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

MICHAEL J DASSOW, Employee

FOREMOST INDUSTRIAL EXCHG, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 12600149MW


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 six years as a salesman for the employer, a manufacturer of industrial cutting tools. On August 9, 2011 (week 33), the employee was involved in a heated argument with a co-worker. The co-worker had agreed to make some sales calls for the employee in exchange for a percentage of the commission the employee earned on the sales. The co-worker wanted to collect his money for previous sales, but the employee would not pay him because the products had not yet shipped. The two men argued back and forth. At one point, the co-worker called the employee a racist pedophile child molester. In response, the employee said to his co-worker, "You're a piece of shit nigger." The employee turned to a different co-worker and said, "You heard him. He started it first." The employee then left for lunch.

The employer was made aware of the argument and was told that the employee lashed out at a few of his co-workers, calling them niggers and tree monkeys. The employer interviewed several witnesses and typed up an incident report. While the employee was on his lunch break, the employer discharged the employee over the phone for using racial slurs in the workplace.

The employee initiated a claim for unemployment benefits on August 15, 2011, and reported his discharge. Following an investigation, the department found that the employee was discharged for misconduct connected with his employment. Benefits were denied.

The employee filed a timely appeal. A hearing was held before an administrative law judge. The only witness the employer brought to the hearing was the general sales manager, who had discharged the employee. The general sales manager did not witness the argument which led to the employee's discharge, although he had interviewed several witnesses and typed up the incident report. All of the individuals listed in the incident report were still employed by the employer but were not brought to the hearing to testify.

The employee admitted at the hearing that he called his co-worker "a piece of shit nigger." The employee explained that his co-worker "was calling [him] stuff, too, such as child molester and pedophile" before the employee "said any racial slur to him." The employee stated that it was okay to refer to other workers as "piece of shit niggers," if they called him a pedophile or child molester. The employee also testified that, because he used slander words, his co-worker could slander him, threaten him, beat him. When asked to explain what he meant by slander words, the employee said that he used the "n" word and that "[t]he guy had the right to do anything after that."

The employer admitted that there were a lot of arguments and fights at the company during the previous five or six years, following which people were not discharged. However, the employer noted that those arguments did not involve "this type of language."

The employee had been subject to prior verbal discipline from the employer. Employees would get a verbal for being "heated". The employer acknowledged that the employee had not been spoken to regarding the use of racial slurs prior to his discharge. The employee had been spoken to after other confrontations with co-workers.

Misconduct for unemployment insurance purposes is the intentional and substantial disregard by an employee of standards of behavior an employer reasonably may expect of its employees. The commission believes the employee's use of a racial slur toward a co-worker constitutes misconduct. The language used by the employee in the workplace on August 9, 2011, went far beyond the bounds of acceptable discourse.

The word "nigger" is a key term in American culture. It represents overt racial hatred and is a disparaging and offensive slur. Although heated arguments and confrontations between the employer's workers may have been common, it would have to have been an extremely unusual workplace if the use of racial slurs was considered tolerable. The fact that the employee stated that his co-worker had the right to slander him, threaten him, or beat him after he used the "n" word shows that the employee was aware that it was inappropriate to use the term "nigger" in the workplace or elsewhere.

The conduct for which the employee was discharged was sufficiently egregious that it is not necessary that it have been proved that the employee was expressly warned against it. The employee could be expected to know that his conduct was inappropriate, and no notice was thus needed. See, e.g., Greenwald v. CUNA Mutual Insurance Society, UI Dec. Hearing No. 02004775MD (LIRC Dec. 23, 2002) (employee in professional office setting needs no warning to know that the use of obscene language and gestures in reference to other employees is inappropriate). It is difficult to conceive of any kind of employment situation in which an employee would need to be told in advance that it is inappropriate for him to refer to his African-American co-workers as "niggers." See, e.g., Xiong v. Educators Credit Union, UI Dec. Hearing No. 07602326MW (LIRC Oct. 18, 2007)(employee's use of the term "ghetto" when referring to her co-workers was derogatory and constituted misconduct); Wright v. Wal Mart Associates Inc., UI Dec. Hearing No. 02611006MW (LIRC Aug. 13, 2003)(although it was an isolated incident, the employee's use of a racial epithet several times in referring to a co-worker as "a lazy black nigger" constituted misconduct); Boos v. Huntsinger Farms Inc., UI Dec. Hearing No. 02200180EC (LIRC May 24, 2002)(employee discharged for misconduct for calling one of the employer's customers a "nigger").

The employee's argument that his co-worker "started it" does not excuse his conduct. The employee's reaction to his co-worker's original request for payment and the subsequent escalation of the argument that ensued did not justify the employee's use of a racial slur.

The commission therefore finds that in week 33 of 2011 the employee was discharged for misconduct connected with his work for the employer, within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that the employee was paid benefits(1) in the amount of $12,138, for which he was not eligible and to which he was not entitled, within the meaning of Wis. Stat. § 108.03(1).

The final issue to be decided is whether recovery of the overpaid benefits must be waived. Wisconsin Stat. § 108.22(8)(c) provides that the department shall waive the recovery of overpaid benefits if the overpayment was the result of departmental error and the overpayment did not result from the fault of the employee. Under Wis. Stat. § 108.02(10e)(a) and (b), departmental error is defined as 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, by commission or omission, or from misinformation provided to a claimant by the department, on which the claimant relied.

The overpayment in this case resulted from departmental error. The administrative law judge reversed the department's initial finding of misconduct because the employer did not bring any witnesses to the hearing who could offer firsthand testimony regarding the employee's conduct in the final incident. For that reason, the administrative law judge concluded that the evidence did not support a finding that the employee was discharged for misconduct connected with his employment. The administrative law judge's reasoning is erroneous.

Although the employer did not present any nonhearsay testimony concerning the events leading to the employee's discharge, the employee's testimony as to those events was competent evidence establishing that the employee engaged in the conduct for which he was discharged. See, e.g., Kowalczyk v. County of Walworth, UI Dec. Hearing No. 07003222JV (LIRC Feb. 1, 2008). The employee admitted that, while engaged in a verbal argument with a co-worker, he called the co-worker a "piece of shit nigger." This is firsthand testimony. The employee was obviously present when the incident occurred and testified at hearing to the same. The administrative law judge misapplied the law and the rules of evidence.

The commission further finds that waiver of benefit recovery is required under Wis. Stat. § 108.22(8)(c), because the overpayment did not result from the fault of the employee, as provided in Wis. Stat. § 108.04(13)(f), but the overpayment was the result of a departmental error. Wis. Stat. § 108.22(8)(c)2.

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 33 of 2011, and until seven weeks have elapsed since the end of the week of discharge and the employee has earned wages in covered employment performed after the week of discharge equaling at least 14 times the employee's applicable weekly benefit rate. The employee is not required to repay $12,138 in unemployment benefits. The employer's account will be credited with the overpaid amount.

The initial Benefit Computation (Form UCB-700) issued on August 15, 2011, is set aside. If benefit payments become payable based on other employment, a new computation will be issued as to those benefit rights.

Dated and mailed June 14, 2012

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner


MEMORANDUM OPINION

The employer filed a petition for commission review of the adverse appeal tribunal decision. In its petition, the employer argues that the administrative law judge's decision was based on a fundamental misunderstanding of Wisconsin law, in that Wisconsin courts have routinely held that a party's admissions are sufficient to fulfill a burden of proof. The commission agrees and, for that reason, reversed the administrative law judge's decision and found that waiver of the overpaid benefits was required.

The employer also argued in its petition that the incident report which was prepared by its witness constituted a business record and was admissible as such. The employer is only partially correct. The incident report is a hearsay summary of several conversations. The department's administrative rules provide, at Wis. Admin. Code § DWD 140.16(1), that no issue may be decided solely on hearsay evidence, unless the hearsay evidence is admissible under Wis. Stat. § 908. The incident report was not admissible under Wis. Stat. § 908. It does not constitute a record of a regularly conducted employer business activity. The commission does not consider statements about an employee's behavior to be records of regularly conducted activity. The commission generally considers attendance records, or other records which might demonstrate some degree of trustworthiness, business records. Here, the employer's incident report would not have supported a finding of misconduct had the employee disputed its contents and had there been no other competent evidence in the record.

The commission did not consult with the administrative law judge before reversing her decision in this matter. The commission's reversal is as a matter of law and does not involve an assessment of the credibility of the witnesses. Thus, no credibility conference was required. Transamerica Ins. Co. v. DILHR, 54 Wis. 2d 272 (1972).

 

 


dassomi . urr : 152 : 2

cc: Attorney Christopher Conrad
Foremost Industrial Exchg, West Allis, WI


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Footnotes:

 

(1)( Back ) The employee was paid weekly benefits of $95 for week 33 of 2011, $257 for weeks 34 through 38 of 2011, $257 for weeks 48 of 2011 through 12 of 2012, $262 for week 15 of 2012, and $357 for weeks 16 through 23 of 2012.