P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)



Hearing No. 97605350MW

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 the applicable law, records and evidence in this case, the commission makes the following:


The employe worked about one year and three months as a director for the employer, a hospital. Her last day of work was July 8, 1997 (week 28), when she was discharged from her employment.

On July 2, 1997, the employer's CEO and president met with the employe and directed her to discharge a worker for falsifying a timecard. The employe asked for an opportunity to review the matter. After her investigation she concluded that the worker had inadvertently completed the timecard incorrectly. She decided to "dock" the worker's pay for those hours incorrectly recorded. She put those recommendations in a memorandum and presented it to the employer on July 3, 1997.

On July 7, 1997, the employe spoke with the employer by telephone. She was informed that no decision had been made concerning her recommendation, that the employer would make the final decision, and that it would inform her of that decision. On July 8, 1997, the employer met with the employe and informed her that she was required to fire the worker. The employe refused, explaining that she believed the worker committed no intentional fraudulent action concerning the timecard. She was again directed to discharge the worker. She again refused. She was then informed that she was discharged for insubordination.

The issue to be decided is whether the employe was discharged for misconduct connected with her work.

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 insurance 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' within the meaning of the statute."

The employe repeatedly refused to carry out a direct order. The employe's actions were insubordinate. It was not within her prerogative as a supervisor to decide not to discharge a worker when the president and CEO, her superior, directed her to do so. It is within the employer's prerogative to override the employe. As supervisor, one of the employe's duties was to discharge workers. While the employe believed the worker made an honest mistake, the employer believed otherwise. While reasonable minds may differ as to whether the worker intentionally submitted an incorrect timecard, it remained the employer's prerogative to determine that it wished to discharge the worker for such actions.

The commission finds that the employe's repeated and willful refusal to carry out a direct order constituted insubordination. The employe's actions amounted to an intentional and substantial disregard of the employer's interests and of the standards of behavior the employer had a right to expect of the employe.

The commission therefore finds that in week 28 of 1997, the employe was discharged from her employment and for misconduct connected with her work within the meaning of Wis. Stat. 108.04(5).

The commission further finds that the employe was paid benefits in the amount of $3948.00 for weeks 29 through 42 of 1997, for which she was not eligible and to which she was not entitled, within the meaning of Wis. Stat. 108.03(1).

The final issue to be decided is whether recovery of the 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 employe. 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). Rather, the commission has reached a different legal conclusion when applying the law to the facts found.

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 employe 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.


The decision of the administrative law judge is reversed. Accordingly, the employe is ineligible for benefits beginning in week 27 of 1997, and until seven weeks elapse since the end of the week of discharge and the employe 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. She is required to repay the sum of $3948.00 to the Unemployment Reserve Fund. The initial benefit computation (UCB-700) issued on July 9, 1997, is set aside. If benefits become payable based on other employment, a new computation will be issued as to those benefit rights.

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 employe 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: March 19, 1998
conneja.urr : 132 : 2  MC 640.03

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner


The commission did not consult with the administrative law judge regarding witness credibility and demeanor. The commission has not disturbed any credibility determination made by the administrative law judge. Rather, the commission has reached a different legal conclusion when applying the law to the facts of the case.

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.C. 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.



Appealed to Circuit Court. Affirmed November 24, 1998. Court Decision Summary

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