DOUGLAS J WERGINZ, Employee

KRENN'S MACHINE 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 less than four months as a sales representative for the employer, a machine shop. His last day of work was September 6, 2004 (week 37).

The issue is whether the separation was a quit or a discharge, and whether it occurred under circumstances which would permit the payment of benefits.

When the employee was hired in April of 2004, it was agreed that he could use his home as his base of operations from which he would make sales phone calls and would travel to sales calls. The employer provided the employee a credit card for gas and entertainment expenses.

In order to monitor his work, the employer required that the employee complete logs identifying the sales contact, the date and time of the contact, and the contact's response to the sales call. The employee did not consistently submit these logs promptly to the employer, and did not consistently provide all of the required information. On many of these logs, the time for which the employee accounted would not consume a full work day or, in the aggregate, a full work week.

Prior to September 1, 2004, the employer became concerned about the employee's lack of sales results, inadequate and incomplete time accounting, and apparent lack of diligence. As a result, on September 1, 2004, the employer advised the employee that he would be required to work out of the employer's headquarters in Germantown rather than his home in Big Bend, a distance of 37 miles. The employee refused to do so. The employer then offered the employee the opportunity to continue to work at home, but to be compensated on a commission basis. The employee agreed but did not perform work for the employer thereafter.

The first issue is whether the separation was a quit or a discharge. The key element to determining whether a separation is a quit or a discharge is whether the employee shows that he intends to leave his employment, and indicates such intention by word or manner of action, or by conduct inconsistent with the continuation of the employment relationship. Nottelson v. DILHR Department, 94 Wis.2d 106, 287 N.W.2d 763 (1980); Holy Name School v. DILHR, 109 Wis.2d 381, 326 N.W.2d 121 (Ct. App. 1982); Janzen v. Roehl Transport, Inc., UI Hearing No. 02000217MD (LIRC Jan. 31, 2003); Cotton v. Crown Services, UI Hearing No. 03607152MW (LIRC April 15, 2004).

The employee had an opportunity to maintain the employment relationship by transferring his base of operations to the employer's headquarters, and the separation which resulted from his refusal to do so is more accurately characterized as a quit than a discharge. See, McCormick v. Beck's Service LLC, UI Hearing No. 03002625WK (LIRC Nov. 25, 2003)(employee had opportunity to maintain employment relationship and failure to do so is a quit); Bressette v. St. Croix Casino, UI Hearing No. 04200320EC (LIRC Aug. 5, 2004)(separation a quit when employee knew that her refusal to accept the subject change in the conditions of her employment would end her employment).

The only exception to the quit disqualification 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 administrative law judge concluded that the $6,000 in increased annual commuting costs for the employee, precipitated by the employer's requirement that the employee begin working from its Germantown headquarters, represented a significant decrease in wages [17%] which provided good cause attributable to the employer for the employee's quitting.

However, the record does not support a conclusion that the employee would bear increased commuting costs, i.e., the testimony of Rae Ann Krenn, the employer's vice president, that the employer would have continued to pay the employee's gas costs, is unrebutted.

Moreover, even if a decrease in wages is substantial, good cause attributable to the employer will generally not be found unless the decrease was arbitrary or unreasonable. See, Schensky d/b/a Schensky Builders v. DILHR, No. 145-357 (Wis. Cir. Ct. Dane County May 16, 1975); Bressette, supra. Here, the record supports a conclusion that the employer was reasonably concerned about the employee's lack of sales results, inadequate and incomplete time accounting, and apparent lack of diligence; reasonably concluded that it was advisable for the employee to be more closely supervised; and relocated the employee's base of operations to the employer's headquarters as a result. The record does not support a conclusion that, even if there had been a decrease in the employee's wages due to increased commuting costs, this decrease was arbitrary or unreasonable.

Under certain circumstances, an employer's modification of a term of employment to which it agreed when it hired the employee could constitute good cause attributable to the employer for the employee's quitting. See, Christensen v. Chas. Levy Co. LLC, UI Hearing No. 01606651RC (LIRC Dec. 5, 2001). However, good cause would not be established if the employer was justified in imposing such modifications due to an employee's work deficiencies, as established here.

Finally, under certain circumstances, the commission has found good cause attributable to the employer when an employee quits due to a significant increase in commuting distance. See, Wimes v. Cornwell Personnel Associates Ltd., UI Hearing No. 04603649MW (LIRC Aug. 17, 2004). Here, however, the employee does not attribute his quitting to the increase in commuting distance per se, but instead to the fact that, in his opinion, spending additional hours in his car was an inefficient use of his work time. However, given that it was the employer's prerogative to decide how the employee's work time was to be used; the employer had a legitimate business reason, attributable to deficiencies in the employee's work performance, for relocating the employee's base of operations; the employee admits (exhibit #9) that he was frequently at the employer's headquarters before the relocation of his base of operations was ordered; and frequent travel, the cost of which was paid by the employer, was part of the employee's basic job responsibilities, good cause has not been demonstrated in this regard.

The commission therefore concludes that, in week 37 of 2004, the employee quit his employment with the employer, but not with good cause attributable thereto or for any other reason constituting an exception to the quit disqualification of Wis. Stat. § 108.04(7)(a).

The commission further finds that the employee was paid benefits in the amount of $4,361.00 for which he was not eligible and to which he was not entitled, within the meaning of Wis. Stat. § 108.03(1); and that waiver of this overpayment is not required under Wis. Stat. § 108.22(8)(c ), because, although the overpayment did not result from the fault of the employee, within the meaning of Wis. Stat. § 108.04(13)(f), the overpayment was not the result of department error. See Wis. Stat. § 108.22(8)(c).

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 37 of 2004 and until four weeks have elapsed since the end of the week of quitting and he has earned wages in covered employment performed after the week of quitting 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 $4,361 to the Unemployment Reserve Fund.

Dated and mailed February 15, 2005
wergido . urr : 115 : 4  VL 1007.01  VL 1080.266

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

NOTE: The commission did not confer with the administrative law judge before reversing his decision, because its reversal was not based upon a differing view as to the credibility of witnesses, but instead upon a differing conclusion as to what the hearing record in fact established and upon a differing interpretation of the relevant law. The only finding which the commission is overturning, i.e., that the employee's unreimbursed commuting expenses would increase by $6,000 per year, was not reached by the administrative law judge through an assessment of witness demeanor.

 

Appealed to Circuit Court.  Appeal dismissed, July 11, 2005.

[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]

uploaded 2005/02/22