KAREN HART BENNA, Complainant

WAUSAU INSURANCE COMPANIES, Respondent

On February 18, 1986, an administrative law judge (ALJ) for the Department found that the Complainant had been discharged because she had been convicted of shoplifting, but that the circumstances of the shoplifting offense were not substantially related to the circumstances of the Complainant's employment (sec. 111.335(1 )(c )1, Stats.), nor had the Respondent proved that the Complainant was not bondable (sec. 111.335(1)(c)2, Stats.) so as to bring the employer under either or both of the affirmative defenses constituting exceptions for discrimination because of conviction record.

The Respondent filed a petition for review of the ALJ's decision challenging his finding that the circumstances of the offense were not substantially related to the circumstances of the Complainant's job and a Commission majority concluded that the affirmative defense of substantial relationship between the offense and Complainant's job was not available to the Respondent because Complainant had not yet been convicted of the offense at the time she was discharged. Thus, the Commission did not reach the question of whether the Complainant's shoplifting offense was substantially related to her job as group claims technician.

The circuit court reversed the Commission, concluding that the substantial relationship defense is available to the employer and that the shoplifting offense was substantially related to the Complainant's job.

The court of appeals affirmed the circuit court's conclusion that the substantial relationship defense is available to the employer, but held that the circuit court exceeded its authority by applying the substantial relationship defense in the first instance rather than remanding the matter to the Commission for its initial determination of that issue. Based upon the court's remand of this matter, the Labor and Industry Review Commission hereby issues the following:

FINDINGS OF FACT

1. The Respondent is an insurance company, doing business in Wausau, Wisconsin. The Respondent provides various lines of insurance coverage including group accident, health and life insurance plans. Respondent also acts as the administrator of self-funded accident and health care insurance plans.

2. The Complainant, Karen Hart, was first employed by the Respondent in 1971. At the time of her discharge in 1983, she was employed in the position of group medical claims technician.

3. As a group medical claims technician the Complainant monitored and supervised the work of a group of medical correspondents. Complainant's duties, and those of the medical correspondents she supervised, included reviewing and processing medical payment claims made under health insurance policies either issued or administered by the Respondent, and where appropriate, authorizing payment of the claimed amounts. The work was performed on computer terminals. As group claims technician, the Complainant's authorization was adequate to approve and release payments of up to $15,000 without having to obtain supervisory approval.

4. The Complainant monitored the processing of claims by claims correspondents through a computerized system programmed to randomly "pend" 4% of the day's claims processed by correspondents to her for review, or through an automatic referral system for payment of claims exceeding the release of a correspondent -- generally $10,000 or less. In addition, all third-party claims (payment to an individual rather than a health care provider or employe) are automatically forwarded to the claims technician for processing and release. Further, with respect to self-funded accounts (particularly the Manitowoc Company policies account) where the claim payments are made from customers' funds rather than on an insured basis, the Complainant, as group medical claim technician, had authority to direct correspondents to add individuals to the system. The Respondent frequently receives special requests and instructions from the Manitowoc Company's self-funded account.

5. On November 25, 1983, the Complainant was arrested and cited for retail theft of a sweater from a store in Wausau, Wisconsin in violation of an ordinance of the city of Wausau. Complainant posted an amount equal to the fine, assessment and court costs for the ordinance violation -- $67.50 -- and was released. A court date was scheduled for December 1, 1983.

6. On November 30, 1983, the Complainant contacted Betty Donovan, personnel manager at Respondent's First Avenue building, and inquired about whether there was anything in Respondent's personnel manual relating to an employe's arrest and any potential impact that that would have on the employe's employment. Ms. Donovan responded that you would have to look at the entire situation, that it depended upon the nature of the arrest, whether it resulted in conviction and that you would have to look at how it would relate to bonding. During their conversation Complainant later stated she had been arrested, convicted and paid a fine, and asked to speak to an attorney.

7. Ms. Donovan contacted Respondent's house counsel, Dixie Wilhite. Ms. Wilhite said she could not talk with the Complainant because of a potential conflict of interest. Ms. Wilhite also advised Ms. Donovan to contact Don Dominski, Respondent's risk manager, on how Complainant's situation would affect her bondability, and to advise Delores Clancey, Respondent's vice president of group claims administration, about the situation.

8. Ms. Donovan next contacted Mr. Dominski who advised her that any acts of dishonest nature such as shoplifting or stealing would void the bond policy, but Delores Clancey could request Respondent's chairman of the board and president to make a written request of him to seek a dispensation for Complainant from the bond company.

9. In a subsequent conversation between Donovan and Complainant, Complainant stated that she had been arrested, convicted and paid a fine because she had shoplifted. Complainant then inquired if this was going to affect her employment and Ms. Donovan responded that she believed it would but she would have to discuss it with Ms. Clancey.

10. Ms. Donovan then met with Ms. Clancey, informing her of Complainant's admission that she had shoplifted, was arrested, convicted and paid a fine. Donovan also informed Clancey of her conversations with Ms. Wilhite and Mr. Dominski and advised Clancey that it was her decision to either seek a bond dispensation for complainant or to effect termination of her employment.

11. Ms. Clancey made the decision to discharge Complainant on November 30, 1983. Clancey made this decision based upon Complainant's conviction for shoplifting because of its relation to Complainant's security sensitive work and responsibility, as a group claims technician, for overseeing and administering Respondent's and its clients' funds. Ms. Clancey concluded that in view of Complainant's conviction and her job responsibilities she could not in good conscience support any type of application for continued bonding which would result in her continued employment.

1. The Respondent is an employer within the meaning of the Wisconsin Fair Employment Act.

2. The Respondent discharged the Complainant because of her conviction record, but such action was not unlawful employment discrimination because the circumstances of Complainant's conviction substantially relate to the circumstances of her employment within the meaning of the Act.

3. The Complainant has failed to prove that the Respondent violated the Act.

The decision of the administrative law judge (copy attached) is affirmed.

Dated and mailed July 10, 1989. 

/s/ Kevin C. Potter, Chairman

/s/ Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

Section 111.335(1)(c)1, Wis. Stats., provides as follows:

(c) Notwithstanding s. 111.322, it is not employment discrimination because of conviction record to refuse to employ or license, or to bar or terminate from employment or licensing, any individual who:

1. Has been convicted of any felony, misdemeanor or other offense the circumstances of which substantially relate to the circumstances of the particular job or licensed activity;

Citing County of Milwaukee v. LIRC, 139 Wis. 2d 805, 407 N.W.2d 908 (1987), the Complainant asserts that the substantial relationship test reflects the concern that "a convicted person, being placed in an employment situation offering temptation or opportunities for criminal activity similar to those present in the crimes for which he had been previously convicted, will commit another similar crime." 139 Wis. 2d at 821. (Complainant's Brief at p. 3) (emphasis in original)

In County of Milwaukee, Complainant Stephen Serebin was dismissed from his position as a "crisis intervention specialist" two days after being convicted for homicide by reckless conduct and 12 misdemeanor counts related to patient neglect arising out of his previous employment as an administrator of a nursing home. The Wisconsin Supreme Court concluded that the circumstances of the offenses for which Serebin had been convicted substantially related to the circumstances of his job with the county and thus his dismissal by the county fell within the statutory exception to the prohibition against conviction record discrimination.

The Complainant argues that in County of Milwaukee, the court determined that there was a substantial relationship between the criminal conviction and Serebin's job ". . . since in both contexts Serebin was in a position of exercising enormous responsibility for the safety, health and life of a vulnerable segment of the population. The 12 misdemeanors indicate a pattern of neglect of duty for the welfare of people unable to protect themselves." 139 Wis. 2d at 828. (Complainant's Brief, pp. 3 and 4) (emphasis in original) Complainant argues that it is significant to note that Serebin's previous convictions related to neglect of patients, and the job from which he was fired involved counseling mental patients; that the contexts were clearly related and the opportunities for criminal activity were similar when the previous offenses and the present job were compared.

The Commission agrees with the Respondent, however, that the Complainant's suggestion that the substantial relationship test can be met only if the contexts of the offense and the job duties are identical is a misstatement of the substantial relationship test set forth by the court. As noted by Respondent, in County of Milwaukee, the Commission had taken the position that the contexts of the offenses and the job duties were not identical, asserting that Serebin's offenses arose from and were committed while he was acting in an administrative capacity; his job duties at the time of his discharge involved direct patient contact. Responding too this argument, the court stated:

The Commission also emphasizes that the offenses related to Serebin's failures as an administrator and not as direct care worker and that the job in question involved direct care. We do not find this distinction to be persuasive . . . 
. . . 
. . . The Commission's application of sec. 111.32(5)(b)2b, Stats., (now 111.335(1 )(c )1, Stats.) in this case conflicts with the interpretation, application, and spirit of both Lyndon Station (infra) and Gibson (infra). These cases have suggested that the inquiry does not turn on superficial matters, such as distinctions between an administrative job and a "direct care" job. These cases make clear that what is important here is that what has been demonstrated is that Serebin was apparently unwilling to accept his legal and professional responsibility for an extremely vulnerable population. The responsibilities of both jobs are such that the "circumstances" of the offenses and the job are "substantially related" for purposes of sec. 111.32(5)(h)2b, Stats.139 Wis. 2d at 827-828.

Furthermore, the case of Gibson v. Transportation Commission, 106 Wis. 2d 22, 315 N.W.2d 346 (1982), cited by the court in County of Milwaukee, clearly demonstrates that the contexts of the offense and the job duties need not be identical. There the court upheld the Transportation Commission's denial of a school bus driver's license to Gibson who had earlier been convicted of armed robbery of a store.

Complainant argues that her offense of theft of a sweater from a retail store had nothing whatsoever to do with her job duties of processing and disbursing payment checks; that there is no similarity of circumstances between the offense and the job, nor is there any indication that theft of a sweater "evidences a tendency toward embezzlement which is likely to reappear in the unrelated context of working as a group claim technician." (emphasis in original) Further, Complainant argues that any scheme of embezzlement could not have been easily carried out and that Complainant could have much more easily stole an adding machine, a more related context but which Respondent fails to focus on.

But there is a very definite similarity of circumstances between the offense committed by the Complainant and her job duties as a group claim technician. The Complainant's offense involved theft of the property of another. In her position of group claim technician Complainant exercised total freedom in authorizing payments of Respondent's and its clients' funds in amounts up to $15,000 without review or scrutiny by a supervisor. This was a position in which Complainant exercised a high degree of responsibility and necessitates complete trustworthiness. Furthermore, the Complainant's arguments regarding the difficulty of embezzlement and ease of stealing an adding machine misses the point. The nature of the test set forth by the court in Milwaukee County was as follows:

Assessing whether the tendencies and inclinations to behave in a certain way in a particular context are likely to reappear later in a related context, based on the traits revealed, is the purpose of the test. What is important in this assessment is not the factual details related to such things as the hour of the day the offense was committed, the clothes worn during the crime, whether a knife or a gun was used, whether there was one victim or a dozen or whether the robber wanted money to buy drugs or raise bail money for a friend. All of these could fit a broad interpretation of "circumstances." However, they are entirely irrelevant to the proper "circumstances" inquiry required under the statute. It is the circumstances which foster criminal activity that are important, e.g., the opportunity for criminal behavior, the reaction to responsibility, or the character traits of the person. 139 Wis. 2d at 823-24.(emphasis added)

Complainant's having had the inclination to steal, as evidenced by her commitment of retail theft, the Respondent was not unreasonable in refusing to continue her employment under circumstances which could foster such criminal activity.

The Complainant also suggests that her previous work record of satisfactory service should be considered in determining whether the circumstances of her shoplifting conviction substantially relate to the circumstances of her duties as a group claim technician. However, in County of Milwaukee, the court expressly rejected this same argument, stating that prior satisfactory job performance was not germane to the inquiry that must be conducted. 139 Wis. 2d at 827.

In further argument about the relationship between the circumstances of her offense and the circumstances of her job as a group medical claims technician, Complainant asserts that if the Respondent's position in this case is sustained, carried to its logical extension, this would allow any employer to lawfully fire or refuse to hire her due to her shoplifting conviction, on the basis that she has a "propensity" for dishonesty, theft or misappropriation. Complainant argues that:

Everyone who has ever been convicted of a property crime involving dishonesty, theft, or misappropriation, could be discriminated against due to a claimed or perceived propensity to steal from employers. Clearly, the Legislature did not intend this result when it created the affirmative defense of sec. 111.335 (1) (c )1, Stats. To accept the Respondent's reasoning is tantamount to allowing the substantial relationship exception to swallow the rule prohibiting discrimination based upon conviction record. (Complainant's Brief at p. 5)

The Commission acknowledges that the Complainant's argument here is not without merit. However, in view of the construction the Wisconsin Supreme Court has given the statutory exception to discrimination on the basis of conviction record, the Commission believes this argument by Complainant is better addressed to the Legislature. In any event, in this particular case the Commission believes common sense dictates that a conviction for shoplifting, being the theft of another's property, substantially relates to the job duties of an individual who exercises unsupervised control and expenditure of large amounts of money for an employer and its clients. The Wisconsin Supreme Court has stated that a common sense approach is to be taken when determining whether a conviction substantially relates to the job performed. Law Enforcement Standards Board v. Lyndon Station, 101 Wis. 2d 472, 305 N.W.2d 89 (1981). Were the Commission to accept the Complainant's position, the Respondent could have discharged her only if she had been employed by Respondent as a sales clerk selling sweaters.

Finally, the Complainant argues that while the Respondent is now creating the impression that the decision to discharge her was based upon its determination that the circumstances of her offense were substantially related to the circumstances of her job as group medical claims technician, the Respondent's stated reason for her discharge at the time of the discharge, was that she had been arrested and convicted of a crime which made her ineligible for bonding. The Complainant's contention is not supported by the record in this case. The decision to discharge Complainant was made solely by vice president Clancey. Clancey testified that she made the decision to discharge Complainant on November 30, 1983, because of her responsibility for funds of Respondent and its customers. Clancey stated that the responsibilities of the Complainant's position -- ability to release payments up to $15,000 without supervisory review -- warranted Complainant's discharge. On December 1, 1983, Clancey signed a termination of employment form for Complainant which had been prepared by personnel manager Betty Donovan. Donovan indicated on this form that "employe had been arrested and convicted of a crime which made her ineligible for bonding." However, Donovan had not made the decision to discharge Complainant. While the issue of Complainant's bondability may have been an immediate consideration or concern of the Respondent upon learning of her shoplifting conviction, that was not the basis for Complainant's discharge nor had Donovan made the decision to discharge Complainant. Clancey alone made the decision to discharge Complainant on November 30, 1983, and the reason she did was because of the substantial relationship of Complainant's conviction to her job duties.

125

[earlier LIRC decision in this case]

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