Pesoli v. Department of Employment Security , 2012 IL App (1st) 111835 ( 2012 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
Pesoli v. Department of Employment Security, 2012 IL App (1st) 111835Appellate Court FRAN PESOLI, Plaintiff-Appellant, v. THE DEPARTMENT OF
Caption EMPLOYMENT SECURITY; DIRECTOR OF THE DEPARTMENT
OF EMPLOYMENT SECURITY; THE BOARD OF REVIEW; and
ADVOCATE HEALTH HOSPITAL CORPORATION, Defendants-
Appellees.
District & No. First District, Third Division
Docket No. 1-11-1835
Rule 23 Order filed October 24, 2012
Rule 23 Order
withdrawn November 30, 2012
Opinion filed December 19, 2012
Held The denial of plaintiff’s claim for unemployment benefits by the Board
(Note: This syllabus of Review of the Department of Employment Security was upheld on the
constitutes no part of ground that she was ineligible for benefits because she was discharged
the opinion of the court from her position as a secretary at a hospital as a consequence of violating
but has been prepared the hospital’s confidentiality policy by accessing a patient’s records
by the Reporter of outside of her job responsibilities.
Decisions for the
convenience of the
reader.)
Decision Under Appeal from the Circuit Court of Cook County, No. 10-L-51359; the
Review Hon. Alexander P. White, Judge, presiding.
Judgment Affirmed.
Counsel on Law Office of Bert Zaczek, of Chicago (Bert Zaczek and Amy Pikarsky,
Appeal of counsel), for appellant.
Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
Solicitor General, and Elaine Wyder-Harshman, Assistant Attorney
General, of counsel), for appellees.
Panel PRESIDING JUSTICE NEVILLE delivered the judgment of the court,
with opinion.
Justices Steele and Sterba concurred in the judgment and opinion.
OPINION
¶1 Fran Pesoli appeals from an order of the circuit court affirming the decision of the Board
of Review of the Illinois Department of Employment Security (Board) which denied Pesoli’s
claim for unemployment insurance benefits pursuant to section 602(A) of the Illinois
Unemployment Insurance Act (Act). 820 ILCS 405/602(A) (West 2008). On appeal, Pesoli
contends that the evidence does not support the Board’s finding that she was discharged for
misconduct connected with her work.
¶2 We find that the Board’s finding that Pesoli accessed a patient’s confidential hospital
records outside of her job responsibilities was not contrary to the manifest weight of the
evidence. We hold that the Board’s decision, that Pesoli was ineligible for unemployment
insurance benefits under section 602(A) of the Act based on misconduct connected with her
work, was not clearly erroneous because Pesoli was aware of her employer’s confidentiality
rule or policy and she disregarded the policy, which made her conduct willful, deliberate and
potentially harmful to her employer. Accordingly, we affirm the Board’s decision.
¶3 Background
¶4 Pesoli worked as a secretary in the radiation oncology services department at Advocate
Lutheran General Hospital (Advocate) from August 1997 until her discharge on September
28, 2009.1 Advocate discharged Pesoli for accessing a patient’s hospital records which was
a violation of Advocate’s confidentiality policy and the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) (Pub. L. No. 104-191, 110 Stat. 1936) (codified as
1
Documents in the record use the dates September 28 and 29, 2009, when referring to
Pesoli’s discharge. We will use the date of September 28, 2009, as the date of Pesoli’s discharge
because that date was on Pesoli’s misconduct questionnaire and on Advocate’s corrective action
notice.
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amended in scattered sections of titles 18, 26, 29 and 42 of the United States Code).
¶5 Advocate’s confidentiality policy provides in pertinent part as follows:
“Associates may only access computerized data from an Advocate system when
necessary for the proper performance of their job responsibilities. All information
contained in any Advocate computerized information system constitutes private,
confidential information.
***
If an associate wrongfully uses and/or discloses confidential information, the
associate may be subject to corrective action up to and including termination of their
employment.”
Advocate’s confidentiality policy explained to its employees when they could access a
patient’s computerized data and made it clear that wrongful use or disclosure of the
information could lead to termination of their employment.
¶6 Pesoli applied for unemployment insurance benefits with the Illinois Department of
Employment Security (Department). The claims adjudicator found Pesoli eligible for
benefits. Advocate appealed the claims adjudicator’s decision and argued that Pesoli was
ineligible for unemployment insurance benefits because she was discharged for “misconduct”
based on section 602(A) of the Act. 820 ILCS 405/602(A) (West 2008).
¶7 Section 602(A) of the Act provides in pertinent part:
“An individual shall be ineligible for benefits for the week in which he has been
discharged for misconduct connected with his work ***. *** For purposes of this
subsection, the term ‘misconduct’ means the deliberate and willful violation of a
reasonable rule or policy of the employing unit, governing the individual’s behavior in
performance of his work, provided such violation has harmed the employing unit or other
employees or has been repeated by the individual despite a warning or other explicit
instruction from the employing unit.” 820 ILCS 405/602(A) (West 2008).
¶8 A telephone hearing was held by a referee pursuant to section 800 of the Act. 820 ILCS
405/800 (West 2008). At the hearing, Butler testified that the hospital used a password-
protected computer system to store patients’ information. Butler explained that Advocate
prohibited its employees from accessing computerized patient information unless accessing
such information was related to the performance of the employee’s job responsibilities.
According to Butler, Advocate’s employees received training regarding the privacy
requirements under HIPAA and were required to sign a HIPAA confidentiality agreement
annually, and information concerning patients’ privacy was reviewed at staff meetings.
¶9 Butler also testified that on September 21, 2009, one of Pesoli’s coworkers, whose name
was not disclosed, called and complained that Pesoli was “on the computer and calling
people about a young child who had been hit by a car” and that the child was Pesoli’s
neighbor. After the complaint was made, Advocate conducted an audit of the hospital’s
computer logs. The audit revealed that Pesoli had accessed the child’s hospital records and
that the child was a patient in the pediatric intensive care unit of the hospital.
¶ 10 Butler further testified that she and Lisa Hack, a human resources representative, met
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with Pesoli. Hack showed Pesoli the patient’s hospital records that were accessed and the
audit trail showing that the information was accessed from Pesoli’s computer. After seeing
the records and the audit trail, Pesoli responded, “oh, yeah, that child lives in my
neighborhood and my son was there when she was hit by a car. And so I was looking in the
computer to see if she was still in the hospital.” Hack told Pesoli that accessing a patient’s
hospital records that were unrelated to radiation oncology was a terminable offense and that
Pesoli was being discharged. According to Butler, Pesoli had never received a prior warning
about a HIPAA violation, but Butler escorted Pesoli to her office, where Pesoli packed her
personal belongings and repeatedly asked, “why am I so stupid?”
¶ 11 Pesoli testified that when Hack and Butler confronted her, she told them several times
that she did not recognize the child or the child’s name. When the referee pointed out that
she had made a different statement during her interview with the claims adjudicator, Pesoli
admitted that she did recognize the child, after seeing the diagnosis, “trauma,” on the
document, but she denied accessing the child’s hospital records.
¶ 12 Pesoli testified that she received an email earlier that morning before she met with Hack
and Butler. The email came from a parent at the child’s grammar school, which her son
attended years ago. The email contained detailed information about the child’s injury and the
fact that the child was a patient in the hospital.
¶ 13 Pesoli explained that it was a common practice for employees within her department to
access patients’ information from the nearest available computer in order to redirect callers
who had mistakenly called the radiology oncology department. Therefore, Pesoli maintained
that someone else could have accessed the patient’s information while she was logged in on
her computer but was away from her desk.
¶ 14 While Pesoli testified that she did not know that accessing a patient’s information on the
computer was grounds for immediate termination, Pesoli admitted in her closing statement
that she was aware that she was not allowed to access patients’ information unless it was
related to her job responsibilities. Finally, Pesoli claimed that Advocate did not explain in
layman’s terms the full extent of HIPAA, and she thought that she was being terminated for
opening the email.
¶ 15 The referee found that Pesoli was discharged for work-related misconduct and was
ineligible for benefits under section 602(A) of the Act. 820 ILCS 405/602(A) (West 2008).
Therefore, the referee reversed the claims adjudicator’s decision, and Pesoli filed an appeal
with the Board.
¶ 16 The Board found that Advocate had provided credible evidence that Pesoli accessed a
patient’s hospital records that were not connected with her job responsibilities in violation
of the hospital’s confidentiality agreement concerning HIPAA. The Board also found that
Pesoli had admitted accessing the patient’s hospital records when confronted with the
evidence. The Board further found that it was unlikely that someone else looked up the
information given that the patient whose information was accessed was Pesoli’s neighbor.
Based on the evidence, the Board determined that Pesoli had been discharged for work-
related misconduct and was ineligible to receive unemployment insurance benefits under
section 602(A) of the Act.
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¶ 17 Pesoli filed an administrative review action in the circuit court and the court affirmed the
Board’s decision. Pesoli now appeals pursuant to Supreme Court Rule 303. Ill. S. Ct. R.
303(a) (eff. May 30, 2008).
¶ 18 ANALYSIS
¶ 19 Standard of Review
¶ 20 In reviewing a decision by an administrative agency, reviewing courts must review the
final decision of that agency. Abbott Industries, Inc. v. Department of Employment Security,
2011 IL App (2d) 100610, ¶ 15. Therefore, we review the decision by the Board, which made
the Department’s final determination regarding Pesoli’s claim. See Abbott Industries, Inc.,
2011 IL App (2d) 100610, ¶ 15. Reviewing courts apply different standards of review
depending on whether the question presented is one of fact or law. City of Belvidere v.
Illinois State Labor Relations Board, 181 Ill. 2d 191, 204 (1998). In reviewing the Board’s
findings of fact, we deem those findings prima facie true and correct and will reverse only
if they are against the manifest weight of the evidence. Abbott Industries, Inc., 2011 IL App
(2d) 100610, ¶ 15. Conversely, when the issue involves the agency’s findings on a question
of law, our review is de novo. City of Belvidere, 181 Ill. 2d at 205. Finally, where the
agency’s decision presents a mixed question of fact and law, we apply the clearly erroneous
standard of review and will reverse only if our review of the entire record leaves us with the
definite and firm conviction that the decision was a mistake. AFM Messenger Service, Inc.
v. Department of Employment Security, 198 Ill. 2d 380, 395 (2001).
¶ 21 The Sufficiency of the Evidence
¶ 22 Pesoli argues that Advocate failed to produce credible evidence to support its allegation
that she engaged in work-related misconduct. Specifically, Pesoli argues that (1) Advocate
failed to present the coworker who witnessed her accessing the patient’s records on the
computer, and (2) Advocate failed to produce the documentary evidence, audit records,
which Advocate claimed would show that Pesoli accessed the patient’s confidential
information from her computer. The Department responds by arguing that Pesoli has waived
these arguments because she failed to raise them during the administrative hearing and is
raising them for the first time before this court.
¶ 23 It is well settled that if an argument, issue, or defense is not presented in an
administrative hearing, it is procedurally defaulted and may not be raised for the first time
on administrative review. Cinkus v. Village of Stickney Municipal Officers Electoral Board,
228 Ill. 2d 200, 212 (2008); Hurst v. Department of Employment Security, 393 Ill. App. 3d
323, 328 (2009). Our review of the record reveals that at no time during the proceedings
before the Board did Pesoli raise the aforementioned arguments. Therefore, we hold that
Pesoli’s arguments regarding Advocate’s failure to call the coworker as a witness and to
introduce the audit records are procedurally defaulted.
¶ 24 Pesoli also argues that Butler’s testimony that a coworker told her that Pesoli accessed
the patient’s hospital records was hearsay. We note that section 3-111(b) of the Code of Civil
Procedure provides that “[t]echnical errors in the proceedings before the administrative
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agency or its failure to observe the technical rules of evidence shall not constitute grounds
for the reversal of the administrative decision unless it appears to the court that such error
or failure materially affected the rights of any party and resulted in substantial injustice to
him or her.” 735 ILCS 5/3-111(b) (West 2008). Moreover, “[i]t is well established that when
hearsay evidence is admitted without an objection, it is to be considered and given its natural
probative effect.” Jackson v. Board of Review of the Department of Labor, 105 Ill. 2d 501,
508 (1985). Here, Pesoli did not object to Butler’s hearsay testimony and, given the fact that
Pesoli admitted that she accessed the patient’s hospital records, there was overwhelming
properly admitted evidence of Pesoli’s misconduct. Therefore, there was no injustice in
admitting the hearsay testimony. Accordingly, the Board did not err when it considered
Butler’s hearsay testimony.
¶ 25 Next, we will consider whether the other evidence that was properly admitted at the
hearing was sufficient to support the Board’s finding of misconduct. Pesoli also maintains
that Butler’s testimony that she admitted accessing the patient’s hospital records was
insufficient to establish that she was guilty of misconduct. We note that Pesoli testified that
when Hack and Butler confronted her, she told them that she recognized the child’s name,
but she was referring to the email that she had opened that morning at work and not the
patient’s hospital records. We also note that Butler testified that Hack showed Pesoli the
patient’s hospital records and the audit trail and that Pesoli admitted accessing the patient’s
hospital records.
¶ 26 The Board determines the facts and issues in each appeal as the ultimate fact finder,
taking the referee’s findings into consideration. Caterpillar, Inc. v. Doherty, 299 Ill. App. 3d
338, 344 (1998). It is the Board’s responsibility to weigh the evidence, evaluate the
credibility of the witnesses and resolve conflicts in testimony. Caterpillar, 299 Ill. App. 3d
at 344. Our task is to determine whether the Board’s findings of fact are contrary to the
manifest weight of the evidence. City of Belvidere, 181 Ill. 2d at 205.
¶ 27 The Board found that Butler’s testimony was more credible than Pesoli’s because it was
unlikely that someone other than Pesoli looked up the patient’s hospital records when the
patient happened to be Pesoli’s neighbor. We find that the Board’s finding that Pesoli
admitted that she accessed the patient’s hospital records was reasonable and clearly
supported by evidence in the record. Therefore, we hold that the Board’s finding was not
contrary to the manifest weight of the evidence.
¶ 28 Misconduct
¶ 29 In order to determine whether Pesoli’s unauthorized access of the patient’s hospital
records constituted misconduct under the Act, three elements must be proven: (1) that there
was a deliberate and willful violation of a rule or policy of the employing unit; (2) that the
rule or policy of the employing unit was reasonable; and (3) that the violation either has
harmed the employer or was repeated by the employee despite previous warnings. See 820
ILCS 405/602(A) (West 2008); Czajka v. Department of Employment Security, 387 Ill. App.
3d 168, 173-74 (2008).
¶ 30 First, we must determine whether Pesoli deliberately and willfully violated a rule or
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policy of the employer. “Willful conduct stems from an employee’s awareness of, and
conscious disregard for, a company rule.” Livingston v. Department of Employment Security,
375 Ill. App. 3d 710, 716 (2007) (citing Wrobel v. Department of Employment Security, 344
Ill. App. 3d 533, 538 (2003)). Pesoli admitted during the telephone hearing that she was
aware of the policy against accessing a patient’s hospital records unless it was related to her
job responsibilities. Pesoli also admitted to Butler and Hack that she looked up the child’s
hospital records because the child lived in her neighborhood and she was checking to see if
the child was still in the hospital. Pesoli’s reason for accessing the patient’s hospital records
was not work related. Based on the aforementioned admissions, we find that Pesoli was
aware of Advocate’s policy and consciously disregarded the policy. Therefore, we find that
Pesoli’s access of the patient’s hospital records for non-work-related purposes was a willful
and a deliberate violation of a rule or policy of Advocate, the employing unit.
¶ 31 Second, we must determine whether the employer’s rule or policy was reasonable. “A
reasonable rule concerns ‘standards of behavior which an employer has a right to expect’
from an employee.” Livingston, 375 Ill. App. 3d at 716 (quoting Bandemer v. Department
of Employment Security, 204 Ill. App. 3d 192, 195 (1990)). HIPAA is a federal law that has
established standards and requirements for the electronic transmission of certain health
information. 42 U.S.C. § 1320d (2006) (purpose). HIPAA applies to a number of “covered
entities,” which includes health care providers, like Advocate. 42 U.S.C. § 1320d-1(a)(3)
(2006). Under HIPAA, Advocate was required to maintain reasonable and appropriate
administrative, technical and physical safeguards to (1) ensure the integrity and
confidentiality of health information, (2) to protect against unauthorized uses and disclosure
of the information, and (3) to ensure that its officers and employees were in compliance with
HIPAA. 42 U.S.C. § 1320d-2(d)(2) (2006). In order to comply with HIPAA, Advocate
promulgated its confidentiality policy. Therefore, because HIPAA requires entities, including
Advocate, to protect the privacy of patients’ health information, and because Advocate
promulgated the rule or policy to comply with HIPAA and to protect the confidentiality of
its patients’ health information, we hold that Advocate’s confidentiality rule or policy was
reasonable.
¶ 32 Third, we must determine whether Pesoli’s violation harmed Advocate or whether
Pesoli’s violation was repeated despite previous warning. Butler testified that Pesoli did not
receive any prior warning about accessing patients’ records that were unrelated to her work.
Therefore, in order to satisfy the third element, Pesoli’s conduct must have harmed the
employer. Harm to the employer is not limited to actual harm, but harm can be established
by showing potential harm. Hurst, 393 Ill. App. 3d at 329 (and cases cited therein). Because
Advocate is a hospital and federal law requires it to keep patients’ health information
confidential, patients have a right to expect that their hospital records will be kept private and
free from unauthorized access. Therefore, Advocate could experience potential harm from
the loss of business or lawsuits, if potential patients discovered that their confidential health
information is accessed by Advocate’s employees for reasons unrelated to their job
responsibilities.
¶ 33 The evidence in the record clearly established that Pesoli received training regarding the
privacy requirements under HIPAA, that Pesoli was aware of Advocate’s rule or policy
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prohibiting the unauthorized access of patients’ health information based on HIPAA, and that
Pesoli disregarded the rule. Pesoli’s knowledge and disregard of Advocate’s policy made her
conduct deliberate and willful in conscious contravention of Advocate’s confidentiality
policy concerning HIPAA and could cause potential harm to Advocate. Therefore, we find
that Pesoli’s access of the patient’s hospital records outside of her job responsibilities
constituted misconduct under section 602(A) of the Act. Accordingly, we hold that the
Board’s conclusion that Pesoli was ineligible for benefits under section 602(A) of the Act
based on misconduct connected with her work was not clearly erroneous.
¶ 34 CONCLUSION
¶ 35 We hold that the Board’s finding that Pesoli accessed the patient’s hospital records
outside of her job responsibilities was not contrary to the manifest weight of the evidence
because the Board’s finding was supported by evidence in the record. We also hold that the
Board’s decision, that Pesoli was ineligible for unemployment insurance benefits under
section 602(A) of the Act based on misconduct connected with her work, was not clearly
erroneous. Accordingly, we affirm the Board’s decision.
¶ 36 Affirmed.
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