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

ABE W YANKO, Employee

BROOKS TRACTOR INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 07002809BD


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 eight months as a salesperson for the employer, a construction equipment business. He was discharged on June 1, 2007 (week 22).

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

The employer alleged generally that the employee did not return phone calls to customers and management, or complete paperwork, as promptly as the employer expected, and, his supervisor (Sullivan) counseled him about this. The employee testified that he received 40-60 phone calls each day, it was difficult to respond immediately to all of them due to the volume, and he returned the calls as soon as practicable. The employer did not persuasively rebut this. The employee also testified that he believed all of his paperwork was completed in a timely manner. The employer offered no specifics in rebuttal.

In addition, the employer testified that the employee's sales volume was not as large as the employer expected. The employee testified that he sold 15-18 pieces of equipment during his tenure, and the employer did not show that this did not satisfy an established performance standard or differed significantly from the sales volume of other new salespeople.

Prior to May 30, 2007, the employee had been negotiating with Fabco, one of the employer's regular customers, for the sale of four used all-terrain vehicles, located at the employer's Sun Prairie location, which the employer had been trying to sell for a significant period of time. Not until Friday, May 25, did the employee and Fabco finally agree to the $31,500 sales price. The following Monday was Memorial Day. The employee received Fabco's signed purchase order on Tuesday, May 29, and immediately completed a sales order for the vehicles and faxed it to Fabco.

The employee then received a phone call from Fabco advising him that it could not cut a check until later that week but its customer needed the equipment before then. The employee told the Fabco representative that Fabco could pick the equipment up on Wednesday, May 30, and have 10 days to pay.

Fabco sent a truck from Milwaukee to the employer's Sun Prairie location on May 30. However, because payment for the vehicles had not yet been made, and staff at the Sun Prairie location could not locate the relevant paperwork, the employer would not release the vehicles to Fabco at that time. The vehicles were released a few days later when payment was made.

The employer concedes that, on May 30, it was presented a signed Fabco purchase order for the vehicles, which it considered binding upon Fabco.

The employer's rule, of which the employee was aware, states that "All complete good sales must be paid for by the customer upon delivery. Any other payment plan must be pre-approved by Sales Manager and Credit Manager. Payment terms should be stated on all purchase orders." Exceptions were made to this policy for rentals and demos. Payment for financed goods was considered effected upon receipt of confirmation from the financing entity. There was no consequence stated in the policy for its violation. The employer's credit manager had reminded the employee of this policy approximately one to two weeks before May 30.

The employee was discharged on June 1.

The commission has been consistent in holding, except in those cases 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 his job is in jeopardy or will be if he 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).

Prior to June 1, the employee had not been warned that his job was in jeopardy or would be if he engaged in certain conduct, and the employer's work rule would not have provided such notice.

The remaining question, then, is whether the subject conduct was sufficiently egregious to relieve the employer of its responsibility to make the employee aware that his job would be in jeopardy if he engaged in it.

In Boynton Cab v. Neubeck, 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' within the meaning of the statute.

The employer failed to prove that the employee's alleged failure to promptly return phone calls and complete paperwork, or to sell enough equipment, met this standard. The employer offered only general allegations in this regard, failed to rebut the employee's reasonable explanation that the volume of calls prevented him from immediately responding, failed to offer specifics in response to the employee's testimony that he believed all of his paperwork was completed within a reasonable period of time, and failed to show that the employee's sales volume did not satisfy a reasonable performance standard or differed significantly from the sales volume of other new salespeople.

The record does show that, although the employee was aware of the employer's payment upon delivery rule and had been recently reminded of this rule, he cut corners in his effort to close the sale by Fabco's deadline, believing that the employer would be anxious to unload this equipment, and, given that Fabco was a regular customer and had signed the purchase/sales orders, would not object to the payment arrangement he had negotiated.

Although releasing $31,500 in equipment could have a significant consequence if the customer then failed to pay for it, this consequence is mitigated significantly here because the employer concedes it was shown a signed purchase order from Fabco on May 30, which it considered binding upon Fabco, and Fabco was a regular customer.

The employee's actions constituted an error in judgment, but not misconduct.

The commission therefore finds that in week 22 of 2007, the employee did not voluntarily terminate his employment within the meaning of Wis. Stat. § 108.04(7) but that he was discharged and his discharge was not for misconduct within the meaning of Wis. Stat. § 108.04(5).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 22 of 2007, if otherwise qualified.

Dated and mailed October 5, 2007
yankoab . urr : 115 : 6  MC 660.01  MC 664

/s/ James T. Flynn, Chairman

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

 

NOTE: The commission did not confer with the administrative law judge before reversing his decision, because its reversal was not based upon a differing view as to the credibility of witnesses, but instead upon a differing conclusion as to what the hearing record in fact established and upon a differing interpretation of the relevant law.


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uploaded 2007/10/08