Legal Writing

555 P. 2d 696 Supreme Court of New Mexico. Zelma M. MITCHELL, Plaintiff-Appellee, v. LOVINGTON GOOD SAMARITAN CENTER, INC. , Defendant-Appellant. No. 10847. Oct. 27, 1976. Appeal was taken from an order of the District Court, Bernalillo County, Richard B. Traub, D. J. , reversing a decision of the Unemployment Security Commission and awarding benefits to discharged employee. The Supreme Court, Sosa, J. , held that employee’s insubordination, improper attire, name calling and other conduct evidencing wilful disregard of employer’s interests constituted ‘misconduct’ disqualifying her from receiving certain unemployment benefits. Reversed. Attorneys and Law Firms *576 **697 Heidel, Samberson, Gallini & Williams, Jerry L. Williams, Lovington, for defendant-appellant. Gary J. Martone, J. Richard Baumgartner, Joseph Goldberg, Albuquerque, for plaintiff-appellee. OPINION SOSA, Justice. This case presents the issue of whether petitioner’s actions constituted misconduct so as to disqualify her from certain unemployment compensation benefits. On June 4, 1974, petitioner-appellee Zelma Mitchell was terminated for alleged misconduct from the Lovington Good Samaritan Center, Inc. On June 12, 1974, Mrs. Mitchell applied for unemployment compensation benefits. Finding that Mrs. Mitchell’s acts constituted misconduct, a deputy of the Unemployment Security Commission disqualified Mrs. Mitchell from seven weeks of benefits pursuant to s 59-9-6(B), N. M. S. A. 1953. On July 24, 1974, Mrs. Mitchell filed an appeal. The referee of the Appeal Tribunal reversed the deputy’s decision and reinstated these benefits to Mrs. Mitchell on August 28, 1974. On September 13, 1974, the Center appealed the decision of the Appeal Tribunal to the whole Commission pursuant to s 59-9-6(E), N. M. S. A. 1953. The Commission overruled the Appeal Tribunal and reinstated the seven week disqualification period. Mrs. Mitchell then applied for and was granted certiorari from the decision of the Commission to the District Court of Bernalillo County pursuant to s 59-96(K), N. M. S. A. 1953. On January 16, 1976, the District Court reversed the Commission’s decision and ordered it to reinstate the benefits to Mrs. Mitchell. From the judgment of the District Court, the Center appeals. The issue before us is whether Mrs. Mitchell’s actions constituted misconduct under s 59-9-5(b), N. M. S. A. 1953. Mrs. Mitchell started work at the Center in Lovington on July 4, 1972 as a nurse’s aide. After approximately one year on the job in addition to her normal duties she also served as a relief medications nurse two days per week. On June 4, 1974, she was terminated. The testimony concerning the events leading up to her termination that day is somewhat contradictory but basically is the following. Mrs. Mitchell arrived punctually to work at three p. m. The director of the Center, Mr. Smith, questioned her about why she was already filling in her time card. Mrs. Mitchell answered that she filled in eight hours, which she would work that day as long as she did not ‘break a leg or die. ’ Mr. Smith replied, ‘Well, I’m not so sure about that. ’ Mrs. Mitchell then became defensive and stated that she had supported him when the Director of Nurses, Mrs. Mary Stroope, sought to have him fired as director. Mrs. Stroope, in the vicinity, overheard this comment, denied it, and called Mrs. Mitchell a liar. At various times during this exchange Mrs. Mitchell referred to Mr. Smith, Mrs. Stroope, and others as ‘birdbrains. This occurred in a crowded area where the Center’s employees were checking in and out, so Mr. Smith told both to go into his office. There, Mrs. Stroope apologized to Mrs. Mitchell for calling her a liar and Mrs. Mitchell apologized for saying that Mrs. Stroope had circulated a petition to replace Mr. Smith. However, tempers soon flared again and Mr. Smith resolved to fire Mrs. Mitchell. Mrs. Mitchell then demanded her check. Mr. Smith paid her for that day, a week’s vacation, and another week’s salary for being terminated, which he was not required to do since Mrs. Mitchell failed to give him two weeks’ notice. 577 **698 Appellee Mitchell argues that the events of June 4, 1974, do not constitute misconduct within the meaning of s 59-9-5(b), supra. Appellant Center argues that these events were the last of a series of acts of misconduct, and the ‘birdbrain’ incident should be considered the ‘last straw’ resulting in her termination. Mitchell counters that the prior acts of misconduct should not be considered. The alleged acts of prior misconduct are the following. On April 2, 1974, Mrs. Mitchell went to work at the Center out of uniform (she wore gold pants rather than navy blue). On that day the Federal Regulation Inspectors visited the Center. Mrs. Mitchell stated that she did not know that the federal inspectors would be there that particular day. The Director of Nurses reprimanded her and told her to go home and to change into the proper attire, which Mrs. Mitchell refused to do. The following day Mrs. Mitchell again came to work out of uniform but this time she was directed to go and did go home to change. On May 24, 1974, Mrs. Mitchell was switched from medications to the floor routine. Angered, Mrs. Mitchell refused to give medications, even though the charge nurse and Mrs. Stroope explained to her that the reason for the switch was that she was familiar with both jobs whereas the replacement nurse, Carol Skurlock, was unfamiliar with the floor routine. Mrs. Mitchell stated that she did not like being replaced by a ‘white’ nurse’s aide (Carol Skurlock). Mrs. Mitchell considered herself and Carol to be just ‘birdbrain against birdbrain,’ apparently because neither she nor Carol was a licensed nurse. From May 24 to June 4 Mrs. Mitchell refused to perform her duties as a relief medications aide. On May 15, 1974, and other days, Mrs. Mitchell sang while counting medications and was not very co-operative, which caused Betty Clarke, R. N. , to complain that Mrs. Mitchell’s actions were unethical and time-consuming. The term ‘misconduct’ is not defined in the Unemployment Compensation Law. The Wisconsin Supreme Court in Boynton Cab Co. v. Neubeck, 237 Wis. 249, 259-60, 296 N. W. 636, 640 (1941) examined the misconduct subsection of its unemployment compensation act, found no statutory definition of misconduct, and formulated the following definition: . . ‘misconduct’ . . . is limited to 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 intenti onal 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. We adopt this definition. Applying this definition of misconduct to the facts of the case before us, we hold that Mrs. Mitchell’s acts constituted misconduct. *578 **699 Mrs. Mitchell’s insubordination, improper attire, name calling, and other conduct evinced a wilful disregard of the interests of the Center. Although each separate incident may not have been sufficient in itself to constitute misconduct, taken in totality Mrs. Mitchell’s conduct deviated sufficiently to classify it as misconduct under the above test. Appellee’s argument that the ‘last straw’ doctrine should not be used is hereby rejected. The district court is reversed and the decision of the Commission is reinstated. McMANUS and EASLEY, JJ. , concur. 764 P. 2d 1316 Supreme Court of New Mexico. Billie J. RODMAN, Petitioner–Appellant, v. NEW MEXICO EMPLOYMENT SECURITY DEPARTMENT and Presbyterian Hospital, Respondents– Appellees. No. 17721. Nov. 30, 1988. The District Court, Bernalillo County, Ross C. Sanchez, D. J. , upheld administrative decision denying unemployment compensation to claimant. Claimant appealed. The Supreme Court, Ransom, J. , held that incident precipitating claimant’s termination demonstrated willful disregard for her employer’s interests. Affirmed. Stowers, J. , specially concurred and filed opinion. Attorneys and Law Firms **1317 *759 Juan A. Gonzalez, Legal Aid Society of Albuquerque, Inc. , Albuquerque, for petitioner-appellant. Connie Reischman, New Mexico Employment Sec. Dept. , Albuquerque, for respondents-appellees. OPINION RANSOM, Justice. An administrative decision of the New Mexico Employment Security Department denying unemployment compensation to Billie J. Rodman was reviewed on certiorari by the district court. Rodman now appeals to this Court from the order of the district court affirming the administrative decision. Rodman had been employed by Presbyterian Hospital as a unit secretary for nearly eight years when, on February 17, 1987, she was terminated under hospital personnel policies following a â€Å"third corrective action† notice. Prior restrictions had been placed on Rodman’s conduct due to personal problems adversely impacting upon her place of work. At issue is whether the misconduct which warranted termination from employment rose to the level of misconduct which would warrant denial of unemployment compensation under NMSA 1978, Section 51–1–7 of the Unemployment Compensation Law. The Department reasonably summarizes the substantial evidence as follows: Rodman was reprimanded in June of 1986 for receiving an inordinate number of personal telephone calls and visitors at her work station, which was disruptive to her own work and to her co-workers. The formal reprimand set forth conditions to prevent further corrective action. Rodman was to have no personal telephone calls during work hours outside of a designated break or dinner time, in which event they were to occur in an area not visible to patients, physicians, or other department staff. When leaving the department for dinner, Rodman was to report to her immediate supervisor and was not to leave the hospital. Rodman was to make every effort to resolve the matters in her personal life that were causing problems at work. Nevertheless, according to the testimony of her supervisor, extremely disruptive telephone calls continued. The doctors were beginning to comment on it. The staff was getting more distressed. According to her supervisor, â€Å"[A]gain we talked about the visits, the behavior at the desk. When it got pretty bad with the phone calls, Billie would slam charts, push chairs and be a little abrupt with the people she worked with. † Another written reprimand in November of 1986 warned Rodman that her job was in jeopardy if the disruptive behavior continued. The supervisor established restrictions prohibiting the claimant from having visitors at the department and instructed her to notify security if there was a potential problem. On February 15, 1987, Rodman began work at 1:00 o’clock in the afternoon. She had spoken to her boyfriend’s mother earlier in the day to tell her that she did not want him to use her car as she had broken off their relationship. The boyfriend’s mother called her at work and told her the boyfriend had her car keys. Rodman told the mother to have the boyfriend call her at work. When he did, she informed him that she could not talk to him at her duty station, and he hung up on her. He called her back and left a number where he could be reached. She left the work area and went to the break room to call him. After returning to her duty station, Rodman got another telephone call from her boyfriend who told her to go downstairs to the lobby to meet him and pick up the keys. When she refused, he told her that if she did not come down he would come up to her department. Claimant eft the department to confront her boyfriend, and, because her supervisor was at lunch in the hospital cafeteria, Rodman notified a co-worker, a registered nurse, that she was leaving. Rodman testified, â€Å"I didn’t want any kind of confrontation at the desk, so I went downstairs. † Before she left her desk, Rodman called the employer’s security guard and asked him to meet her in the lobby because she anticipated that a problem could develop. When Rodman got to the l obby, her boyfriend started yelling and forced her outside. In doing so, he tore her shirt. At this point the security guard arrived and observed them arguing. Rodman was in the passenger seat of her car. The security guard instructed the boyfriend to return the keys, but the boyfriend jumped into the driver’s seat, locked the doors and drove off. About thirty-five minutes later, Rodman returned to her work station, after having changed her torn shirt. She resumed working, but, as the shift progressed, more telephone calls were received for her in the department. The supervisor became frustrated with the volume of calls and the behavior of Rodman. It was determined that Rodman should be sent home. Thereafter she was terminated. The Appeals Tribunal of the Department of Employment Security found on the basis of the evidence that the appellant had proven unwilling to restrict her personal contacts while at work, as requested by her employer. The hearing officer dismissed as without **1319 *761 merit Rodman’s contention that she could not stop her acquaintances from calling or visiting her at work. The hearing officer concluded that Ms. Rodman’s behavior was unreasonable, had caused many problems for her work section, and constituted misconduct connected with work under Section 51–1–7(B). The Meaning of â€Å"Misconduct† in New Mexico’s Unemployment Compensation Law. Given the remedial purpose of the Unemployment Compensation Law, New Mexico courts, like most jurisdictions, interpret the provisions of the law liberally, to provide sustenance to those who are unemployed through no fault of their own, and who are willing to work if given the opportunity. Wilson v. Employment Sec. Comm’n, 74 N. M. 3, 14, 389 P. 2d 855, 862–63 (1963); Parsons v. Employment Security Comm’n, 71 N. M. 405, 409, 379 P. 2d 57, 60 (1963). Like most states, New Mexico also provides that an employee who is determined to have been discharged for â€Å"misconduct† is ineligible for unemployment compensation benefits. 51–1–7(B). Two purposes are served by this statutory bar: first, it prevents the dissipation of funds for other workers; second, it denies benefits to those who bring about their own unemployment by conducting themselves with such callousness, and deliberate or wanton misbehavior that they have given up any reasonable expe ctation of receiving unemployment benefits. Given the remedial purpose of the statute, and the rule of statutory construction that its provisions are to be interpreted liberally, the statutory term â€Å"misconduct† should not be given too broad a definition. Accordingly, in adopting the majority definition of the term, this Court wrote in Mitchell v. Lovington Good Samaritan Center, Inc. , 89 N. M. 575, 577, 555 P. 2d 696, 698 (1976): â€Å"[M]isconduct† * * * is limited to 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 * * *. M]ere 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 â€Å"misconduct† within the meaning of the statute. Where an employee has not acted with the requisite degree of â€Å"fault† under Mitchell, he or she has not sacrificed a reasonable expectati on in continued financial security such as may be afforded by accrued unemployment compensation benefits. It is therefore possible for an employee to have been properly discharged without having acted with such willful or wanton disregard for an employer’s interests as would justify denial of benefits. This Court recognized in Alonzo v. New Mexico Employment Security Department, 101 N. M. 770, 689 P. 2d 286 (1984), that even an act of willful disobedience which leads to termination will not always rise to the level of â€Å"misconduct† when the act is an isolated incident in an otherwise favorable employment history and the incident does not cause a significant disruption of the employer’s legitimate interests. Trujillo v. Employment Sec. Dep’t, 105 N. M. 467, 472, 734 P. 2d 245, 250 (Ct. App. 1987) (where employment contract gave employer the right to draft employees to work overtime in emergency situations significantly affecting the employer’s interests, it was â€Å"misconduct† for appellees to have refused to report for overtime work). Alonzo and Trujillo demonstrate that there are two components to the concept of misconduct sufficient to justify denial of benefits. One is the notion that the employee has acted with willful or wanton disregard for the employer’s interests; the other is that this act significantly infringed on legitimate employer expectations. *1320 *762 Totality of circumstances and the â€Å"last straw† doctrine. Often, the courts have been confronted with a series of minor infractions by the employee, where each incident showed a willful disregard of the employer’s interests, but no single incident was serious enough to justify denial of benefits. In su ch cases, courts have applied a â€Å"totality of circumstances† or â€Å"last straw† test to determine whether, taken together, this series of incidents constitutes misconduct sufficient to disqualify the claimant from receiving benefits. Mitchell v. Lovington Good Samaritan Center, Inc. 89 N. M. 575, 555 P. 2d 696 (1976). Rodman recognizes the â€Å"last straw† doctrine, but contends that the district court erred in applying the rule in this case because her infractions of February 15 were the result of acts of third parties over whom she had no physical or legal control. Appellant contends that she may not be denied unemployment benefits where the â€Å"last straw† which led to her termination was not willful or intentional, especially where, under the employer’s personnel policy, she could not have been discharged at all before this final incident. The Department contends that it is immaterial whether the precipitating act was a willful or intentional violation of the employer’s rules, where the record indicates that the claimant had a history of previous acts which demonstrate a willful or wanton disregard for the employer’s interests, and the employer discharged the employee for the accumulation of events, including the precipitating event. Fort Myers Pump & Supply v. Florida Dep’t of Labor, 373 So. 2d 429 (Fla. Dist. Ct. App. 1979). Although Fort Myers does offer support for the appellee’s position, we believe termination for a series of incidents which, taken together, may constitute â€Å"misconduct† is distinguishable from termination for a single incident following one or more corrective action notices. In the latter event, as here, we hold that the â€Å"last straw† must demonstrate a willful or wanton disregard for the employer’s interests for unemployment benefits to be denied. If substantial evidence existed that Rodman’s conduct on February 15, considered in light of the totality of ircumstances including her previous history of personal phone calls and unauthorized visitors, showed a willful or wanton disregard for her employer’s interests, then Rodman’s benefits were properly denied. Although the evidence in this case is amenable to more than one reasonable interpretation, we conclude that there was a substantial basis for the district court to decide t hat Rodman’s actions on February 15, when considered in light of the restrictions which had been placed upon her and her previous failure to comply with those restrictions, demonstrated a willful disregard for her employer’s interests. Therefore, the decision of the district court is affirmed. IT IS SO ORDERED. WALTERS, J. , concurs. STOWERS, J. , specially concurs. 769 P. 2d 88 Supreme Court of New Mexico. In re Claim of Lucy APODACA. IT’S BURGER TIME, INC. , Petitioner–Appellee, v. NEW MEXICO DEPARTMENT OF LABOR EMPLOYMENT SECURITY DEPARTMENT, BOARD OF REVIEW and Lucy Apodaca, Respondents–Appellants. No. 17952. Feb. 22, 1989. Employer filed writ of certiorari to challenge Employment Security Department’s award of unemployment compensation to fast-food restaurant employee who refused to retint her purple hair. The District Court, Dona Ana County, Lalo Garza, D. J. reversed award of benefits. Employee appealed. The Supreme Court, Ransom, J. , held that evidence supported Department’s award of benefits. Reversed and remanded. Attorneys and Law Firms **89 *176 Jose R. Coronado, Southern New Mexico Legal Services, Inc. , Las Cruces, Connie Reischman, New Mexico Dept. of Labor, Albuqu erque, for respondents-appellants. Kelly P. Albers, Lloyd O. Bates, Jr. , Las Cruces, for petitioner-appellee. OPINION RANSOM, Justice. A determination by the Board of Review of the New Mexico Employment Security Department awarding unemployment compensation to Lucy Apodaca was reversed by the district court on certiorari. Apodaca appeals the district court decision, arguing that the court erred in finding the administrative determination was unsupported by substantial evidence and was contrary to law. We conclude substantial evidence supports the Board of Review decision that the conduct leading to Apodaca’s termination did not constitute misconduct warranting denial of unemployment compensation under Section 51–1–7(B) of the Unemployment Compensation Law. Accordingly, we reverse the district court. Apodaca was employed as a counter helper from August 1986 to August 1987 with It’s Burger Time, Inc. Apodaca’s supervisors had no complaints concerning the performance of her work. Several times during the summer of 1987, Apodaca approached the store manager, John Pena, to ask how the owner, Kevin McGrath, would react if she were to dye her hair purple. Pena did not at first take the question seriously. When Apodaca persisted, Pena told her that he would have to ask McGrath. Apparently, he never did so. After several weeks, Apodaca went ahead and dyed her hair. McGrath saw Apodaca’s tinted hair for the first time at work two days later. He instructed Pena to give Apodaca a week to decide whether she wanted to retain her new hair color or her job. In a letter to the Board of Review, McGrath wrote that he had a good sense for community standards and believed he could not afford to wait until â€Å"this incident [took] it’s [sic] toll on my business. † Apodaca had signed the company handbook upon being hired, which instructed employees about acceptable hygiene and appearance. The handbook said nothing specific about hair color. Pena relayed McGrath’s message to Apodaca and suggested she make up her mind quickly so he could find someone to replace her if necessary. Two days later, Apodaca told Pena she had decided to keep her hair the way it was. She was then terminated and applied for unemployment benefits. The Department initially determined that Apodaca was ineligible for compensation because she had been terminated â€Å"for refusing to conform to the standards of personal grooming compatible with the * * * work [she was] performing. † The claims officer concluded this constituted misconduct under Section 51–1–7(B). Apodaca appealed to the Appeals Tribunal, which affirmed the denial of her benefits after a hearing. She appealed the Tribunal’s decision **90 *177 to the Department’s Board of Review. After reviewing the record of the hearing, the Board concluded that the employer failed to show how the color of Apodaca’s hair affected its business; therefore, her refusal to return her hair to its original color did not rise to the level of â€Å"misconduct† required for denial of her benefits. For review of the Board’s decision, the employer filed a writ of certiorari with the Dona Ana County District Court. The district court determined Burger Time’s request to Apodaca to change the color of her air was reasonable and enforceable and Apodaca’s refusal of that request was misconduct. The court concluded that the Board of Review’s decision was not supported by substantial evidence and was contrary to the law and reversed the decision granting Apodaca her benefits. This appeal followed. In reviewing the district court decision, we look first to see whether the court erred in concluding that the Department’s decision was unsupported by substantial evidence. Because we conclude that the court erred in this determination, it is unnecessary for us to examine the findings and conclusions adopted by the court. Misconduct and the employer’s interest. Both Apodaca and Burger Time agree that the definition of â€Å"misconduct† as used in Section 51–1–7(B) is to be found in this Court’s opinion in Mitchell v. Lovington Good Samaritan Center, Inc. , 89 N. M. 575, 577, 555 P. 2d 696, 698 (1976): â€Å"[M]isconduct† * * * is limited to 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. * * [M]ere 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 â€Å"misconduct† within the meaning of the statute. Apodaca d oes not deny that her refusal to redye her hair was an intentional and deliberate act. At issue in this case is whether an employee who refuses to alter her personal appearance in conformity with the employer’s personal beliefs about acceptable community standards has engaged in misconduct. The employer argues, and the district court apparently agreed, that so long as the request is reasonable and the employee is given adequate time to comply, refusal amounts to â€Å"insubordination and misconduct. † We disagree. In Alonzo v. New Mexico Employment Security Department, 101 N. M. 770, 772, 689 P. 2d 286, 288 (1984), we recognized that termination for an isolated incident which does not â€Å"significantly affect[ ] the employer’s business† may not form the basis for denial of benefits on the grounds of misconduct. In Alonzo, an employee was terminated after refusing to wear a smock when working at the cash register as required by company policy. Id. at 771, 689 P. 2d at 287. As here, the employee’s previous work history was completely satisfactory, and there was no evidence that the employer’s business interests had been affected. Alonzo should be compared with Trujillo v. Employment Security Department, 105 N. M. 467, 471–72, 734 P. 2d 245, 249–50 (Ct. App. 987), which held that failure to report for overtime work pursuant to an employment contract provision allowing the employer to draft employees in emergency situations constituted misconduct, when the evidence demonstrated that the orders directing employees to report early to work were explicit and not confusing. In Trujillo, unlike Alonzo, failure to comply with the employer’s request was recognized as having significantly affected the employer’s interest. See also Thornton v. Dep’t of Hum an Resources Dev. , 32 Cal. App. 3d 180, 107 Cal. Rptr. 92 (1973) (refusal of restaurant employee to shave beard immediately or be terminated was not misconduct when employer failed to show that beard was unsanitary or otherwise detrimental to business); cf. Lattanzio v. Unemployment Comp. Bd. of Rev. , 461 Pa. 392, 336 A. 2d 595 (1975) (claimant’s refusal to report back to work was for good cause when employer demanded he shave beard but no evidence supported contention that requested alteration in appearance was essential to performance of duties other than employer’s vague assertion that claimant’s â€Å"modish† appearance might reflect unfavorably on business). In this case, there is absolutely no evidence that the color of Apodaca’s hair significantly affected Burger Time’s business. McGrath and Pena both testified they received no customer complaints regarding the color of Apodaca’s hair. Apodaca’s immediate supervisor, testifying in her behalf, reported that the only comments she heard were compliments and that Burger Time’s customers had readily registered complaints in the past when they found something amiss. Under these circumstances, the Board of Review could properly decide that Apodaca’s refusal to retint her hair did not rise to the level of misconduct. Burger Time argues that none of our previous cases require an employer to demonstrate its business was affected by an employee’s refusal to comply with a request from the employer. However, it is well established in New Mexico that the party seeking to establish the existence of a fact bears the burden of proof. See Newcum v. Lawson, 101 N. M. 48, 684 P. 2d 534 (Ct. App. 1984); Carter v. Burn Constr. Co. , 85 N. M. 27, 508 P. 2d 1324 (Ct. App. ), cert. denied, 85 N. M. 5, 508 P. 2d 1302 (1973); Wallace v. Wanek, 81 N. M. 478, 468 P. 2d 879 (Ct. App. 1970); cf. Moya v. Employment Sec. Comm’n, 80 N. M. 39, 450 P. 2d 925 (1969) (when claimant sought to establish that he ought not be disqualified from receiving benefits because the position for which he refused to interview was not suitable employment, he bore burden of proof on this issue). In this case, pursuant to Department regulations requiring an employer to report why a claimant was fired or have that claimant’s benefits charged against the employer’s account, Burger Time submitted a letter stating that Apodaca refused to comply with company grooming standards. At each subsequent stage of the administrative process and before the district court, Burger Time sought to establish that Apodaca was terminated for misconduct. It therefore fell upon Burger Time to show that Apodaca’s refusal to change the color of her hair amounted to misconduct under the standard considered in Alonzo and Trujillo. This, Burger Time failed to do and thus failed to meet its burden of proof. Moreover, Apodaca presented uncontroverted testimony that no customers complained, and some complimented her for her hair. We do not question Burger Time’s right to establish a grooming code for its employees, to revise its rules in **92 *179 response to unanticipated situations, and to make its hiring and firing decisions in conformity with this policy. However, as we noted in Rodman, â€Å"It is * * * possible for an employee to have been properly discharged without having acted [in a manner] as would justify denial of benefits. † 107 N. M. at 761, 764 P. 2d at 1319. 2 Definition of misconduct and the right to terminate. Although not directly presented on appeal in this case, we note that in their decision letters both the Appeals Tribunal and the Board of Review used the following definition: â€Å"The term ‘misconduct’ connotes a material breach of the contract of employment or conduct reflecting a willful disregard of the employer’s best interests. (Emphasis added. ) We rejected this definition in Rodman, 107 N. M. at 763, 764 P. 2d at 1321, as inconsistent with the Mitchell standard requiring a willful or wanton disregard of the employer’s interests. The use of the term â€Å"or† implies that any breach of the employment contract sufficient to warrant discharge of the employee serves as adequate grounds for denial of benefits, whether or not the employee acted in a willful or wanton manner. Where an employee has not acted with the requisite degree of ‘fault’ under Mitchell, he or she has not sacrificed a reasonable expectation in continued financial security such as may be afforded by accrued unemployment compensation benefits. † Id. at 761, 764 P. 2d at 1319. The decision of the trial court is reversed, and this case is remanded for entry of judgment consistent with the decision of the Board of Review. IT IS SO ORDERED.

Lululemon Business Strategy Essay

Lululemon was founded by Chip Wilson who took a commercial yoga class in Vancouver and was immediately drawn in to the concept. After spending many years in the surf, skate, and snowboarding business, he found yoga was performed using cotton clothing and this seemed inappropriate because it neither removed sweat adequately nor did it allow for maximum flexibility. Given his passion and expertise in technical athletic fabrics, he began a movement in yoga clothing where he relied on feedback from yoga instructors to optimize his apparel. Lululemon was founded in 1998 to meet these goals. It opened its first store in November 2000 in Kitsilano, a beach area of Vancouver BC. Beyond getting feedback from instructors on how to improve the performance of the apparel, the firm sought to act as a community hub where people can interact and share the physical and mental aspects of having a healthy lifestyle. 1. What are the key elements of the strategy that Lululemon is pursuing? What generic strategy best fits Lululemon’s strategy? The five key elements are: Grow the company store base in North America The strategic objective was to add new stores to strengthen the company’s presence and then tap into new geographical markets in the Canada and US Increase brand awareness Leveraging the publicity surrounding, the opening of new stores with grass roots marketing programs. This included organizing events and partnering with local fitness coaches. Introduce new product technologies Continue to focus on developing and offering products that incorporate technology enhanced fabrics, and performance features that differentiate Lululemon for its competitor and increase its customer base. Broaden the appeal of Lululemon products This is divided in 3 sections 1. Adding men apparel to the line 2. Expanding to product category to items such as athletic bags, undergarments, sandals, outerwear 3. Adding products suitable additional sports and athletic activities Expand beyond North America Expand their presence in Australia and Japan. Then eventually pursue the Asian and European markets that offer similar, attractive demographics. Distinctive shopping expericance Provide a distinctive in-store shopping experience, complemented by strong ties to fitness instructors, fitness establishments and community events The two biggest strategic adjustments since 2007 had been to drawback from the use of franchising and sell directly to the consumers through the company website. Lululemon fits itself in a differentiated niche strategy 2. Is Lululemon’s strategy effective? Let’s look at the following to determine if the strategy is effective for Lululemon The firm currently has three segments: Corporate-Owned Stores The corporate-owned stores segment includes all sales to customers through corporate-owned stores in North America and Australia. This segment is by far Lululemon’s largest revenue base and will continue to be successful as Lululemon looks to expand its base in 2012 by opening 30 stores in the United States and 2 Ivivva Athletica stores in Canada. Direct To Consumers The Direct to Consumers segment involves Lululemon’s e-commerce website. Which is 10.6 % of revenue (2011) comes from this segment. The idea behind is to shift from brick-and-mortar stores to online channels, Lululemon’s commitment to increasing its presence in e-commerce will help the company expand its customer base and improve brand awareness. Franchise While previously franchise sales were part of their strategy, the company  reported that it will no longer partake in the business and that it had reacquired its four remaining franchise stores during fiscal 2011. SWOT Analysis Strength Trademarked fabrics Community involvement – offered free yoga class on monthly basis Employee training Innovation Style/comfort Multiple green initiatives Quality – products designed to sustain 5 years of intended use while maintaining functional Brand identity Weakness High retail price Narrow product line Quality control/supply chain Marketing targeted to mostly yoga instructors/studios Loss of customer service with increased scale Weak brand recognition Lack of targeting to men Opportunity Expand product line Serve additional market segments Expand into additional geographic markets Increased demand in athletic apparel Fitness craze Threats Increased competition from current large players in the market Copy cats Economy New entrants Risk of banking on niche markets Lululemon only went public five years ago and have not entered any new industries (focusing mostly in the fitness apparel industry). They have done some corporate restructuring shortly after the company was formed, Lululemon  entered into franchise agreements and then a joint venture. The idea behind this was based on growing the brand to meet consumer demand while conserving financial resources. This was a very effective strategy and served Lululemon well in establishing themselves as a multinational company, helping to build on economies of scope, increasing brand awareness and building a larger customer base. In 2011, Lululemon finally repurchased all the franchise organizations and now all of their stores are corporate owned. The ultimate motive for closing out the franchise business was to preserve and maintain control over branding and focus more on e-commerce. We believe this strategy will work well for Lululemon as it preserves its brand image / competitive advantage and st aying competitive in the online market as well. 3. Top Key Issues facing the company needs to focus on are: The analysis shows us that the retail apparel industry is competitive with very low barriers to entry. Lululemon’s success will attract new competitors to the industry and attract interest from existing competitors. Ultimately, this is a competitive industry with limited barriers to entry. The athletic apparel industry is very competitive, with well capitalized rivals such as Nike and Gap, Inc. Lululemon has limited intellectual property in regards to its performance fabrics and manufacturing processes, therefore the quality and innovation components of strategy could easily be replicated. Lululemon’s self reinforcing activities, such as target customer base, tailored products and community based marketing approach make it very challenging for existing retailers to challenge Lululemon in its market from their own store bases. However, there are limited barriers to entry in this industry and Lululemon should expect new competition to try to copy its format This analysis brings us to issues the company is / could face: Increasing Competition Despite occupying a unique niche within the athletic apparel industry, Lululemon has recently gained competitors in recent years. I.e. Big  companies with large market capitals such as Nike, Adidas, and Under Armor have dominated the athletic apparel industry and keep gaining more ground. With the exception of a commitment to creating innovative products in apparel, these initiatives are in contrast to Lululemon. In order to market its products, Lululemon completely shuns away from print or media advertising and instead focuses on selecting ambassadors within carefully selected markets. As a result, it’s possible for Lululemon’s competitors to achieve and maintain brand awareness and market share more quickly Narrow focus Lululemon is targeted towards sophisticated and educated women who understand importance of active, healthy lifestyle. Under-Armor, Nike, and Adidas are targeted towards men and women of all ages. New Threats Apart from the big name athletic apparel manufacturers, competitors such as Gap’s Athleta brand, Lucy Activewear Inc. and Bebe Stores’ BEBE SPORT collection have emerged as competitors to Lululemon. Price Point and Manufacturing In light of the new and old competitors, Lululemon could be forced to sell their products at lower price thus reducing margins. Plus Lululemon does not own exclusive intellectual property rights to the technology for its products. This makes it easier for current and future competitors to manufacture and sell products with similar performance capabilities and styling. Cross-country differences in demographic, cultural and market conditions. Buyer tastes for a particular product or service sometimes differ substantially from country to country. Sometimes, product designs suitable in one country are inappropriate in another because of differing local standards. Lululemon is operating in an international marketplace and they have to wrestle with whether and how much to customize their products in each different country market to match the tastes and preferences of local buyers or whether to pursue a strategy of offering a mostly standardized product worldwide. For example, the clothing for women offered in the winter  season will be different from Canada to Australia and vise versa. Firstly, Australia gets hardly any snow and while Canada on the other hand, gets majorly hit every winter. Therefore, the running gear and the hoodies offered in both countries will vary because of the temperature and the climate. Making products that are closely matched to local tastes make them more appealing to local buyers, customizing Lululemon’s products country by country may have the effect of raising production and distribution costs due to the greater variety of designs and components, shorter production runs, and the complications of added inventory branding and distribution logistics. The second issue of transnational strategy incorporates elements of both a globalized and localized approach to strategy making. This type of middle ground strategy is called for when there are relatively high needs for local responsiveness as well as appreciable benefits to be realized from standardization. This strategy that Lululemon is trying to apply has its own disadvantages, such as; it is more complex and harder to implement, conflicting goals may be difficult to reconcile and require trade-offs and implementation more costly and time-consuming. All major global companies employ the franchising strategy. With the franchising strategy, the franchisee bears most of the costs and risks of establishing foreign locations; while Lululemon would have to expend only the resources to recruit, train, support, and monitor franchisees. The big problem that Lululemon is facing currently has to bear all costs of stores all around the world. With this, they would have to ensure that they are providing the products at discounted costs but also having to monitor to ensure that their standard for stores and customer service and experience is maintained. 4. Recommendations for management to improve performance / address key issues The recommendations we have for management is to improve performance and address the key issues, are employing a think global and act local strategy (Transnational). They need to ensure that each country does have the required customizations because the demographics, cultural differences and market conditions vary from country to country. They need to ensure that all their locations follow the same guidelines and customer satisfaction guidelines like they have for their primary locations. Price point and Manufacturing Lululemon does not own any intellectual property to the technology of what processes their products. In turn this makes it easy for competitors to imitate their style. Through analysis, a recommendation to solve this issue would be to patent their processing system. This would be beneficial to the company in such ways as; increasing price points, which in turn increases overall profits. It will also allow for a higher competitive advantage, making it difficult for competing company’s to imitate or copy their style. Sponsor Events and Shows Lululemon should sponsor some sort of events to gain publicity and increase brand awareness. Such can be done by organizing yoga events on a grand scale or some sort of sporting event. Not as high scale as done by its competitors (Nike sponsors the PGA Golf and Adidas sponsors FIFA) E.g. Lululemon could organize a yoga event at the Metro Convention Hall, Toronto Expand in Asia and Europe The company should plan to enhance its European and Asia market, recruiting new management talent and initiating an aggressive program to regionalize this business utilizing a consistent brand image throughout Europe and Asia. New Customers Lululemon should find new customers base other than its niche market. A potential target niche would be adding apparel for golf and tennis into its stores. Action Plan to address issues and improve performance The following action plan is the recommended steps we believe would be the appropriate approach to successfully completing these recommendations. Appendix 1 Value Chain Analysis Supply Chain Management 45 different manufacturers, no long-term contracts – can improve quality control and lower costs by decreasing # and agreeing to contracts Operations Tighten inspection and verification processes to ensure another recall does not occur (see-through pants issue) Distribution Facilities only in Vancouver-BC, Sumner, Washington, and Melbourne, Australia Limits Company’s reach Growth in online sales can offset Sales/Marketing Depend on word of mouth and community based marketing – can increase marketing via media (television, magazines, etc.) and other avenues

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