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

KAREN R BERGEMAN, Employee

HORIZON MANAGEMENT GROUP INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 04201849EC


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

On July 15, 2003, the employee signed an employment agreement with the employer, a property management business. She was to work as a full-time property manager for the employer's Otter Creek apartment complex. The agreement that she signed indicated that she would be paid $10.00 an hour and was to live on site.

While the employment began on July 15, 2003, the employee did not sign a rental lease with the employer until September 10, 2003. The lease term was from September 15, 2003 to August 31, 2004 and was subject to the employee's employment with the employer. The employee also received an $80.00 concession against her $545.00 a month rent. The lease did not specifically set forth a deadline for renewal.

After 90 days, the employee's rate of pay was increased to $11.00 per hour. There were no apparent concerns with the employee's work performance until a new individual became the employee's immediate supervisor in May 2004. The new supervisor was dissatisfied when she made a surprise visit to the apartment complex on May 6, 2004 and the employee was absent during her normal office hours. The supervisor was also dissatisfied with the employee's maintenance of the physical property and her administrative responsibilities.

On May 28, 2004, the supervisor returned to the apartment complex to present the employee with a 90-day performance improvement plan (PIP). The terms of the plan were to be stayed during the employee's anticipated unpaid maternity leave; the employee was pregnant with a June 1, 2004 due date. During the term of the PIP, the employee was to receive bi-weekly feedback. In response to the supervisor's criticism of the employee's laundry room maintenance, the employee explained that she was unable to move the washers and dryers or work with the chemical cleaners because of her pregnancy. Based upon the employee's limitations, the employer decided to hire someone else to temporarily perform the maintenance duties and the employee was only paid for the administrative work she performed. The employer directed the employee not to work in excess of 30 hours per week.

Also, on May 28, 2004, the supervisor presented a new one-year lease to the employee. The term was to begin on September 1, 2004 and, like the prior lease, it was contingent upon the employee's employment. However, the new lease took away the $80.00 rent concession, effectively reducing the employee's income as a property manager. The employer gave the employee the opportunity to review the lease requiring her signature.

On June 6 or 7, 2004, the employee gave birth to her daughter and started her six-week unpaid maternity leave. On June 10, 2004, the supervisor sent the employee a letter requiring signature on the lease by June 30, 2004. Additionally, the supervisor stated that she was:

discouraged with the lack of attention to important work in the past two weeks. This type of performance is unacceptable and will not be allowed to continue upon your return from maternity leave.

On June 29, 2004, the supervisor's assistant knocked at the employee's residence twice to speak with her but the employee did not answer the door as she was busy with her baby. That day, the employee mailed her supervisor a letter indicating that she would like to move off site at the end of her lease but wanted continue to work as the employer's property manager. The employee had spoken with her prior supervisor about this as a possibility but it was not guaranteed.

On July 7, 2004, the supervisor responded to the employee's letter by mail. The supervisor accused the employee's letter of containing inaccuracies. The supervisor claimed that except for the rental rate, the employee's terms of employment had not changed. She informed the employee that the employee would be required to live on site to continue her work for the employer. The letter then stated:

Given your refusal to sign a timely lease renewal and your stated intention of moving off site, I must interpret your response to be a voluntarily resignation of your position effective July 13, 2004. If I've misunderstood any aspect of your communication to me, then I would ask that you contact me within three (3) business days of the date of this letter. If I do not hear from you by close of business on Monday, July 12, 2004, then your formal voluntary resignation will be processed accordingly.

In a letter dated July 11, 2004, the employee informed her supervisor that she was still on maternity leave and that she considered the employer's treatment of her regarding the lease to be harassing. She also mentioned that she previously had conversations with the prior manager about residing off site and was concerned about the recent decrease in her rate of pay. Specifically, the employee's final pay check before her leave was paid at a rate of $10.00 per hour, not her $11.00 rate of pay. The employee also that complained her prior supervisor told her that it would be acceptable for the employee to bring her infant child into the office during her office hours but the new supervisor would not allow her to do so. The employee expressed concern that the situation created additional stress for which she would need to take additional family medical leave time off.

In a July 12, 2004 telephone conversation between the employee and the supervisor, the employee reiterated her desire to continue her employment but failed to signify her intent to sign the lease.

As of July 13, 2004 (week 29), the new supervisor received the employee's July 11 letter. On the 13th, the supervisor sent a letter to the employee indicating that the employee's stated intention of not signing the lease was a voluntary termination and that the employer was accepting her quitting. Pursuant to the employer's treatment of the employee's lease as conditional upon employment, the supervisor also directed the employee to vacate the premises by July 31, 2004.

On July 14, 2004, the employee, by letter, informed her supervisor that she understood the employer's actions to be a termination. She argued that she did not patently refuse to sign the lease but wanted to discuss aspects of the lease. She also requested an extension for vacating the premises. An extension was granted but the employment relationship was never reestablished. The employee filed for and began receiving unemployment insurance benefits.

The issue to be decided is whether the employee quit or was discharged and, ultimately, whether she is eligible for unemployment insurance benefits.

The employer contended that the employee voluntarily terminated her employment by refusing to sign the new lease agreement, while the employee contended that she was discharged.

Where there is ambiguity regarding a separation from employment, when determining whether the separation was a quit or a discharge one looks for the party which initiated the ultimate separation. Kline v. Laub & Horton, Inc., UI Dec. Hearing No. 00601736MW (LIRC May 16, 2000).

While it is true that the employee did not sign the lease by the deadline set by the supervisor, the employee was attempting negotiate the terms of the new lease, which was an integral part of her employment. The "take away" of the $80.00 rent concession, when combined with the PIP, the reduced hourly rate paid to her on her final paycheck, and the change in policy towards bringing her baby to the office, resulted in lower job and housing security as well as a drop in her anticipated earnings. Her concerns were reasonable and her attempts to discuss this situation before "locking" herself into an unstable higher rent lease were not so inconsistent as to constitute a quitting. Instead, the supervisor initiated the ultimate separation by refusing to negotiate with the employee and by notifying her that the employment relationship was over. Additionally, by initially tying the employment and lease together, the employer set her employment at a fixed term which could only be continued/renewed by mutual agreement. Clearly, there was no such agreement. Under these circumstances, the commission finds that the employee did not quit but was discharged.

Wisconsin Stat. § 108.04(5) provides that a worker who is discharged for misconduct connected with the employment is ineligible for unemployment insurance benefits. Misconduct connected with employment means conduct showing an intentional and substantial disregard of the employer's interests or of the employee's job duties and obligations. Boynton Cab Co. v. Neubeck & Ind. Comm., 237 Wis. 249 (1941).

The employer failed to establish misconduct. While the supervisor may have had some concerns with the employee's work performance, those concerns were not the basis of the discharge. The "final straw" was the employee's attempt to negotiate the lease and, for the same reasons mentioned above, the commission finds that the employee's behavior in this regard did not evince any willful or intentional disregard of the employer's interests.

The commission therefore finds that the employee did not voluntarily terminate her employment within the meaning of Wis. Stat. § 108.04(7) but was discharged and not for misconduct within the meaning of Wis. Stat. § 108.04(5).

DECISION

The appeal tribunal decision is reversed. Accordingly, the employee is eligible for unemployment insurance benefits, if otherwise qualified. There is no overpayment as a result of this decision.

Dated and mailed March 17, 2005
bergeka . urr : 150 : 1  MC 626

/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 the reversal was not based on a differing view as to the credibility of the witness, but instead upon a differing legal conclusion.

 

cc:
Attorney Dawn Marie Harris
Attorney Janet M. McDonough


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uploaded 2005/03/25