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

MICHAEL C BARROWS, Employee

DIAMOND TRANSPORTATION SYSTEM INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 05603288RC


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 agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own, except that it makes the following modifications:

1. Delete the third paragraph after the FINDINGS OF FACT and CONCLUSIONS OF LAW, and substitute therefor:

"On March 9, 2005, (week 11) the employer learned that the employee intended to open a freight transportation business and that he had been soliciting his co-workers to work for him. Since the employer's business was also freight transportation, the employer discharged the employee that same day for engaging in competition with the employer and for soliciting his co-workers and customers for that business."

2. After the final sentence of the sixth paragraph after the FINDINGS OF FACT and CONCLUSIONS OF LAW, add the following:

"Further, soliciting business away from the employer and attempting to lure the employer's workers from their employment with the employer was so harmful to the employer's interests as to constitute misconduct connected with his employment."

DECISION

The decision of the administrative law judge, as modified, is affirmed. Accordingly, the employee is ineligible for benefits beginning in week 11 of 2005 and until seven weeks have elapsed since the end of the week of discharge and the employee has earned wages in covered employment performed after the week of discharge equaling at least 14 times the employee's weekly benefit rate which would have been paid had the discharge not occurred. The employee is required to repay the sum of $1,974.00 to the Unemployment Reserve Fund. The initial Benefit Computation (Form UCB-700), issued on April 4, 2005, is set aside. If benefit payments become payable based on other employment, a new computation will be issued as to those benefit rights.

Dated and mailed August 26, 2005
barromi . usd : 145 : 1  MC 610.04

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

MEMORANDUM OPINION

In his petition for commission review the employee asserts that he called the employer and was told that he was discharged for soliciting workers to work for him, and that this was merely office talk. However, the employee agreed that he talked to people about his business. The employer's controller testified that the employee told him that the employee was going to start a transportation business and he had a few people lined up from the employer's company to work for him, as well as an outside contact. The commission concludes that the evidence in the record supports a conclusion that the employee was attempting to solicit workers from the employer. While the employer may not have had a rule against this, loss of its workforce is clearly detrimental to the employer's interests.

The employee further asserts that it was his mother who was starting a competitive business and that even assuming that he has some involvement in the business, the business is not yet an ongoing concern. The commission has held that preparing to start a competing business is not misconduct, or even good cause for a suspension. See Kal A. Kerlin v. Executive Mortgage LLC (LIRC March 6, 2002). However, the ALJ concluded that the employee was beyond the preparation stage with his business. Further, the employee was attempting to solicit workers from the employer and his actions in this regard demonstrated such a willful and substantial disregard of the employer's interests as to constitute misconduct connected with his work.


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