The Hawaiʻi Supreme Court has ruled that an employer who fired a worker before the deadline in its own disciplinary warning failed to prove misconduct and could not deny her unemployment benefits.
In Hye Ja Choi v. Tachibana Enterprises, LLC, decided on June 4, 2026, the court held that a tour company failed to establish the level of misconduct required under Hawaiʻi unemployment law to disqualify a former employee from receiving benefits. The ruling reversed lower decisions and sent the case back to the Department of Labor and Industrial Relations to determine the amount of benefits owed.
The dispute arose after Hye Ja Choi, a part-time airport guide employed by Tachibana Enterprises, declined to sign an acknowledgment of the company’s revised employee handbook. Although the company said employees were required to sign by January 31, 2020, the manager responsible for notifying Japanese-speaking tour guides did not send the request until after that deadline had already passed. Choi later said she wanted clarification about the handbook’s at-will employment provision before signing.
The handbook instructed employees to raise questions with a supervisor if they did not understand any policy. Choi followed that instruction and sought an explanation. Nevertheless, on March 16, 2020, the company issued her first written warning under its progressive discipline policy. The notice gave her until April 14 to submit the acknowledgment and stated that failure to comply could lead to further disciplinary action, including termination.
The company terminated Choi’s employment on March 30, approximately two weeks before that deadline expired.
The timing of the termination became a key issue in the case. Under Hawaiʻi unemployment law, an employee is not disqualified from benefits simply because an employer was dissatisfied with their conduct. To establish misconduct, an employer must show conduct amounting to a “wilful or wanton disregard” of the employer’s interests rather than poor judgment, ordinary negligence, unsatisfactory performance, or a good-faith mistake.
The burden of proving misconduct rests with the employer. The court concluded Tachibana had not met that burden.
One problem was the company’s own documentation. The March 16 warning criticised Choi for failing to comply with a January 31 deadline even though company witnesses acknowledged that the request had not been communicated to the relevant tour guides until February. The court also noted that the warning expressly gave Choi until April 14 to correct the issue, yet the company terminated her employment before that date arrived.
The Supreme Court held that by firing Choi before the corrective deadline it had established, Tachibana failed to follow its own progressive discipline policy. The justices viewed the employer’s handling of its disciplinary process as relevant when assessing whether Choi’s conduct demonstrated the level of conscious disregard required to constitute misconduct under Hawaiʻi unemployment law.
Tachibana also relied on two customer-service incidents. In one, Choi attempted to direct a family with a baby through a TSA priority security lane. In another, she raised her voice while attempting to speed up seat changes for members of a tour group. The company argued that both incidents reflected unprofessional conduct and harmed important business relationships.
The court disagreed that either incident met the legal standard required to deny unemployment benefits. While the events may have justified management concern, the court found they did not demonstrate the wilful or wanton disregard necessary to establish misconduct. The court also noted that neither incident appeared in Choi’s March 16 written warning despite later being included in the termination notice. In addition, the company produced no evidence of further violations after the written warning was issued.
A recurring theme throughout the decision was the distinction between termination and unemployment disqualification. The court emphasised that the case was not about whether Tachibana could terminate an at-will employee. The question was whether the company had proven misconduct as defined by Hawaiʻi unemployment law. Those are separate legal issues, and a lawful termination does not automatically justify denying unemployment benefits.
The ruling offers several lessons for employers and HR professionals. Disciplinary deadlines should be realistic, clearly communicated, and consistently enforced. Written warnings should accurately reflect the underlying facts and identify the conduct being relied upon. Where progressive discipline policies exist, employers should either follow them or be prepared to explain why a departure from the process was justified.
The decision also highlights the importance of consistency. Courts and administrative tribunals reviewing unemployment disputes often examine whether the reasons given in warnings, investigations, and termination notices align with one another. When an employer’s own records point in different directions, proving misconduct can become significantly more difficult.
By reversing the denial of benefits, the Hawaiʻi Supreme Court reinforced a longstanding principle of unemployment law: benefits are generally intended for workers who become unemployed through no fault of their own, and disqualification for misconduct remains a limited exception that employers must prove with clear evidence.