Wisconsin Supreme Court Rules that Employer’s Absenteeism Policy Carries the Day Under the Unemployment Compensation Statute

Employers should welcome the Wisconsin Supreme Court’s recent decision in Wisconsin Dept. of Workforce Development v. Wisconsin Labor and Industry Review Commission (June 26, 2018), which clarifies when employee attendance issues constitute “misconduct” for purposes of unemployment compensation benefits.  Rejecting the Labor and Industry Review Commission’s (“LIRC’s”) historical interpretation of the unemployment compensation statute, the Court ruled that an employee who violates her employer’s absenteeism policy, even where that policy is more restrictive than a standard referenced in the statute, engages in “misconduct” and is thus disqualified from receiving benefits.

The Uncontested Story

The facts in DWD v. LIRC were largely undisputed.  Valerie Beres was a registered nurse employed by Mequon Jewish Campus (“MJC”).  At the time of her hire, Beres signed a written attendance policy which specified that during her 90-day probationary period, MJC could terminate her employment if she failed to provide at least 2 hours advance notice of an absence, in even a single instance.  On one occasion during her probationary period, Beres stayed home from work with flu-like symptoms but failed to inform MJC 2 hours before her shift began.  MJC determined that this constituted a violation of its attendance policy and terminated Beres’ employment.  When Beres filed for unemployment compensation benefits, DWD determined that her violation of MJC’s written attendance policy constituted “misconduct” under Wisconsin’s unemployment compensation statute and therefore denied her benefits.

The Next Chapter

Beres appealed DWD’s denial of benefits to LIRC, and LIRC reversed DWD’s decision.  In support of its ruling, LIRC cited the Wisconsin’s unemployment statute provision that addresses when absenteeism constitutes “misconduct” disqualifying a claimant from obtaining benefits.  That provision states that “misconduct” includes an employee’s absenteeism if the employee is absent on more than 2 occasions within a described 120-day period “unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature.”  LIRC reasoned that Beres had not committed “misconduct” under the statute because, although she violated MJC’s stricter attendance policy, she did not violate the “2 in 120-day” standard referenced in the statute.

On appeal, the Circuit Court disagreed and reversed LIRC’s ruling.  Based upon the second clause of the statutory provision, the Court found that an employer may establish its own absenteeism policy, and violation of that policy constitutes “misconduct” for purposes of the unemployment compensation statute.  LIRC appealed to the Court of Appeals, which adopted LIRC’s original interpretation of the statute, finding that Beres had not violated the “2 in 120-day” absenteeism standard referenced in the statute and was therefore eligible for benefits.  DWD petitioned for review by the Supreme Court.

The Final Chapter

In a straight-forward, unqualified and unanimous decision, the Wisconsin Supreme Court reversed the decision by the Court of Appeals.  Citing a case argued before it on the very same day, the Supreme Court began by announcing that it would not defer to an administrative agency’s conclusions of law, as it “is the province and duty of the judiciary to say what the law is.”  The Court proceeded to find that LIRC’s initial determination, upheld by the Court of Appeals, was based on an incorrect interpretation of the unemployment compensation statute.  Rejecting that interpretation, the Supreme Court found that the plain language of the relevant statutory provision allows an employer to adopt its own absenteeism policy, and that policy may differ from the standard referenced in the statute.  Moreover, an employee who is terminated for violating his employer’s policy is disqualified from receiving unemployment compensation benefits, even if the employer’s policy is more restrictive than the policy set forth in the statute.  Applying this interpretation to the undisputed facts of the case, the Supreme Court found that MJC had an absenteeism policy in its employment manual, and Beres acknowledged receipt of that policy.  When she violated that policy by failing to provide MJC notice of an absence, she committed “misconduct” and was properly denied unemployment compensation benefits.

The Epilogue

In the wake of this DWD v. LIRC decision, employers who establish written absenteeism policies, obtain acknowledgments from employees, and consistently apply those policies can be confident that they will be upheld to define “misconduct” under Wisconsin’s unemployment compensation law.  For employers who have not reviewed their attendance/absenteeism policies recently, it may be a good time to determine whether they are sufficiently robust and adequately communicated to employees.  We encourage you to contact the attorneys at Clark & Gotzler if you have specific questions or concerns about your policies.