ROBERT D. FLING, Claimant

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 claimant, Robert Fling, was the head of product development and marketing for Duffel Sportswear Inc. ("Duffel"), a company located in Portland, Oregon. Monterey, Inc. purchased the assets of Duffel in late 1998. On the recommendation of Charles Miller, who was an 8% owner of Monterey and its acting day-to-day president under Jay Jensen, who was chairman, and with Jensen's concurrence, Monterey also hired Fling to work with the Duffel operation.

Initially, Miller was Fling's supervisor. Miller left Monterey effective January 31, 2000, as a result of his interest being bought out by the other owners. At that point, Monterey's other owners considered that the Duffel operation was weak and they were dissatisfied with it and with Miller's performance as head of the consumer products division. After Miller left, Fling reported to Don Eatz.

In February, 2000, Monterey began making an effort to address what were considered to be excessive travel expenses being incurred by Fling in connection with his work. Fling continued to incur what Jensen considered to be unnecessarily high travel expenses. In March, 2000, Jensen sent Fling a memo indicating that from that point on, his travel expenses would have to be approved in advance.

In April, 2000, Jensen had a meeting with Fling in the latter's office, which developed into a heated argument. In this meeting, Jensen told Fling that because of the difficulties with the Duffel line he wanted him to accept a pay cut, from $120,000 per year to $90,000 per year. At that time, Jensen himself had already taken a pay cut in the range of 25%, and others at the company had as well. Fling refused to consider the idea of taking a pay cut.

Jensen and Fling had another meeting in early May, 2000, along with Gary Pribanich, Monterey's Chief Financial Officer, again concerning Monterey's desire that Fling accept a pay cut. This meeting too became heated, with arguments about things including Fling's travel expenses and about whether Fling had a valid contract. Jensen decided at that point that he wanted to discharge Fling, but he took a few minutes to go outside to calm down, and in discussions with Mr. Pribanich they decided against discharging him, and instead decided to try to get more value out of Fling's services, by directing him to try to come up with a plan to salvage the Duffel line.

Fling came up with an initial plan, but it was rejected by Jensen a couple of weeks later because he was concerned that it would not work. They continued working on trying to put together such a plan, looking at things such as selling the private label, or putting together a tent sale program. However, neither of these possibilities worked out.

Through the summer of 2000, Jensen continued to be dissatisfied with aspects of Fling's performance. Jensen then made the decision to terminate Fling in mid- to late August, 2000. Jensen terminated Fling in person, with Pribanich present, on August 31, 2000. Mr. Jensen said to Mr. Fling something on the order of how he was sorry that it had not worked out and that it was not a happy day for him; he may also have said something to the effect of "last in, first out". At that time, a severance agreement which had been prepared beforehand was tendered to Fling, but he did not agree to sign it.

The operations which Fling had been in charge of continued to operate for 30 to 60 days following Fling's discharge on August 31. There were as many as 9 other administrative personnel in the consumer products or apparel division in Janesville, and these administrative personnel continued to be employed during some or all of that period. Positions continued to be occupied in operations Fling had been in charge of in that time period. However, those operations were eventually shut down, by November, resulting in approximately 100 persons losing their jobs.

This issue for decision in this case is whether Fling was eligible for benefits under the Trade Act of 1974, 19 U.S.C. § 2101 et seq. The Trade Act provides for payment of certain weekly benefits (referred to as "TRA" benefits, for "Trade Readjustment Allowances") to employees of employers which are certified by the Department of Labor as having been adversely affected by foreign competition. TRA benefits are payable to "adversely affected workers" of such employers. 19 U.S.C. § 2291 (a). The Trade Act provides that the term "adversely affected worker" means an individual who has been totally or partially separated from employment with an adversely affected employer "because of lack of work". 19 U.S.C. § 2319 (2). For this reason, a person whose separation from employment with an adversely affected employer is caused by some reason other than "lack of work", is not eligible for TRA benefits. See, e.g., Frank Fore (LIRC, December 13, 2000), Peggy Dallas (LIRC, September 10, 2001).

The commission finds that the reason Fling was terminated was because his superiors were dissatisfied with his performance. The record clearly indicates that there had been such dissatisfaction through much of 2000. By May, his discharge was being actively considered, clearly because of the view that the value which Monterey was getting out of Fling was not making up for the $120,000 annual salary it was required to pay him. The operations which Fling was responsible for also continued to operate for some period even after he was discharged. Fling himself indicated at the hearing, that the administrators are some of the last to go when a company is shut down, yet here, Fling was one of the first to go. That too indicates that the decision to discharge Fling was caused by something other than the subsequent shutting down of the company.

The commission therefore finds that the claimant was separated from adversely affected employment, but not due to lack of work, within the meaning of the Trade Act of 1974 (as amended).

The commission further finds that the claimant was overpaid Trade Benefit Allowances in the total amount of $5321 which must be repaid.

The decision of the administrative law judge is affirmed. Accordingly, the claimant is not eligible for Trade Readjustment Allowances and is overpaid in the amount of $5,321, which he must repay. The claimant may file for a waiver as more particularly set forth in the department's determination.

Dated and mailed April 5, 2002
flingro . trr : 110 : TRA   PC 715 

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

The critical issue in this case, that being the reason that Monterey's management made the decision to terminate Fling, involves the question of the intent and motivation of the persons who made the decision, principally Mr. Jensen. Necessarily, this intent must be inferred from actions and statements. The commission believes that the most reasonable inference is, that Jensen was dissatisfied with Fling's performance and made the decision to discharge him for that reason.

The commission recognizes that to some extent the testimony of and representations made by Fling in this matter were contrary to the testimony of Jensen and Pribanich in their depositions. (1)    Determining whose version of the facts should be considered more persuasive must be based on considering such things as the inherent reasonableness and internal consistency of the party's statements. The commission felt that the description of the course of events leading up to Fling's discharge which was offered by Jensen and Pribanich in their depositions was reliable. It also notes that Fling represented to the department's investigator that "no one ever mentioned that there were performance problems", see, Ex. 2 p. 2, but that he subsequently acknowledged at the hearing that Jensen had been unhappy with the performance of the company when he tried to reduce Fling's salary in the Spring of 2000. The depositions of Jensen and Pribanich make it clear, that there was indeed substantial dissatisfaction with Fling's performance through much of 2000. This supports the inference, that the reason for the decision to discharge him was dissatisfaction with his performance.

It should be emphasized, that the question of whether that dissatisfaction with Fling's performance was objectively justified, is not what is at issue. This is not a case about whether Fling was discharged for misconduct. Rather, the question is what the employer's reasons were. The commission finds and concludes, as did the ALJ, that the employer decided to discharge Fling because it was dissatisfied with his performance. Thus, he did not lose his job "because of lack of work" within the meaning of 19 U.S.C. § 2319(2).

The commission would note that it had no disagreement with the material findings and conclusions of the ALJ, and it has issued its own decision in this matter simply in order to more fully set forth why it arrived at the same decision as did the ALJ.

NOTE: While the department listed Fling's former employer, Monterey Inc., in the caption of documents it issued in this case, the commission has listed only the claimant, Robert D. Fling, in the caption of this decision, because he is the only interested party. This case concerns a claim for benefits under the Trade Act. Unlike benefits paid out under the unemployment insurance system, which is supported by a direct tax on or direct reimbursement from a claimant's former employer(s), benefits paid under the Trade Act are not charged to a claimant's former employer or against some kind of account maintained for that employer. The allowance or denial of a claim has no financial effect on a claimant's former employer(s).

In addition, the provisions of Wis. Stat. § 108.101 limit the potential for even collateral effect on a claimant's former employer(s). Because TRA benefit claims are adjudicated pursuant to the procedures in place for unemployment benefit claims, that section is applicable. It provides:

108.101 Effect of finding, determination, decision or judgment. (1) No finding of fact or law, determination, decision or judgment made with respect to rights or liabilities under this chapter is admissible or binding in any action or administrative or judicial proceeding in law or in equity not arising under this chapter, unless the department is a party or has an interest in the action or proceeding because of the discharge of its duties under this chapter.

Thus, even where (as here) a claimant for TRA benefits and his former employer are involved in collateral litigation arising out of the employment, this provision insures that nothing about the proceedings as to the TRA benefits can have any effect in that collateral litigation. No decision reached in the case -- neither findings of fact, nor ultimate determinations -- is admissible, much less binding, in any other proceeding.

Fling's former employer is not and cannot be affected by any decision made in respect to Fling's claim for TRA benefits. It is therefore not designated as a party in the caption in this matter.

Monterey has raised the issue of Fling's apparent receipt of sums in settlement of the collateral litigation between Fling and Monterey which may, in part, represent or be in lieu of claims for back pay covering some or all of the period for which Fling was paid Trade Readjustment Allowances. The potential relevance this has, is that sums received in connection with settlement of an action that are intended to settle a claim for lost wages, might be considered "back pay" under Wis. Stat. § 108.05(6), in which case the sums might reduce or eliminate the recipient's eligibility for benefits, entirely apart from any other eligibility issues presented in the case. However, the commission cannot address that issue in this case, because there was never an initial determination issued on it. For this same reason, the commission also cannot "remand" the matter of Fling's apparent receipt of sums which might constitute back pay to the department, because since there never was a determination addressing that question, there is nothing to remand. Of course, if the department concludes that it is advisable to do so, it may investigate and issue a determination on the issue.

cc: 
Attorney Doris E. Brosnan
Attorney Richard R. Grant

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(1)( Back ) At the hearing, Fling's attorney offered partial copies of two depositions (of Jay Jensen and Gary Pribanich) which had been taken in the breach of contract action between Fling and Monterey. These were received into the record as Exhibit 1. Monterey's attorney objected and asked that complete copies of the depositions be used. Fling's attorney agreed and stated that she would submit complete copies after the hearing. The ALJ then indicated that when these were received they would be marked as Exhibit 2. These documents were in fact filed after the hearing. Given that it was clearly agreed at the hearing that the full depositions would be received, the commission treats them as being part of the record, and it has considered them along with the other evidence in its review in this matter. However, although the ALJ indicated at the hearing that the full depositions would be designated as "Exhibit 2" when received, he ended up using that designation for another document received at the hearing. Therefore, the commission has marked the full copies of the depositions as "Exhibit 3".

uploaded 2002/04/24