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

RONALD E SMITH, Employee

OLDENBURG GROUP INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 01610369MW


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 began working as a machinist for the employer in August of 2000. His last day of work was October 24, 2001 (week 43), when he was discharged.

On January 9, 2001, the employee signed a quality disciplinary policy which provided for discharge after five quality incidents in a rolling 12-month period.

The employer manufactures lighting fixtures and has genuine concerns about product liability and lawsuits. Accordingly, the employer requires 1st piece inspections. The procedure is for a worker to inspect the 1st and 5th pieces being produced to ensure that they are being made correctly, and to have another worker sign off on the inspection.

In December 2000, January 2001, and August 2001, the employee received performance reviews which commented on the need for the employee to perform 1st piece inspections.

On January 12, 2001, the employee received a warning for making 36 bad parts and blaming another shift for the incorrect parts.

On March 16, 2001, the employee received a warning and one-day suspension for failing to do 1st piece inspections resulting in bad parts.

The employee received a counseling action on May 23, 2001, for not performing at the skill level expected of him. As a result, his pay was reduced and he was transferred to a position in manual machining.

On June 21, 2001, the employee received a final warning for failing to fill out log sheets as required.

On October 23, 2001, the employee failed to notice a broken drill which resulted in 16 roll bars being scrapped. Later that same day, the employee ran 39 pieces for a job when the work order only called for 8 pieces. This resulted in a lack of material for another job, four hours of machining time, and a delay in completing the other job. The employer discharged the employee on October 24, 2001 (week 43), for the aforementioned performance failures.

The issue to be decided is whether the employee's discharge was for misconduct connected with his employment. 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' with in the meaning of the statute."

The commission finds that the employee's repeated failures in performance demonstrated a pattern of indifference to the employer's interests constituting a wanton disregard for those interests. The employee was repeatedly told that he was required to follow the employer's 1st piece inspection procedure. Despite such warnings the employee continued to run jobs without checking the pieces as required and without obtaining verification from a co-worker that the inspection had been performed. The commission does not credit the employee's claim that it was not possible to perform a 1st piece inspection on the last occasion. The commission does not believe the employer would discharge the employee for failing to perform the inspection if it was impossible to do so. The employee's claim that inspections were not required for jobs involving fewer than 20 pieces is likewise rejected. There is no credible evidence that the employer was willing to risk the use of defective pieces simply because the job involved fewer than 20 pieces. Further, while the employee claimed that his supervisor would fail to appear to verify an inspection, the supervisor during the last two weeks of the employee's employment credibly testified that the employee had never asked the supervisor to verify an inspection. The employee's claim that he did not have the time to follow basic inspection procedures and complete necessary paperwork is rejected. Finally, there is no evidence to support the employee's bald assertion that he was subjected to criticism after he complained of racial undertones at his place of work.

The commission therefore finds that in week 43 of 2001, the employee was discharged from his employment and for misconduct connected with his work within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits in the amount of $1,238.00 for weeks 43 through 46 of 2001, for which the employee was not eligible and to which the employee was not entitled, within the meaning of Wis. Stat. § 108.03(1).

The final issue to be decided is whether recovery of overpaid benefits must be waived.

Wisconsin Statute § 108.22(8)(c), provides that the department shall waive the recovery of overpaid benefits if the overpayment was the result of departmental error, and the overpayment did not result from the fault of the employee. Under Wis. Stat. § 108.02(10e)(a) and (b), department error is defined as an error made by the department in computing or paying benefits which results from a mathematical mistake, miscalculation, misapplication or misinterpretation of the law or mistake of evidentiary fact, or from misinformation provided to a claimant by the department, on which the claimant relied.

The overpayment in this case results from the commission's reversal of the appeal tribunal decision. Such reversal was not due to department error as defined in Wis. Stat. § 108.02(10e)(a) and (b).

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 43 of 2001, and until seven weeks elapse since the end of the week of discharge and the employee has earned wages in covered employment equaling at least 14 times the weekly benefit rate which would have been paid had the discharge not occurred. The employee is required to repay the sum of $1,238.00 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 April 30, 2002
smithro . urr : 132 : 1 :  MC 663

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

MEMORANDUM OPINION

The commission did discuss witness credibility and demeanor with the ALJ who presided at the hearing. The ALJ found the employee to be a generally credible witness. The commission disagrees with the ALJ's credibility assessment for reasons set forth above.

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.I. and other special benefit programs that are due to this state, another state or to the federal government.

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


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uploaded 2002/05/10