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

PETER A ERDMAN, Employee

RPM LOGISTICS INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 02600248WB


On December 19, 2001, the Department of Workforce Development issued an initial determination which held that the employee quit but not for a reason which would allow for immediate eligibility for unemployment insurance. The employee filed a timely request for hearing on the adverse determination; hearing was held on February 21, 2002 in West Bend, Wisconsin before a department administrative law judge. On March 14, 2002, the administrative law judge issued an appeal tribunal decision amending and affirming the initial determination. The employee filed a timely petition for commission review of the adverse decision, and the matter now is ready for disposition.

Based upon the applicable law and the records and other evidence in the case, the commission issues the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee was employed for approximately five years as a partner in the business of the employer corporation, RPM Logistics (RPM). His last day of work was on or about December 3, 2001 (week 49), and the issue is how to characterize the subsequent separation from employment with RPM. Under the narrow circumstances of this case, the commission concludes that the separation was a constructive discharge by the employer, and so reverses the appeal tribunal decision.

In addition to his employment with the employer, the employee also worked for Krebs Trucking. On or about November 30, 2001, the owner of Krebs Trucking laid the employee off from that employment, due to economic cutbacks. Although the record is unclear, it appears that the employee's work for Krebs Trucking was as a freight broker. That also was his work for RPM. It again is not clear from the record, but it appears that RPM was formed to broker freight assignments with companies other than Krebs Trucking (presumably to cover freight hauls that Krebs Trucking itself could not accept). Randy Krebs was the owner of Krebs Trucking, and the individual who laid the employee off from that employment. Randy Krebs and the employee were each 50 percent owners of RPM.

The employee and Krebs each received a flat salary of $500 per quarter, in their employment in RPM. As indicated, this corporation appears to have been set up specifically in order to broker freight hauls that Krebs Trucking itself could not take. RPM sometimes brokered a few loads a week, but sometimes there were several weeks without any loads to be brokered. The work for both RPM and Krebs Trucking was in the same office, owned by Krebs.

After being notified by Krebs that he was being laid off from Krebs Trucking, the employee asked Krebs to buy him out of RPM; Krebs did so, and the issue in the case is the proper characterization of the resulting separation. In the narrow circumstances of this case, the commission concludes that the layoff of the employee from Krebs Trucking also constituted a constructive discharge of employment with RPM. The commission reaches this conclusion due to the interconnectedness of the two employments. First, the work for the two employers arose out of the same context: brokering freight assignments. This interconnectedness is shown by the minimal amount of time the employee spent each week brokering freight assignments for RPM. Second, the work for the two entities took place in the same offices, offices owned by the owner of Krebs Trucking. Third, Krebs himself conceded that it would not be possible for the employee to have remained a partner in RPM while not working for Krebs Trucking. For all of these reasons, the commission concludes that the separation from employment with RPM was due directly to the separation from employment with Krebs Trucking, which for unemployment insurance purposes makes it a constructive discharge (layoff) and not a voluntary quit under Wis. Stat. § 108.04(7)(a).

The commission therefore concludes that, in week 49 of 2001, the employee was discharged but not for misconduct connected with his employment, within the meaning of Wis. Stat. 108.04(5).

DECISION

The appeal tribunal decision is reversed. Accordingly, the employee is eligible for unemployment insurance beginning in week 49 of 2001, if he is otherwise qualified.

Dated and mailed June 19, 2002
erdmape . urr : 105 : 6    VL 1007.01

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

 

NOTE: The commission did not confer with the administrative law judge before determining to reverse the appeal tribunal decision in this matter. Credibility was not a factor in the commission's reversal of the appeal tribunal decision. Indeed, the employee and employer essentially agreed as to the critical factors surrounding the separations from the employments. The commission believes that, as a matter of law, the two employments were so intertwined that the discharge from the first operated as a discharge from the second as well.


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uploaded 2002/06/21