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

TONYA J MCCOY, Employee

GUARANTY BANK SSB, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 07604447MW


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 more than three years for the employer, the last five months in the loss prevention unit as a loss prevention specialist. She was discharged on June 19, 2007 (week 25).

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

In an April 6, 2007, email, John Shimshak (Shimshak), the employee's supervisor, forwarded to her and other members of the loss prevention unit a copy of the employer's deposit fraud guidelines (exhibit #4), and indicated that he would also be distributing a hard copy of these guidelines to them.

These guidelines set forth detailed steps for loss prevention specialists to follow in reviewing checks drawn on other financial institutions and deposited in Guaranty Bank accounts, for the purpose of identifying possible fraud. One of these requirements is that, in reviewing a check written on a business account, the specialist is to phone the business, and, if the specialist leaves a message for a return call but no return call is received, a second call must be placed within 1-2 hours. These guidelines also require a specialist to document each contact, and only to review those checks with a risk score of 25 or higher.

The employee was assigned to review 100-200 checks each day.

On April 10, 2007, the employee was issued a written "final warning" (exhibit # 5) by supervisor Shimshak for taking a day of paid time off without prior approval, for using work time and her work computer for personal business, and for reviewing checks with risk scores less than 20 even though the employer's deposit fraud guidelines require her to limit her review to those with risk scores "of 20 or higher." The written warning form indicates three levels of warning, i.e., initial warning, warning, and final warning. Although Shimshak testified that no other warnings had been issued to the employee, he wrote and processed the April 10 warning as a final warning.

The employee was discharged on June 19, 2007, for allegedly failing to follow the employer's deposit fraud guidelines in regard to three checks, as follows:

(1) $27,800 (exhibit #1)-the deposit fraud review report on page 2 of the exhibit indicates that the specialist requested a copy of the check from the issuing bank but does not indicate that this copy was ever received. The employee disputes that she reviewed this check or that supervisor Shimshak ever discussed it with her. The number which would identify the specialist who reviewed this check does not appear on the copy of the report which is a part of the hearing exhibit. Shimshak testified that the employee was the specialist who reviewed this check and failed to obtain and review a copy of it; a hold was not placed on the check; the check was counterfeit; the employer lost $27,800 as a result; and he discussed this check with the employee at the termination meeting on June 17.

(2) $8,570 (exhibit #2)-the deposit fraud review report on page 2 of the exhibit indicates that the specialist contacted the business which wrote the check and left a message but does not indicate that the message was returned or the business contacted again. The employee testified that she does not remember reviewing this check. The number which would identify the specialist who reviewed this check does not appear on the copy of the report which is a part of the hearing exhibit. However, since the hearing record shows that a single specialist is assigned to review a particular report each day, and this $8,570 check appears on the same report for June 13 as the $8,764 check (exhibit #3) which the employee admits she reviewed, it is reasonable to credit the employer's testimony that the employee was the responsible specialist. Exhibit #2 also shows that this check was written on the same business account (Ikhwan Development Group) as check (3). Shimshak testified that a hold was not placed on the check; the check was drawn on insufficient funds; and the employer lost $8,570 as a result. There is no corroborating documentation of this loss in the hearing record. The employee admits that Shimshak discussed this check with her at the termination meeting on June 17.

(3) $8,764 (exhibit #3)-the deposit fraud review report on page 2 of the exhibit indicates that the specialist contacted the business which wrote the check and left a message but does not indicate that the message was returned or the business contacted again. The employee admits that she reviewed this check, but testified that she placed a second call to the business but her call was again forwarded to voice mail; contacted the issuing bank but this bank would not verify the balance in the account; and placed a hold on the check, and, as a result, the employer did not sustain any loss. Shimshak testified that the employee was the specialist who reviewed this check and failed to document a return call or other action; a hold was not placed on the check; the check was drawn on insufficient funds; the employer lost $8,764 as a result; and he discussed this check with the employee at the termination meeting on June 17. The employer did not offer any corroborating documentation of this loss in the record. The employee admits that Shimshak discussed this check with her at the termination meeting on June 17.

The employer, by failing to offer as evidence that part of the deposit fraud report identifying the specialist who reviewed check  (1), and given the employee's denial, failed to prove that the employee reviewed this check. Shimshak's testimony that he viewed the deposit fraud report for this check and it identified the employee as the reviewer does not satisfy the best evidence rule. See, Hendricks v. Riverfront Activity Center, Inc., UI Hearing No. 06003360LX (LIRC Jan. 26, 2007).

The evidence of record establishes that the employee reviewed checks (2) and (3); phoned and left a voice mail message for the business which had issued both of these checks, and documented these calls/messages; failed to document any further actions she took in regard to these checks; and, based on these further actions, placed a hold on check (3) but not check (2).

That part of the employee's prior warning relating to her failure to follow the deposit fraud guidelines was undeservedly harsh. She was issued a final warning, without having been issued either an initial warning or an intermediate warning, for reviewing checks below the risk factor standard when even her supervisor was confused as to what that standard was, i.e., he references the standard as "20" in the warning but testified at hearing that the standard has "always been 25." Moreover, the employee was not discharged for reviewing checks below the risk factor standard, but instead for not placing a second call within 1-2 hours after leaving a voice mail message for the issuing business.

In addition, the employer did not prove the employee engaged in the conduct for which she was discharged, i.e., her alleged failure to follow up after leaving a phone message for the issuing business. The employee testified that she did place a second unproductive call to Ikhwan Development Group, as well as an unproductive call to the issuing bank, which she apparently failed to document, and then placed a hold on check (3). The employer could have successfully rebutted this testimony by offering documentary evidence of the loss it claims it sustained in regard to check (3), i.e., such evidence could have established that, contrary to her testimony, the employee had not placed a hold on the check after exhausting investigative options, but the employer failed to do so.

Under the circumstances present here, failing to document two unproductive phone contacts, and forgetting to place a hold on one of two companion checks, the only actions the employer proved, although negligent and certainly deserving of some level of warning/discipline, do not rise to the level of misconduct.

The commission therefore finds that in week 25 of 2007, 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).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 25 of 2007, if otherwise qualified.

Dated and mailed November 8, 2007
mccoyto . urr : 115 : 8  PC 714.11  PC 714.03  MC 660.01

/s/ James T. Flynn, Chairman

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

 

NOTE: The commission did confer with the administrative law judge (ALJ) before reversing his decision. The ALJ indicated he did not have a clear recollection of the employee, and was unable to identify any demeanor impressions upon which he may have relied.



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uploaded 2007/11/15