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

JOHN W BEHRINGER, Employee

BANK MUTUAL, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 05401256GB


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 four years as an information systems operation specialist for the employer, a bank. He was discharged on March 30, 2005 (week 14) for violation of the employer's confidentiality policy.

Part II of the Code of Conduct section of the employer's personnel manual contains the following:

"You shall not divulge confidential information to anyone except authorized persons who need to know.
 . . .
You shall consider computer information, equipment, and resources to be Bank Mutual's assets, and as such, you shall ensure that they are used exclusively for and in furtherance of Bank Mutual's business.

You shall consider Bank Mutual to be the sole owner of its computer information, equipment and resources, as defined in the broadest sense, whether by purchase, lease, license, or other arrangement.

You shall not use, disclose, alter, destroy or illegally reproduce any of Bank Mutual's computer information, equipment or resources without the express written permission of the Chief Executive Officer CEO."

(Emphasis in the original).

The employer has adopted a policy allowing employees to access its network, but users are not equipped with the hardware and software required to "burn" files to CDs. Only individuals on the Information Technology (IT) staff have the capability to "burn" CDs. There is no dispute that CDs are burned for staff and vendors for a variety of purposes.

While the employer has no specific IT policy in place limiting the access of otherwise authorized employees or managers to CD versions of any type of office file, section 9.01 of the Employer's Personnel Manual, titled "Information Systems Policy/Confidentiality," explains:

"All software and data files, whether purchased or developed internally, are the property of Bank Mutual and are not to be used for any purpose other than Bank Mutual's proprietary business operations. Unauthorized copies of any software and/or data files are prohibited.

Likewise, confidential business information which you may receive, use or participate in the creation of in the course of your employment with Bank Mutual may not be disclosed, misused or copied for unauthorized purposes during or following your employment with Bank Mutual."

Later in the same policy section, workers are directed that:

"As an employee of Bank Mutual Corporation, I acknowledge that in the course of employment I may receive, use or participate in the creation of confidential business information belonging to the Bank. Such confidential business information may include details regarding the Bank's operations and finances, customer identity and account numbers, computer programs and systems, employees, policy and procedure manuals, and other valuable proprietary information. I agree that I shall not disclose, either directly or indirectly, any confidential business information belonging to Bank Mutual Corporation to any unauthorized entity or person, and further agree that I shall not use such confidential business information for my own purposes or for my own personal gain. 
 . . .
To protect Bank Mutual Corporation, its subsidiaries and its employees, any Bank Mutual Corporation employee learning of any intended or unintended misuse of the Bank's confidential business information shall immediately notify his/her department manager or a senior officer of the Bank.

All confidential business information of Bank Mutual Corporation is considered property of the Bank. Any unauthorized disclosure, misuse, unauthorized copying or use for personal gain of confidential business information will result in disciplinary action up to and including discharge, civil damages and criminal penalties."

The employee is on the IT staff at the employer's regional hub in Green Bay. On Friday, March 18, the branch office manager of the bank's New Holstein branch, Samantha Ploor, contacted the employee by e-mail and asked him to "burn" a copy of a variety of files she maintained on her bank computer locally. The employee asked Ploor if any file she was requesting contained proprietary bank information. He reminded her that his department was extremely shorthanded, and told her, "I don't have time to look at everything you're sending me." Ploor responded that there was no confidential information involved. Later that same day, the employee informed Ploor that he would not have time to "burn" a CD that day, but that he would try to complete the task on Monday morning. Ploor asked him to forward the CD to her in care of Joanne Zimmerman, a personal banker at the bank's Kiel branch. The Kiel branch is located two to five miles from Ploor's branch in New Holstein. Kiel is Ploor's hometown.

On Monday morning, March 21, the employee reviewed the files Ploor had earmarked to be "burned." The first folder to be requested, the TBC folder, contained three sub-folders ("Chamber," "Pics" and "Reviews") and approximately 40 other files. The employee did a cursory scan of ten files in the TBC folder, and saw no information that he considered proprietary. The employee then reviewed five other files that Ploor had requested. These files included documents with the bank's logo, and the employee concluded that these were "borderline company related information." He ignored these five files, and "burned" only the contents of the TBC folder. Some of the names of the files that he copied from the TBC folder were: "05LoansIns.xls," "05SalesGoals.xls," "2004LoansIns.xls," "BM PROFIT CD Renewals.doc.," "BM Profit Credit Insurance. doc.," "BM PROFIT Insurance Calc.doc.," "BM PROFIT stock price.doc.," "BM PROFIT YearEnd Stmts.doc.," and "Life_DisabilityCalc.xls." The employee then placed the CD into a "bubble-pack," on which he wrote: "For Sam" [a shortened version of Ploor's first name]. At 2:49 p.m. that afternoon, March 21, Ploor sent a group e-mail to all employees in the region. In that e-mail, she announced:

"I gave my notice today!!! My last day will be Friday, April 8th (or sooner if they decide to escort me out).

It's been a blast! But I couldn't pass up the incredible opportunity sitting in front of me. I'm very excited about it, as I believe this bank will be an even more positive environment than First Northern was! I'm excited, but also sad to be leaving friends behind. I will miss many of you. Thank you so much for the fun and laughter we had. I've got many good memories to take with me.

I just wanted to take a moment to say "Thanks for everything!" before I ride off into the sunset. (lol . . . You should be picturing a Harley, not a horse.)"

The employee read this e-mail approximately ten minutes after Ploor circulated it on Monday, March 21.

On Tuesday, March 22, the employee placed the "bubble-pack" containing the CD for Ploor in an interoffice envelope. He addressed the envelope to Joanne Zimmerman at the Kiel office. He identified himself as the sender. The employee placed the envelope in the appropriate mailroom slot. He knew this mail would be picked up by a courier between 2:30 p.m. and 3:00 p.m., and delivered to the Kiel branch on the following morning. Sometime that afternoon, the employee began to have "second thoughts" about providing this CD to Ploor, who he now knew was leaving the bank. He went to the mailroom to try to retrieve it, but the envelope was no longer there. He did not contact Zimmerman or his supervisor to share any concerns about whether Ploor should be given the CD.

At noon on Tuesday, March 22, two managers arrived at the New Holstein branch, and relieved Ploor of her duties. The managers then went to the Kiel branch, to inform that manager that Ploor was no longer an employee, and to request the assistance of that branch's personnel in keeping the New Holstein branch running. Due to this communication, Zimmerman learned that Ploor was no longer a Bank Mutual employee. There is no evidence that this management decision was shared with the employee's IT department in Green Bay.

Zimmerman was scheduled to work on Wednesday, March 23 at 8:30 a.m. While she was still at home (at approximately 7:00 a.m.) Ploor called her. Ploor told Zimmerman: "An inter-office envelope addressed to you will be arriving in the next day or two. I'll be in to pick it up." Ploor indicated that the envelope would contain a computer disk. Zimmerman responded, "OK." Later, on the 30-mile drive to work, Zimmerman reconsidered Ploor's request. She concluded, "If she no longer works for Mutual, why is she sending me a disk? I don't want anything to do with this disk." When Zimmerman reached her desk that morning, the interoffice envelope was there. She felt the contents, and knew it was "bubble-packed." She immediately alerted the Kiel branch manager.

Later that same day, the Kiel branch manager instructed Zimmerman to deliver the disk to Fond du Lac, into the custody of the bank's vice-president and director of information technology. When the IT director received the disk, he immediately delivered it to his manager, the senior vice-president of retail banking. The IT director acknowledged at the hearing that the senior vice-president contributed important customer knowledge, which led management to conclude the disk contained proprietary information. In fact, one of the files on the disk contained customer name and account information.

The employee was interviewed on Thursday, March 24 about his participation in "burning" the disk. The employee was placed on suspension, and ultimately discharged on March 30. The employee never again performed work for this employer.

The employee initiated a claim for unemployment insurance benefits and, following an appeal tribunal hearing, a decision was issued allowing unemployment insurance benefits to him. The employee filed for and received unemployment insurance benefits totaling $6,541.00 for the calendar weeks ending April 2, 2005 (week 14) through September 10, 2005 (week 37). The employer petitioned the appeal tribunal decision seeking review by the Labor and Industry Review Commission (commission).

Wis. Stat. § 108.04(5) provides that a worker who is discharged for misconduct connected with his or her employment is ineligible for unemployment insurance benefits. Thus, the issue before the commission is whether the employee's discharge was for misconduct connected with his employment.

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."

While the commission agrees with the appeal tribunal that the employee did not intentionally violate the employer's confidentiality policy, the commission finds that the employee's behavior in copying the files onto the CD, without a thorough review, and mailing it to Ploor, in light of the personnel manual language and the employee's knowledge that Ploor was terminating her employment was so grossly negligent as to manifest equal culpability. In particular, the employee knew that he was under an obligation to check the files and should have notified his supervisor of the request given his workload, instead of attempting a cursory and, ultimately, ineffective review. In fact, his carelessness of the review is exhibited by the titles of many of the files copied; specifically, a number of files indicated the bank's initials and bank subject matter, such as "CD renewals," "credit insurance," "stock price," "year end statement," "loans, " and "insurance" and "disability" calculations. Additionally, while the employee may not have known of Ploor's termination on March 22, as of the 21st he knew that she would be leaving the business to work for another bank. By copying the requested files onto the CD for Ploor, she now had "portability" of the employer's information. As an information technology worker for the bank, the employee should have understood the consequences of such a release to both the bank's business and its clients. But for the other branch worker, the employee's grossly negligent behavior would have resulted in the release of the employer's proprietary information. For these reasons, the commission finds that the employee's discharge was for misconduct connected with the employment.

Given the misconduct finding, the employee is ineligible for the $6,541.00 in unemployment insurance benefits that he received and the next issue is whether he must repay the overpaid benefits.

As there is no evidence of employer error as a basis for the erroneously paid benefits, pursuant to Wis. Stat. § 108.22(8)(c), the requirement that the employee repay the overpaid benefits will only be waived if the overpayment (1) was due to department error and (2) was without fault, false statement, or misrepresentation on behalf of the employee.

In this case, the overpayment was created by the commission's reversal of the appeal tribunal decision. The commission's reversal is due to reaching a different legal conclusion, namely that the employee's conduct constituted gross negligence equivalent to misconduct. There is no departmental error and, the employee is required to repay the overpaid benefits.

The commission therefore finds that the employee was discharged in week 14 of 2005 and his discharge was for misconduct connected with the employment within the meaning of Wis. Stat. § 108.04(5). The commission further finds that waiver of the 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 appeal tribunal decision is reversed. Accordingly, the employee is ineligible for unemployment insurance benefits beginning in week 14 of 2005 and until seven weeks have elapsed from the week of the discharge and the employee's learned wages in covered employment performed after the week of the quitting equaling at least 14 times his weekly benefit rate. The employee is required to repay $6,541.00 to the Unemployment Insurance Reserve Fund. The department's monetary computation (Form UCB-700), issued on March 31, 2005, is set aside.

Dated and mailed September 30, 2005
behrijo . urr : 150 : 8   MC 690

/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 prior to reversing her decision. The reversal is based on essentially the same facts as found by the ALJ and the personnel manual that was received into evidence; it is not due to differing credibility assessment but due to a different legal conclusion.

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.


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


uploaded 2005/10/10