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

CATHY S BRENNUM, Employee

LANDS END INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 08000392MD


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 approximately 18 years as a merchandising assistant for the employer, a catalog and internet sales company. The employee's last day of work was December 19, 2007 (week 51) when she was discharged after admitting that she had resold, on E-Bay, merchandise she had purchased from the employer under its discount policy.

The employer's discount policy provides, in relevant part, the following:

As part of your benefit package at Lands' End, you can purchase Lands' End merchandise at a discount for yourself, your spouse and dependent children. ...

In efforts to protect this discount benefit, we expect that you will use good judgment with all of your purchases and returns. Similar to our customers, we are able to monitor this activity and, if abuse of this benefit is identified, appropriate action will be taken. Depending on the seriousness of the situation, action could range from a warning to a suspension of the employee discount benefit or even dismissal. Examples of inappropriate activity include such things as purchasing items for others and receiving reimbursement, sharing your Internet employee password, pattern of excessive purchasing, resale of items (i.e. E-Bay), high return rates or pattern of returning seasonal/worn out items. If you have any questions, please talk to your manager or employee services.

The employee admitted she was aware that the discount policy was limited to purchases for herself and her immediate family. The employee however was unaware that she was prohibited from reselling on E-Bay merchandise purchased under the employer's discount policy. The employee testified that had she known of this prohibition she would have never jeopardized her 18-year employment with the employer. The employer failed to prove the employee was aware of its rule in its entirety, as for example by the employee's signed acknowledgment of the policy. The only proof the employer provided was testimony that employees can access the policy on the employer's "intranet" home page.

The issue for review is whether the employee's discharge for reselling, on E-Bay, merchandise purchased under the employer's discount policy constitutes misconduct within the meaning of Wis. Stat. § 108.04(5).

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 employer failed to establish that the employee was aware of this specific prohibition by producing proof that the employee read and/or received the full policy outlining the prohibition and potential consequences of any violation. The commission is persuaded that the employee would never have jeopardized her 18-year employment with the employer had she known that the resale of merchandise she purchased under the employer's discount policy was prohibited. Proof of the employee's acknowledgment of receipt of the policy was within the employer's control and the employer failed to demonstrate to the commission that the employee was aware of the entire policy and of the consequences for violating the policy. Because the employer failed to meet its burden of proof, the commission cannot conclude that the employee's conduct in question constituted an intentional disregard of the employer's interests or of the standards of behavior the employer had a right to expect of the employee.

The commission therefore finds that in week 51 of 2007, the employee was discharged and not for misconduct connected with her employment, 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 51 of 2007, if she is otherwise qualified.

Dated and mailed May 9, 2008
brennca . urr : 135 : MC 687

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

MEMORANDUM OPINION

The commission consulted with the ALJ, who presided at the hearing, regarding his impressions of witness credibility and demeanor. The ALJ indicated that the employee was believable when she testified she was aware of the employer's discount policy regarding the purchase of merchandise. The commission however will not infer that because the employee admitted knowing part of the employer's policy she was aware of the remaining part of the policy prohibiting the resale of discounted purchased items on E-Bay. The commission declines to make the inference because the employer failed to meet its burden of proof by establishing the employee's acknowledgement of the rule in its entirety. The commission therefore reverses the ALJ's decision as a matter of law.

 


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