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

ROSALYN A LENZKE, Employee

RACINE INDUSTRIES INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 02603627RC


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 agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, the employee is ineligible for benefits beginning in week 12 of 2002, and until seven weeks have elapsed since the end of the week of discharge and the employee has earned wages in covered employment performed after the week of discharge equaling at least 14 times the employee's weekly benefit rate which would have been paid had the discharge not occurred. The employee is required to repay the sum of $1,775 to the Unemployment Reserve Fund.

Dated and mailed October 29, 2002
lenzkro . usd : 135 : 8  MC 665.12  MC 691  MC 692.02

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

MEMORANDUM OPINION

In her petition for commission review and brief, the employee admits that she utilized the employer's name in conjunction with processing mail orders for merchandise out of her home because the merchandiser requested a business name. The employee also admitted that she failed to pay the merchandiser for the goods ordered even though she had received money from her co-workers to pay for the goods, and converted the money to her own use. Based on the employee's conduct, the employee was terminated. The ALJ concluded that the employee's discharge was for misconduct connected with her employment within the meaning of Wis. Stat. § 108.04(5).

The employee argues that her conduct as noted above, was neither an intentional or substantial disregard of the employer's interests nor connected to her employment. In regard to the employee's actions, the employee argues that the ALJ misinterpreted her intent and that more importantly taking the money from her co-workers did not affect the employer. The commission disagrees. The employer's business reputation and its good will were both directly affected by the employee's conduct. Moreover, based on the employee's nonpayment to the merchandiser the employer became directly involved in establishing that it was not responsible for the debt the employee had personally incurred.

The employee argues that the employer's name was only used because she was required by the merchandiser to list the employer's name on the billing invoices. The employee argues that she did not know the employer would face liability or exposure to the merchandiser for her nonpayment. The commission disagrees. The employee knew or should have known that placing the employer's name on the bill without prior proper management approval could compromise the employer's business reputation and its good will, as well as expose the employer to potential liability for the employee's nonpayment.

The employee cites Janet O. Polk v. Liphatech Inc., Unemployment Insurance Decision, Hearing No. 99601141MW (LIRC August 4, 1999) in support of her argument that her actions do not constitute misconduct. In Polk, the commission found that the employee's discharge was not for misconduct when she ordered a color printer (for personal use from the employer's supplier), had it shipped to her home and bounced the check issued to pay for it. The commission concluded that the employee demonstrated poor judgment rather than any intentional and knowing disregard of the employer's interests despite the employer's potential resentment of the employee's conduct and the short term damage it caused the employer's relationship with its supplier.

By analogy, the employee argues that her conduct demonstrated poor judgment rather than any intentional and knowing disregard of the employer's interests. The commission disagrees and concludes that the employee's conduct is distinguished from the employee's conduct in Polk. In Polk, the commission noted that there was no formal policy governing the practice permitting employees to purchase personal items from the employer's suppliers.

Here, the employee was aware that the employer prohibited the activity of ordering from this specific merchandiser and having the merchandise sent to the employer's place of business. The employee argues that she was not violating the employer's prohibition because she did the ordering off duty and had the goods sent to her house. The employee however fails to acknowledge that while the employee may have conducted the business at home and off company time, the only way she could conduct this business was if she used the employer's name on the merchandiser's billing invoices. The employee did so without seeking approval from management. This conduct suggests to the commission that the employee either knew or should have known that using the employer's name without its permission was not only inappropriate but a knowing and intentional disregard of the employer's interests. Furthermore, because the employer was unaware of the employee's conduct until it was billed for the goods, it is difficult to conclude the employer condoned such conduct.

In sum, the commission is satisfied that the record amply supports a conclusion that the employee's conduct constitutes an intentional disregard of the employer's interests and of the standards of conduct the employer had a right to expect of the employee.

The employee also argues that her conduct involving the merchandiser was not connected with her employment and therefore misconduct was not established within the meaning of the law. The employee argues that an insufficient nexus between her conduct and her employment exists. Again, the commission disagrees. The employer became involved by the employee's failure to pay for goods she ordered for herself and co-workers after the merchandiser contacted the employer about its responsibility to pay for the goods. Furthermore, the employer was required to use its resources to respond to this inquiry caused by the employee's personal nonpayment. As important, the employee used the employer's name without its permission when ordering the goods from the merchandiser.

Finally, the employee argues that the administrative law judge conceded that the use of the employer's name resulted in a nominal impact to the employer's interests. The commission notes that even if the effect was nominal it nonetheless constituted an effect that subjected the employer's reputation to unwanted and unfavorable scrutiny. The commission therefore concludes that there is a sufficient nexus between the employee's conduct and her employment.

Therefore, for the reasons discussed above, the commission concludes that the employee's discharge was for misconduct connected with her employment within the meaning of Wis. Stat. § 108.04(5).

cc: Attorney Mark R. Hinkston


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