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

NANCY L REPKA, Employee

MASON SHOE MFG CO, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 02201573EC


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 about ten and one-half years for the employer, a shoe manufacturer and distributor. She was hired into a customer service position and worked in that position for about 5 years. She then worked as a purchasing clerk. In her most recent position she was working 40 hours per week, at a rate of pay of $ 10.60 per hour. She last worked for the employer during the week ending May 4, 2002 (week 18), and she was then laid off.

The first issue to be decided in this case is whether the employee voluntarily terminated her employment or was discharged by the employer. A secondary issue is whether, in view of the nature of her separation, she is eligible for benefits.

On April 18, 2002, the employee learned from her supervisors that her purchasing clerk job was going to be eliminated. She and the two other persons employed as purchasing clerks were advised at that time that the positions would no longer be there as of May 3. The purchasing clerk jobs were being eliminated because there had been a drop in business, and activity in the factory was declining, which reduced the amount of work that need to be done in the Purchasing Department.

After they were advised that their purchasing clerk positions were being eliminated, the employee and the other purchasing clerks were offered two options. One option was to transfer to positions in the Telephone Order Department. These were full-time positions, at that same rate of pay as that for purchasing clerks, that involved taking orders over the telephone and doing customer service. They were actual open positions which the employer had a need to fill and would have to fill by outside hiring if no current employees agreed to transfer into them. The other option which was offered to the employee and the other purchasing clerks was to agree to be laid off, in which case they would receive certain severance benefits. The severance benefits included severance pay in the amount of one week of pay for every year of continuous employment plus any accrued PTO hours, insurance benefits to be continued through the month of May, and the right to receive any 401(k) account balance.

The options were described to the employee and the other purchasing clerks in a meeting with Rich Johnson, the Human Resources Manager at Mason Shoes. In this meeting, the employee mentioned to Johnson that she had heard that some Mason Shoes factory workers who had been laid off were getting an education through the "Trade Relief Act" and asked Johnson if that would apply to them. Johnson told them that benefit was open to all workers, union and non-union; he also told the employee in relation to that, that she was "in the right place at the right time". The employee understood Johnson's statement to mean that she was in a good position to take advantage of an opportunity for re-training benefits under the Trade Act.

The employee had also been provided with a memo from Johnson detailing the options available to her and the terms of the severance package that would be provided if she asked to be laid off instead of working as a telephone order clerk. The memo indicated, among other things, that the severance pay would be allocated over a number of weeks for unemployment compensation purposes, and the memo also stated:

EXAMPLE: Wisconsin unemployment compensation regulations would generally find if a participating employee received a lump sum payment for the equivalent of 6 weeks pay, you would not be eligible to receive unemployment compensation for 6 weeks. Beginning with the 7th week you would be eligible to apply for unemployment benefits in accordance with state regulations.

The employee and the other purchasing clerks were not given any indication that if they chose to ask to be laid off they would be considered to have voluntarily quit their jobs for unemployment compensation purposes.

Based on the information she received, the employee formed the belief that if she elected to be laid off, she would be eligible for Unemployment Compensation benefits and for re-training benefits under the Trade Act. The employee therefore chose to take the option of being laid off, as did the other purchasing clerks. Thereafter, the employer laid her off.

As noted above, the first issue to be decided in this case is whether the employee voluntarily terminated her employment or was discharged by the employer.

Where an employer informs an employee that they will be transferred to another position, and the employee refuses to accept that transfer with the consequence that their employment ends, the separation from employment is appropriately treated as a voluntary quitting by the employee. See, e.g., Dentici v. Industrial Comm., 264 Wis. 181, 186 (1953). However, this is not what happened here. While the employer here could have simply told the employee that it was transferring her to the telephone order clerk position, it in fact did not do so. Rather, it expressly gave the employee an option, of either transferring to that position, or of being laid off with a package of severance benefits.

To exercise this option, the employee needed to request the employer to put one of the options into effect. In other words, the employee could either request to be transferred to the position of telephone order clerk, or she could request to be laid off. The commission has consistently held that if an employer agrees to lay an employee off at the employee's request, the separation from employment is not a voluntary termination within the meaning of Wis. Stat. § 108.04(7), but instead must be viewed as a situation in which the employee has been discharged. See, Schenk v. Tweed Garot Mechanical, Inc. (LIRC, Dec. 4, 2002), Shipman v. Robbins Mfg. Inc. (LIRC, May 31, 2000), Alan M. Greuel v. Jim Greeley Signs & Awnings Inc. (LIRC, June 12, 1998), Miller v. ABCO Building Corp. (LIRC Feb. 5, 1998), Daniel Jandourek v. Rogers Electric (LIRC Dec. 5, 1997). The commission concludes that this rule is applicable here.

The rationale behind this rule, is that in such cases it is ultimately the employer's choice whether to lay the employee off or not. Greuel, supra. This is exactly the situation here. The employer here could have made the choice to continue the employment of the employee, by simply transferring the employee to the telephone order clerk job. Furthermore, it was under no obligation to accede to a request by the employee that she instead be laid off. "A mere request to be laid off . . . does not constitute a severing of the employment relationship because it depends on the employer's acquiescence". Greuel, supra.

For purposes of characterizing the nature of the separation here, the employee was laid off because the employer made the choice -- which it was free to make or not to make -- to acquiesce in the employee's request that she be laid off rather than being continued in employment. Therefore, the separation was not a voluntary termination under Wis. Stat. § 108.04(7)(a), but rather a discharge. Because there is no contention by the employer, and no evidence in the record, that the discharge was for misconduct connected with the employee's employment within the meaning of Wis. Stat. § 108.04(5), there is no basis for finding the separation disqualifying.

The commission therefore finds that in week 18 of 2002, the employee was discharged from her employment but not for misconduct connected with her work within the meaning of Wis. Stat. § 108.04(5).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 19 of 2002, if she is otherwise qualified.

Dated and mailed December 23, 2002
repkana . urr : 110 :  MC 626  VL 1007.01

/s/ David B. Falstad, Chairman

James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

NOTE: The commission's reversal of the ALJ's decision is not based upon any disagreement with the material findings of fact made by the ALJ. The material facts in this matter are not in dispute and no issues of credibility were presented. The commission has arrived at a different conclusion of law concerning the characterization of the employee's separation from employment.

It should be noted that this decision is concerned solely with the employee's claim for and eligibility for benefits under Wisconsin's Unemployment Compensation Act. The employee's claim for benefits under the Trade Act of 1974 is subject to different legal standards and presents different issues, and it is addressed in a separate decision issued this date.


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