RAYMOND A TERESINSKI, Employee

US FOODSERVICE - MINNESOTA, Employer
c/o U C EXPRESS

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:

The employee worked for the employer, a foodservice provider to restaurants, institutions, and other businesses, for over seventeen years, most recently as a "Center of the Plate Specialist." The employee's job responsibilities included procuring and marketing "center of the plate products," such as meat. His last day of work was March 6, 2003 (week 10).

The employer had emphasized the need for the employee to get rid of certain inventory. The shelf life for ribs is 180 days. The employee devised a scheme to sell ribs that were about to become outdated to a third party, in order to get them off the employer's books, with the agreement that the employer would later repurchase them as needed at a price that was ten cents higher. The employee reasoned that the employer could then sell the same ribs, but could roll over its inventory by using a new inventory date. The employee located a customer who was willing to buy the ribs, and implemented this scheme. On February 20, 2003, the employee sold 147 cases of ribs to the customer at $2.74 a pound. On March 4, 2003, he bought back approximately two-thirds of the ribs at $2.84 a pound and gave them a new item code number.

During the course of an audit of its perishable foods, the employer learned of the transaction and confronted the employee about it. The employee admitted to having engineered the transaction in order to get the ribs off the employer's books. The employer discharged the employee for falsification of records based upon the incident described above.

The issue to be decided is whether the employee's discharge was due to misconduct connected with his employment.

In Boynton Cab v. Neubeck, 237 Wis. 249, 296 N.W. 636 (1941), the leading case with respect to the meaning of the term "misconduct" as applied to unemployment compensation 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 employe, 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 employe'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 employee indicated that he believed it was okay to sell the product after 180 days and that he did not think he was doing anything wrong. However, the employee had many years experience in the foodservice industry, and the commission does not find it credible that he would not have understood the significance of the packaging dates on the meat. Moreover, quite apart from the issue of the shelf life of the ribs, the employee's actions in spending the employer's money to warehouse product as part of a scheme to manipulate the employer's inventory so as to give the appearance of having sold product that had not actually been sold were fraudulent and inconsistent with the employer's interests.

At the hearing the employee contended that he ran the idea past his supervisor prior to implementing it, and that she did not respond yes or no, which he took to mean that the employer approved his actions. However, the employee's own testimony indicates that the supervisor did not affirmatively give him permission to enact the scheme, but was silent when he explained his idea to her. The commission does not believe this can be reasonably construed as employer condonation. Moreover, even assuming the employee's supervisor did condone his actions, such condonation would not alter the fact that the employee knowingly and deliberately engaged in fraudulent conduct.

The commission, therefore, finds that in week 10 of 2003, the employee was discharged for misconduct connected with his employment, within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits in weeks 11 through 25 of 2003 in the total amount of $4,935, for which he was not eligible and to which he was not entitled, within the meaning of Wis. Stat. § 108.03(1). Pursuant to Wis. Stat. § 108.22(8)(a), he 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.

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 10 of 2003 and until seven weeks have elapsed since the end of the week of discharge and he has earned wages in covered employment performed after the week of discharge equaling at least 14 times his weekly benefit rate which would have been paid had the discharge not occurred. He is required to repay the sum of $4,935 to the Unemployment Reserve Fund. The initial benefit computation (UCB-700) issued on March 12, 2003, is set aside. If benefits become payable based on work performed in other covered employment a new computation will be issued as to those benefit rights.

Dated and mailed November 6, 2003
teresra . urr : 164 : 8   MC 630.09

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

NOTE: The commission conferred with the administrative law judge regarding witness credibility and demeanor. The administrative law judge indicated that he believed the employee knew what he was doing and understood he was "pulling a fast one" and not being honest, but that the employer failed to bring a witness who could rebut the employee's testimony with regard to employer condonation. The commission agrees with the appeal tribunal regarding its assessment of the employee's credibility. However, because the commission does not believe the employee's testimony established condonation and, further, because it is not persuaded that condonation by a supervisor would affect the ultimate conclusion that the employee's actions evinced misconduct, the commission has reversed the appeal tribunal decision.

Repayment instructions will be mailed after this decision becomes final. The department will withhold benefits due for future weeks of unemployment in order to off set overpayment of U.I. 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.

cc: 
Attorney Kerry E. Dwyer
US Foodservice - Menomonee Falls, WI 53051

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uploaded 2003/11/10