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

RENEE J GIEBINK-BROWN, Employee

MASSES INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 03401917GB


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 for the employer, a specialty subcontractor for epoxy flooring, for approximately five and a half years as office manager. She last performed services for the employer on April 18, 2003, and tendered her resignation on April 25, 2003 (week 17).

During the course of the employee's employment, the employer lost out on a number of jobs because it was not a union shop. The employer began talking to the employee about setting up a company that would be able to bid on union jobs. In early 2002 the employee asked the employer if she should go ahead and set up the new company, and the employer told her to "do it." In April of 2002 the employee established a corporation called Unified Installations (hereinafter "Unified"). The employee and her father were designated as the owners of the company. The employee used her own funds to establish the company--she invested $4900 and her father invested $5100. It was understood that the employer, which owned a separate company that distributed flooring materials, would supply the materials to Unified and would make a profit on those sales. It was also understood that Unified would only bid on union jobs for which the employer was ineligible.

In March of 2003, Unified won the bid on a big job. When the employer learned about this it decided it had made a mistake and wanted to own its own union company. It made its feelings known to the employee. Tired of getting pressured about the issue, the employee told the employer it could buy her out, but the parties were unable to agree on a reasonable offer.

On April 11, 2003, the employee left on vacation. In her absence the employer withdrew its bid to supply materials for the job referred to above. The employee lost out on the bid as a result.

On April 18, 2003, while the employee was still on vacation, the employer sent her an e-mail in which it accused her of conflicts of interest and bidding on the employer's jobs. While the employee had bid on some of the same jobs as the employer, these were union-only jobs which the employer had decided to bid on in hopes that the general contractor would decide to go with a non-union bidder. The employee bid the jobs based upon referrals from the employer's sales representative and without verifying whether the employer had also done so. She did not get any of the jobs on which the employer had bid, as her bids tended to be higher due to higher labor costs.

On April 25, 2003, the employer telephoned the employee and stated, "Unified Installations is out of the picture. Forget it. It's done." The employer indicated that its business would no longer support Unified. The employee told the employer she quit.

Under Wis. Stat. § 108.04(7)(a), an employee who voluntarily terminates employment with an employer is ineligible for benefits unless the quitting falls within a statutory exception permitting the immediate payment of benefits. One such exception is Wis. Stat. § 108.04(7)(b), which provides that, if an employee voluntarily terminates employment with good cause attributable to the employing unit, he or she is eligible for the immediate payment of unemployment benefits. "Good cause attributable to the employing unit" means that the employee's resignation is caused by some act or omission by the employer which justifies the employee's decision to quit. It involves some fault on the part of the employer and must be real and substantial. Kessler v. Industrial Comm., 27 Wis. 2d 398, 401, 134 N.W.2d 412 (1965); Hanmer v. DILHR, 92 Wis. 2d 90, 98, 284 N.W.2d 587 (1979).

The appeal tribunal found that the employee's quitting was not based on a conflict between herself and the employer, for whom she worked as office manager, but that she quit because her own entrepreneurial ambitions came into conflict with those of the employer. However, while Unified was the employee's separate business, there was clearly a connection between that business and her work for the employer. The employee established the business at the employer's suggestion and for the employer's benefit. The employer later attempted to take over the employee's business and, when it did not succeed, interfered with one of her contracts. While the employer contended that the employee competed with it and bid on the same jobs, it does not appear that the employee ever deliberately bid on any jobs for which she knew the employer was also bidding and, further, the record indicates that the employee bid exclusively on union-only jobs for which the employer was presumably ineligible. The commission does not believe that the employee acted in a manner that was contrary to the employer's interests, and it does not find that the employer's treatment of the employee was justified by any legitimate conflict of interest concerns. The employer asked the employee to set up a business, attempted to take over the business when it looked like it might be profitable, and, when that failed, undermined one of her major contracts. It is hard to see how the employee could be expected to continue working for the employer under those circumstances, and the commission concludes that the employer's actions provided her with good cause to quit.

The commission therefore finds that in week 17 of 2003, the employee voluntarily terminated her work with the employer, and that her quitting was with good cause attributable to the employer, within the meaning of Wis. Stat. § 108.04(7)(b).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 17 of 2003, provided she is otherwise qualified. She is not required to repay the sum of $1979 to the Unemployment Reserve Fund.

Dated and mailed January 14, 2004
giebire . urr : 164 : 1  VL 1005.01

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

 

NOTE: The commission conferred with the administrative law judge to obtain his impressions of the credibility and demeanor of the witnesses. The administrative law judge indicated that he found both parties to be credible, but that their perceptions of the facts differed greatly. The commission does not disagree with any credibility assessment made by the administrative law judge, and its reversal is not the result of a differing assessment of credibility. 

cc: Attorney Robert W. Burns


Appealed to Circuit Court.  Affirmed June 23, 2004.

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