Monday, May 15, 2017

Wisconsin Supreme Court Affirms Court of Appeals in "Substantial Fault" Unemployment Insurance Case

Last month I wrote about the Operton case where the Wisconsin Court of Appeals reversed the Wisconsin Labor and Industry Review Commission's (LIRC) finding that a former Walgreens employee, Lela Operton, was terminated for "substantial fault" after she made 8 "cash-handling mistakes" during her 20-months of full-time employment.  Walgreens acknowledged that the cash handling errors were not intentional nor performed with any ill will on the part of Operton but LIRC and circuit court all affirmed the ALJ's finding that this conduct amounted to substantial fault.  The matter was ultimately appealed to the Wisconsin Supreme Court who affirmed the Court of Appeals and held Operton's conduct was not for "substantial fault."  

LIRC's Interpretation of Wis. Stat. sec. 108.04(5g)

The majority opinion first noted that Wisconsin's unemployment compensation statutes embody a strong public policy in favor of compensating the unemployed, but that, nevertheless, not all employees are entitled to unemployment benefits.  As noted by the Court of Appeals, the Wisconsin legislature made substantial changes to Wisconsin's unemployment laws to include "substantial fault" to make it more difficult for individuals to obtain unemployment benefits.  Substantial fault includes "acts or omissions of an employee over which the employee exercised reasonable control and which violate reasonable requirements of the employee's employer."  The burden is on the employer to show that the termination was due to the substantial fault of the employee.  

In noting the differences amongst the articulated exceptions enumerated under "substantial fault," the Court noted that it is important to view Wis. Stat. sec. 108.04(5g)(a)2 in context to ascertain the types of conduct to which it applies and that an employee who is warned about an inadvertent error is not necessarily terminated for substantial fault even if the employee subsequently makes another error.  The facts are always key in employment and unemployment law cases, which a detailed review of the facts in this case highlight as Operton's 8 mistakes were very spread out during her 20-months of employment with Walgreens.  The Court noted how Operton would go months without a mistake, despite the thousands and thousands of transactions she would handle.  

The Court also noted that Operton was not repeatedly making the same error, though they were all similar in nature.  The Court found that, for the most part, Operton violated different rules or procedures each time.  

To read the full opinion, and concurring opinions, see here.

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