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

MARY R SCHAEPE, Employee

ECERT KOST VOCKE
ATTORNEYS AT LAW, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 04200061RH


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 as a legal secretary for the employer, a small law firm. The employee originally worked part-time from 1985 to approximately 1991. The employee returned to work for the employer as a full-time legal secretary in July of 1997. The employee's last day of work was December 4, 2003 (week 49). The employee was discharged by the employer on December 5, 2003 (week 49) for obtaining confidential payroll information and divulging it to a co-worker.

Although the employer does not have any written policies prohibiting the divulging of confidential personnel information, it was undisputed that employees are told during their annual reviews that payroll information is confidential and are instructed not to discuss or divulge salary information to their co-workers.

The employee was a friend of the office manager whose husband was also a partner in the firm. Another partner, however, supervised the employee. The employee often complained to the office manager about favoritism she perceived her supervising attorney exhibited toward another co-worker. The office manager remarked to the employee that the employee would be sick if she knew what that co-worker was paid. The employee also complained about this favoritism to the office manager's husband. This partner encouraged the employee to speak to her supervising attorney regarding these concerns.

Sometime in October 2003 the employee was looking for a letter regarding a work matter at this co-worker's desk. The employee opened the co-worker's desk drawer to obtain something to write with and saw the co-worker's pay stub. The employee not only looked at the pay stub but also made a photocopy of it. The employee then showed another co-worker the photocopied pay stub.

Sometime in late October or early November the employee spoke to her supervising attorney about what she considered was his favoritism. The employee mentioned that she had seen the another worker's pay stub and stated that this other worker was making more money than she was although this person worked less hours and had much less experience. The employee's supervising attorney presented his justification for the difference which included the fact that the employee was participating in a 401K and this other employee was not.

On December 3 the employee's supervising attorney became aware that the employee had photocopied the pay stub and had shown it to another worker. The supervising attorney spoke to the employee the following day about the matter as well as about the employee applying for another job outside the firm. The employee explained that she was not happy with her job with the employer and the following day the employee was discharged.

The issue is whether the employee's actions constitute misconduct within the meaning of the law. 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 ALJ concluded that while the employee exhibited poor judgment, her actions did not evince a substantial and intentional disregard of the employer's interests necessary for a finding of misconduct. The commission respectfully disagrees and reverses the appeal tribunal decision.

Throughout the years, the commission has addressed similar situations involving employees who have obtained confidential payroll information and divulged such information in violation of either written or verbal employer prohibitions. In Patricia Cavey v. LIRC, Legal Aid Society Inc. and Gibbons Company, (Wis. Cir. Ct. Milwaukee County August 28, 1998), the court affirmed the commission's decision finding that the employee's disclosure of confidential payroll information amounted to an intentional disregard of the employer's interests. In Melissa A. Vogler v. Medical Billing Specialists, UI Hearing No. 00200563EC (LIRC August 4, 2000), the employee became aware of the owner's son's rate of pay through her job duties. The employee told another worker about the owner's son's rate of pay and the information spread throughout the employer's place of business. Citing Carol M.Culhane v. MLG Commercial Inc., UI Hearing No. 99604782 (LIRC January 21, 2000), the commission noted in Melissa Vogler that it has held that an employee should know without express policies that gossiping about other workers' salaries is detrimental to the employer. Additionally, in Chapin v. Marathon Implement Co., and LIRC, 98-CV-47 (Wis. Cir. Ct. Langlade County March 16, 2000), the court agreed that there was a breach of salary confidentiality even though the information was only disclosed to the employee's husband and the involved worker. The court held that even without an express policy, the employee knew that confidentiality was important to the employer and that a breach of confidentiality could destroy the office trust.

In this case, the commission is most troubled by the employee's action of photocopying the worker's pay stub and then divulging this confidential information to another co-worker. The employee knew that salary information was not to be discussed with other co-workers and yet she intentionally photocopied this confidential information and then proceeded to divulge the information to another co-worker. Given these facts, the employee's actions are substantial and credible evidence of an intentional disregard of the employer's interests and of the standards of conduct the employer had a right to expect of the employee.

The commission therefore finds that in week 49 of 2003 the employee was discharged for misconduct connected with her employment within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits for week 50 of 2003, week 52 of 2003 and weeks 1 through 3 of 2004 amounting to a total of $1,400.00 for which she is not eligible and to which she is not entitled, within the meaning of Wis. Stat. § 108.03(1). Pursuant to Wis. Stat. § 108.22(8)(a), the employee is required to repay such sum to the Unemployment Reserve Fund.

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) 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). Rather, the commission has reached a different legal conclusion when applying the law to the facts found by the ALJ.

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 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 49 of 2003, and until seven weeks have elapsed 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 $1,400.00 to the Unemployment Reserve Fund. The initial benefit computation (Form UCB-700), issued on December 7, 2003 is set aside. If benefit payments 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 or 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.

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.C. 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.

Dated and mailed November 30, 2004
schaema . urr : 135 : 1   MC 666.01  MC 687

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner


MEMORANDUM OPINION

Because the commission's reversal is not based upon a differing credibility assessment from that made by the ALJ, the commission did not confer with the ALJ before determining to reverse the appeal tribunal decision in this case. Rather, the commission reaches a different legal conclusion based on essentially the same set of facts found by the ALJ.

The employee argues that her actions were intended to "clear the air" of this favoritism and that at best her actions were an exercise in poor judgment but not intentional conduct. However, the commission is satisfied that the employee's decision to photocopy another a worker's pay stub and then divulge that information to another co-worker was an intentional disregard of the employer's prohibition regarding discussing confidential salary information. In addition, the employee's conduct was clearly detrimental to the employer's interest in maintaining office morale.

cc: Attorney John Schiek


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