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

ANN M JAKEL, Employee

CUNA MUTUAL INSURANCE SOCIETY, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 06001609MD


On April 7, 2006, an initial determination held that the employee was discharged in week 11 of 2006 for misconduct connected with her employment and unemployment insurance benefits were denied. A timely appeal was filed and an appeal tribunal hearing was conducted. On May 19, 2006, an administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. (1)   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, and after consultation with the administrative law judge, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked for more than 16 years a technology management consultant for the employer, an insurance business. Her last day of work was March 13, 2006. She was discharged on March 15, 2006 (week 11) for improperly releasing the employer's confidential and proprietary information to a third party.

The events leading to the employee's discharge began in early March 2006. At that time, a private attorney requested assistance from the employee regarding a coworker's termination. The employee understood that the attorney was hired by the union both she and the worker were members of. The attorney wanted to substantiate whether other workers had difficulty with the employer's computerized attendance system for the worker's upcoming arbitration.

On or about March 8, 2006, while at an out-of-state business conference, the employee remotely accessed the employer's computer system, (2) selected and downloaded a report containing attendance system data for the period of January 1, to August 31, 2005. The report listed 195 calls to the employer's "help desk" reporting problems or asking questions about the computerized attendance system. The document contained the opening date and time of the call, the name of the client/worker calling, the worker's phone extension, the identifier code of the worker who handled the call, the identifier of the worker to whom it was assigned, the date and time of closure, the elapsed time from the opening and the narrative notes describing the problem encountered, its resolution and other notes.

After downloading the report, the employee converted it to a Word document and e-mailed it to the attorney. In the e-mail, she advised the attorney that she was at a conference and, due to time limitations, did not edit the document for calls that were related to his request.

The attorney e-mailed the employee follow-up questions which she then forwarded to another worker. The employer learned of the employee's actions after another worker notified the employer's management of the situation.

The employer's contract with the employee's union was received into evidence as Exhibit 1, it:

1. warns workers not to breach "the confidentiality of company records or business,"

2. prohibits "misappropriation, misuse or removing company property, records, data or other materials from the premises without prior authorization," and

3. allows the employer to use any disciplinary step depending on the severity of the situation and that a worker may be discharged for reasonable cause.

The employer also uses an on-line policy book, received as Exhibit 2, which explains that proprietary and confidential information includes computer programs. Included in its definition of a confidentiality violation is "disclosing proprietary or confidential information to any third party without proper authorization." The on-line policy directs a worker, who receives a request for proprietary or confidential information, to contact his/her "manager, HR or LR consultant or the employee resource center."

The employee was also subject to the employer's Corporate Codes of Conduct, received as Exhibit 3, which provide in relevant part:

All Company records including financial, personnel and customer information are considered confidential. . . All employees are responsible for protecting the confidentiality of information in their possession and any careless use or disclosure of confidential information or other than authorized Company related business is expressly prohibited.

The employer's conflict of interest policy, received as Exhibit 4, further prohibits an individual from having "material conflicts with any interest of the Companies" and defines a conflict to include "any activity of an individual which involves, or is likely to involve, unfavorable or adverse financial, competitive or detriment to or for an interest of the Companies."

Wis. Stat. § 108.04(5) denies unemployment insurance benefits to a worker who has been discharged for misconduct connected with his or her employment; thus, the issue for decision is whether the employee's actions that led to her discharge constitute misconduct connected with her 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.

Additionally, in Milwaukee Transformer Co. v. Industrial Comm., 22 Wis. 2d 502 (1964), the Wisconsin Supreme Court noted:

In considering whether a breach of company work rules or collective-agreement provisions is misconduct, the "reasonableness" of the company rule must be assessed in light of the purpose of unemployment compensation rather than solely in terms of efficient industrial relations. We are less concerned with the "reasonableness" of the rule from the point of view of labor-management relations, than with the "unreasonableness" of the conduct of the employee in breach of the rule. The unemployment compensation statute is not a "little" labor relations law. The critical question is whether [the employee's] conduct was an intentional and unreasonable interference with [the] employer's interest, regardless of what construction was put on the rules or the reasonableness of those rules. Milwaukee Transformer at 512 [footnotes omitted].

The employee, via her attorney, contended that her discharge was not for misconduct. Specifically, the employee argued that this was an isolated violation in the employee's 16 years of service to the employer. Yet, the employee's improper release of the employer's proprietary and confidential information violated its rules and potentially damaged the employer. The employee admitted that she understood that she was releasing the employer's data to an attorney whose interests were adverse to the employer. In addition, given the size of the document, she was aware of the major scope of her release of the employer's proprietary and confidential information. Under these circumstances, the commission finds that the employee's actions were not an isolated incident of poor judgment or ordinary negligence, it was such an intentional, serious and damaging act as to rise to the level of misconduct.

Because the employee was discharged for misconduct connected with her employment, she was not eligible for the $3,873.00 dollars of unemployment insurance benefits that she received for the calendar weeks ending March 18, 2006 through June 3, 2006 (weeks 11-22) and the final issue is whether the employee must repay the erroneously paid benefits.

The employee was paid benefits after the administrative law judge reversed the initial determination. There is no evidence of employer error as a basis for the erroneously paid benefits. Thus, pursuant to Wis. Stat. § 108.22(8)(c), the employee is required to repay the overpaid benefits unless the overpayment (1) was due to departmental error and (2) was without fault, false statement, or misrepresentation on behalf of the employee. Wis. Stat. § 108.02(10e) defines "departmental error" as an error made by the department in computing or paying benefits resulting from

(a) A mathematical mistake, miscalculation, misapplication or misinterpretation of the law or mistake of evidentiary fact, whether by commission or omission, or

(b) Misinformation provided to a claimant by the department, on which the claimant relied.

Further, Wis. Stat. § 108.22(8)(c)2 provides that the mere act of the commission reversing a decision does not constitute department error. In this case, the overpayment was created when the commission reached a differing legal conclusion as to whether the employee's actions constituted misconduct. This is not departmental error and the employee must repay the overpaid benefits.

The commission therefore finds that in week 11 of 2006, the employee was discharged for misconduct connected with her employment within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits in weeks 11 through 22 of 2006 in the total amount of $3,873.00, for which she was not eligible and to which she was not entitled, within the meaning of Wis. Stat. § 108.03(1).

The commission finally finds that the employee is required to repay the overpaid monies to the Unemployment Reserve Fund pursuant to Wis. Stat. § 108.22(8)(a), because waiver of benefit recovery is not required under Wis. Stat. § 108.22(8)(c); 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 unemployment insurance benefits beginning in week 11 of 2006 and until seven weeks have elapsed from the week of her discharge and she has earned 14 times her weekly benefit rate in subsequent covered wages. The employee is required to repay the sum of $3873.00 to the Unemployment Reserve Fund. The initial benefit computation (UCB-700) issued on March 17, 2006, 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.

Dated and mailed November 3, 2006
jakelan . urr : 150 : 1 MC 675   MC 687  MC 690

James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner


NOTE: Repayment instructions will be mailed after this decision becomes final. The department will withhold benefits due for future weeks of unemployment in order to offset overpayment of U.I. and other special benefit programs that are due to this state, another 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 overpayment.

 

FURTHER NOTE: Prior to reversing the appeal tribunal decision, the commission conferred with the administrative law judge. The administrative law judge did not have any demeanor impressions which led to his decision. The commission has reversed the administrative law judge because it reached a different legal conclusion on essentially the same facts.

 

cc:
Attorney Thomas R. Crone
Attorney Kurt C. Kobelt



Appealed to Circuit Court.

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Footnotes:

(1)( Back ) The cover page of the Appeal Tribunal Decision incorrectly notes that neither party appeared at the hearing. However, as noted by the administrative law judge, both parties appeared; the employee was represented by Attorney Kobelt while the employer was represented by Attorney Crone.

(2)( Back ) To do so, the employee used her user identification and her password, using the employer's secure access system.

 


uploaded 2006/11/06