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

KAREN M GROVOGEL, Employee

LEATHEM SMITH LODGE CORP OF DOOR COUNTY, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 01403452AP


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 for the employer, a restaurant/hotel, for 11 months as a waitress. Her last day of work was September 9, 2001 (week 37).

During her employment the employee was subjected to abuse and harassment on the part of the chef, who would yell and swear at her and belittle her in front of co- workers and customers. The employee complained to the employer on several occasions, and insisted it take some action. The employer indicated it would talk with the chef. However, the rude treatment continued. When the employee complained again, the employer assigned the employee to the banquet room, where she would have less contact with the chef. The employee objected to the move, although she did not demonstrate that it had any adverse effect on her ability to earn tips. The abuse by the chef continued after the employee was transferred to the banquet room. However, in her last week of employment the employee complained again, after which the abusive conduct stopped and the chef basically ignored the employee.

The employee's rate of pay was $7 an hour plus tips. When the employee began her employment, the employer's practice was to co-mingle the tips from the dining room and the banquet room and split them up on a percentage basis, with the person working the most hours getting the highest percentage of the tips. In addition to the waitresses, the bartenders, bussers, and chef all received a share of the tips. The employee and other waitresses did not consider this method of splitting the tips to be fair, and proposed an alternative to their supervisor, that all servers working a party in the banquet room would split their tips equally, while those working in the dining room could keep their own tips. The supervisor agreed to implement the waitresses' proposal. For about a month the employer handled the tips in the manner the employee and her co-workers preferred, with the hostess separating tips from the dining room into individual tip cups. However, at some point the employer reverted to its former method of splitting tips. Thereafter, the hostess discontinued the practice of separating the waitresses' tips into individual cups.

After the employer went back to its former method of payment, the employee began to believe that she was not receiving a sufficient amount of tips. She complained to her supervisor about this, but was assured that everything was fair. When the employee asked to see the employer's records showing how the tips were divided, she was told that she had no right to see anyone else's split. The employee did not know the total gratuity for each banquet, and was unable to ascertain whether her share of the tip had been figured correctly. In her last week of work the employee learned that the chef had netted a greater amount of tips off of a party than the employee had. On September 9, 2001, the employee informed her supervisor that she was tired of being shorted on her tips and was going to quit. The supervisor agreed that, if the employee felt she was being shortchanged, she should go work someplace else.

The question to decide is whether the employee's quitting was for any reason permitting the immediate payment of benefits.

Under Wis. Stat. § 108.04(7)(a), an employee who voluntarily terminates employment with an employer is ineligible for benefits unless the quitting falls within a statutory exception permitting the immediate payment of benefits. One such exception is Wis. Stat. § 108.04(7)(b), which provides that, if an employee voluntarily terminates employment with good cause attributable to the employing unit, he or she is eligible for the immediate payment of unemployment benefits. "Good cause attributable to the employing unit," means that the employee's resignation is caused by some act or omission by the employer which justifies the employee's decision to quit. It involves some fault on the part of the employer and must be real and substantial. Kessler v. Industrial Comm., 27 Wis. 2d 398, 401, 134 N.W.2d 412 (1965); Hanmer v. DILHR, 92 Wis. 2d 90, 98, 284 N.W.2d 587 (1979).

The employee quit because the employer changed the method of payment without notifying her, because she believed she was being shorted on her tips, and because the chef treated her in an abusive manner. Regarding the latter allegation, the record indicates that the employer took action to address the situation by moving the employee into the banquet room where she would have less contact with the chef and that, at the time of her quitting, no harassment was occurring. The commission believes that the employee's quitting was motivated primarily by her concern over the tips, and that the issue with the chef was only a secondary consideration.

The employer had a right to decide how tips would be divided among its staff, without regard to the wishes of the waitresses. Although the employee was not informed by the employer that it was reverting back to its former method of remuneration, she should have discerned this from the fact that the hostess was no longer separating the waitresses' tips into individual cups in the dining room, as she had when each waitress kept her own tips. While the employee may have been suspicious about the amount of tips she was receiving, she did not demonstrate that the employer actually shortchanged her, and the commission is not persuaded this occurred. The commission also believes that the employee did not do enough to address the situation prior to quitting and that one or two complaints to the employer was not sufficient. To the contrary, if the employee believed the employer was underpaying her, she needed to explore her reasonable alternatives to quitting, including putting the employer on notice that she intended to quit over the issue. Finally, notwithstanding the employee's argument to the contrary, the commission does not believe the employer was obligated to open its books to the employee to show her how it calculated her tips.

The commission therefore finds that in week 37 of 2001, the employee voluntarily terminated her work with the employer, and that her quitting was not with good cause attributable to the employer, within the meaning of Wis. Stat. § 108.04(7)(b), or within any other statutory exception which would permit the immediate payment of benefits.

The commission further finds that the employee was paid benefits in weeks 40 through 51 of 2001 in the total amount of $2,012, 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.

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 37 of 2001 and until four weeks have elapsed since the end of the week of quitting and she has earned wages in covered employment performed after the week of quitting equaling at least four times the employee's weekly benefit rate which would have been paid had the quitting not occurred. She is required to repay the sum of $2,012 to the Unemployment Reserve Fund.

Dated and mailed June 6, 2002
grovoka . urr : 1  VL 1005.01  VL 1059.201

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

 

NOTE: The commission conferred with the administrative law judge regarding witness credibility and demeanor. The administrative law judge indicated that she found the employee's testimony to be credible and that the employer's witness did not seem to know all the facts. The commission's reversal is not based upon a disagreement with any credibility determination made by the administrative law judge.

Repayment instructions will be mailed after this decision becomes final. The department will with hold benefits due for future weeks of unemployment in order to off set over payment of U.C. and other special benefit programs that are due to this state, an other 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 over payment.


DAVID B. FALSTAD, CHAIRMAN (dissenting):

I disagree with the majority in this case and I dissent. Wages are an important part, if not the most important part, of the contract between an employee and an employer. While the employer may have a right to determine the amount and method of remuneration, it is obligated to notify the employee of any changes to his or her pay before such changes are implemented. Further, during the course of his or her employment the employee should, upon request, be provided with sufficient information to allow a determination that paychecks have been accurately calculated and that the employee has not been underpaid.

In this case, the employer changed the method in which tips were divided without providing notice to its employees, leaving it to the employees to discern after the fact that changes had been made. In addition, the employer was unwilling to provide its employees with enough information about the amount of tips received and the manner in which they were divided among staff members to permit a conclusion that they had been paid fairly. Because I believe these circumstances provided the employee with good cause to quit her employment, I would affirm the appeal tribunal decision.

/s/ David B. Falstad, Chairman


[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]


uploaded 2002/06/10