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

GAIL L WOODRUFF, Employee

CHEX  I, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 05201385EC


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 over two years, most recently as a manager for the employer, a financial services booth located at a casino. Her last day of work was June 16, 2005 (week 25), when she was discharged.

On June 9, 2005 (week 24), one of the employee's subordinates cashed a federal tax refund check for over $4,000.00 at the casino. This was a fraudulent transaction and the employer will not be reimbursed for those funds. The employee was not contacted by the subordinate for approval on that check, because refund checks had not required such approval, nor were they subject to ordinary cash limits, prior to the incident taking place.

On June 13, 2005 (week 25), the employer conducted a financial audit of the booth at the casino. At that time it was discovered that approximately $44,000.00 was missing. The employer questioned the employee about the matter. The employee explained that in May she was unable to reconcile the numbers. The employer was short $44,000 so she plugged in an additional $44,000 in the amount delivered by the bank.

The employee was discharged for improperly approving checks and falsifying documentation.

The issue to be decided is whether the employee's discharge was for misconduct connected with her work for the employer. 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 employer did not establish that the employee acted improperly with respect to approving checks. However, the employer did establish that the employee knowingly and intentionally falsified documentation to cover a $44,000 shortfall. The employee was a manager and should have immediately notified the employer of the discrepancy. The fact that others should have discovered that money was missing does not excuse the employee's conduct. The employer had a right to know immediately that its money was missing which would have allowed the employer to conduct a more timely investigation. The employee's actions clearly demonstrated an intentional and substantial disregard of standards of behavior the employer had a right to expect of the employee.

The commission therefore finds that in week 25 of 2005 the employee was discharged from her employment and for misconduct connected with her work within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits in the amount of $5,264.00 for weeks 26 through 41 of 2005, for which the employee was not eligible and to which the employee was not entitled, within the meaning of Wis. Stat. § 108.03(1).

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)(a) and (b), departmental 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, by commission or omission, 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 departmental error as defined in Wis. Stat. § 108.02(10e)(a) and (b).

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 a departmental 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 25 of 2005, and until seven weeks elapse 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 the sum of $5,264.00.00 to the Unemployment Reserve Fund. The initial benefit computation (UCB-700) issued on June 20, 2005, is set aside. If benefits become payable based on work performed in other covered 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 of 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.

Dated and mailed October 20, 2005
woodrga . urr : 132 : 1 : MC 630.09

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner


MEMORANDUM OPINION

The commission did consult with the ALJ who presided at the hearing regarding his impressions of witness credibility. The ALJ indicated that the employee gave her testimony in a determined manner. The ALJ conducted a telephone hearing and did not indicate any other impressions that were gleaned from hearing the parties testify that led him to credit the employee's testimony. The commission does not credit the employee's claim that she simply committed a transcription error. The commission finds it too coincidental that the employee's error was in the same amount as turned up missing.

 

NOTE: 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.I. 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.

cc: Attorney Andrew E. Tanick


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