CATHERINE A GUNNARSON, Employee

VALLEY ESTATES LLP, Employer

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:

The employee worked ten years, most recently as a bar manager, for the employer, a golf and supper club. The employee was discharged on September 19, 2006 (week 38)

The issue is whether the actions for which the employee was discharged constitute misconduct connected with her employment.

The employer's general manager discharged the employee for insubordination because she allegedly, contrary to his directives, (1) on several occasions, at the end of a shift, depleted cash from the till below a specified dollar amount in order to pay bartenders the tips they had earned during that shift, resulting in insufficient cash in the till for the following shift; and (2) scheduled two bartenders rather than one to work Friday nights.

The employer failed to prove that the employee was directed not to distribute tips from the cash in the till below a certain specified dollar amount. First of all, the employer did not testify consistently as to what this dollar amount was. The general manager testified that the employer would start a shift with "$200-300," and, if they didn't have "$300" in the till, he would have to figure out where to get it. The bookkeeper, apparently the general manager's wife, testified that she would not have the "$200 or whatever" in the till because the employee had paid tips out, presumably at the end of the previous shift. If the general manager and the bookkeeper, who issued the claimed directive, did not know what this amount was required to be, it is difficult to understand how they believed the employee should know. Moreover, the general manager and the bookkeeper gave inconsistent reasons to justify this claimed directive. In addition to their testimony that it depleted the cash in the till available to the next shift, they also testified that it threw the books out of balance. However, if the tip is noted on the slip placed in the till by the worker distributing it, it should have no effect on the bookkeeper's ability to balance the books. The record shows instead that the books did not always balance because, as the bookkeeper testified, she was confused and did not want to do the bookkeeping.

In contrast, the employee and her witness (Joan Mayer), a former bartender/cook for the employer, consistently and specifically testified as to their understanding of the employer's policy for distributing tips. The employee testified that, on June 24, 2006, there was a large wedding party which paid with a check for more than $1,060, including a tip for $149, and, when she took cash from the till for the tip, the general manager told staff for the first time not to take big tips out of the till. The employee further testified that her understanding after that date was that, if there was a large party, i.e., a party of 50 or more, she was to record the amount of the tips on the paperwork left in the till, and the general manager would distribute the tips later, but, if there was only a small party, she was to take cash from the till to distribute the tips. The employee testified that she was never told by the employer to leave a certain amount of cash in the till each night. Mayer testified that, even though she distributed tips to waitresses and bartenders, she was never told by the employer that she was required to leave a certain amount of cash in the till at the end of a shift. Mayer further testified that, for small parties, staff took cash out of the till and distributed it for tips, and, for large parties, the general manager would do the tips.

The employer referred specifically to only one incident after the directive was allegedly issued where the employee, on September 14, 2006, took $72.67 for tips from the cash in the till which then left less than $300 in the till for the next shift. The employee testified that this incident involved a "men's league" function for 43 guests who "tabbed all their drinks." The $460 tab, plus the $72 tip, was paid by check. The employee distributed $72 from the cash in the till to cover the tip, leaving less than $300 in cash in the till. Her actions were consistent with her stated understanding that, if the party consisted of fewer than 50 people, the tip should be distributed from the cash in the till.

The other allegation relates to the scheduling of bartenders. The employee testified that her former practice, when the business was consistently busy on Friday nights, had been to schedule two bartenders and send one home if things slowed down sufficiently. She further testified, however, that, "near the end, because business had gotten so terrible," she would schedule only one bartender unless there was a special event that night such as a wedding rehearsal dinner or a reunion, and that she would review the scheduling of the bartenders with the general manager. Even though the record does show that the employee scheduled more than one bartender on Fridays on occasion, the employer did not successfully rebut her testimony that she did so only when the scheduled volume of business required it and that she reviewed this scheduling with the general manager. This circumstance would certainly not qualify as insubordination.

Not only did the employer fail to prove that the employee ignored the employer's directives as alleged, but also failed to prove that the employee was ever warned that taking cash from the till to pay tips or scheduling two bartenders on Friday nights placed her job in jeopardy. The commission has been consistent in holding, except in those cases, unlike this one, in which the alleged conduct is sufficiently egregious, that, before there can be a finding of misconduct, the employee has to be aware or have reason to be aware that her job is in jeopardy or will be if she engages in the subject conduct. See, e.g., Hainz v. Nelson Industries, Inc., UI Hearing No. 00003095MD (LIRC Oct. 3, 2000); Marcolini v. Alma Public Schools, UI Hearing No. 78-20774EX (LIRC May 29, 1979); Kovach v. Farm/Fleet Janesville, Inc., UI Hearing No. 05005166WK (LIRC Feb. 24, 2006).

The commission therefore finds that in week 38 of 2006, the employee did not voluntarily terminate her employment within the meaning of Wis. Stat. § 108.04(7) but that she was discharged and her discharge was not for misconduct within the meaning of Wis. Stat. § 108.04(5).

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 38 of 2006, if otherwise qualified

Dated and mailed March 28, 2007
gunnaca . urr : 115 : 1   MC 691

/s/ James T. Flynn, Chairman

/s/ Robert Glaser, Commissioner

NOTE: The commission did consult with the administrative law judge (ALJ) before reversing her decision.

The ALJ first indicated that she had no recollection of the hearing demeanor of Lawrence Shimono, the owner and general manager.

The ALJ also indicated that she credited Sandra Shimono's testimony because she believed Ms. Shimono was doing her best to balance the books but the employee was placing roadblocks in her way. The ALJ did not impart any specific demeanor impressions which caused her to reach this conclusion. Moreover, Ms. Shimono herself testified that the "books are messed up because I don't want to be there doing it," and was unable to explain how taking cash from the till for tips, and properly recording it, as the employee had done, would result in unbalanced books.

The ALJ further stated that she discounted the testimony of Mayer because Mayer simply stated that she had followed the tip practices imposed by the employee. However, Mayer testified that she "did learn from Mr. Shimono and his wife Sandy about how I should distribute tips for the different events," and that it was her understanding in distributing tips that cash could be taken from the till for small parties (under 50) but that Mr. Shomono would distribute tips for larger parties.

The ALJ did not share any demeanor or other impressions relating to the bartender scheduling allegation.

The commission, in reversing the ALJ's decision, did not reverse any credibility determinations based upon specific demeanor impressions, but instead based upon its conclusions as to the relative plausibility of the versions of events offered by the parties, and upon a differing view as to what the hearing record in fact established.

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