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

Subject: Fox Valley VTAE  v. Peggy Scharenbroch and LIRC, Case No. 89-CV-399 (Wis. Cir. Ct., Outagamie Co., December 19, 1989)

Digest Codes:  MC 630.05  MC 665.08

The employe worked about 19 months as an administrative assistant for the employer technical college and her last day of work was on July 15, 1988.

On June 30, 1988, the employe and her supervisor met to discuss her job performance, which the supervisor considered was unsatisfactory. The supervisor contended the employe had received various warnings concerning job performance, which was denied by the employe, who pointed out she had received pay raises and an excellent evaluation some months before from the same supervisor.

The employe was given the option of how her employment would end. A discharge letter, setting forth reasons for discharge and job duties not performed, was prepared but not shown to her as she elected to resign. She was advised that if she was discharged the employer would not contest her eligibility for U.C. Her last day of work was set for July 15, 1988, she was to continue on the payroll with full fringe benefits through August 31, 1988, and to receive, among other benefits, a letter of recommendation. The letter of recommendation given to her set forth the positive aspects of her work and contradicted the allegations set forth in the letter of discharge.

Several days after filing a claim for U.C., the employer learned that during her employment the employe had taken funds donated to the employer by signing withdrawal slips when the employe made bank deposits. Several weeks later the employer also learned the employe had in 1987 paid herself for overtime. The employe stated such overtime was authorized by her supervisor but he denied such authorization. At about the same time the employer learned the employe had repaid the bank the sum she had taken via withdrawal slips.

The Initial Determination, the ALJ and LIRC all held that the employe did not quit but was discharged. It was also held that the discharge was not for misconduct connected with her employment as there was no evidence that her unsatisfactory job performance was undertaken in any wilful manner or so negligent to demonstrate equal culpability. In addition, there was no causal relationship between the actions which led to her termination and the misappropriation of the employer's funds as the employer had no knowledge of the misappropriation at the time of discharge.

Held: Affirmed. The employer contends that benefits should be denied initially or as of the time it learned of the misappropriation. It is correct that the misappropriation of funds occurred during the employment relationship and that public policy and equity do not permit an individual to benefit from a wrongful act. It is also correct that where there is a void in the law a circuit court can, within limitations, declare what the policy should be.

Here, even if the employe took funds and it is unfair to allow her to benefit, there is no void in public policy. Marathon Elec. Mfg. Corp. v. Industrial Comm., 269 Wis. 394, 411A, 69 N.W.2d 573, 70 N.W.2d 57 1955 ; and Arbitration Between West Salem & Fortney , 108 Wis. 2d 167, 183, 321 N.W.2d 225 (1985), where the facts are not as bad as here, could have said you look at entire conduct of employe based on subsequent discovery. The cases hold you cannot look at subsequently discovered acts and the cases established public policy. Although there may be inequities, any need for change must be done by the legislature.

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

[LIRC decision]

[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]