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


LEONARD G JOHNSON, Employe

BINKOWSKY INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 98401954SH


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 the applicable law, records and evidence in this case, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employe worked about seven years for the employer, a firm engaged in the sales of janitorial maintenance supplies. His last day of work was June 26, 1998.

On June 12, 1998, the employe was warned by the employer's sales manager that he had two weeks to improve his performance or he would be subject to termination. Subsequently, the manager determined that his customer data and check-off lists were not complete and decided to offer the employe another job, instead of terminating his services. On June 26, 1998, the manager advised the employe that he would be transferred to a warehouse position requiring him to perform warehouse duties and demonstrate equipment. The manager demanded an immediate answer. The employe asked the manager to give him until the end of the day. Nevertheless, the manager called him later in the morning and demanded that he provide an answer. When he refused to do so, the sales manager advised him that they would consider that to be a termination of employment.

The employe had been advised, even prior to his last day, that his job performance was not satisfactory and that he would be subject to termination, if it did not improve. On the last day, he was aware that the only option he had to permit the continuation of his services, was to accept the new position. His failure to do so with full knowledge of the consequences was inconsistent with the continuation of the employer-employe relationship and constituted a voluntary termination for unemployment insurance purposes.

The second issue which must be resolved is whether the employe's quitting was for any reason which would permit the immediate payment of benefits under the statutes. At the original hearing, the parties had agreed that the employe had been making about $28,000 to $30,000 in his most recent position. At the remand hearing the employer indicated that the employe made about $9.20 per hour in his most recent position. The employer offered the employe a position which paid $720 biweekly, for a 45 hour week, along with a three percent commission on gross sales. (1)    Normally, a commission based on performance cannot be used to enhance wages, because assigning an hourly dollar amount attributable to the commission is speculative. This case is no exception. The employer was unable even to furnish any reliable information regarding past sales. However, even using only the $720 biweekly salary, any decrease in the employe's salary as compared to his most recent position was insignificant and did not amount to good cause for the employe's quitting. However, under the law, the employe can refuse to accept new work if the wages, hours (including arrangement and number) or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality. In this case, the labor market analyst determined that the offered position was actually a combination of two positions, that of a warehouse worker and a sales rep. For a warehouse worker, $8.16 would be a substantially less favorable wage. For a sales rep., $16.01 would be a substantially less favorable wage. In this case, the employe was offered $720 biweekly for a 45 hour week, or about $8 per hour. That wage is less than the prevailing wage for a warehouse worker, let alone a sales rep.

The commission is aware of the fact that the employe had made about $18,000 in 1997, and that therefore even $720 biweekly would be an increase. However, the relevant inquiry is not how the position compared to a previous position, but to similar work.

In sum, while the employer may have intended only to benefit the employe by the transfer, the commission cannot disregard the law. The commission therefore finds that in week 26 of 1998, the employe terminated his work with good cause attributable to the employer, within the meaning of Wis. Stat. § 108.04 (7)(b) and Wis. Stat. § 108.04 (9).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employe is eligible for benefits as of week 26 of 1998, if he is otherwise qualified.

Dated and mailed: March 18, 1999
johnsle.urr : 145 : 3  VL 1080.26  SW 844

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner


MEMORANDUM OPINION

The commission did not discuss witness credibility and demeanor with the ALJ. The ALJ did not have sufficient evidence to make a determination as to whether the wages, hours and other conditions of employment in the offered position were substantially less favorable to the employe than those prevailing for similar work in the labor market. The commission remanded this matter for such evidence, and its reversal is based not on a differing impression of witness credibility and demeanor, but based on evidence in the record which was not available to the ALJ.

NOTE: The dissent suggests that the commission's ruling is punitive to the employer, which was merely offering the employe work. However, the result is compelled by the statutes, and the commission cannot disregard the statutes despite the fact that the employer had good intentions. The dissent suggests that it is not speculative to include commissions on the gross sales of equipment. However, the fact that sales were at a specific level one year does not indicate that sales will always remain at that level or increase. Further, the employer itself believed that the amount of sales was tied to the actions of the individual sales representative. The commission in its remand order of November 18, 1998, requested information concerning the commissions of persons who held this job before the employe. The employer indicated that the person who held this job prior to the employe did not receive any commissions on items sold, but was simply paid an hourly wage pursuant to his duties as a technician. The employer believed that the employe should have a commission because he would do a better job of demonstrating the equipment, and that the employer would sell more equipment. The employer did not keep records of the sales the previous person made in order to calculate the kind of commission the employe might expect. In addition, the employer presented information for 1998 from April 1 until December 31. This figure included some of the employer's sales after July, which is when the employe would have started in the new position. However, this was the gross dollar amount of sales for equipment and took into account some of the smaller equipment that the sales reps demonstrated. Therefore, the commission concluded that this data could not be used. The data could not be separated into sales of products which would have been sold only by the employe.

The employer also testified at the remand hearing that 80 percent of the sales amount it provided pertained to larger pieces of equipment that had to be transported. It is not clear how much commission the employe would receive from this 80 percent, but, it was clear that the employe would not be receiving a commission on the entire $200,000 (actually $195,105.80) as suggested by the dissent.

In addition, the commission has difficulty in duplicating the figures that the dissent has posited. The commission understands the figures involve adding the hourly commission from sales work, at 3 percent as testified by the employe at the original hearing (rather than the 1 1/2 percent testified to by the employer at the remand hearing) to the employe's wage for warehouse work. The dissent appears to compare that wage to the nonprevailing rate for warehouse work. Having done so, the dissent concludes that the posited wage for warehouse and sales work is not less favorable than prevailing for warehouse work only.

In apparent support of its conclusion, the dissent states that the category of sales representative is too broad because "you need to have some idea of what someone is selling to determine the wages they can expect." The dissent goes on to dismiss consideration of the prevailing wage for sales representatives of $16.01 per hour. However, the commission cannot see the logic behind adding the sales commission to the base wage but then comparing the employe's wage to a figure which assumes he did no sales work. Logically, the commission should be added to that portion of the employe's job which involved sales work, not that portion that involved warehouse work, and compared to the prevailing wage for sales work.

The dissent also states the value of the product sold has a major relationship to what a sales representative can make thus indicating that only sales representatives selling products of a similar value to that sold by the employe should be considered. The commission points out that the labor market analyst stated that according to its survey, sales representatives make $12.31 to $30.81 per hour. Thus, even accepting the wage reached by the dissent, $10.50 per hour would be less than that earned by any other sales representative in the employe's labor market and $5.49 per hour less than a wage which would be substantially less favorable to him than that prevailing for similar work in his labor market. The dissent's approach completely disregards the labor market analyst's conclusion because it considers the category too "broad", and fails to consider whether the wage offered was substantially less favorable to the employe than that prevailing for similar work in the labor market, but denies unemployment insurance payments nonetheless. Under the law the commission is required to make a conclusion as to whether a wage is nonprevailing. The commission cannot ignore this requirement when it does not agree with the conclusions reached by the department's labor market analyst.

 

PAMELA I. ANDERSON, COMMISSIONER (Dissenting):

I am unable to agree with the result reached by the majority herein and I dissent

An employe may refuse a job and still receive benefits under Wis. Stat. § 108.04(9) "Protection of Labor Standards. Benefits shall not be denied under this chapter to any otherwise eligible individual for refusing to accept new work under any of the following conditions: ... (b) If the wages, hours (including arrangement and number) or other conditions of work offered are substantially less favorable to the individual than those prevailing for similar work in the locality;..."

This provision is a conformity requirement which initially appeared in the Social Security Act in 1935. The federal government published Unemployment Insurance Program Letter #130 (dated 1/6/1947) which on page 3 explained the purpose of the section as "(T)he second, which prevents denial of benefits if wages, hours, or other conditions are substantially less favorable to the individual than those prevailing for similar work in the locality, was designed to prevent the unemployment compensation system from exerting downward pressure on existing labor standards. It was not intended to increase wages or improve the conditions under which workers are employed, but to prevent any compulsion upon workers, through denial of benefits, to accept work under less favorable conditions than those generally to be obtained in the locality for such work."

The 1947 UIPL described "Similar work," on page 4, in the following way: "Similarity of work can best be judged on the basis customarily used by employers and employes as a result of industrial experience: by occupation and grade of skill. As used in prior legislation, `similar work' has in fact been held to mean work in the same trade or occupation. Superficially this would seem to mean that a job is to be compared with others known by the same title."

However, job titles are sometimes misleading. Different occupations and grade designations are often used in different establishments for the same work. Conversely, the same titles are sometimes used for different kinds of work. The actual comparison of jobs must therefore be made on the basis of the similarity of the work done without regard to title: that is, the similarity of the operations performed, the skill, ability, knowledge required, and the responsibilities involved.

In some occupations the similarity of work cuts across industry lines and the differences in the manner in which the work is done are relatively minor. Bookkeepers and boiler operators, for example are likely to do much the same kind of work whether employed by a grain elevator company, a manufacturing concern or a retail clothing establishment... This essential similarity of work which cuts across industrial lines is generally true of most office, janitorial and clerical occupations and to some degree of unskilled common labor.

In most occupations, on the other hand, there is likely to be considerable variation in the work done in different industries, in parts of industries or even in particular types of establishments within industries. There are marked differences, for example, in the work of a glazier in the construction industry and one in automobile or the furniture industry; and within the furniture industry between a glazier on wooden furniture and one who works on metal furniture. Similar differences exist in the nature of work done by a waiter in a "greasy spoon" and one in a hotel dining room and between the work of a dress saleswoman in the bargain basement and a sales person in a dress salon. Thus, even where there is essential similarity, differences in the nature of the tools used, in the size and quality of the materials worked on, or in the clientele to be served, may create characteristic differences in the work which are important to both employers and employes. Such differences are generally to be found in mass-production-process and service occupations.

At the time UIPL #130 was written, a number of jobs were not covered by minimum wage laws. Page 15 dealt with "Substandard Employment - There are some situations which the prevailing standard provisions are not applicable though the work is unsuitable because the conditions of employment are substandard. Thus, though the conditions prevailing for similar work in the locality will ordinarily be better than the minimum standards set by state and federal law, investigation may occasionally reveal that the wages, hours and conditions prevailing in a particular occupation and locality are below the applicable legal minimum. In such cases where the conditions are in violation of law, even though they are not substantially less favorable than those prevailing, the claimant has good cause for refusing the job under the general suitable work provisions in the State acts."

With this background in mind, what does the ruling in this case do? It punishes an employer who tried to salvage an employe who was not performing his current job. In January the sales manager stopped at the employe's house at 2:30 p.m. and the employe was out shoveling with a glass of brandy in the snow bank near the area he was working. The employe was a commissioned salesman and his production was going down hill. The employer proposed to give him a salary equal to what he had made on commissions in April, May and June of 1998 or $4,800. This wage came out to over $8.00 if figured for 45 hours per week. The employer also was going to give him commissions of 3% of gross sales on equipment. The majority says that it is speculative as to what he would make on commission so we cannot include any dollar figure for commissions. There was discussion about $200,000 in gross sales between April 1, 1998 and December 31, 1998. Even using that number as an approximate of what gross sales for a whole year would be, the employe would be earning around $2.50 an hour from commissions. These figures would have allowed the employe to earn more than the labor market testimony for warehouse workers.

The category of sales representative is too broad because you need to have some idea of what someone is selling to determine the wages they can expect. The labor market testimony assumed that his work would be evenly divided between sales work and warehouse work. The value of the product has a major relationship to what a sales representative can make. The labor market testimony did not give information about the differences between sales jobs that are paid only by commission as the employe was prior to this job offer and those paid by salary.

When we apply new work to this situation, I believe that it would be improper to say that the employer's wage offer would depress wages. The employer was trying to see that the employe's wages did not go down to zero. The employer's offer to the employe was not substantially less favorable to the individual in this situation.

For these reasons, I would reverse and deny benefits in this case because the work was not substantially less favorable to the employe for similar work in her locality.

Pamela I. Anderson, Commissioner


Footnotes:

(1)( Back ) At the remand hearing, the employer asserted the employe was offered $750 biweekly on a 1 1/2 percent commission, thus it is unclear what wage was offered to the employe.


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