STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


JONATHON WALLS, Employee

MAACO AUTO PAINTING & BODYWORKS, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 00607310MW


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked approximately six months, most recently as a sales person, for the employer, an automobile service business. The employee's last day of work was July 5, 2000 (week 28), when he was discharged from his employment.

The employer provides both bodywork and painting services for automobiles. The employee's job duties included selling those services to customers. On a number of occasions throughout the course of his employment relationship, the employee dealt with customers who informed him that, after receiving the employer's estimate on bodywork, the estimate was too high and they could not afford the services. On those occasions, the employee suggested that the customers obtain the bodywork service at other locations and then return to the employer for painting services. The employee suggested several locations where the bodywork services could be obtained, including the business of someone previously employed by the employer. On or about July 3, 2000, the employer learned of this practice. On July 5, 2000, the employer met with the employee and informed him that he was discharged from his employment for suggesting customers go to its competitors to obtain bodywork.

The issue for review is whether the employee's discharge was for misconduct, within the meaning of Wis. Stat. § 108.04(5). In Boynton Cab Co. v. Neubeck & Ind. Comm., 237 Wis. 249, 296 N.W. 636 (1941), the leading case with respect to the meaning of the term "misconduct" as applied to unemployment compensation in the United States, the court said, in part, as follows:

" . . . the intended meaning of the term 'misconduct' . . . is limited to conduct evincing such wilful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion are not to be deemed 'misconduct' within the meaning of the statute."

The ALJ found that the employee's discharge was not for misconduct concluding that it was not established that the employee received kickbacks or that he was acting in a concerted effort to divert business from the employer to competitors.

At the hearing, the employee testified that the owner's son, during training, informed the employee that he could make such referrals. The employee argued that he had no idea that what he was doing was against the employer's policy. Although the owner's son did not appear at the hearing, the owner testified that it was not his policy to allow employees to make such referrals since that constituted a diversion of business.

The commission is therefore satisfied that the employee knew or should have known that his referrals constituted a diversion of the employer's business and as such amounted to an intentional disregard of the employer's interests.

The commission therefore finds that in week 28 of 2000, the employee was discharged for misconduct connected with his employment, within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits amounting to $4,984.00 for which he is not eligible and to which he is not entitled, within the meaning of Wis. Stat. § 108.03 (1). Pursuant to Wis. Stat. § 108.22 (8)(a), the employee is required to repay such sum to the Unemployment Reserve Fund.

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

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 28 of 2000, 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 employee is required to repay the sum of $4,984.00 to the Unemployment Reserve Fund.

For purposes of computing benefit entitlement: Base period wages from work for the employer prior to the discharge shall be excluded from any computation of maximum benefit amount for this or any later claim. If the employee was also paid base period wages from work by other covered employers, the excluded wages shall be used to determine benefit eligibility. However, any benefits otherwise chargeable to a contribution employer's account shall be charged to the fund's balancing account.

Dated and mailed March 1, 2001
wallsjo.urr : 135 : 2   MC 610.04

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

James A. Rutkowski, Commissioner



MEMORANDUM OPINION

The commission conferred with the ALJ as to his credibility impressions and assessment of those who testified. The ALJ noted that he found the employee to be a very credible witness. The commission however is satisfied that the employee either knew or should have known that diverting business away from the employer constituted an intentional disregard of the employer's interests.

NOTE: Repayment instructions will be mailed after this decision becomes final. The department will withhold benefits due for future weeks of unemployment in order to offset overpayment of U.C. and other special benefit programs that are due to this state, another state or to the federal government.

Contact the Unemployment Compensation Division, Collections Unit, P. O. Box 7888, Madison, WI 53707, to establish an agreement to repay the overpayment.

cc: R. E. Harrington


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uploaded 2001/03/05