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

LORRIE A HARTMAN, Employee

OASIS CREATIONS, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 09003067MD


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 five and one-half years as a senior nail technician for the employer, a hair salon/spa. The employee was discharged on April 8, 2009 (week 15).

The employee was paid commission at 55 percent of the nail services that she performed at the employer's hair salon/spa. The employer became concerned in 2009 after a significant drop in the employee's nail service business. Additionally, the employee often arrived late for work or left work early during the last 16 months of her employment. The employee however gave prior notice of the events and received permission to leave early from the employer. Additionally, the employee no longer did pedicures because it hurt her back so her services were strictly limited to nail services. The business was owned by three individuals, a husband and wife who handled the business end of the salon and a hair stylist who oversaw the salon's day-to-day activities.

In early spring, the on-premises owner, Dawn Jeanson, met with the salon's employees to discuss ways to improve their business. At that time, the owner passed out names to her employees to increase business and discussed with the employee that she should send out business cards and call people the employee had not recently seen. The owner commented that the employee was limiting her sales because a coupon the employer recently placed in a local paper included half-price pedicures and the employee did not do pedicures. According to the employer, the employee did not comply by sending out cards to clients she had not seen in a while. The also employee informed the employer at the meeting that she did not feel comfortable asking clients who are getting their hair done to come over to the nail side of the salon and hire the employee for her nail serves. The employee preferred to have the hair stylist who was styling the client's hair suggest to the client that the client go over to the nail side of the store and have his or her nails done by the employee.

On March 27, the employee had a discussion with another owner. At that time, the employee informed the other owner that she hated doing nails and most of her clients and hated to come into work. The owner told the employee she was shocked and did not want anybody working at the salon that hated what they were doing since they were in the customer business. The owner told the employee that since she was scheduled for three days off, she should go home and see if she could think of ways the employer could help her feel better and help her rebuild her customer base.

The owners met on April 8, 2009, and discharged the employee after deciding that she hated her job and that she was not interested in doing anything to improve her attitude or her income. The employee was not given an express warning that her job was in jeopardy.

The initial issue to be decided is whether the employee quit her employment or whether the employer discharged her. If the employee quit, a secondary issue is whether the employee's quitting was for any reason that would permit the immediate payment of unemployment benefits. If the employee was discharged, a secondary issue is whether the employee's discharge was for misconduct connected with that employment.

The ALJ concluded that the employee's separation was a constructive quit and found the employee's quitting was not for any reason permitting the immediate payment of benefits. The commission has addressed issues of constructive quits before and in doing so has held that where there is a question of whether a discharge is considered equivalent to a quitting, the focus is on whether the employee intended to quit. See Kallin F. Janzen v. Roehl Transport, Inc., UI Hearing Dec. No. 02000217MW (LIRC January 31, 2001). In deciding such quit or discharge questions, under the standard noted in Nottleson v. ILHR Dept., 94 Wis. 2d 106, 119, 287 N.W.2d 763 (1980) and Dentici v. Industrial Comm., 264 Wis. 181, 186, 58 N.W.2d 717 (1953), the commission looks to see whether an employee intends to leave his or her employment evidenced by word or manner of actions or by conduct inconsistent with the continuation of the employee-employer relationship.

Here, the ALJ concluded that the employee's failure to come up with any suggestions to rebuild her business coupled with her poor and negative attitude constituted conduct inconsistent with the continuation of the employment relationship. The ALJ reasoned that the employee intended to do nothing, forcing the employer to discharge her. The commission disagrees with the ALJ's legal conclusion and reveres his decision as a matter of law.

The commission is not satisfied that the employee's poor attitude and inability to come up with suggestions to rebuild her business evinces conduct inconsistent with the employment relationship. The employee explained she did not feel comfortable asking clients getting their hair done on the other side of the salon to come over to her side of the salon for additional business. The employee's inability to perform the pedicures because it hurt her back was known to the employer for some time. Although the employee earned her pay based solely on commission, she no longer felt comfortable or capable of improving the number of clients for her to serve. Under these circumstances, the commission is satisfied that the employer was the moving party and severed the employment relationship on April 8, 2009, when it decided to discharge the employee for her poor attitude and comments she made on March 27 during a discussion with one of the owner's.

The remaining inquiry is whether the employee's discharge was for 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."

During the March 3, 2009 meeting, the employee was not disciplined for her declining business. After the March 27, 2009 meeting, the employee was given three days to find ways to help increase her business. The employee failed to do this and less than two weeks later she was discharged. The employer however failed to provide the employee with a warning that if she did not improve her attitude and business she could be discharged. While the employer may argue that the March 27 meeting should be construed as a final warning, it was never made clear to the employee that she could be discharged if she failed to return to work with suggestions for the employer to help her and her business. Thus, while the employer may have made a valid business decision in discharging the employee, the evidence does not demonstrate that the employee's discharge was for misconduct connected with her employment as that phrase has been defined in the statutes and case law summarized in this decision.

The commission therefore finds that in week 15 of 2009, the employee did not voluntarily terminate her employment within the meaning of Wis. Stat. § 108.04(7)(a).

The commission further finds that in week 15 of 2009, the employee was discharged and that her discharge was 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 15 of 2009, if she is otherwise qualified. There is no overpayment as a result of this decision.

Dated and mailed January 15, 2010
hartmlo : 135 : 5 MC 626

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner


MEMORANDUM OPINION

The commission did not confer with the administrative law judge before reversing his decision. The commission reached a different legal conclusion regarding the nature of the employment separation based upon essentially the same set of facts found by the administrative law judge.

cc: Oasis Creations, Inc. (Watertown, Wisconsin)


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