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

BRAD R HOTTMAN, Employee

BARABOO-DELLS FLIGHT CENTER INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 05004098BO


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.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, the employee is ineligible for benefits beginning in week 33 of 2005 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 his weekly benefit rate which would have been paid had the quitting not occurred.

Dated and mailed February 21, 2006
hottmbr . usd : 115 : 4   VL 1059.206

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner


MEMORANDUM OPINION
 
The employee had worked for the employer as an hourly employee beginning in October of 1995. He resigned and worked for other businesses until he was hired by the employer as a salaried employee in August of 1998. He received at least one salary increase after that date and, at the time of the separation, his salary was $600 per week.

Prior to April 1, 2005, the owner, Michael Olah, offered to sell the business to the employee, but he declined. Olah then sold the business to Bill Murphy, who became its owner/president on April 1, 2005.

Murphy's staff consisted of the employee and two hourly workers. The hours the employee worked and the salary he earned did not change after Murphy purchased the business.

Although the employee testified that he routinely worked around 60 hours each week, the administrative law judge did not credit this testimony, and adopted instead the employer's testimony that the employee was scheduled to work, and did work, around 40 hours per week. The commission found no persuasive reason in the record to overturn this credibility determination.

On June 30, 2005, Murphy fell off a roof at work and was seriously injured. Murphy was unable to work the first three weeks of July, worked a few hours the last week of July and the first week of August, and resumed performing many of his duties the second week of August.

According to the employee, after Murphy was injured, Murphy told the employee to cover the schedule the best he could during his absence and to have the hourly workers help fill in, and Murphy's wife told the employee to "take care of the business" which he understood to be a directive from Murphy.

It is undisputed that the employee worked many more hours than usual in July and the first week of August in order to fill in for Murphy during his absence, and that, despite Murphy's suggestion that the employee use the hourly workers to help fill in as well, did so sparingly.

The employee and Murphy had a conversation the last week of July. According to Murphy, the employee stated that he was going to fill out a time card, which he had not done before as a salaried employee, and Murphy told him to go ahead. Murphy testified that neither of them discussed why the employee was doing this, the employee did not state that he wanted to be paid on an hourly basis, and Murphy did not agree to pay the employee on an hourly basis. The employee testified that, during this conversation, the employee stated that he would work all the hours that Murphy needed him to work, but he wanted to be paid hourly for it and Murphy said, "OK."

The administrative law judge credited the employer's testimony as to this conversation. Again, the commission found no persuasive reason to overturn this credibility determination. Murphy, who did not even pay Olah for coming in each week during his absence to do the books, did not come across in the record as an employer who would readily agree to begin paying a salaried worker on an hourly basis during a period of temporarily increased hours.

Paychecks were to be distributed on August 12 for the pay period consisting of the last week of July and the first week of August. Prior to August 12, the employee had apparently submitted his time cards for this two-week pay period to Murphy. On August 12, Murphy called the employee into his office. Murphy stated to the employee that he was not going to pay the employee on an hourly basis for this July/August pay period because he was a salaried employee. Murphy did offer, however, to permit the employee to take compensatory time for the hours he had worked in excess of his usual schedule. The employee did not accept this offer and demanded that he be paid for all of the overtime hours he had worked during the pay period. Murphy refused, stating that, if the employee didn't "like it, there's the door." It is apparent that by "it," Murphy was referring to the original and continuing agreement that the employee was a salaried, not an hourly, worker.

The offer of compensatory time to a salaried employee who works additional hours on a temporary basis is a common personnel practice.

The administrative law judge decided that the separation was a quit, and that it did not satisfy any exception to the quit disqualification. The commission agrees.

The employee first argues in his petition that the administrative law judge incorrectly concluded that the employee had conceded that the separation was a quit.

However, the discussion of this matter at hearing, a transcription of which counsel for the employee set forth in his brief, is confusing at best. Although the employee's attorney stated that the employee was not conceding he had quit, "we're actually saying it was a termination attributable to the employer---pretty much the statute 108.04(7)(b)." However, the cited statute relates to a quit with good cause attributable to the employer. As the administrative law judge correctly noted, "we don't get to a good cause attributable unless there's a quitting in the first place." As a result, the administrative law judge framed the issue at hearing as whether the employee's quit satisfied any exception to the quit disqualification.

However, in view of counsel's statement that the employee was not conceding he had quit and the broad language of the issue noticed for hearing, the commission will address here the preliminary issue of whether the separation was a quit or a discharge.

This is a case where the separation occurred because the employee decided he would not continue working for the employer unless he was paid at an hourly rate for the additional hours he had worked in July and August. The employee had the last chance to maintain the employment relationship, but chose not to do so. This is a quit. See, Ruka v. Epic of Wisconsin, Inc., UI Hearing No. 02610259WB (LIRC May 20, 2003); Thompson v. Sports Impressions Ltd., UI Hearing No. 03003667BO (LIRC Nov. 26, 2003); McCormick v. Beck's Service LLC, UI Hearing No. 03002625WK (LIRC Nov. 25, 2003); Werginz v. Krenn's Machine, Inc., UI Hearing No. 04609760WK (LIRC Feb. 15, 2005).

The next question is whether this quit falls within any exception to the quit disqualification.

The only exception 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). A necessary corollary to these considerations is that before good cause can be shown, the employee must establish that he explored alternatives short of quitting. The employee must give the employer an opportunity to address and resolve matters that the employee finds so serious that he is considering terminating his employment because of them. See, e.g., Roth v. LIRC & Wisconsin Youth Co. Inc., Case No. 02-CV-00409 (Milw. Co. Cir. Ct. Aug. 5, 2002); Collier v. Rubbermaid & Co., UI Hearing No. 99604071RC (LIRC Oct. 14, 1999).

Adopting the administrative law judge's finding that Murphy had not promised to pay the employee for all the hours he worked in July and August, but offered him instead the opportunity to earn compensatory time for those hours, the commission concludes that the employee has failed to show good cause attributable to the employer for his quitting. He was offered the opportunity to continue working for the employer on those terms to which he had originally agreed, and to be compensated in time rather than dollars for those additional hours he had worked on a temporary basis during the owner/president's absence. If the employee believed that he had been entitled to overtime since he began as a salaried employee, or at some point thereafter, and it is not clear from the record that he was, he should, as the administrative law judge stated, have remained employed and filed a wage claim with the Equal Rights Division.

This is not akin to those cases in which it is clear from the record that the employee and the employer had reason to be aware that the employee was entitled to certain compensation, but the employer purposely failed to pay it. See, e.g., Broten v. J. R. Electric, Inc., UI Hearing No. 99201595NR (LIRC Feb. 24, 2000)(employer's directive to employee to return to hiring hall after employee demanded overtime pay required by collective bargaining agreement a discharge); Wilks v. Healthcare Services Group, Inc., UI Hearing No. 05003718LX (LIRC Oct. 28, 2005)(quit was with good cause attributable where employer failed to properly pay non-exempt employee for overtime hours).

It should finally be noted that the letters, affidavits, deposition, and other documents attached to the parties' briefs to the commission were not a part of the hearing record. Since the record shows that the parties had full and fair opportunity to present their cases at the hearing before the administrative law judge, further hearing to permit them to offer these documents is not merited. The commission may only rely upon the evidence of record in rendering its decision here.

cc: Attorney Adam D. June



Appealed to Circuit Court.

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uploaded 2006/02/27