P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)



Hearing No. 95000269JV

On January 6, 1995, the Department of Industry, Labor and Human Relations (department) issued an initial determination holding that the employe was discharged, but not for misconduct connected with his employment. Consequently, benefits were granted. The employer appealed and a hearing was held before an administrative law judge. On February 16, 1995, the administrative law judge issued his appeal tribunal decision affirming the initial determination. The employer filed a timely petition for review. On April 25, 1995, the commission issued its decision affirming the appeal tribunal decision on the ground that all of the employer's evidence was hearsay. However, the commission further indicated in its decision that it would reconsider its decision if the employer presented newly discovered evidence within one year of the decision under section 108.09 (6)(c) of the Statutes, that the employe had been convicted of the alleged crime.

On July 20, 1995, the employer moved for reconsideration stating that the employe was convicted of theft on June 8, 1995. On August 10, 1995, the commission set aside the decision of April 25, 1995, and remanded the matter back to the appeal tribunal for a new hearing on the issue of whether the employe had been convicted of theft. A new hearing was held before the administrative law judge on August 28, 1995. The employe did not appear at that hearing. The exhibits of the remand hearing and a synopsis of the new hearing testimony has now been submitted to the commission.

Based upon the applicable law, records and evidence in this case the commission makes the following:


The employe worked approximately ten years as a crane operator for the employer, a recycling business. He was discharged on December 23, 1994 (week 52).

The employer employed about 16 employes at its Janesville yard. The employe transferred there about four years prior to his discharge. Because the employe was a long-term employe, he had a key to the premises and had some supervisory responsibilities. The employer sold used catalytic converters from automobiles to Winston Judd in Fort Atkinson who reclaimed certain metals from them. The used converters are worth between $8 and $16 each. Judd contacted the employer and informed it that he suspected that some of the employer's employes were stealing converters and selling them to him. Judd gave the employer a list that showed that certain employes of the employer had sold 398 converters worth $3,953.75 to Judd during a one and one half year period. Judd did not indicate that the employe was directly involved in these transactions. However, the employe did travel along with a co-employe on some of the deliveries to Judd.

The employer's manager testified for the employer at the original hearing. The employer marked some of the converters and a co-employe was caught with some of the marked converters. According to the manager, the co-employe admitted the thefts and implicated the employe. However, the manager did not bring the co-employe or any other witness to the original hearing. The employe and the co-employe were arrested and charged with theft. A preliminary hearing was held in the employe's case, and he was bound over for trial prior to the original hearing.

The manager submitted copies of three police reports investigating the theft. The police officer's report of November 22, 1994, stated that the employe denied any knowledge of a theft and that he, the police officer, had no reason to disbelieve the employe. In addition, the report stated that the police officer had talked to Judd and it was Judd's opinion that the employe did not know what was going on and that Judd guessed that the employe was not involved in the theft.

The employe denied any involvement. He said he rode along on some of the deliveries because the co-employe did not have a driver's license. According to the employe, the cc-employe said he was buying the converters before they reached the employer's place of business. The employe said he did not report anything to the employer because the co-employe was dangerous and easily angered, and he was afraid of the co-employe.

The employer attached additional information to its petition for review to show that the employe testified at his preliminary examination that he knew about the thefts by the co-employe. However, that evidence was not considered by the commission in its prior decision because it was not submitted at the original hearing.

The manager testified again at the remand hearing. The manager submitted a copy of the judgment of conviction of the Rock County Circuit Court adjudging the employe guilty on June 8, 1995, of the crime of being a party to felony theft. The manager also submitted a copy of a letter dated July 17, 1995, from a victim/witness coordinator in the Rock County District Attorney's office stating that the employe was found guilty by a jury of the crime of being a party to a felony theft on June 8, 1995, and that he was sentenced on July 14, 1995, to three years probation and 45 days in the Rock County Jail, with a requirement to make restitution as a part of his probation.

The issue is whether the employe's actions constituted misconduct. Misconduct has been defined as an intentional and substantial disregard of the employer's interests or of the standard of conduct that an employer has a right to expect from its employes. Boynton Cab Co. v. Neubeck, 237 Wis. 249, 259-60 (1941); Wehr Steel Co, v. ILHR Dept., 106 Wis. 2d 111, 116 (1982).

In addition, because the allegation was that the employe had committed a crime, the employer was required to prove its case by clear, convincing and satisfactory evidence. Kuehn v. Kuehn, 11 Wis. 2d 15, 26 (1960).

Previously, the commission affirmed the appeal tribunal decision because the majority of the employer's evidence was hearsay. However, circuit court decisions have held that, as a matter of public policy, UC benefits should be denied where an employe is found guilty of a criminal charge of theft from an employer, even in cases where the conviction was entered after the UC hearing and no evidence of theft was introduced at the hearing. See Harley-Davidson Motor Co. v. DILHR et al., (Dane County Circuit County, No. 161-226, Nov. 13, 1978);  Koss Corp. v. DILHR et al., (Dane County Circuit Court, No. 153-261, July 5, 1977).  See also Spector Freight System. Inc. v. DILHR et al., (Dane County Circuit Court, No. 131-057, May 10, 1971).  In Koss Corp., the circuit court held that the commission's refusal to remand after the receipt of the new evidence that the employe had been convicted amounted to a patent denial of justice. "It is contrary to public policy in the objective of UC Act to award UC to an employe who's admitted by his plea of guilty that he stole property from his employer, the very act for which he was discharged. Koss Corp., supra, p. 7, J. Currie.

Although the employe in this case did not plead guilty, but rather was convicted by a jury after a plea of not guilty, the principle is the same. The commission now has irrefutable evidence that the employe has been convicted of the crime of being a party to felony theft. That, combined with the evidence adduced at the original hearing, is sufficient by clear, convincing and satisfactory evidence that the employe was involved in the thefts from the employer. The commission therefore further concludes that the employe's actions constituted misconduct and reverses the appeal tribunal decision.

The commission therefore finds that in week 52 of 1994, the employe was discharged for misconduct connected with employment, within the meaning of section 108.04 (5) of the Statutes.

The commission further finds that in week 53 of 1994, and in weeks 1 through 19 of 1995, the employe was paid benefits in the amount of $2,234, for which he was not eligible and to which he is not entitled, within the meaning of section 108.03 (1) of the Statutes. Pursuant to section 108.22 (8)(a) of the Statutes, the employe is required to repay such sum to the Unemployment Reserve Fund.

The commission further finds that waiver of benefit recovery is not required under section 108.22 (8)(c) of the Statutes, because although the overpayment did not result from the fault of the employe as provided in section 108.04 (13)(f) of the Statutes, the overpayment was not the result of a departmental error. See section 108.22 (8)(c)2. of the Statutes.


The decision of the appeal tribunal is reversed. Accordingly, the employe is ineligible for benefits beginning in week 52 of 1994, and until seven weeks have elapsed since the end of the week of discharge and he has earned wages in covered employment performed after the week of discharge equaling at least 14 times his weekly benefit rate which would have been paid had the discharge not occurred. The initial benefit computation (form UCB-700) issued on December 19, 1994, is set aside. If benefits become payable based on other employment, a new computation will be issued as to those benefits rights. The employe is required to pay the sum of $2,234 to the Unemployment Reserve Fund.

Dated and mailed September 21, 1995
puckejo.urr : 198 : 3  MC 630.14 PC 740

/s/ Pamela I. Anderson, Chairman

/s/ Richard T. Kreul, Commissioner

/s/ David B. Falstad, Commissioner


NOTE: The commission did not confer with the administrative law judge regarding witness credibility and demeanor. The commission's decision is as a matter of law based upon the undisputed fact that the employe was convicted of being a party to the crime of felony theft.

cc: Samuels Recycling Company

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