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

TODD A GONNERING, Employee

PAUL DAVIS RESTORATION OF FOX VALLEY, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 07400642AP


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 most recently as a project superintendent during his approximate two and one-half years of employment with the employer, a building restoration business. The employer removed damaged building contents and building structures from damaged buildings and restored the premises.

It was the employer's customary practice, in cases in which the insurance company deemed the structural/building materials to be unsalvageable, to allow supervisors to use their discretion to determine whether building/structural materials, such as flooring, paneling, etc. in a customer's building should be discarded or saved for possible use in the employer's future projects. The employer had a history of allowing staff to take, without cost, any materials the employee or other management personnel deemed unusable by the employer and which were going to be fully replaced to the customer by the insurance company. The employee had never been reprimanded for such practice.

Due, in part, to workers taking damaged personal items from the work sites that were deemed unsalvageable by the insurance company, the employer issued an employee handbook in the fall of 2006. A list of unacceptable conduct that could result in dismissal included "stealing materials or supplies." The handbook also stated, "Rejected items, scrap material, or waste items taken off company property must be checked out by the general manager." The employee did not read the handbook in its entirety but attended a meeting on January 10, 2007, at which staff were reminded of a recent incident in which a worker took unsalvageable personal items from a work site and was discharged. The meeting minutes indicate that attendees were told that "Taking any type of customer property without permission is considered stealing and you will be terminated."

In approximately August or September of 2006, the employee decided that some flooring from a damaged building/work site that was being discarded into the dumpster was in good enough condition to return to the employer's premises for the possible use in a future restoration project. The insurance company had decided to replace that flooring for the customer. The resource manager complained that he didn't want the materials due to a lack of storage space, however, the flooring was stored anyway. On January 19, 2007, the employee gave the flooring materials to an acquaintance. When the resource manager noticed on January 22 that the flooring was missing, he asked the workers about it. The employee readily informed him of his actions on January 19. The resource manager made no further comment to the employee about the flooring but reported the matter to the employee's immediate supervisor, the general manager, on January 23 because he suspected that the employee's actions were improper. The general manager then discussed the incident with the owners.

When the general manager brought the matter to the attention of the employee, the employee acknowledged that he had given the flooring away and explained that it had been stored on the employer's premises for a long time, that he gave it away to help a friend, and that he did not think he needed permission to do so because it was waste and because he was a supervisor. He added that he did not think he had done anything wrong. The general manager informed him that he was being let go for giving away product that they normally give away. The general manager replied that the employee did not have proper permission. The employee responded that he thought that he (the employee) was considered management and that he had done this before.

The employee then requested of one of the owners that the discharge be rescinded. The owner refused because he considered the employee's actions a violation of the employer's new policy, because he thought he should follow precedent regarding the discharge of the previous worker, and because the topic had been discussed very recently on January 10. In a letter to the employee, dated January 25, 2007, the owner informed him that he was discharged for violating the policy requiring the permission of the general manager to remove "rejected items, scrap material, or waste items" from the company property. He added that the employee had admitted that he had removed flooring from the property for an acquaintance "without express permission of any management personnel or the General Manager."

The issue to be decided is whether the employer discharged the employee for misconduct connected with his 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 insurance 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' within the meaning of the statute."

The employee gave away building material that he acknowledged was in good condition and could be used on another project. The material was not at a job site but stored at the employer's place of business. This was not similar to the employee's examples of allowing workers to take materials out of dumpsters or at worksites. The employee made the decision that the employer could use the materials in the future. It was unreasonable for the employee to believe that he thereafter had the authority to give those same materials to a friend, without seeking approval from the general manager. Further, the employee signed an acknowledgment that he read the employer's handbook. He was responsible for knowing the contents of that handbook. In addition, if the employee considered himself a member of management it was even more reason for him to apprise himself of the contents of the employer's manual.

The commission therefore finds that in week 4 of 2007 the employee was discharged from his employment and for misconduct connected with his work within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits in the amount of $2,305.00 for weeks 5 through 15 of 2007, 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 4 of 2007, 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 $2,305.00 to the Unemployment Reserve Fund. The benefits paid for weeks 5 through 8 in the amount of $355.00 each week, and benefits paid for week 9 of 2007, of $180.00, were withheld as forfeitures. Since the employee is not eligible for those weeks, they cannot be used to satisfy the forfeiture. $1,595.00 is restored to the forfeiture balance. The initial benefit computation (UCB-700) issued on February 9, 2007, 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 August 17, 2007
gonneto . urr : 132 : 8 : MC 694

/s/ James T. Flynn, Chairman

Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

MEMORANDUM OPINION

The commission did consult with the ALJ who presided at the hearing regarding her impressions of witness credibility and demeanor. The ALJ indicated that she had no recall of the parties.

 

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.



Appealed to Circuit Court. Affrirmed May 13, 2008.  Appealed to the Court of Appeals.  Affirmed, unpublished per curiam decision, January 8, 2009.

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