State court rules that fired Paratransit driver cannot be denied unemployment benefits

July 04--In a victory with broad implications for the state's army of unemployed, the California Supreme Court ruled Thursday that unemployment benefits for a Sacramento Paratransit driver cannot be denied because he was fired for refusing to sign a formal notification of discipline.

"Even assuming (Paratransit's) order to sign the disciplinary notice was reasonable and lawful, and even assuming (Craig Medeiros') refusal to do so may have justified his termination ... the ... issue here is whether the ... facts, which are undisputed, establish that he committed misconduct within the meaning of" a state statute, the court said. "We conclude the answer is no," it declared.

The unanimous opinion was authored by Justice Marvin R. Baxter.

After a passenger filed a complaint against Medeiros in 2008 alleging he harassed her and Paratransit decided the claim was well founded, he defied repeated orders to sign a memorandum that he was being disciplined for the incident, including two days on suspension without pay.

Medeiros said he disputed the factual scenario depicted in the document, he believed he had the right to consult with a union representative before deciding whether to sign it, and he was concerned he would be admitting wrongdoing.

Paratransit officials warned Medeiros that, if he did not sign the notice, it would be a violation of the company's collective bargaining agreement with the union and would be viewed as insubordination and grounds for termination.

But Medeiros would not accept the company's assurances that his signature would not be an admission of guilt but would only acknowledge receipt of the notice.

So, in May 2008, after six years with Paratransit, Medeiros was fired.

Paratransit Inc., is a private nonprofit corporation providing transportation to disabled and elderly people and related agencies throughout the Sacramento region.

In the years of legal wrangling that followed Medeiros' firing, his lawyers did not question the legitimacy of his termination, but they challenged findings by trial and appellate courts that he is not entitled to unemployment benefits because he was fired for misconduct.

California law bars unemployment benefits for someone fired for misconduct, as the law defines that term, and Paratransit says that is the reason Medeiros was discharged.

But the Supreme Court, reversing decisions in the two lower courts, ruled that his refusal to sign the notice does not fall under the rubric of misconduct, "but was, at most, a good faith error in judgment that does not disqualify him from unemployment benefits."

Carole Vigne, a staff attorney at the Legal Aid Society-Employment Law Center in San Francisco, described the ruling as "important on multiple levels."

Vigne, who filed a brief with the Supreme Court in support of Medeiros, said it is the court's "first substantive decision interpreting the Unemployment Insurance Code that we've had in 30 years. It is a very clear affirmation that the code is intended to relieve hardship and cannot be vitiated by a one-time incident of disobedience."

She said the decision "is certainly timely, given the huge unemployment numbers we've had in recent years. Unemployment insurance is a safety net and lifeline for so many people, especially low-wage workers, and now there is no doubt they do not forfeit that protection when they lose a job through no fault of their own by disobeying what even might have been a reasonable and lawful order."

Paratransit attorney Laura McHugh takes strong exception to that view and to the high court's conclusion.

Thursday's opinion "is result-oriented and inconsistent with the purpose of unemployment benefits, which are meant to help people who have lost their jobs through no fault of their own," McHugh said.

"Mr. Medeiros had an option," she said. "He could have signed off on the suspension, continued to work and grieved it through the union. So, it was his own fault that he wasn't employed.

"But wait, now we're told it was not his fault. So he gets unemployment.

"This allows employees to refuse to comply with reasonable and lawful directives from their employers," McHugh said. "It makes it easier for them to come up with excuses why they don't have to do what they are told. It is disappointing that our courts here in California continue to gravitate toward these types of positions."

Stacey Leyton, an attorney who filed a brief with the Supreme Court in support of Medeiros on behalf of United Steelworkers, said the "general legal principles regarding honest-mistake termination" were established in earlier California case law, but the factual scenario in Medeiros had not before been addressed.

She said the Supreme Court's ruling "is tremendously important. The lower courts were out of sync with the law and the purpose of unemployment insurance."

"This is common," Leyton said of the situation Medeiros claims he found himself in. "It happens to a lot of people. It is not at all unusual for someone to believe they are admitting wrongdoing if he or she signs such a document.

"But now we have a definitive answer: Even if they can be fired for not signing, they can't lose their right to unemployment benefits."

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