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

JEFFREY J RAYMER, Employee

VAN DER GEEST DAIRY CATTLE INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 10200710EC


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 for over nine and one-half years as a fabricator and maintenance worker for the employer, a dairy operation. His last day of work was January 29, 2010 (week 5).

When the employee was working in certain areas he was expected by the employer to record the inventory of supplies on a daily basis. The employee repeatedly failed to do that because he did not always have an inventory sheet readily available even though he could have gotten one from the employer's vice president office. The employer issued the employee several verbal warnings for not filling out inventory sheets before changing the employee's job duties on November 17, 2009, so that he was no longer working in an area where he had to keep track of inventory. The employee's rate of pay remained at $18 per hour at that time and he continued to work full-time for the employer despite the changing of job duties. The employer also believed that the employee was not properly maintaining garage doors as was his duty. On December 15, 2009, the employee told the employer's vice president that it was not possible to fix the garage doors correctly using the old parts the employer had on hand, and if he was not going to buy newer parts that were needed he should put someone else in charge of maintaining the garage doors. The vice president then took those duties away from the employee. He also reduced the employee's hours of work until he realized he would have to pay unemployment to the employee, at which time he returned the employee to working full-time at $18 per hour around the end of December of 2009.

On February 1, 2010 (week 6), the vice president met with the employee and gave him a letter indicating that effective that day the employer would be reducing the employee's wages from $18 per hour to $12 per hour, because of poor job performance and the change in the employee's job duties that had occurred in November and December of 2009. The employee was told he could go home that day to think about whether he wanted to work for that new wage rate or not. The employee determined he did not and quit.

The issue to be decided is whether the employee's quitting was for any reason that would permit the immediate payment of benefits.

The commission has consistently held that when an employer changes an employee's duties and decreases his pay in reaction to shortcomings in the employee's performance, even if the decrease is substantial, good cause attributable to the employer will generally not be found unless the decrease was arbitrary or unreasonable. See, Schensky d/b/a Schensky Builders v. DILHR, No. 145-357 (Wis. Cir. Ct. Dane County May 16, 1975).

In Anthony v. The Good Guy's Pub, UI Hearing No. 90-402092 (LIRC Feb. 14, 1991), the employee's failure to meet employer expectations as to scheduling of hours, cleaning of grill, and tapping of beer by subordinate bartenders reasonably justified demotion from manager to bartender. In Bressette v. St. Croix Casino, UI Hearing No. 04200320EC (LIRC Aug. 5, 2004), the employee was demoted and offered a lower rate of pay because her performance as a supervisor was deficient despite warnings.

In Werginz v. Krenn's Machine, Inc., UI Hearing No. 04608760WK (LIRC Feb. 15, 2005), the employee's lack of sales results, inadequate and incomplete time accounting, and apparent lack of diligence while working unsupervised from home justified the employer's transfer to an in-house position which would cause the employee to incur significant commuting costs and result in a net loss of pay. Finally, in Micoley v. Event USA Inc, U I Hearing No. 06400319GB (LIRC Apr. 21, 2006), the commission concluded that the employee did not have good cause to quit when she was transferred after she could not master the duties of the e-commerce specialist position and continued to make numerous costly errors, despite frequent retraining.

Based on the above cases, the commission concludes that the employee's quitting was not with good cause attributable to the employer. The employee acknowledged that he was warned about his performance. In response to his failure to properly carry out the duties assigned to him, his duties were changed and his wage substantially reduced. The wage reduction was in reaction to the employee's shortcomings and was neither arbitrary nor unreasonable.

The commission therefore finds that in week 5 of 2010 the employee voluntarily terminated his employment within the meaning of Wis. Stat. § 108.04(7)(a), and not for any reason permitting the immediate payment of benefits.

The commission further finds that the employee was paid benefits in weeks 6 through 46 of 2010 in the total amount of $14,883 for which he was not eligible and to which he was not entitled, within the meaning of Wis. Stat. § 108.03(1). Pursuant to Wis. Stat. § 108.22(8)(a), he is required to repay such sum to the Unemployment Reserve Fund.

A secondary issue presented in this case is whether the overpayment of benefits to the employee was because of departmental error or was partially or wholly because of the employee's actions, and whether the department is required to waive recovery of any portion of the overpayment.

"Departmental error" is 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, whether by commission or omission, or misinformation provided to a claimant by the department on which the claimant relied. Wis. Stat. § 108.02(10e). In this case, benefits were paid to the employee because the appeal tribunal chose to disregard controlling case law.  In similar cases, the commission has held that substantial decreases in pay in reaction to shortcomings in the employee's performance will not give good cause attributable to the employer for quitting unless the decrease was arbitrary or unreasonable. The ALJ chose to base his decision on Henderson v. Craig L Graybar Furniture Works Ltd, U I Hearing No. 03601924MW (LIRC October 31, 2003). However, that decision relied on Cornell v. Cloverleaf Farm Supply & Marketing Inc, UI Hearing No. 92400465GB (LIRC Nov. 13, 1992), where an employee's substantial decrease in pay was unrelated to any acts or omissions of the employee but arose from the employer's financial difficulties. Under these circumstances, the overpayment was caused by a departmental error, and recovery of the overpaid benefits must be waived.

The commission, therefore, finds that waiver of benefit recovery is required under Wis. Stat. § 1088.22(8)(c), because the overpayment was the result of a department error and did not result from the fault of the employee, as provided in Wis. Stat. § 108.04(13)(d).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 5 of 2010 and until four weeks have elapsed since the end of the week of quitting and he has earned wages in covered employment performed after the week of quitting equaling at least four times his weekly benefit rate which would have been paid had the quitting not occurred. The employee is not required to repay the sum of $14,883 to the Unemployment Reserve Fund. This decision also results in an overpayment of Federal Additional Compensation (FAC) benefits. The employee will receive, or may have already received, a separate "UCB-25 Notice of Federal Additional Compensation Overpayment" regarding the amount of FAC benefits that must be repaid.

Dated and mailed November 30, 2010
raymeje . urr : 178 : 5 VL 1059 . 20

/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 about witness credibility. It accepts the findings of the ALJ but reaches a different legal conclusion when applying the law to those facts.

cc: Attorney Peter P. Karoblis
Attorney Christopher Toner


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