Wisconsin Labor and Industry Review Commission --
Summary of Wisconsin Court Decision relating to Unemployment Insurance

Subject: Research Products Corporation v. LIRC and Cory J. Schutz (Hearing No. 98001619BO), Case 99-CV-2960 (Wis. Cir. Ct., Dane Co., July 21, 2000)

Digest Codes:  VL 1080.266   VL 1059.20

The employe worked approximately 18 months as a machine operator at the employer’s plant in Poynette. The employe was a leadworker on the second shift. His base rate was $8.05 per hour, with a 30-cent-per-hour shift differential, and an additional 15 cents per hour for leadworker pay. The applicable collective bargaining agreement also provided for a production incentive system, under which the employe could expect, but was not guaranteed to earn 130 percent of his base rate. In 1997, the employe earned $25,646.35 from the employer, which when divided by 2,080 hours, results in a net wage of $12.33 per hour. The employe did not work any overtime hours at the Poynette plant.

In March of 1998, the employer informed the employe that he was to be laid off, but that he could transfer to the employer’s plant in Madison. The Poynette plant was within three miles of the employe’s residence, but the commute to the Madison plant would have meant a drive of 30 miles each way. When the employe requested further information regarding his pay rate and the position in which he would be working, the employer sent him a memo dated 3/4/98. The memo indicated that his layoff was to be effective 3/6/98; that the Madison job would also be second shift but might involve overtime hours; that he would transfer with his present job classification, less leadperson pay, and he would have to bid for whatever jobs were posted; that the jobs being posted in Madison were for utility worker and assembler; and that his base wage would be $8.05 per hour plus the 30-cent shift differential.

The employe refused the transfer offer because of the increased commuting distance and the additional costs this would entail, and because of the uncertainties regarding what his job duties and hourly wage would be in Madison.

The employer’s witness testified that the average wage earned by its Madison plant workers in March and April of 1998, was 168.9 and 164.5 percent of their base rate, respectively. He also testified that three individuals who did accept transfers from Poynette to Madison in March of 1998, averaged 149.6 percent, 164 percent, and 193.7 percent of their respective base wages in their first six weeks of employment at the Madison plant. He did not indicate whether any of these percentages reflected overtime or other pay differentials.

The appeal tribunal found that the proposed transfer was not unreasonable as to justify a quitting. The commission reversed [original commission decision] and appeal was made to Dane County Circuit Court. Judge Higginbotham set aside the commission’s decision and remanded, because in computing wage loss for the transfer, LIRC compared the actual gross hourly wage the employe earned in Poynette with the 130 percent of base rate projected to be earned in Madison. The judge considered this to be a comparison of "apples and oranges." [Higginbotham decision summary].

On remand, the commission reconsidered and rewrote its decision, this time comparing what the employe actually earned in Poynette with what a reasonable person could have assumed he would earn by accepting the transfer to Madison. By using this method, the commission concluded that the employe could reasonably have expected to earn about the same hourly wage in Madison as he had earned in Poynette, but his increased commuting costs would have resulted in a 19.3 percent reduction in net pay. Accordingly, the commission again found good cause for the quitting [remand commission decision], and the employer again appealed.

Held: The commission’s decision is affirmed, this time under review by Judge O’Brien. The commission’s factual assumptions are supported by the record and its legal conclusion is reasonable. The employer also argued that the commission’s use of the federal mileage rate to compute commuting costs was unreasonable, but Judge O’Brien disagreed and found that this was a reasonable method for calculating commuting costs. 

Please note that this is a summary prepared by staff of the commission, not a verbatim reproduction of the court decision.

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