Wisconsin Department of Workforce Development, Plaintiff-Respondent,
Wisconsin Labor and Industry Review Commission, Defendant-Appellant, Valarie Beres and Mequon Jewish Campus, Inc., Defendants.
from an order of the circuit court for Ozaukee County: No.
2015CV358 SANDY A. WILLIAMS, Judge. Reversed.
Neubauer, C.J., Reilly, P.J., and Gundrum, J.
This case addresses eligibility for unemployment benefits
when an employer has terminated an employee for misconduct
due to absenteeism. The Wisconsin Department of Workforce
Development (DWD) challenges the Labor and Industry Review
Commission's (LIRC) interpretation of the absenteeism
statute, WIS. STAT. § 108.04(5)(e)
(2015-16). Given our standard of review, we uphold
LIRC's interpretation of § 108.04(5)(e) as
reasonable and reverse the circuit court.
Prompted by concerns within the employer community that
eligibility for unemployment benefits was too generous, the
legislature, in 2013, made wholesale changes to the
unemployment benefit law,  including modifying the absenteeism
ineligibility criteria from "5 or more" absences
without notice in a twelve-month period to "more than
2" absences without notice in a 120-day period,
"unless otherwise specified by his or her employer
in an employment manual." Compare WIS. STAT. §
108.04(5g)(c) (2011-12), with § 108.04(5)(e)
(emphasis added). It is this final clause that is at the
heart of the dispute.
DWD argues that the statute by its plain language allows an
employer to have an attendance policy more restrictive than
the "2 in 120" standard, whereas LIRC argues that
the "2 in 120" is the default standard. According
to LIRC, while employers may be more generous (i.e., utilize
the former "5 in 12 month" standard), an employer
may not be more restrictive than the "2 in 120"
default standard. As we are required to accord deference to
LIRC rather than DWD, and as we conclude that LIRC's
interpretation is more reasonable given LIRC's three-step
approach, we affirm LIRC's interpretation and reverse the
Stat. § 108.04(5)
As noted, in 2013, the legislature created a two-tier
standard for denial of benefits: misconduct and substantial
fault. WIS. STAT. § 108.04(5)-(5g).
"Misconduct" is defined in two parts. The first
part defines misconduct as willful or wanton actions
demonstrating deliberate violations; carelessness or
negligence of such degree to manifest culpability, wrongful
intent, or evil design; or the intentional and substantial
disregard of an employer's interests. Sec. 108.04(5). In
addition to these bad/intentional acts, the legislature
enumerated seven specific circumstances that qualify as
misconduct (i.e. no requirement to prove deliberate or bad
acts on part of the employee): (1) use of drugs and 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. Sec.
This case involves the legislature's definition of
absenteeism. At the same time the legislature overhauled the
unemployment insurance statute and created substantial fault,
it also folded "absenteeism, " which was previously
a stand-alone statutory basis for denial of benefits under
WIS. STAT. § 108.04(5g) (2011-12), into discharge for
misconduct. Sec. 108.04(5)(e). The legislature further
modified the definition of what constitutes
"absenteeism" by removing any reference to the term
"excessive" and defining misconduct as including
"[absenteeism by an employee on more than 2 occasions
within the 120-day period before the date of the
employee's termination, unless otherwise specified by his
or her employer in an employment manual of which the employee
has acknowledged receipt with his or her signature ... if the
employee does not provide to his or her employer both notice
and one or more valid reasons for the absenteeism."
Valarie Beres, a registered nurse, was employed by Mequon
Jewish Campus (MJC) and was in her ninety-day probationary
period when she did not show for work on February 23, 2015,
due to "flu-like symptoms." Beres had signed
MJC's written attendance policy which provided that
employees in their probationary period may have their
employment terminated for one instance of "No Call No
Show." MJC's policy required that an employee
"call in 2 hours ahead of time" if they are unable
to work. Beres did not call MJC prior to her shift to inform
MJC that she would be unable to work. Beres was informed on
February 26, 2015, that her employment was terminated.
Beres filed for unemployment benefits. DWD denied benefits on
the ground of "misconduct" as Beres violated
MJC's "No Call No Show" attendance policy.
Beres appealed to LIRC, who reversed on the grounds that
employers may not be more restrictive than the "2 in
120" day standard and that Beres' actions did not
meet the definitions of misconduct or substantial fault. The
circuit court reversed LIRC, adopting DWD's argument that
the plain language of WIS. STAT. § 108.04(5)(e) allows
an employer to have its own rules as to what constitutes
misconduct related to absenteeism. LIRC now appeals.
While DWD is the agency charged with administering the
unemployment insurance program, LIRC handles all appeals of
unemployment insurance claims and has final review authority
of DWD's interpretations. Racine Harley-Davidson v.
State Div. of Hearings & Appeals, 2006 WI 86,
¶¶32, 33, 292 Wis.2d 549, 717 N.W.2d 184; DILHR
v. LIRC, 161 Wis.2d 231, 245, 467 N.W.2d 545 (1991).
"Where deference to an agency decision is appropriate,
we are to accord that deference to LIRC, not to the
[DWD]." DILHR v. LIRC, 193 Wis.2d 391,
397, 535 N.W.2d 6');">535 N.W.2d 6 (Ct. App. 1995) (citing DILHR, 161
Wis.2d at 245).
There are three levels of deference applicable to
administrative agency interpretations: great weight, due
weight, and de novo review. Harnischfeger Corp. v.
LIRC, 196 Wis.2d 650, 659-60, 539 N.W.2d 98 (1995).
Great weight deference, the highest level of deference, is
appropriate when "(1) the agency is charged by the
legislature with administering the statute at issue; (2) the
interpretation of the statute is one of longstanding; (3) the
agency employed its expertise or specialized knowledge in
forming the interpretation; and (4) the agency's
interpretation will provide uniformity in the application of
the statute." Milwaukee Cty. v. LIRC, 2014
WI.App. 55, ¶14, 354 Wis.2d 162, 847 N.W.2d 874
(citation omitted). Due weight deference applies "when
an agency has some experience in the area but has not
developed the expertise that necessarily places it in a
better position than a court to interpret and apply a
statute." Id., ¶15 (citation omitted). De
novo review is applied if the "issue before the agency
is one of first impression or when an agency's position
on an issue provides no real guidance." Id.,
¶16 (citation omitted).
LIRC argues for great weight deference as it asserts all four
conditions are met, most notably that it has issued at least
fifty uniform decisions applying Wis. STAT. §
108.04(5)(e) since the statute was amended. DWD argues for de
novo review as this case ...