DONALD C MICHALS, Employee

STANDARD TAR PRODUCTS CO INC, Employer

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 about five years as a plant manager for the employer, a manufacturer. His last day of work was on September 30, 2003 (week 40).

The initial issue to be decided is whether the employee quit or was discharged. If the employee quit, a secondary issue is whether the employee's quitting was for any reason that would permit the immediate payment of unemployment benefits. If the employee was discharged, a secondary issue is whether the employee's discharge was for misconduct connected with that employment.

The employee was a salaried worker, so he had flexible hours and was not paid overtime. The employer allowed him to work from 7:00 a.m. to 3:00 p.m. to avoid commuting traffic. However, he generally worked about 45 hours per week in the spring and summer and 55 hours per week in the fall and winter.

The employee had his own business connecting sidecars to motorcycles. On August 21, 2003, the employee asked the employer's president if he could leave early. He was given permission to do so. On August 22, the employee told the president he was leaving at noon to go to Elkhart to install a sidecar for one of his customers. The employee asked to be off of work from August 25 through August 29. The employer denied that request because the employee did not have any personal time remaining. The employee then asked to take off the afternoon of August 29. The president denied his request because the president was going to be out of the plant and the employee did not have any personal time remaining. On the morning of August 29, the president called the plant and spoke with the employee. The employee informed the president "in no uncertain terms" that he was leaving before 1:00 p.m. to work on his sidecar business.

On September 22, 2003, the president met with the employee. The president reminded the employee that the employer's business was seasonal and that fall was a busy time. The president told the employee that he needed to work from 7:45 a.m. to 5:00 p.m. The employee stated that he would not stay until 5:00 p.m. and would quit before he would work those hours. The employee then expressed dissatisfaction with his responsibilities and the employer's personnel. The employee stated that he wanted to quit to work full time selling and installing sidecars on motorcycles. The president replied that he would immediately find a replacement for the employee and accepted his resignation. The employee indicated that he would stay until a replacement was found.

On September 26, 2003, the employer informed the employee that the company had found a replacement for the employee. The employer and employee agreed that the employee would work through September 30 to complete a project. The employee's replacement started on September 29. The employee commented to his replacement that he was going to work on his sidecar business full time and could make a lot more money in that business than he could make working for the employer. The employee also commented that he had not wanted to leave so quickly.

The employee maintained that he did not quit his employment but was discharged by the employer. The employee asserted that he had been working the hours the employer asked him to work. The employee testified that the employer informed him on September 26 that a replacement had been found for him. However, the employee's version provides no reason for the employer to have replaced the employee. The commission finds the employer's version to be more credible. The employee admitted he did not want to work the hours the employer wanted him to work. The employee had been requesting time off to work on his business. When the employer denied the employee's request for time off, he took it anyway. The employee's comments to his replacement support the conclusion that he quit to concentrate on his sidecar business.

Wisconsin Statute. § 108.04(7)(a) provides that an employee who quits his employment is ineligible for benefits until he requalifies, unless his quitting falls within a statutory exception. The only exception which could arguably apply here is set forth in Wis. Stat. § 108.04(7)(b), which provides for payment of benefits if an employee quits with "good cause attributable to the employing unit." The courts have defined "good cause attributable to an employer" to mean some act or omission that reasonably justifies the employee's decision to become unemployed rather than to continue working. It must involve some fault on the part of the employer and must be "real and substantial." Nottleson v. ILHR Department, 94 Wis. 2d 106, 120 (1980); Stetz v. DILHR, et al., Dane County Circuit Court, Case No. 136-215 (February 13, 1973). The employee quit because he did not want to work the hours imposed by the employer. However, the employee was a salaried worker and the employer had a right to require the employee to work standard hours that it deemed necessary for efficient business operations. There is no exception to the quit disqualification for quitting work to pursue self-employment.

The commission therefore finds that in week 40 of 2003, the employee voluntarily terminated his employment within the meaning of Wis. Stat. § 108.04(7)(a) and not for any reason constituting an exception to that section.

The commission further finds that the employee was paid benefits in the amount of $8,778.00 for weeks 40 through 52 of 2003, and weeks 1 through 14 of 2004, of which $224.00 is set forth on another decision, for which the employee was not eligible and to which the employee was not entitled, within the meaning of Wis. Stat. § 108.03(1).

The final issue to be decided is whether recovery of 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 employee. 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).

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 40 of 2003, and until four weeks elapse since the end of the week of quitting and the employee has earned wages in covered employment equaling at least four times the weekly benefit rate which would have been paid had the quitting not occurred. The employee is required to repay the sum of $8,778.00 to the Unemployment Reserve Fund.

Dated and mailed June 30, 2004
michado . urr : 132 : 1 : VL 1007.01  VL 1039.01

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

The commission did consult with the ALJ who presided at the hearing regarding his impressions of witness credibility and demeanor. The ALJ indicated that he found both parties hard to pin down. The ALJ indicated that he found the employer a little less credible than the employee, but did not impart any demeanor impressions that led to such assessment. For reasons set forth above, the commission has found the employer's version of events more credible than the employee's version.

NOTE: Repayment instructions will be mailed after this decision becomes final. The department will with hold benefits due for future weeks of unemployment in order to off set over payment of U.I. and other special benefit programs that are due to this state, an other 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 over payment.

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uploaded 2004/07/02