ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

JOHN B. ROBBINS, JUDGE

DIVISION IV

ANITA S. SKOOT

APPELLANT

V.

DIRECTOR, EMPLOYMENT

SECURITY DEPARTMENT

APPELLEE

E 00-70

MAY 16, 2001

APPEAL FROM THE ARKANSAS

BOARD OF REVIEW COURT

[NO. 2000-BR-00252]

REVERSED

Appellant Anita Skoot appeals the denial of unemployment benefits to her after she was discharged on December 24, 1999, from her employment as a teller supervisor at Mercantile Bank in Mountain Home, Arkansas. She had been employed at the bank since March 17, 1996, until her termination date. The basis for her termination was that she violated bank policy by conducting a strip search of a teller in an effort to recover missing bank funds, which were never found. The Board of Review determined that appellant should be disqualified from receiving unemployment benefits for an eight-week term due to misconduct in connection with the work. This appeal resulted, and appellant argues that the Board's decision is not supported by substantial evidence. We reverse.

On appeal, the findings of fact of the Board of Review are conclusive if they are

supported by substantial evidence. Perry v. Gaddy, 48 Ark. App. 128, 891 S.W.2d 73(1995); see also Ark. Code Ann. § 11-10-529(c)(1) (Supp. 1999). We review the evidence and all reasonable inferences deducible from the evidence in the light most favorable to the Board's findings. Id. Even when there is evidence upon which the Board might have reached a different decision, the scope of judicial review is limited to a determination of whether the Board could reasonably reach its decision on the evidence before it. Id.; White v. Director, 54 Ark. App. 197, 924 S.W.2d 823 (1996). To establish an absence of substantial evidence to support the decision, the appellant must demonstrate that the proof before the administrative tribunal was so nearly undisputed that fair-minded persons could not reach its conclusion. Singleton v. Smith, 289 Ark. 577, 715 S.W.2d 437 (1986).

Appellant testified in her own defense, stating that she was only protecting the bank's interest by acting as she did. Appellant testified that she had suspected a bank teller named Allison of taking money a few months prior to the December incident. Appellant stated that she was on vacation in July 1999, and during her absence there were two $100 "outages." Allison was present on both of those occasions and was in close proximity to the cash drawers where the shortages occurred. According to appellant, there had been no problems with shortages prior to Allison's employment. She stated that when she first suspected Allison in July, she called Debbie Goade at the bank's Little Rock office who instructed appellant to do whatever she had to in order to stop someone from stealing money.

On December 24, 1999, appellant arrived at work and saw Allison counting the night deposits, heard the sound of a zipper, and saw Allison place her hand in her pocket, putting a crumpled piece of paper in it. Appellant asked Allison which bag was opened, and Allisonsaid none. Allison explained that the zipper sound was her pants unzipping when she stood. Allison then went to the bathroom. As Allison returned from the bathroom, appellant told everyone to empty their pockets because there was a $100 shortage. Allison stated to appellant, "What are you going to do now, strip search?" Appellant responded, "okay," and the search was conducted in the bathroom. Allison first removed her shirt and bra, put those back on, and then took off her pants, shoes and socks. Appellant also conducted a search on another employee, but only had the other woman remove her shoes. Before any further searches were conducted, the bank manager telephoned and halted the searches. Appellant stated that she was trying to protect the bank's interests and had no intent of harming the bank or placing it in jeopardy.

Judy Pevril, the other employee who was searched, testified that she was teller supervisor, a position that she assumed after appellant was terminated. Ms. Pevril removed her shoes in appellant's search of her, but appellant did not ask her to take off any other clothing. Ms. Pevril stated that the bank had not trained her on how to handle such a situation. She did not feel that what appellant did was wrong, though she would not have done it. Ms. Pevril stated that she would have called the customer if there were a shortage in a night deposit bag. Another teller supervisor who had since left the company, Shelly Webb, testified that she had not been trained in what to do if a teller was suspected of stealing money. Ms. Webb stated that if there was a shortage of money in a night deposit bag, the typical response would be to first call the customer.

Testimony was taken from Wayne Dierks, senior vice-president over humanresources for Mercantile Bank of Arkansas. Mr. Dierks stated that appellant violated bank procedure in her attempts to locate the missing money. He testified that the appropriate procedure would have been to contact the audit department about the shortage, but appellant did not contact the bank manager or human resources prior to taking the actions she did. It was Mr. Dierks' opinion that although there was no explicit prohibition from conducting a strip search, professional business practice and common sense would dictate that she not treat the employees in this manner.

The agency's initial determination was to disqualify appellant from benefits on the ground that she had been discharged for misconduct. Appellant appealed to the Appeal Tribunal, which reversed the agency determination and awarded her benefits. The employer sought review before the Board and prevailed. This appeal followed.

The Board found by a preponderance of the evidence that the suspected teller did not volunteer for a strip search; that it was unreasonable to believe that she was justified in performing a strip search under the rationale that bank personnel had told her to do "anything" to prevent a theft; and that appellant's decision to act as she did was not just an error in judgment in an isolated incident. The Board found that appellant acted in disregard of her employer's interest, and thus she was found to be disqualified for misconduct connected with the work.

To qualify for benefits under the Arkansas Employment Law, a discharged employee must have been discharged for reasons other than misconduct connected with the work. Ark. Code Ann. § 11-10-514 (Supp. 1999). "Misconduct" means disregard of the employer'sinterest, violation of the employer's rules, disregard of the standards of behavior that the employer has a right to expect from his employees, or disregard of the duties and obligations an employee has toward his employer. See Greenberg v. Director, 53 Ark. App. 295, 922 S.W.2d 5 (1996). Mere inefficiency, unsatisfactory conduct, failure of good performance as the result of inability or incapacity, inadvertencies, ordinary negligence or good faith errors in judgment or discretion are not considered misconduct for unemployment insurance purposes unless it is of such degree or recurrence as to manifest culpability, wrongful intent, evil design, or an intentional or substantial disregard of an employer's interest or of an employee's duties and obligations. Washington Regional Center Board of Review v. Director, 64 Ark. App. 41, 979 S.W.2d 94 (1998). There is an element of intent involved in determining misconduct; whether an employee's acts are willful or merely the result of unsatisfactory conduct or unintentional failure of performance is a fact question for the Board to decide. Rucker v. Director, 52 Ark. App. 126, 915 S.W.2d 315 (1996).

Appellant's actions exhibited an extremely poor management decision. However, we cannot conclude that this single episode, designed to meet upper management's express directive to do anything necessary to prevent theft, was motivated by any evil design or wrongful intent. See 76 Am. Jur. 2d Unemployment Compensation § 78 (1992). What justifies termination, and what warrants disqualification from unemployment benefits, are two separate inquiries. Because there is a lack of substantial evidence in the record to support the Board's conclusion on these particular facts, we reverse.

Jennings and Baker, JJ., agree.