Wednesday, April 26, 2017

Governor Walker's Recent Budget Proposal Would Have Eliminated Independent Appellate Body

Wisconsin Attorney Victor J. Forberger has a very well-written article in the Wisconsin Bar Association's Labor and Employment Blog about the impact a recent budget proposal would have had that called for the elimination of the Labor and Industry Review Commission (LIRC), the current independent appellate body that hears appeals in unemployment compensation, equal rights division (employment discrimination), and worker's compensation cases.  The results, needless to say, would have been devastating and many people, even legislators, do not know about these proposed changes and their impact on Wisconsin employees and residents.  Definitely worth a read!

Thursday, April 20, 2017

Dealing with Hearsay in Unemployment Appeal Hearings

Former Administrative Law Judge Charles Schaefer has a really good article in the recent edition of the Wisconsin State Bar's publication, "Wisconsin Lawyer," titled, "Hearsay Problems at Unemployment Insurance Hearings."  

I have handled hundreds of unemployment insurance appeals over my several years as an attorney and am all too familiar with this issue--and many of the other issues that plague the unemployment insurance appeal process in Wisconsin.  Understanding that representation in unemployment insurance appeals is expensive--especially for people recently unemployed and unsure of their financial future--it is always best to have an experienced attorney for these matters as it could be the difference between collecting unemployment checks for the maximum period and receiving nothing.

Many people assume that they just show up and explain their side of the story, which is only partly true.  Though highly relaxed, unemployment insurance appeal hearings still adhere to the rules of evidence, for the most part, and still require the parties to meet certain evidentiary burdens.  Experienced counsel can help a claimant or respondent ensure they have all of the required evidence and witnesses and then competently represent the party at hearing as it is never known in advance who will appear as a witness for either side.  An unemployment appeal hearing before an administrative law judge is also the best chance to get a decision reversed in a party's favor as each appeal thereafter gets more difficult with the issue(s) narrowing to near impossibility.

Thus, get an attorney for your unemployment appeal!

Wednesday, April 12, 2017

Wisconsin Court of Appeals Weighs in on "Substantial Fault" in Unemployment Insurance Claims

Back in 2013, the Wisconsin legislature enacted amendments to the unemployment insurance statute in response to "concerns within the employer community that the current misconduct standard in Wisconsin was too generous in providing benefits to employees who should not qualify."  These amendments created a new two-tier standard for disqualifying claimants from receiving unemployment insurance benefits: misconduct and substantial fault.  I have written about this new "substantial fault" standard previously here and here.

The statutory definition for "substantial fault" is as follows:
For purposes of this paragraph, "substantial fault" includes those acts or omissions of an employee over which the employee exercised reasonable control and which violate reasonable requirements of the employee's employer....
Unlike for "misconduct," in which the Wisconsin legislature expressly set forth specific employee actions that constitute "misconduct," the legislature set forth three (3) acts or omissions by employees that do not constitute substantial fault:
1.  One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction.
2.  One or more inadvertent errors made by the employee.
3.  Any failure of the employee to perform work because of insufficient skill, ability, or equipment. 
In the appeal that will be discussed, the terms "inadvertent errors" and "infractions" come into play.  Under the Wisconsin Court of Appeals rules of statutory construction, when the legislature uses different terms within the same statute, they intend the terms to have distinct meanings.  Whereas "error" is defined in Wisconsin statute, "infraction" is not.

Lela M. Operton v. LIRC, et al. 

Lela Operton worked as a full-time service clerk for Walgreens from July 17, 2012 until her termination on March 24, 2014.  As a service clerk, Operton average hundreds of cash handling transactions per day during her 20 months of full-time employment, or an estimated 80,000 transactions.  Operation was well-liked by Walgreens, who described her work and demeanor as "conscientious," "always on time," "worked to the best of her ability," and willing to work on her days off.  However, Operton made eight (8) "cash handling errors" during her 20 months with Walgreens that led to her termination which was labeled as "cash handling errors" and "her failure to improve on them."  Walgreens acknowledged that the cash handling errors were not intentional nor performed with any ill will on the part of Operton.

Operton applied for unemployment benefits and Walgreens opposed Operton's application claiming that she "was discharged for violation of a reasonable company policy regarding excessive cash discrepancies" which was as a result of her "incapacity to perform."  The Department of Workforce Development ("DWD") initially denied benefits to Operton on the grounds of "misconduct." Operation appealed this initial determination and an administrative evidentiary hearing was held before an administrative law judge ("ALJ").  The ALJ concluded that Operton was ineligible for benefits not because she engaged in misconduct, but that her discharge was for "substantial fault."   Operton appealed to LIRC, who affirmed the ALJ's decision and adopted the ALJ's decision as its own.  LIRC also made a finding not included within the ALJ's decision:  Operton's March 22, 2014 failure to check the customer's identification was a "major infraction."  LIRC did not explain why the error was a "major infraction."  Operton then filed for an appeal for judicial review to circuit court and the circuit court appealed LIRC.  Operton then filed an appeal to the Wisconsin Court of Appeals.

Wisconsin Court of Appeals Decision

The Court of Appeal ruled that de novo review is required as "substantial fault" is a completely new legal concept not previously in existence.  LIRC was not applying an old statute in a new way; it was applying a new statute to a new concept.  The application of the "substantial fault" statute is a matter of first impression before the Court of Appeals, and LIRC did not have a longstanding nor consistent history in the application and construction of the substantial fault statute (the Court noted two other cases dealing with substantial fault where LIRC arrived at results inconsistent with this case).

The Court of Appeals reversed LIRC for three (3) main reasons:  1)  There was no evidence in the record that Operton committed a "major infraction," 2) Repeated inadvertent errors, even if warned, do not constitute "substantial fault," 3)  Operton's conduct reflects a failure or ability to conform to Walgrees' expectations rather than "substantial fault."  The Court of Appeals discussed each of these in great detail, which is beyond the scope of this post, but only furthers the famous saying, "the devil is in the details."

In concluding their opinion, the Court of Appeals stated that "[i]nadvertent errors, even if repeat after a warning, do not constitute substantial fault," that LIRC's finding that Operton's eight error was a "major infraction" has no support in the record, and Operton's failure to meet Walgreens expectations under the facts presented does not make Operton ineligible for unemployment benefits under Wisconsin Statute.  The Court of Appeals reversed the circuit court's order affirming LIRC's decision and remanded for further proceedings consistent with this opinion.

While the definition and application of "substantial fault" is still developing and evolving, this case further shows that "substantial fault" will not apply to employees and terminations where the employee clearly was not making intentional mistakes or errors unless it's established that the employee was warned and made aware of these mistakes and errors and that more of them will result in discipline, up to and including termination. Thus, even if an employee made a dozen mistakes or errors that were of great cost to an employer, without clear warnings or evidence the employee was acting intentionally, misconduct nor substantial fault is likely to apply and the employee will likely be eligible for unemployment benefits.

The case is Lela M. Operton v. LIRC et al., 2016 WI APP 37 (April 14, 2016).  The Milwaukee Journal Sentinel wrote about the case here.

Wisconsin Court of Appeals Upholds Decision Finding Employee's Termination for Behavior Attributed to Disability Violated Wisconsin Fair Employment Act

The Wisconsin Court of Appeals in a decision late last month affirmed an Equal Rights Division Administrative Law Judge and Labor and Industry Review Commission's ("LIRC") decision that found that a former Wisconsin Bell/AT&T employee's termination violated the Wisconsin Fair Employment Act ("WFEA") when he was terminated for conduct caused by his disability (bipolar I disorder).  As is the case with almost every employment law case, the facts are very intensive and specific, but important lessons are still to be learned from this case.

Facts

The plaintiff, Charles E. Carlson ("Carlson") had worked for Wisconsin Bell/AT&T since 1986 and worked in several positions but at the time of his termination he was serving as a customer service representative, which is a position he held from November 2007 until his termination in June 2011.  In 1997 Carlson began treatment for his eventual diagnosis for bipolar I disorder, which is an illness characterized by having at least one episode of mania, combined with episodes of depression.

Carlson disclosed his condition to a supervisor prior to moving to the call center.  At the discretion of that supervisor, temporary accommodations for limited periods could be made when Carlson's symptoms arose at work and when he could not get the symptoms under control, he sometimes requested time off to be covered under FMLA.  Carlson informed his next supervisor about his condition as well.  This next supervisor informed Carlson that she already knew about his condition from his previous supervisor.  When Carlson moved to his recent position at the call center, he did not inform his new supervisor because he thought this information was passed on by management.

In 2010, Carlson was disciplined after he was observed disconnecting 8 consecutive calls over a period of 9 minutes, without explanation, in violation of AT&T's policy that prohibits call avoidance. Carlson was issued a suspension pending termination for this incident.  A Review Board hearing was held regarding this suspension where Carlson presented letters from his physicians describing his illness and its symptoms, such as "extreme moods" that can come on rather quickly, triggers by a "relatively minor frustration."  Prior to this hearing, Carlson's supervisor had not been informed about Carlson's condition.  Nevertheless, Carlson's supervisor found the physician letters to have no impact on the proceeding because the conduct for which Carlson was being disciplined, intentionally disconnecting customers, would never be allowed under any circumstances.  Instead of termination, Carlson was issued a 50-day suspension.  Carlson was then told by AT&T's Labor Relations Manager that if he needed accommodation for his condition in the future, that he should request it through their 3rd party administrator.

AT&T required Carlson to enter into a "Back to Work Agreement" which permits an employee to return to work with the understanding that at any time during a one-year time frame, they would have just cause to terminate that employee for any infractions relating to customer care, or for a breach of integrity.  This Agreement was to commence when he returned to work on May 1, 2010 and continue through April 30, 2011.  A mere 10 days prior to the expiration of this Agreement, Carlson left work just before lunch due to illness.  Prior to leaving, around 11am, he activated a "health code" which took him temporarily offline and kept him from receiving any incoming customer calls, for a variety of reasons, from illness to simply having to use the restroom.  The average "health code" is 3-5 minutes.  The total time Carlson's health code was activated that day was 38 minutes.  Carlson's use of AT&T's inter-office communication system (Q-Chat) was questioned and it was revealed that he had initiated Q-Chats with coworkers during his health code times discussing various things.  Based on these Q-Chats, his supervisors concluded that he was not really ill and he was subsequently issued another suspension pending termination.

Another Review Board hearing was held regarding Carlson's latest suspension and Carlson again obtained a letter from his physician about his bipolar disorder.  His supervisor dismissed this letter stating, "[w]e've seen this before."  After the hearing AT&T determined that Carlson's termination was warranted.  Carlson then filed 2 complaints with the Wisconsin Department of Workforce Development Equal Rights Division.  The first was after his 50-day suspension and the other after his termination.

ERD, LIRC and Circuit Court Appeals

Carlson's 2 complaints were consolidated for hearing before an ALJ where Carlson alleged that AT&T violated the WFEA in suspending and terminating him because they were based on his disability and that AT&T failed to accommodate his disability.  In a decision dated April 24, 2014, the ALJ determined that Carlson's conduct was caused by his condition and thus both actions taken by AT&T were "because of" his disability and therefore violated the WFEA.

AT&T appealed the ALJ's decision to LIRC.  LIRC, in a decision dated February 19, 2015, reversed the ALJ's ruling regarding the suspension, and found that although Carlson's conduct in February 2010 was caused by his bipolar disorder, his supervisor and managers at that time did not have knowledge of his disability.  However, LIRC affirmed the determination that AT&T had terminate Carlson because of his disability because at that point his supervisors had been informed of his condition and the types of symptoms which could arise at work (because of the Review Board hearings and physician letters).

AT&T then filed a petition for judicial review of LIRC's decision with the Milwaukee County Circuit Court.  The circuit court found that the inference theory of causation utilized by LIRC in finding AT&T liable was reasonable.  However, the circuit court remanded the case to LIRC, finding LIRC's analysis of the issues and facts of the case to be "incomplete," specifically with regard to LIRC's findings relating to whether AT&T had known that Carlson's conduct was caused by his condition at the time of his termination.  AT&T appealed the circuit court's decision to the Wisconsin Court of Appeals, arguing that the inference method of establishing causation is NOT a reasonable interpretation of the WFEA; or, in the event that it is found reasonable and applied in this case, that the evidence is not sufficient to support a finding of liability.

Court of Appeals Decision

There was no dispute that Carlson had a qualified disability or that he was terminated.  The main issue on appeal (a second issue was the level of deference given to LIRC given the main issue) addressed whether LIRC's interpretation of the WFEA is reasonable, specifically with regard to the "because of" language in the statute, whereby LIRC applies the inference theory of causation to impose liability on employers.  Under the inference theory of causation, "[i]f an employee is discharged because of unsatisfactory behavior which was a direct result of a disability, the discharge is, in legal effect, because of that disability."

The Court of Appeals agreed with LIRC and held that AT&T had sufficient information and knowledge about Carlson's disability due to the evidence and information provided at the 2010 Review Board hearing and that Carlson's conduct in April 2011 was consistent with the symptoms described in those letter presented by Carlson's physicians.  These findings were further supported by deposition testimony from Carlson's physicians which stated Carlson's engaging in Q-Chats with coworkers was indicative of his bipolar condition as he was seeking out help during a difficult time.  Based on all of this evidence, LIRC determined, and the Court of Appeals agreed, that Carlson had established a link between his conduct and his condition, and that AT&T's response was insufficient to contradict this evidence.

Take Away's

If an employee has a known disability, it's important to review what you know about this employee's disability when reviewing their disciplines and certainly before you terminate them.  This may involve not only reviewing their personnel file but also speaking to their supervisors as often times employees reveal information about their disabilities to their managers and supervisors.  In this case, the employer knew a great deal about Carlson's disability because they had a hearing on the issue where medical evidence was introduced and where his supervisor was present.  If the employee is behaving in a manner consistent with their disability, it is more than likely more proper to consider engaging in the interactive process to see how they may be accommodated instead of disciplining them as it may lead to liability in a disability discrimination claim.

The case is Wisconsin Bell, Inc. v. LIRC and Charles E. Carlson, Appeal No. 2016AP355 (WI Ct. App. March 28, 2017)