Wisconsin Supreme Court accepts one new case

Madison, Wisconsin - July 19, 2016

The Wisconsin Supreme Court has voted to accept one new case. The case number, issues, and county of origin of the granted case are listed below. A hyperlink to the Court of Appeals' decision is provided. The synopsis provided is not a complete analysis of the issues presented. More information about any case before the Supreme Court or Court of Appeals can be found on the Supreme Court and Court of Appeals Access website.

2015AP1055 Operton v. LIRC
Supreme Court case type: Petition for Review
Court of Appeals: District IV
Circuit Court: Dane County, Judge John C. Albert, reversed
Long caption: Lela M. Operton, Plaintiff-Appellant, v. Labor and Industry Review Commission, Defendant-Respondent-Petitioner, Walgreen Co. Illinois, Defendant.

Issues presented: This unemployment compensation case is the first appellate case dealing with “substantial fault,” as that term is defined in § 108.04(5g)(a) (2013-14). The Supreme Court reviews the proper standard of review of the Labor and Industry Review Commission’s (LIRC) conclusions of law in cases where the issue is whether an unemployment benefit claimant has committed substantial fault.

Some background: Lela M. Operton worked as a full-time service clerk for Walgreens from Jan. 17, 2012 until March 24, 2014. Operton averaged hundreds of cash handling transactions per day. She was well liked by Walgreens, who described her as "conscientious," "always on time," and "worked to the best of her ability."

Operton participated in Walgreens' employee training and received information on Walgreens' policies and procedures, which included training on how to process Women, Infants, and Children (WIC) program checks. She was aware that employees faced discipline for failing to follow the training checklist.

Operton made eight "cash handling errors" during her 20 months with Walgreens. The first six errors involved WIC program checks, including two instances in which she gave the check back to the customer. The last two errors occurred four days apart, with the last one involving Operton’s failure to check the identification of a customer who was using a stolen credit card to make a $399.27 purchase, even though Operton knew it was Walgreens' policy for employees to check customers' identifications for credit card purchases over $50.

Operton was warned after each error, and she was discharged after the eighth occasion. Operton's explanation for her errors was that she was having personal family issues that left her homeless for a period of time during her employment with Walgreens.

Operton filed a claim for unemployment benefits. Walgreens objected to the request for benefits, claiming Operton "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 on the grounds of "misconduct." Operton appealed.

An administrative law judge (ALJ) held an evidentiary hearing. The ALJ accepted Walgreens' evidence that Operton's mistakes were "errors." The ALJ found that Operton’s actions were not so careless or negligent as to manifest culpability or wrongful intent. The ALJ concluded that Operton was ineligible for unemployment benefits because her discharge was for "substantial fault" rather than misconduct.

The LIRC affirmed the ALJ's decision and adopted it as its own. The LIRC also made a finding not included in the ALJ's decision, i.e. that Operton's failure to check a customer's identification before allowing the customer to use a credit card was a "major infraction."

The circuit court affirmed, concluding that Operton's failures amounted to substantial fault. The Court of Appeals reversed on the grounds that Operton’s failures were inadvertent errors covered by the inadvertent error exclusion from the definition of substantial fault. The Court of Appeals concluded there was no evidence to show that Operton committed a "major infraction."

The appellate court noted that in 2013, the legislature enacted amendments to Wis. Stat. § 108.04(5) and (5g). The appellate court said the legislature replaced the Boynton Cab common law definition of misconduct, [Boynton Cab Co. v. Neubeck, 237 Wis. 249, 296 N.W. 636 (1941)], with a new statutory definition, and as a result, the LIRC's almost 80 years of experience interpreting Boynton Cab had diminished importance. The LIRC says the Court of Appeals erred in concluding that the Boynton Cab analysis is no longer useful.

The Court of Appeals noted the parties disputed the appropriate level of deference to afford the LIRC's decision. The LIRC argued for great weight deference, saying it has longstanding experience interpreting the statutory scheme as the determination of misconduct under the former statute and the determination of substantial fault under the new statute was similar. The LIRC asserted that when deciding if the substantial fault standard has been met, it looks at many of the same facts and circumstances it has reviewed since Boynton Cab.

Tom Sheehan
Court Information Officer
(608) 261-6640

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