LARHONDA T GAINES, Employee

VAN RU CREDIT CORP, Employer

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:

The employee worked for the employer, a collections agency, for three years as a collections representative. Her last day of work was August 28, 2001 (week 35).

The employer's handbook contains a conflict of interest policy that prohibits employees from going to work for a competitor of the employer or for any entity engaged in the same or similar business. The employee signed an acknowledgement form indicating that she had received and would comply with the provisions of the employer's handbook. However, before the employee's last day of work another worker informed the employer that the employee was working for a competitor, and the employer's human resources manager verified that information. The employee was discharged as a result.

The issue to be decided is whether the employee's discharge was due to misconduct connected with her employment.

In Boynton Cab v. Neubeck, 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 employe, 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 employe'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 employee was discharged for violating the employer's conflict of interest policy. The employee did not deny going to work for a competitor, but argued that there were other employees with similar conflicts of interest who were allowed to work part-time for the employer. In fact, the employee asserted that the employer had actually made accommodations in their schedules to permit them to do so. However, while the employee may have believed that her co-workers were permitted to work for competitors, she did not establish that this was the case. The employer's handbook specifically addresses the issue of outside employment and indicates that employees may hold other jobs if there is no conflict of interest. It was not demonstrated that any accommodations in her co-workers' work schedules were designed to permit them to work for competitors as opposed to simply enabling them to hold other non-related part-time jobs and, assuming some of them did work for competitors, there is no basis to conclude that this was with the employer's knowledge or consent. Finally, if the employee thought the employer had granted others permission to work for competitors, she should have sought such permission herself before engaging in conduct which she knew was directly prohibited by the employer's rules. Overall, the commission is not satisfied that the employee had reason to believe the employer condoned her conduct, notwithstanding its rule to the contrary, and it concludes that her actions in going to work for a competitor amounted to misconduct.

The commission, therefore, finds that in week 35 of 2001, the employee was discharged for misconduct connected with her employment, within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits in weeks 43 through 52 of 2001, and weeks 1 through 15 of 2002 in the total amount of $7,990, for which she was not eligible and to which she was not entitled, within the meaning of Wis. Stat. § 108.03(1). Pursuant to Wis. Stat. § 108.22(8)(a), she 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.

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 35 of 2001 and until seven weeks have elapsed since the end of the week of discharge and she has earned wages in covered employment performed after the week of discharge equaling at least 14 times her weekly benefit rate which would have been paid had the discharge not occurred. She is required to repay the sum of $7,990 to the Unemployment Reserve Fund.

Dated and mailed April 19, 2002
gainela . urr : 164 : 8   MC 610.04 

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

NOTE: The commission conferred with the administrative law judge about witness credibility and demeanor. The commission does not disagree with any credibility determination made by the administrative law judge, but differs with her conclusion that the employee's discharge was not for misconduct.

cc: Van Ru Credit Corp

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uploaded 2002/04/24