Court of Appeals affirms Erling v. Wells Fargo Bank opinion

This opinion is nonpre cedential except as pro vided by Minn. R. Civ. App. P. 1 36.01, subd. 1(c). STATE OF MINNES OTA IN COURT OF APP EALS A25-0828 Noelle Erling, Relator, vs. Wells Fargo Bank, N. A., Respondent, Department of Employment and Ec onomic Development, Respondent. Filed March 2, 2026 Affirmed Smith, Tracy M., Judge Department of Employ ment and Economic Development File No. 51190684 Daniel J. Wilcox, Traut mann Martin Law PLL C, St. Paul, Minnesota (for relator) Sara L. Lewenstein, Nilan Johnson Le wis PA, Minneapolis, Minn esota (for respondent Wells Fargo Bank, N. A.) Melann ie Markham, Keri A. Phil lips, Katrina Gu l stad, Minne sota Department of Employment and Ec onomic Development, St. Paul, Minnesot a (for respondent department) Considered and decide d by Harris, Presiding Judge; Smith, Tracy M., Judge; and Segal, Judge. ∗ ∗ Retired judge of the Minnesota Court of A ppeals, serving by appointment pu rsuant to Minn. Const. art. VI, § 10.

2 NONPRECEDENTI AL OPINION SMITH, TRACY M., Judge Relator Noelle Erling challenge s an unemployment - law j udge’s (ULJ) determination that he r filing of a false c ompliance form constituted employme nt misconduct, rendering her ineligib le for unemploymen t benefits. She argues that (1) t he ULJ’s findings are not supported by substanti al evidence; (2) even accepting the findings, her conduct did not ris e to the level of emplo y ment mis conduct; and (3) the ULJ erred by denying relief on her re quest for reconsidera tion. We affirm. FACTS Erling worked as a lend ing operations m anager for Wells Fargo from 2009 until the termination of her employment i n November 2024. Afte r she was di scharged, Erling filed for unemployment ben efits with responde nt Minnesota Dep artment of Employ ment and Economic Developmen t (DEED) and initially was determined eligible for unempl oyment benefits. Wells Fargo appealed, argui ng that Erling had been dischar ged for employ ment misconduct and was therefore ineligible for employment benefits. A hearing was held before a ULJ. Two w itnesses testified: N.C., a p lanning operation s d irector for Wells Fargo; and Erling. N.C. testified that, as part of Wells Fargo ’s “control and major compliance requirements, ” managers are required to go t hrough a monthly “Greenlight inspe ction” with their direct repor ts. The Greenlig ht inspection is a series of ye s or no questions that are provided to manage rs and that managers m ust ask their direct repo rts during a one- on- one meeting. Manager s must “submit and p ublish” an electronic attestation t hat they

3 completed the Greenlight inspectio n. Erling was a manager and su pervised an employee, T.; by the end of ea ch month, she was required t o ask T. the Greenlight inspection questions and attest that the quest ions were completed. N.C. testified that, at the end of July 202 4, Wells Fargo Business Execution Consultant T.R. conducted a compliance ins pection. Electronic records showed tha t on July 30, 2024, Erling submitted an atte station that she had completed the Greenlight inspection for July w ith T. On July 31, T. R. t alked to T., who rep orted that he and Erling had meant to meet to complete the Greenlight inspectio n for July but they did not. Subsequent investigati on of the incident led t o Erling’s discharge in November. N.C. testi fied that the Greenlight inspection is part of Wells Fargo’s record system for risk and compliance requirements a nd that false attestatio n is a violation of Wells Fargo policy. In response to a question fro m the ULJ, N.C. stated that Erling was “on final notice for conduct from 2019” when Erling was reprimanded for recor ding a conversation between herself and a nother manager in violat ion of Wells Fargo’s p olicy. Erling testified that the Greenlight i nspection process required her to “meet with each employee and review the question s and then go into the system to attest that we have reviewed the information with the employee.” Erling testified that, d ue to system time-out issues, “i t wasn ’ t unco mmon for an attestation to either go in at the beginning wh en you met with them so the system didn ’ t time out or put in an attestation at the end of the day or end of the week eve n, you know, stati ng when it was c ompleted. ” E rling testified that N.C. was aware that sometimes managers wou ld put in their attestation at the beginning of a meeting.

4 As for th e July 2024 events with T., E rling stated that s he had returned from time off the week before the end of July and h ad to get her month- end tasks completed “ kind of quickly.” Erling me t with T. on July 29 for a regular one-on-o ne meeting, in which Erling intended to complete the Greenlight inspection, but they instead worked on an urgent client closing issue int o the evening. Erlin g testifie d that, “ because this was such an escalated situation, [the cl osing issue] would definitely have taken precede nce over us working through a Greenlight attestation.” Erl ing testified that she and T. met the next day, July 30, but they wer e still wor king on the clie nt issue. Erling testified that s he did not reme mber exactly what occurred and that she could have forgotten to complete the Greenlig ht questions with T. and that she “must have ma de a mistake somewhere along the way.” She did not deny submittin g an attestation that sh e had completed the Greenlight i nspection with T. Erling testified tha t she had never had an issue with the Greenlight p rocess before this incident and that she had been asked to train new manager s on the Greenlight inspection process that summer. In response to the ULJ’s ques tions about Erling’s typica l Greenlight-inspection process, Erling stated that she typically sent an email to the employee with the attestation number after she had met with the employee but she no longer had access to her Wells Fargo emails to confirm whether she had sent an email to T. confirming their end -of-July meeting. After the hear ing, the ULJ found that Erlin g had been discharged f or employment misconduct and ordere d her to repay $8, 226 in unemploymen t benefits she had previously received. Erling filed a request for reconsideration. The reviewing ULJ affirmed th e

5 decision, determining that Erling had not submitted e vidence that w ould likely change t he outcome or require an evidentiary hearing. This certiorari appeal f ollows. DECISION Erling argues that (1) the ULJ’s fin dings are not supporte d by substantial evidenc e, (2) alternatively, even accepting the ULJ’s findings, Erling’s action s did not consti tute employment misc onduct, and (3) the U LJ erred in denying rel ief on Erling’s request for consideration. We addr ess each argument in tu rn. I. The ULJ’s findi ngs are supported by substantial evidence. Erling argues that substantial evidence does not support th e ULJ’s findings regarding Erling’s act ions and Wells Farg o’s reasonable expect ations and standard practices. Under Minnesota Statu tes section 268.105, s ubdivision 7(d)(5) (2024), an appellate court may reverse or modify a ULJ’s decision “ if the substa ntial rights of the petit ioner may have been prejudiced because the findings, inferences, co nclusion, or decision are . . . unsupported by substantial evidence. ” The appellate court reviews the U LJ’s factual findings in the light most favor able to the decision, giving de ference to the ULJ’s credibility determinati ons. Skarhus v. Davanni ’ s Inc., 721 N.W.2d 340, 344 (Minn. App. 2006). “Whether the e mployee committe d a particular act is a q uestion of fact. ” Id. A ULJ’s credibility determinatio n must be supported by substantial ev idence. Wichmann v. Travalia & U.S. Directives, Inc., 729 N.W.2d 23, 29 (M inn. App. 2007).

6 “ An unemployment la w judge may only use reliable, probative, and substantial evidence as a basis for decision. ” Minn. R. 3 310.2922 (2023). A ULJ is not requ ired to conform to the rules of evidence and “may re ceive any evidence that possesses probative value, including hearsay.” Id. As a resu lt, “[a] witness at an evide ntiary hearing is not required to have firs thand knowledge.” Skarhus, 721 N.W.2d at 345. “W hen the credibility of a witness testifyi ng in a hearing h as a significant effe ct on the ou tcome of a decision, the unemployment la w judge must set out the reason for creditin g or discrediting that testimony. ” Minn. Stat. § 268.105, subd. 1a(a) (202 4). An appe llate court “will uphol d a ULJ’s credibility determinations if s upported by substantia l evidence.” Wichman n, 729 N.W.2d at 29. A. Erling’s Actions Erling takes issue wit h three findings in th e ULJ’s decision rega rding Erling’s actions: (1) “On July 30, 2024, Erling signed t he attestation form, eve n though she had no t yet met with [T.] and r eviewed the questions, ” (2) the investigator “learned that [T.] and Erling never met or discussed” the G reenl ight inspection questions, and (3) “Erlin g testified that she signed the attestation b efore meeting with [T.] but never reviewed the questions with him.” Regarding the first and second findings that Erling challenge s, Erling focuses on the word “met,” arguing t hat she and T. did in fact “ meet” multiple times. But the crucial part of the ULJ’s finding s is that Erling and T. never “reviewed the questions” an d never “discussed” the questions, and that findin g is supported by the record. Erling testified, “ I didn’ t forget to meet w ith him. I did meet wit h him and I think I me t with him twice. Did

7 I forget to finish the attestation? Yeah, I could have very well forgotten. ” Erling also testified that she would sometimes attest at the beginning of the me eting with an employ ee, before ask ing the Greenlight in spection questions. In addition, N.C. testifie d that the investigation revealed that Erling had atteste d but had never completed the questions with T. Erling challenge s N.C. ’s testimony as “doub le hearsay” because N.C. testified as to what T.R. said T. said. But the rules of evidence d o not apply to unemployment hearin gs, and N.C. ’s testimony need not have been excluded by the ULJ if it was pr obative. See Skarhus, 721 N.W.2d at 34 5; Minn. St at. § 268.105, subd. 1a(a). We conc lude that N.C.’s and Erling’s testimon ies provide substa ntial evidence to support the first and second findin gs that she signed the attestation without having met with T. and w ithout having reviewed the Greenlight inspection q uestions. We t urn to the third factual finding that Erling challenges: “ Erling testified that she signed the attestation b efore meeting with [T.] ” Erling co ntends that this findi ng is false because she never testif ied that she signed the attestation before “meeting” with T. It is true that Erling never testified that she signed the a ttestation before “meeting” with T.— in fact, she testified that she met with T. on July 30. But her argument t hat the error requires reversal is not convinci ng. Erling contends that the error requires reversal because it led the ULJ to find her testimony not credib le. When witness credibility has a significant effe ct on the outcome, a ULJ is required to set o ut the reason for crediti ng or discrediting testi mony. See Minn. Stat. § 268.105, subd. 1a(a). The ULJ found:

8 The findings of fact are based on [N.C.’s] testimony. Her testimony was credible because it was detailed and specific. In her written answers to questions, Erli ng’s testimony was not credible because it was incons istent. In her written answers, she stated tha t her review wit h [T.] was int errupted by the closing and her attestation was a simple “mistake.” Erling testified that she signed the attestation before meeting with [T.] but never reviewed the questions with him. Accordingly, th e findings of fact are bas ed on [N.C.’s] testi mony. We do not doubt that the credibility of th e witnesses was critical to the ULJ’s determination. But Erling urges an extremel y literal interpretation of the ULJ’s credibil ity finding. For the reason s discussed above, in c ontext the ULJ was likely referring to Erling signing the attestation before meeting with T. on the topic of the Greenlight i nspection — not simply before any “meeting” with the employee. Moreover, there were other inconsistencies in E rling’s testimony—her test imony was often contradictory and unclear. In any event, if the finding contained a mis statement, an unsupported finding or sli ght factual inaccuracy doe s not require relief so long as the findings n ecessary for a le gal conclusion are adequa tely supported. See Hanka v. Pogatchnik, 276 N.W.2d 63 3, 636 (Minn. 1979) (holding that if the findings nec essary for a legal conclusion are adeq uately supported, a court’s inclusion of other unsupported find ings is harmless error). T he ULJ explicitly found tha t N. C. ’s testimon y was cr edible because her testimony was “detailed and specific.” That cre dibility determination i s supported by substant ial evidence, and, as a result, any minor misstatement in c haracterizing Erling’s testimony did not prejudice her substantial rights. See S karhus, 721 N.W.2d at 344.

9 B. Wells Fargo’s Expect ations and Practices Erling also argues that the ULJ made “virtuall y no findings” on the issue of Wells Fargo’s actual practi ces and whether Wells Fargo co uld reasonably expect strict compliance given those practices. We note f or clarity that, while this argument involves similar facts as the argument addressed in Se ction II below regardin g our de novo review of whether Erling’s act ions constituted emplo yment misconduct, Erl ing’s argument here asserts that the ULJ’ s finding that Erling violated employe r policy is unsupported by substantial evidence be cause there are no finding s on what Wells Fargo’s actual practice s were. At the hearing, N.C. testified about Wells Fargo’s policy for the Greenlight inspections, stating that managers a nd their direct reports “were required to meet a nd complete [the Greenlight question s] prior to the attestation.” N.C. stated that empl oyees were “not supposed to” complete the attestation before asking the questions of their direct reports, though she all uded to managers perh aps putting in the atte station “at the sam e time” as performing an inspection. Erling contends that managers attestin g before asking the Greenlight questions was an accepted practice due to a syste m time - out issue. Erlin g testified, “[N.C. ] herself was a part of many conv ersations that did n’t follow t hat playbook along this process. An d it was known that we would put in, you know, our attestation at the begin ning.” Additionally, Erling stated, “[T]his was a process that m yself and most of, if not all of [N. C.’s] employees, managers were doing when they put in the atte stations. That we would get on

10 the phone with them, plug it in so that it didn’t, the system didn’t time out and then do our attestation. ” The ULJ’s findings d o not specifically a ddress whether other managers comple ted attestations before completing Greenlight inspections, despite Wells Fargo’s policy. But we have held that an employer’s alleged failure to enforce its ow n rules against other employees is not a defe nse to a determination of employmen t misconduct. Sivertso n v. Sims Sec., Inc., 390 N.W.2d 868, 87 1 (Minn. App. 1986), rev. denied (Minn. Aug. 20, 1986). Here, t he ULJ may not have incl uded a finding as to whether other managers e ver made attestations before co mpleting a Greenlight inspection either becau se it is immaterial o r because the ULJ d id not find Erlin g’s testimony abo ut others’ prac tices credible. In any event, the ULJ did not fail to make necessary findings about Wells Farg o’s expecta tions and practices. II. Erling’s attestation th at she completed a Gr eenlight inspection w hen she had not completed it const itutes employ m ent misconduct. Erling argues t hat, eve n if we accept the ULJ’ s findings, Erl ing’s conduct does not rise to the level of emp loyment misconduct. An employee dischar ged for employment misconduct generally is n ot eligible for unemployment benefits. Minn. Stat. § 268. 095, subd. 4 (2024). “ Whether an employee committed employmen t misconduct is a mixed question of fact an d law.. . . But whether the act committed by t he employee constitute s employment miscond uct is a question of law ” that this court revi ews de novo. Skarhus, 721 N.W.2d at 344.

11 Minnesota Statu t es sec tion 268.095, subdivision 6(a) (2024), define s employment misconduct as “any intentional, negli gent, or indifferent conduct, on t he job or off the job, that is a serious violation of the standar ds of behavior the em ployer has the right to reasonably expect of t he employee.” The sta tute further provides t hat, regardless of the definition provided in s ubdivision 6(a), conduc t “that was a consequence of the applica nt’s inefficiency or inadvertence, ” was “conduct an average reasonable e mployee would have engaged in under the ci rcumstances,” or was a “good faith error[] in ju dgment if judgment was required” is not em ployment misconduct. Minn. Stat. § 268.095, subd. 6(b)(2), (4), (6) (2024). The statute also provides that, “[i]f the conduct for whic h the applicant was discharged involved on ly a single incident, tha t is an important fact that must be considered in deciding whether the conduct ri ses to the level of employme nt misconduct.” Id., subd. 6(d) (2024). But “[a] single incid ent can constitute misconduc t when an employee deliberately chooses a course of condu ct that is adverse to the empl oyer. ” Schmidgall v. FilmTec Corp, 644 N. W.2d 801, 806 (Minn. 2002). Erling first argues that her conduct was not employ ment misconduct because it was inadvertent. She asserts that she inten ded to complete the Greenli ght inspection, had scheduled a meeting with T. intending to do so, and was interrupted b y a closing issue with an urgent deadline. D EED counters that Er ling would have committed emplo yment misconduct even if she had subsequently completed the question s with T. becau se the intentional misconduct occurred when Erlin g attested to having completed the Greenlight inspection wit hout first asking the Greenlight questions. We agree with DEED. While the fact that T. said that h e and Erling meant to meet to com plete the inspection suggest s

12 inadvertence in failin g to com plete the ins pection, it does n ot suggest inadvertence regarding the attestatio n. Erling’s miscon duct occurred wh en she fa lsely atte sted that she had complet ed the Greenlight que stions. And regardless of other employee s’ practices, “[v]iolation of an employer’s rules by other e mployees is not a valid defense to a claim of misconduct. ” Dean v. Allied A viation Fueling Co., 381 N.W.2 d 80, 83 (Min n. App. 1986). Erling next argues that a reason able employee would have taken the same acti on as she did — forgoing the “routine monthly paperwork that could the oretically be finished later” in favor of he lping to c omplete a client closing. She also argues that that d ecision was at most a good faith error in judgment. But the question is not whether a reasonable employee w ould postp one the Greenlight ins pection in favor of oth er work, it is whether an employee’s attestat ion falsely stating that the Greenlight inspec tion was completed constituted employmen t misconduct. That is n ot reasonable or an erro r in judgment. Erling nevertheless contends that submi tting the untrue a ttestation was not a se rious violation of the standar ds of behavior that Wells Fargo had the right to expect. See Minn. Stat. § 268.095, subd. 6(a). She also suggests that the action of sub mitting an attestation before performing an inspection is j ustified by the system sometime s timing out. DEE D counters that the system tim ing- out issu e was not a significant or unreasonable burden tha t excuses Erling’s failur e to follow Wells Fargo’s required pr ocedures and that Erl ing’s violation was serious and intentional becaus e compliance in the banking industry is essential, and Erling t estified that she was aware of Wells Fargo ’s policy. DEED’s argument is persuasive.

13 Finally, Erling argue s that her act ions should not be considered employ ment misconduct because they involved a single in cident and the mistake was mitigated by he r 15-year employment hi story and the work eme rgency that she faced. 1 But the ULJ did not abuse its discretion by not finding that the work emergency that Erling faced justif ied submitting an untrue a ttestation. Nor did it a buse its discretion by finding that Erlin g’s attestation was not a mistake. Accordingly, we conclude that t he ULJ did not err by determining that Erling ’s actions constituted e mployment misconduct. III. The ULJ did not err by denying relief on E rling’s request for rec onsideration. Erling argues that the ULJ’s affirmation or der ignore s the mista kes that she identified in her reques t for reconsideration a nd that the ULJ erre d by not correcting the errors or ordering an ad ditional hearing to rece ive further evidence. Upon a request for rec onsideration, a revie wing ULJ may “correct any factual or legal mistake in the decision” or “order an additional hearing when appropriate.” Minn. Stat. § 268.105, subd. 2 (b)(1) (2024). An appellate court reviews a UL J’s decision to deny an additional evidentia ry hearing for an abuse of discretion. Kelly v. Ambassador Press, Inc., 792 N.W.2d 103, 104 (Minn. App. 2010). On a request for rec onsideration, [t] he unemployment law judge must order an additional hearing if a party shows that eviden ce which was not sub mitted at the hearing: (1) would likely change the outcome of the 1 DEED argues that, based on Erling’s own te stimony that her p rocess was to complete attestations at the beginning of her Gree nlight inspection me etings, Erling submitted a false attestation form every time she did a Gre enlight inspection and therefore was not discharged for a “single incident.” But the U LJ’s decision is based only on the July 202 4 incident, and the evidence that DEED relies on for its argument was developed after Erling ’s discharge and thus cannot have been the basis for the dischar ge. Thus, the relevant question is whether Erl ing’s July 2024 actions constituted employme nt misconduct.

14 decision and there was good cause for not having previously submitted that evidenc e; or (2) wo uld show that the evide nce that was submitted at the hearin g was likely f alse and that the likely false evidence had an effect on the outcome of the decision. Minn. Stat. § 268.105, subd. 2(c) (202 4). “ In deciding a request for reconsidera tion, the ULJ must not consi der any evidence that w as not submitted at the hearing, exce pt for purposes of determinin g whether to order an a dditional hearing.” Id. In her request for reconsideration, Erling foc used on N.C. ’s testimony about the 2019 corrective action involving E rling, stating that Well s Fargo “brought up a past situation/corrective action that [she] believ ed was removed from [her] file” and that the “two situations were not related.” Erlin g said that she wanted to obtain her personnel fi le regarding this issue. Erline also argued that, based on the hearing transcript, she “ never said [she] attested without being on the call wi th [her] employee” and ar gued that attesting at the beginning of the call “was an acc epted common practice perfo rmed by many of the managers. ” The reviewing ULJ affirmed, determi ning that Erling had not submi tted evidence that would likely chan ge the outcome. The a ffirmation order states, “A ny testimony the employer provided about any corrective acti on in 2019 did not affect the outcome of the decision. The information in Erling’ s personnel file is irreleva nt. Erling’s falsification of the [Greenlig ht] inspection report is employment misconduct regar dless of information in her personnel file.” The affirmatio n order also states th at “[t]he evidence showed tha t Erling’s conduct in July of 2024, by itself, was intentional condu ct that was a serious

15 violation of the standar ds of behavior her employer had a right to rea sonably expect” and that “[Erling’s] argume nts would not change t he outcome of the deci sion.” We discern no abuse of discretion in the ULJ’s decision. As to the pr ior corrective action, the ULJ deter mined that the testimony about tha t action did n ot affect the outcome and that information in Erling’s per sonnel file is irrelevant. The ULJ’s determination accords with the i nitial decision, w hich makes no mention of the 2019 corrective a ction and focuses entirely on Erling’s July 2024 con duct. As to Erling’s other argument, in her app ellate brief, Erling asserts t hat she should be given the oppor tunity to obtain from Wells Fargo and present at an additional hearing her calendar entries, email tha t she sent to T. after their meeting, documentati on around system tim ing- out iss ues, testimony from other manage rs about standard practice, documentation regardi ng the closing issue, and Erling’s tra ining materials for other managers. But, as the reviewing ULJ determi ned, Erling does not assert facts that would change the outcome. S he does not assert that she actually did com plete the Greenlight questions with T. And, as discussed above, because Erling k new the required proced ures and falsely attested, potential evidence of ot her employees ’ mis conduct would not change the outcome. Moreover, Erling does not make a clear argum ent for good cause for n ot previously submitting evidence an d has not identif ied evidence that “would sho w that evidence that was submitted at the h earing was likely false. ” See Minn. Stat. § 268.105, sub d. 2(c). We acknowledge that man y of the documents related to the in vestigation are li kely in Wells Fargo’s possession, ma king it more difficult f or Erling to identif y pieces of evidence with

16 specificity. However, because Erling’s arg ument at the hearing focused on proving that she and T. “met,” which is not the relevant inquiry, Erling has failed to ide ntify what additional evidence would change the outcome or that su bmitted evidence was f alse. Finally, Er l ing argue s that, at t he time of the hearing and her request for reconsideration, she was not represented by co unsel and the ULJ did not adequately assist her. In general, a ULJ is required t o “assist all parties in the prese ntation of evidence,” “ensure that all relevan t facts are clearly and f ully developed,” and “ exercise control over the hearing procedure in a manner that protect s the parties’ rig hts to a fair hearing.” Minn. R. 3310.2921 (2023). The record demonstrates that the ULJ me t this burden. The ULJ was heavily involved in the hearing. The ULJ repeatedly asked Erling and N.C. to slow down, explain jargon, and further describe Wells F argo’s systems and practices. The ULJ asked follow- up questions to clarify both Erl ing ’s and N.C. ’s testimon ies. The ULJ directly asked N.C. about Wells Farg o’s policies and its investigation of Erling’s c onduct. Accor dingly, we discern no abuse of discretion by the ULJ. Affirmed.