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A Better Partnership
February 10, 2015

MSC clarifies standard of review for unemployment-benefit determinations

In lieu of granting leave to appeal and without hearing oral argument, the Michigan Supreme Court in Hodge v. U.S. Security Associates, Inc., No. 149984, reversed the Court of Appeals and held that an administrative law judge applied the proper legal standard in determining that an employee was not entitled to unemployment benefits.
 
Carnice Hodge was employed as a security guard for U.S. Security Associates, Inc. and was positioned at Detroit Metro Airport. Hodge was fired for accessing flight departure information on a computer at the request of a passenger, contrary to a policy that prohibits employees from accessing airport computers. Hodge requested unemployment insurance benefits, but the Unemployment Insurance Agency determined that she was disqualified under a provision of the Michigan Employment Security Act that disallows benefits for individuals discharged for work-related misconduct.
 
An administrative law judge and the Michigan Compensation Appellate Commission both upheld the Unemployment Insurance Agency’s determination. On appeal, however, the circuit court reversed, finding that Hodge made an error in judgment trying to reconcile her duty to help passengers with the policy against computer use, which did not amount to a denial of employment benefits. The Court of Appeals affirmed the circuit court, agreeing that Hodge’s violation was not sufficiently egregious to deny benefits.
 
The Supreme Court held that the circuit court and Court of Appeals erred because they applied an incorrect standard of review. The Court reasoned that the lower courts failed to give deference to the administrative judge’s determination and should have reviewed only to ensure conformity with the law and the existence of competent, material, and substantial evidence. Instead, the Court explained, the lower courts improperly reweighed the evidence in order to reach a different assessment. The Court concluded that the Michigan Compensation Appellate Commission’s decision to deny benefits was made within the correct legal framework and was not contrary to law.
 
Therefore, the Supreme Court reversed the judgment of the Court of Appeals and reinstated the judgment of the Michigan Compensation Appellate Commission to deny employment benefits.

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