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

JANITA M REED, Employee

TCF BANK, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 04602799MW


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 over seven years in several capacities, including supervisor and branch manager, for the employer, a banking business. Her last day of work was February 17, 2004 (week 8), when she was discharged.

The issue to be decided is whether the employee's actions, which led to the discharge by the employer, constitute misconduct connected with the employment.

The employer's rules prohibit a worker from performing transactions on his or her own account. Those rules also prohibit a worker from using his or her position for financial gain.

"Closed to post" is a temporary closure of a checking account. It is usually a one-time closure to prevent fraud. For example, if a customer reports stolen checks the customer's account would be closed to post. The customer would be required to complete a hold set-up/maintenance form. The procedure prevents checks from posting to the account. If checks were trying to clear they would be sent back to the payee marked "account closed." The employer does not charge a fee for those returned checks. If the account had insufficient funds, the employer would charge $31 for a returned check.

In December of 2003 a manager heard the employee discussing closed to post. In February of 2004, the employee's mother came through the drive-in window and attempted to withdraw money from her account. The mother's account was closed to post and the mother was not permitted to withdraw money. The employee later called the employer and asked why her mother had not been able to withdraw money. The employer informed the employee that the account was closed to post. The employee stated that her mother had lost her checks, but that she had since found them.

The employer became suspicious and began an investigation into the employee's account. The employer discovered 17 to 18 occasions over a six-month period that closed to post was put on and taken off the employee's account. A record of the transactions indicated a number of different individuals had performed the transaction. In its investigation, the employer found two workers who admitted performing the transaction at the employee's request, as she was their supervisor. However, a number of individuals listed denied performing the transaction and/or did not work at the employee's work location. Further, one individual not only did not work at the employee's location, he had not performed the transaction and did not know how to perform such transaction at the time it took place. There were no hold set-up/maintenance forms documenting any of the closed to post activity. There was no paperwork completed as would be expected in the case of fraud.

On February 17, 2004, the employer met with the employee and showed her the transaction history. The employee first stated that she had lost her checks. The region manager replied that the employee's explanation did not make sense. The employee then stated she later found her checks. The employee then stated, "I suppose you are going to fire me." The region manager again stated that the employer wanted an explanation. The employee replied, "Everybody does it." The region manager asked for names of other workers who did it. The employee refused to provide any names and walked out the door. The employee was discharged for manipulating her own checking account to avoid service charges.

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 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 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' with in the meaning of the statute."

The employee asserted that her account was initially closed because she lost her checkbook. The employee maintained that an Internet company was taking money from her account without her permission. The employee claimed she would direct a representative to open her account to permit automatic withdrawals, such as her mortgage, to clear. The employee maintained that she attempted to provide this explanation to the region manager. The commission does not find the employee's testimony credible. The employee did not inform the employer that she was the victim of fraud. The employee did not complete or have completed any documentation to support her assertion that she was the victim of fraud. The employee did not complete or have completed documentation supporting the closed to post transactions. The employee presented no documentation at the hearing to support her assertions. The employee's statement to the employer that "everybody does it" does not suggest that the employee was acting to prevent unauthorized withdrawals from her account. The more reasonable inference from the record is that the employee directed others, and on occasion acted personally, to open and close her account to avoid service charges. The employee used her position to benefit herself at the expense of the employer. The employee's actions demonstrated an intentional and substantial disregard of the employer's interests and of standards of behavior the employer had a right to expect of the employee.

The commission therefore finds that in week 8 of 2004 the employee 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 employee was paid benefits in the amount of $6,518.00 for weeks 8 through 45 of 2004, of which $697.00 is set forth on other decisions, 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. Wis. Stat. § 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.

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 8 of 2004, and until seven weeks elapse since the end of the week of discharge and the employee 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. The employee is required to repay the sum of $6,518.00 to the Unemployment Reserve Fund. The initial benefit computation (UCB-700) issued on February 17, 2004, 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.

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 employee 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 November 16, 2004
reedjan . urr : 132 : MC 691

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

 

MEMORANDUM OPINION

 

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 did not have a recollection of the employee.

 

cc:
TCF Bank (Milwaukee, Wisconsin)
Attorney Kaye Vance
Attorney Scott P. Phillips


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uploaded 2004/11/22