrell, Associate Judges.
The opinion of the court was delivered by: Steadman
STEADMAN, Associate Judge: Petitioner seeks review of a Department of Employment Services ("DOES" or "Department") decision holding her ineligible for unemployment compensation because she was discharged for "misconduct." Unfortunately, the record is inadequate to permit us to perform our appellate review function. Accordingly, we must remand for further agency action.
The factual setting, briefly put, was as follows. Petitioner, then an employee of Potomac Electric Power Company ("PEPCO"), filed a charge in the District of Columbia Office of Human Rights ("OHR") on September 30, 1986, alleging that PEPCO had discriminated against her on the basis of race. Petitioner took with her to an OHR conference four PEPCO documents, which she obtained, at least in part, from PEPCO computer disks. *fn1 Five days later, after an investigation, PEPCO wrote petitioner: "As a result of your unauthorized entry into, and search of, Company records and your unauthorized removal of Company documents in violation of Company and Departmental rules, you are discharged, effective close of business, December 8, 1986." *fn2
Petitioner applied for unemployment compensation. Two hearings were held before a DOES appeals examiner, the second following an order of remand by the DOES Office of Appeals and Review ("OAR"). *fn3 Each hearing resulted in an appeals examiner decision denying petitioner's claim. *fn4 The second decision was summarily affirmed by OAR. An appeal was then taken to this court.
All agency action must ultimately rest upon legal principles established by statute, regulation or case law. Paramount in any agency decision for purposes of appellate review is a clear exposition of the legal principle or principles underlying the agency decision. "Where an administrative agency is delegated broad authority to administer a statutory scheme . . . we defer to a reasonable construction of the statute made by the agency." Smith v. District of Columbia Dept. of Employment Servs., 548 A.2d 95, 97 (D.C. 1988) (citations omitted). However, "absent an analysis staking out an agency position to which this court normally would accord some deference," Wells v. District of Columbia Dept. of Employment Servs., 513 A.2d 235, 242 (D.C. 1986), we have no choice but to remand for clarification. "An administrative order can only be sustained on the grounds relied on by the agency; we cannot substitute our judgment for that of the agency." Jones v. District of Columbia Dept. of Employment Servs., 519 A.2d 704, 709 (D.C. 1987) (citations omitted); see also Jadallah v. District of Columbia Dept. of Employment Servs., 476 A.2d 671, 675 n.3 (D.C. 1984) (per curiam).
In this case, the Department denied unemployment compensation on the ultimate ground that petitioner was discharged for "misconduct." The District of Columbia Unemployment Compensation Act, D.C. Code § § 46-101 to 46-128 (1987) (the "Act"), is the controlling statute. It defines the word "misconduct":
For the purposes of this section, the term "misconduct" means an act of willful disregard of the employer's interests, a deliberate violation of the employer's rules, a disregard of standards of behavior which the employer has a right to expect of his employees, negligence to such a degree or recurrence as to manifest culpability, wrongful intent, or evil design, or showing an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to the employer.
D.C. Code § 46-111(b)(2) (1987). Furthermore, the Department, pursuant to statutory authority, *fn5 has by regulation particularized the meaning of the word "misconduct" within the statutory scheme:
Misconduct occurring in the course of work includes, but is not limited to, the following:
(a) Willful violation of employer's rules;
(c) Repeated disregard of reasonable orders;
(e) Gross neglect of duties;
(f) Insubordination; and
7 DCMR § 312.3 (1986). The regulations further provide:
If willful violation of employer's rules is the basis for a disqualification from benefits because of misconduct, the Director shall determine the following:
(a) That the existence of the employer's rule was known to the employee;
(b) That the employer's rule is reasonable; and
(c) That the employer's rule is consistently enforced by the employer.
Id. § 312.4.
It is clear that the appeals examiner was of the view, at least in part, that petitioner had engaged in "misconduct" because she had violated a PEPCO rule. The examiner did not make a clear finding, however, as to petitioner's mental state nor did the examiner articulate her view of the legal standard governing an employee's mental state. *fn6 The Act requires that the violation be "deliberate"; the regulation uses the word "willful." *fn7 The difficulty is that we cannot perceive the appeals examiner to have made any finding that petitioner's action here was either "willful" or "deliberate." *fn8 Indeed, there is a rather telling indication to the contrary in the examiner's statement that "while claimant believes her conduct was not done in violation of the employer's rule her actions in this case can not be overlooked." *fn9 The latter phrase may reflect the examiner's interpretation of the statute and regulations to mean that even if petitioner subjectively believed she was committing no violation, misconduct may be found when the employee should have known that the action would constitute a violation. If this is the examiner's view, she should make it explicit and set forth the legal reasoning. See Wells, supra, 513 A.2d at 242 (case with open legal issue remanded for "reasoned interpretation by the agency charged with administering the statute"). *fn10
It is possible that the appeals examiner alternatively relied upon a form of misconduct other than violation of an employer's rule. *fn11 She states that "the claimant's conduct was intentionally done against the legitimate in interest of this employer." It is not clear what the source of this standard is, whether it is meant to be different from the rule violation standard and to what conduct the Department was referring. It may have been meant to coincide with the clause in section 46-111(b)(2) of the Act *fn12 which defines "misconduct" to include "an act of willful disregard of the employer's interests"; or, as suggested by the employer before us, it may have been meant to coincide with the clause "disregard of standards of behavior which the employer has a right to expect from his employees"; or it may have been meant to coincide with the clause "showing an intentional and substantial disregard of the employer's interest or of the employee's duties and obligations to the employer." *fn13 We simply cannot tell with confidence what the hearing examiner meant. The full legal basis on which an administrative agency relies in its determination and its underlying factual determinations should not be left to appellate speculation. *fn14
In short, we are unable to perform our function of appellate review where we cannot confidently ascertain either the precise legal principles on which the agency relied or its underlying factual determinations: *fn15 "'he orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed and adequately sustained'." Gordon v. District Unemployment Compensation Bd., 402 A.2d 1251, 1258 (D.C. 1979) (quoting SEC v. Chenery Corp., 318 U.S. 80, 94, 87 L. Ed. 626, 63 S. Ct. 454 (1943)). Accordingly, we must remand the case for further proceedings consistent with this opinion.