Wisconsin Unemployment Insurance Benefits Upon Discharge for Absenteeism – the Employer’s Policy May Be More Generous, But Not More Restrictive, Than the Statutory Default

by Ruder Ware

The Wisconsin Court of Appeals issued a decision in an unemployment insurance benefits case on March 8 that provides clarity where an employee is discharged for absenteeism.  The case is Wisconsin Department of Workforce Development v. Wisconsin Labor and Industry Review Commission, et al (2017 WL 946724).  In doing so the court of appeals described recent legislative history as it relates to discharge for absenteeism.

Prior to 2013, unemployment insurance (UI) benefits could be denied where an employee was discharged for “5 or more” absences without notice in a 12-month period.  In 2013 the legislature changed the standard to “more than 2 absences” without notice in a 120-day period “unless otherwise specified by his or her employer in an employment manual.”  What does that last phrase mean?  The Wisconsin Department of Workforce Development (DWD) asserted that UI benefits could be denied where the employer’s handbook provided that its attendance policy was more restrictive than the “2 in 120 days” floor set in Wisconsin Statute section 108.04(5)(e).

The facts that gave rise to the case involved an employer’s written policy that just one “no call no show” during the probationary period would result in termination.  The flu bug visited the employee shortly before her shift was to begin, and she did not call in. The employer fired her.  The Labor and Industry Review Commission (LIRC) did not accept the DWD’s argument that the employer had free rein to impose a stricter standard than provided by the legislature.  Rather, LIRC ruled that eligibility for UI benefits cannot be eliminated upon an employer’s written attendance policy that is more restrictive than the “2 in 120 days” standard.  The court of appeals affirmed LIRC’s determination.

The court of appeals accorded “due weight” deference to LIRC’s decision.  The due weight standard applies where the agency has “some experience” in administering the statute in question.  Indeed, LIRC has issued over 50 decisions interpreting section 108.04(5)(e).  The due weight standard calls for deferring to LIRC’s judgment “as long as it is reasonable and another interpretation is not more reasonable.”  LIRC employed a 3-step analysis, which the court of appeals found to be reasonable.  First, was the employee discharged for “misconduct” by engaging in any of the seven activities listed in section 108.04(5)(a)-(g)?:

  1. use of drugs or alcohol;
  2. theft from an employer;
  3. conviction of a crime that affects the employee’s ability to perform his or her job;
  4. threats or harassment at work;
  5. absenteeism or excessive tardiness;
  6. falsifying business records, and,
  7. willful or deliberate violation of a written and uniformly applied government standard or regulation.

The terminated employee did not meet any of those seven activities.

Second, did the employee’s action amount to “misconduct” as defined from prior case law (Boynton Cab Co. v. Neubeck, 237 Wis. 249, 259-60, 296 N.W.2d 636 (1941)) and codified in the 2013 statute?  LIRC found that failing to call in on just one occasion was “an isolated incident of ordinary negligence resulting from her ill health” that did not amount to “misconduct.”  Finally, did the employee’s conduct constitute “substantial fault”?  The employee did not have control over becoming ill, and her failure was viewed as health-related inadvertence. 

LIRC acknowledged that the statute allows employers to “substitute a different standard to suit its needs, in this case a different quantity of absences.” But LIRC noted the distinction between the discharge decision of an exacting employer, on the one hand, and eligibility for UI benefits, on the other.  The UI statute is remedial in purpose such that provisions for denial of benefits should be narrowly construed in order to soften the law’s severity and to liberally effect coverage for those who are economically dependent on others. 

The court of appeals found LIRC’s 3-step analysis to be reasonable.  As an example, the court reasoned, would there have been any difference if the employee, instead of coming down with the flu, had been involved in a car crash within two hours of the start of her shift so as to require hospitalization?  Almost no one would deny coverage under that circumstance.  Alternatively, the employee could fail to call in due to drunkenness, in which case almost everyone would deny coverage   LIRC’s 3-step analysis, according to the court of appeals, allows the agency to balance the legitimate concerns of the employer with the remedial purpose of UI benefits.  The court viewed the DWD’s analysis as not more reasonable than that of the LIRC.  And it’s the LIRC, not the DWD, whose decisions are judicially reviewed because the LIRC hears UI appeals and has final review authority of DWD’s decisions.

The minority dissented, noting that review of LIRC’s decision should be “de novo,” in which no deference is given to its analysis.  According to the dissent, the plain language of section 108.04(5)(e) allows the employer to substitute a more generous or a more severe “no call no show” standard.  Moreover, the dissent argued that what is really more or less generous may be a matter of subjective interpretation.  Will we see this case petitioned for review to the Wisconsin Supreme Court for a final determination? Or will LIRC be abolished after the next budget is enacted?

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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