In the matter of the
unemployment benefit claim of
JENNIFER J PANZIGRAU, Employee
Involving the account of
DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, Employer
On August 14, 1987, the Department of Industry, Labor and Human Relations (DILHR) (1) issued an Initial Determination which held that in week 28 (week ending July 11, 1987), the employe concealed from the DILHR a material fact relating to her eligibility for benefits, within the meaning of section 108.04(11)(a) of the Statutes. The alleged act was the employe's failure to disclose receipt of vacation pay which may be treated as wages, pursuant to section 108.05(4) of the Statutes and which may reduce benefit entitlement, pursuant to section 108.05(3) of the Statutes. She was required to forfeit the next one week of unemployment compensation benefits payable to her by August 12, 1989. The employe filed a timely appeal.
On September 23, 1987, a hearing was held before Jo Ellen Rehbein, an Administrative Law Judge (ALJ) of the DILHR (hearing number 87-201292 EC). The Commission takes administrative notice of the record made at this hearing. On September 25, 1987, Judge Rehbein issued a decision which reversed the Initial Determination, to find that the employe did not conceal a material fact relating to her eligibility for benefits, within the meaning of section 108.014(11)(a) of the Statutes. This decision was not appealed and has become final.
On November 10, 1987, the DILHR issued an Initial Determination which held that in week 36 (week ending September 5, 1987), the employe was suspended for misconduct connected with her employment, within the meaning of section 108.04(6)(a) of the Statutes. The alleged act leading to the suspension was the same act alleged in the concealment decisions noted above. The employe's entitlement to benefits was suspended from August 30, 1987 through November 21, 1987 (week 36 through week 47). (2) The employe filed a timely appeal.
On February 10, 1988, a prehearing conference was held before Howard S. Lustig, an ALJ of the DILHR. The issue noticed for discussion was whether ALJ Rehbeins final decision would have collateral estoppel or res judicata effect on the pending suspension issue. After the prehearing conference, both parties submitted written arguments for Judge Lustig's consideration.
On March 23, 1988, ALJ Lustig issued an Appeal Tribunal Decision which applied the doctrine of collateral estoppel and denied the employer an opportunity for hearing on the suspension issues. As a result, the employe was found to have been suspended in weeks 36 through 43 (from August 30 through October 24, 1987), but not for misconduct or other good cause connected with her employment, within the meaning of section 108.04(6) of the Statutes.
The employer filed a timely petition for review, contending, among other things, that it had additional evidence to present on the suspension issues which was not properly presented at the concealment hearing due to the narrower focus of' that hearing. By letter dated June 30, 1988, the Commission gave the employer an opportunity to submit a written offer of proof to support its contention. The employer's offer of proof was timely received by the Commission on July 11, 1988.
Based on the applicable law, records and evidence in this case, including listening to the hearing tapes from ALJ Rehbein's hearing and a review of the written arguments submitted to ALJ Lustig and the Commission, the Commission makes the following:
The employe worked about 12 years for the employer's Unemployment Compensation Division. Her most recent work for the employer was as a monetary computation technician and disputed claims assistant.
The employe requested and was granted vacation leave for week 28 (week ending July 11, 1987). She subsequently filed a claim for unemployment compensation benefits for that week. She did not disclose her receipt of vacation pay on the claim cards for week 28.
The facts recited above are given as a general background and are not disputed. The parties do dispute the legal consequences of these facts for unemployment compensation purposes, as well as the resolution of additional contested facts.
The employer first contended that the employe's actions amounted to concealment, within the meaning of' section 108.04(11)(a) of the Statutes. This contention was resolved in the employe's favor in the Apppeal Tribunal Decision issued by ALJ Rehbein on September 25, 1987. The decision was not appealed and became final.
The employer next contended that the employee's actions resulted in a dsciplinary suspension for misconduct or other good cause connected with her employment, within the meaning of section 108.04(6)(a) and (b) of the Statutes. This contention is the issue for which the employer seeks a hearing.
The initial question for resolution is whether the employer is entitled to a hearing on the disciplinary suspension issue. The answer to this question requires an analysis of the applicability of the doctrines of res judicata and collateral estoppel.
The basic distinction between the two doctrines is the effect which they have on subsequent hearings. Res judicata would operate as a total bar to subsequent hearings. Collateral estoppel would only foreclose rehearing of the findings of fact and law which resulted from the first hearing, but the parties could still go to hearing on any additional matters necessary to resolve the new issue under consideration.
The issue resolved in the first hearing was concealment. The new issues are whether the employe was suspended for misconduct or other good cause. The issue in the first hearing is not the same as the new issues and the elements (items of proof) of the alleged offenses differ. Application of the doctrine of res judicata would not be appropriate under these circumstances.
The Commission has determined that it is appropriate to apply the doctrine of collateral estoppel for the following reasons. First, while the employer was not listed as a party to the first case, the employer has conceded that it appeared as a party at ALJ Rehbein's hearing. The employer's concession is accepted here because its appearance at the concealment hearing was as a party-employer in substance. Second, the employer had a full and fair opportunity to present its case at the concealment hearing. It was represented by an attorney and had the opportunity to present and cross-examine witnesses. Third, the employer had the ultimate burden of proof at the concealment hearing and has the ultimate burden of proof on the disciplinary-suspension issues. Fourth, the concealment decision was issued after a full hearing and said decision is now final. Fifth, all issues arose from the same set of facts because the prior hearing involved the same allegation of the employe's failure to disclose vacation pay as is alleged in the disciplinary-suspension issues. The reasons cited are the threshold factors which must be present before application of' the doctrine of collateral estoppel would be appropriate.
All threshold factors indicate that the doctrine of collateral estoppel should be applied. As a result, the findings of fact and law made in ALJ Rehbein's decision are binding here. The employer contended that ALJ Rehbein's finding that the employe did not intend to conceal her receipt of vacation pay should not be binding in the disciplinary-suspension case because such finding was not necessary to resolve the concealment issue. The Commission disagrees. While the finding of the employe's intent was not wholly determinative of the concealment issue, it was highly relevant. Therefore, ALJ Rehbein's finding of the employe's lack of an intent to conceal, as well as her other findings and conclusions are binding on the disciplinary-suspension case under the doctrine of collateral estoppel.
As noted previously, the elements of concealment are not the same as needed for disciplinary suspensions. Therefore, a further inquiry is required. Specifically, it must be determined whether it is necessary to resolve questions not resolved in ALJ Rehbein's decision in order to dispose of the disciplinary-suspension issues.
The employer contended that it had additional evidence to present on the disciplinary-suspension issues which it had no basis for introducing at the concealment hearing due to the narrow focus of that hearing. The employer submitted an offer of proof to the Commission in support of its contention.
The employer's offer of proof contained some alleged facts which were already presented at ALJ Rehbein's hearing and accepted as true. These included the employe's job as a claimstaker and the fact that she requested the vacation herself.
Other alleged facts in the employer's offer of proof were not presented at ALJ Rehbein's hearing. These included the dates of her suspension, copies of her position descriptions, copies of her performance evaluations, and a copy of the Unemployment Compensation Manual regarding vacation pay which she allegedly had access to in the performance of' her duties. All of these items were relevant to the question of whether the employe knew or should have known to report to the DILHR the fact that she received vacation pay for week 28. These items were relevant to the issue presented at ALJ Rehbein's hearing. Since the employer could have presented this information at ALJ Rehbein's hearing and since it was relevant to that hearing, it appears that the employer is attempting to obtain a second chance to resolve findings already made, rather than a chance to resolve new and necessary matters.
Furthermore, even if the new items contained in the employer's offer of proof were considered in resolving the disciplinary-suspension issues, the Commission would still rule in favor of the employe. The information presented shows that the employe might have been aware of the basic legal principles associated with receipt of vacation pay, but she did not have sufficient knowledge to resolve her particular situation. For example, her position description showed that she identified and investigated issues such as vacation pay, but then referred them to an adjudicator for resolution. Her case presented an example of a situation where a little bit of knowledge caused more confusion than no knowledge would have.
The Commission therefore agrees with ALJ Lustig's conclusion that the doctrine of collateral estoppel applies here and that the employer is not entitled to a hearing on the disciplinary-suspension issues.
The final questions for resolution are whether the employe could be found to have been suspended for misconduct or other good cause connected with her employment, within the meaning of section 108.04(6)(a) and (b) of the Statutes. The findings of fact and law in ALJ Rehbein's decision are binding here. The Commission takes administrative notice of ALJ Rehbein's decision and incorporates it herein as if fully recited. Both parties already have copies of that decision.
The test used to determine whether an employe was suspended for misconduct connected with her employment, within the meaning of section 108.04(6)(a) of the Statutes, is whether a reasonable person under the factual situation presented would have considered the employe's conduct to be a wilful interference with the employer's interests. Wehr Steel Company v. ILHR Dept. , 106 Wis. 2d 111, 315 N.W. 2d 357 (1982). The Commission has determined that this question must be answered in the employe's favor. The employe did not report the vacation pay because of her reasonable confusion regarding a technical and legal aspect of the allocation of that pay. Such confusion cannot be properly characterized as wilful, interference with the employer's interests.
The test used to determine whether an employe was suspended for other good cause connected with her employment, within the meaning of section 108.04(6)(b) of the Statutes, has not been defined by a precedent-setting court. However, the Commission believes that a reasonable person must find some fault with the employe's actions before a finding of a suspension for other good cause should result. The Commission does not believe that a reasonable person could find the required degree of fault with the employe's actions.
The employe was not sure whether she was required to report the vacation pay under the specific circumstances present with her claim. A similarly-situated co-worker was also confused. The claim cards were mailed by the employe's husband despite her attempts to keep them from being mailed until she could check with her supervisor. It is uncontested that when she did check with her supervisor, her supervisor told her to check with a higher supervisory figure. It is also uncontested that the higher supervisory figure was not available for consultation at the times of the employe's attempted contacts, until after such time as the concealment issue was raised by the employer's report of the vacation pay to the DILHR. The Commission does not believe that a reasonable person could find fault with the employe under these circumstances.
The Commission therefore finds that in weeks 36 through 43 of 1987, the employe's employment was suspended, but not for misconduct connected with her employment, within the meaning of section 108.04(6)(a) of the Statutes, or for other good cause connected with her employment, within the meaning of section 108.04(6)(b) of the Statutes.
The appeal tribunal decision is modified to conform with the foregoing and, as modified, is affirmed. Accordingly, the employer's request for hearing is denied and the employe is eligible for benefits, if she is otherwise qualified.
Dated and mailed July 29, 1988
140 : CD0127 PC 770 PC 749
/s/ Hugh C. Henderson, Chairperson
/s/ Carl W. Thompson, Commissioner
/s/ Pamela I. Anderson, Commissioner
Michael J. Vinopal, Attorney
Howard I. Bernstein, Attorney
Appealed to Circuit Court. Affirmed July 27, 1989. [Summary of Circuit Court decision]
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(1)( Back ) DILHR is the employe's employer in this case, as well as the administrative agency statutorily responsible for administration of the unemployment compensation program. In this decision, the acronym "DILHR" is used to distinguish the role of the Department as an agency, from the role of the Department as an employer.
(2)( Back ) The Commission notes that the benefit-suspension period ordered in the Initial Determination of November 10, 1987, was erroneous. The suspension letter submitted to the Commission by the employer, shows that the employe was suspended from August 30, 1987 through October 25, 1987 (week 36 through week 43). The benefit-suspension period ordered was erroneous because it exceeded the actual suspension period.