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  • WI Appeals Court Could Set Precedent On “Substantial Fault” Unemployment Benefit Denial
    Posted On: May 02, 2016

    By JoAnne Powers, May 3, 2016

    In 2013, Wisconsin Governor Scott Walker and the state’s Republican-controlled legislature made changes to state law adding a new basis for denying unemployment benefits to workers.  While historically a discharged worker could only be denied unemployment if engaged in gross misconduct such as lying, cheating and stealing, the new law added something called “substantial fault’.  Madison Labor and Employment attorney Marilyn Townsend says the legislature was very transparent in what it was trying to do:

    [Marilyn Townsend]: “They said, essentially, they believed too many people were qualifying for unemployment benefits, and employers believed it was too difficult for them to prove misconduct…so the legislature projected that, with this new standard, they could save 19.1 million dollars in benefits per year.”

    Thousands of Wisconsin workers would likely have to be denied unemployment benefits every year in order to save that 19 million dollar figure.  In an April ruling Townsend hopes will set a precedent, a Wisconsin Court of Appeals reversed a decision by the Labor Industry Review Commission, or LIRC, which had denied benefits to an elderly African American Walgreens worker.    What exactly was her client’s “substantial fault?”

    [Marilyn Townsend]: “She made eight cash handling errors out of over 80,000 she engaged in over a period of twenty months.   LIRC said she engaged in ‘substantial fault’ because there came a point where she shouldn’t have been making these errors.” 

    While the definition of ‘substantial fault’ is nebulous-at-best, the statute specifically says that it is not one or more inadvertent errors nor working to the best of your ability. 

    [Marilyn Townsend]: “We had a record that indicated these errors were inadvertent.  LIRC agreed that she didn’t intentionally commit wrongs.  We said these inadvertent errors and the fact that she was working to the best of her ability actually restricted LIRC from denying her unemployment.”

    Townsend describes the reasoning behind the court’s decision:

    [Marilyn Townsend]: “Everyone makes errors on the job.  These are the kinds of errors anyone would make.  While we don’t know what substantial fault is, we know what it is not.  The legislature said it was not one or more inadvertent errors.  Furthermore, the court said, she had a perfection rate of over 99 percent.  Walgreens can fire here, essentially, for not being perfect, but she cannot be denied unemployment.”


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