Wisconsin employers that have found themselves frustrated by the fact that they can end an employment relationship for legitimate, business-related reasons yet the employee can still collect unemployment benefits were granted some relief by the Wisconsin Supreme Court in one of its final decisions of the 2017–2018 term. In Wisconsin Department of Workforce Development v. Wisconsin Labor and Industry Review Commission, No. 2016AP1365 (June 26, 2018) (also known as Beres), the court examined a 2013 change to the Wisconsin statute controlling an individual’s disqualification from unemployment benefits and whether an employee may be denied such benefits based on an employer’s attendance policy that is stricter than the statutory standard. The court concluded that the statutory number of absences by an employee that will result in disqualification from unemployment benefits may be overridden by an employer’s written policy that implements a stricter standard.

Wisconsin’s Unemployment Law

Wisconsin’s unemployment law disqualifies an employee from receiving benefits if the employee engages in “misconduct” leading to termination from employment. In 2013, prior to the events in Beres, Wisconsin had made significant changes to its unemployment insurance law. One change included the definition of misconduct based on absenteeism under Wisconsin Statutes section 108.04(5)(e):

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, or excessive tardiness by an employee in violation of a policy of the employer that has been communicated to the employee, if the employee does not provide to his or her employer both notice and one or more valid reasons for the absenteeism or tardiness.

Following this legislative change, the lower courts and administrative agencies took this area of the law on a roller coaster ride by issuing a number of decisions on one clause in this definition, “unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature.”

The Beres case

The employee in Beres worked as a nurse for an employer whose written attendance policy stated that the employer could discharge an employee if he or she had a single absence during a 90-day probationary period if he or she did not call in at least two hours ahead of her scheduled shift. During her probationary period, the employee was absent due to sickness and did not comply with the employer’s attendance policy requiring that she call in at least two hours prior to the start of her shift. As a result, the employer terminated her employment.

When the employee in Beres applied for unemployment benefits, the Wisconsin Department of Workforce Development (DWD) found she was disqualified from receiving them because she violated the employer’s attendance policy. DWD determined that the employer could enact a stricter attendance policy than the one outlined in the statute, and the employee could be denied unemployment benefits for violating the employer’s sterner requirement.

When the employee appealed, the Wisconsin Labor and Industry Review Commission (LIRC) reversed DWD’s decision and awarded unemployment benefits to her. LIRC’s opposing position was that section 108.04(5)(e) set a standard and an employee could not be denied benefits on the basis of an employer’s attendance policy that was stricter than the absenteeism policy in the statute. DWD appealed this decision, and a judge in the Circuit Court of Ozaukee County agreed with DWD’s interpretation of the law. The Wisconsin Court of Appeals then reversed the lower court’s opinion and took LIRC’s position on the statute, thus setting up the issue for the Wisconsin Supreme Court to review.

The Wisconsin Supreme Court Decision

In the final decision on this issue, the Wisconsin Supreme Court found that the employee was disqualified from receiving unemployment benefits pursuant to the “plain language” of the law. The court held the statute “allows an employer to adopt its own absenteeism policy that differs from the policy set forth in section 108.04(5)(e), and that termination for the violation of the employer’s absenteeism policy will result in disqualification from receiving unemployment compensation benefits even if the employer’s policy is more restrictive than the absenteeism policy set forth in the statute.”

The court’s Beres decision demonstrated that Wisconsin courts are no longer required to defer to an administrative agency’s conclusions of law but must instead only give “due weight” to their experience, technical competence, and specialized knowledge. This principle was also put into practice in one of the court’s major employment decisions concluding its 2017–2018 term, Wisconsin Bell, Inc. v. Labor and Industry Review Commission.

Key Takeaways

The Beres decision emphasizes for employers the importance of implementing an attendance policy, putting it in writing, and obtaining employees’ acknowledgement of that policy. For employers that experience high turnover due to employee attendance issues, adopting a written policy that accounts for the most common offenses leading to termination may be a means of reducing unemployment benefit costs.

The Beres decision also presents an example of the Wisconsin Supreme Court diverging from LIRC’s position and only granting its opinion “due weight” consideration. The greater flexibility currently granted to Wisconsin courts may be an important factor for employers evaluating whether to appeal an unfavorable decision through the administrative review process.