California Supreme Court Confirms: "Refusing to Sign" Is Insubordination. But it's not "Misconduct."

Somewhere along the line, employees got the idea that they can "refuse to sign" personnel documents.  Our advice is always to clearly indicate on a form that "signing" simply means acknowledgement of receipt.  Yet, employees still refuse to sign, even with that disclaimer.  Some then claim they did not receive them, usually during depositions.

Can the employer fire a worker for refusing to sign?  One of this blog's most popular posts addressed the court of appeal's decision in Paratransit v. Unemployment Insurance Appeals Board.  (Here)  The court there held that an employee's "refusing to sign" a disciplinary notice was insubordination, warranting discharge. But the court also held that the employee's refusing to sign was also "misconduct" within the meaning of  unemployment insurance law, disqualifying the fired worker from benefits.

The California Supreme Court has now weighed in on the case. As stated by the Court:

Craig Medeiros (Claimant) worked for Paratransit, Inc. (Employer) as a vehicle operator for approximately six years. As a condition of his employment, Claimant was required to join a union. The union and Employer were parties to a collective bargaining agreement (CBA) containing the following provision: “The Employer shall provide a Vehicle Operator with copies of complimentary letters received regarding his or her job performance and with copies of disciplinary notices, including verbal warnings that have been put in writing. All disciplinary notices must be signed by a Vehicle Operator when presented to him or her provided that the notice states that by signing, the Vehicle Operator is only acknowledging receipt of said notice and is not admitting to any fault or to the truth of any statement in the notice.”

Yet, when Paratransit attempted to discipline Medeiros, he refused to sign the document.  Later, he claimed he was tired and confused, and believed he did not have to sign because of advice he had received from his union.  

Paratransit contested Medeiros's claim for unemployment benefits.  Ultimately, the Court of Appeal decided, 2-1, that Medeiros was disqualified, because his refusal to sign amounted to "misconduct" within the meaing of California's Unemploymet Insurance Code section 1256.

The Supreme Court previously ruled in Amador v. Unemployment Ins. Appeals Bd. (1984) 35 Cal.3d 671, that misconduct means the following:

“conduct evincing such wilful or wanton disregard of an employer‟s interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer‟s interests or of the employee‟s duties and obligations to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed "misconduct" within the meaning of the statute.” 

With respect to insubordination, the Court noted prior rulings established that

“an employee‟s unequivocal refusal to comply with the employer‟s rule, without more, is not misconduct within the meaning of section 1256.” (Robles v. Employment Development Dept. (2012) 207 Cal.App.4th 1029, 1035 (Robles).) As in all cases of misconduct, the employee‟s insubordination must be marked by fault. (See Amador, supra, 35 Cal.3d at p. 678; Robles, at p. 1035.) Hence, violating an employer‟s reasonable order because of a good faith error in judgment does not disqualify an employee from receiving benefits. (See Amador, at p. 680; Moore v. Unemployment Ins. Appeals Bd. (1985) 169 Cal.App.3d 235, 243 (Moore).)

The Supreme Court acknowledged that refusing to sign the paper was insubordinate and justified discharge.  But the Court also unanimously held that Medeiros's refusing to sign one disciplinary notice was insufficient evidence of "misconduct" under the above definitions.

So, the Court found the disciplinary notice's disclaimer ambiguous, because it did not say that signing was "only" for acknowledging receipt of the document.  So, it pays to include a clear statement on documents requiring an employee's signature.  Additionally, the Court was concerned that Medeiros merely made a "good faith error in judgment" rather than misconduct.  The Court may have been persuaded otherwise had Medeiros engaged in a pattern of insubordination, or if his action had been detrimental to the employer.

This case is Paratransit v. CUIAB and the opinion is here.

Court of Appeal: "Refusing to Sign" Is Insubordination(!)

When you present an employee a warning (or a review, etc.), and you ask the employee to sign the document to acknowledge receipt of a copy, and the employee refuses to do so, that is called "insubordination" and is a legitimate reason to fire an employee.  Better, still:  it's "misconduct" and the employee may be disqualified from unemployment benefits.

The employer does not have to discharge the employee, but it could.  I have no idea where this "refuse to sign" notation came from, or when employees gained the power to tell employers what they will and will not sign. Perhaps this decision will change things a bit.

In Paratransit v. UIAB, the employee was in a union. The union contract required employer to obtain the signature of the employee on disciplinary action notices, but the notices had to have a disclaimer that says the employee is only acknowledging receipt of the document.  So, employee Craig Medeiros was rude to a customer, the employer tried to give him a disciplinary notice. Employee refused because he feared it would be deemed an admission of guilt, despite the clear disclaimer.  He was told he would be fired if he did not sign the document, and he refused.  Paratransit fired him.

So, the employee then applied for unemployment, which Paratransit contested.  The Unemployment Ins. Appeals Board granted benefits, overturning the decision of an Administrative Law Judge.  Paratransit then sought relief in court.  The Superior Court agreed with Paratransit, and the employee appealed to the Court of Appeal.

If you're fired for "misconduct" you are disqualified from receiving unemployment.  What is misconduct?  Unemployment Ins. Code Section 1256 has the answer, as explained by the court:

Section 1256 provides in relevant part: ?An individual is disqualified for unemployment compensation benefits if . . . he or she has been discharged for misconduct connected with his or her most recent work.? Misconduct within the meaning of section 1256 is limited to "conduct evincing such willful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer‟s interests or the employee‟s duties and obligations to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed "misconduct" within the meaning of the statute . . .

The Court of Appeal held that refusing to sign an acknowledgment, in violation of a direct order to do so, was insubordination and, therefore, misconduct:

Under the circumstances presented, we conclude Claimant‟s failure to sign the disciplinary memo violated his obligations to Employer under Labor Code section 2856. (See Lacy v. California Unemployment Ins. Appeals Bd., supra, 17 Cal.App.3d at p. 1133 [employee must comply unless the employer‟s directive imposes a duty that is both new and unreasonable].) The remaining question is whether such insubordination was misconduct under section 1256 or a good faith error in judgment. ***

As described above, an intentional refusal to obey an employer‟s lawful and reasonable directive qualifies as misconduct. But where an employee, in good faith, fails to recognize the employer‟s directive is reasonable and lawful or otherwise reasonably believes he is not required to comply, one might conclude his refusal to obey is no more than a good faith error in judgment. ***

***Claimant was told to sign the disciplinary memo and that, if he did not, he would be subject to termination. Instead, Claimant requested union representation. He was then told he had no right to union representation at the meeting. Claimant was then instructed to sign the memorandum without union representation. By refusing to do so, Claimant was not seeking redress by other means. He was directly disobeying the employer‟s command.

So, employers have the right to obtain an employee acknowledgment of a disciplinary action. Why is this a big deal?  Because employees may later claim that the action notice was "inserted" in the file, or that the employee did not have prior notice that his or her performance was unsatisfactory, or that the employee did not get a chance to see a disciplinary warning.  That "refused to sign" language that employers write on unsigned notices is worth nothing in court.  The employee's signed acknowledgment is worth a lot. That's why.

To be sure, an employer is not required to fire someone who does not follow directions, or who does not want to sign a disciplinary notice.  But then again, there are employers who may wish to impose consequences for employees' who refuse to follow directions.  Even in 2012, it's nice to know the employer still has a fundamental management right to ask an employee to obey a legal instruction.  Important caveat:  it's a good idea for the warning notice to include an express disclaimer, such as: "Signature is only an acknowlegement that the employee received a copy of this notice and does not signify agreement with the contents."  Or somethjing like that.  Remember: Nothing in this blog is legal advice. 

This case is Paratransit Inc. v. Unemployment Ins. Appeals Bd. and the opinion is here.