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Court rules errors don’t preclude unemployment benefits (UPDATE)

Associated Press

MADISON, Wis. (AP) — Employees cannot be denied unemployment benefits in Wisconsin for inadvertent errors, even if the worker has been repeatedly warned about such errors, a state appeals court ruled Thursday.

The ruling is the 4th District Court of Appeals’ first look at interpreting “substantial fault,” a new threshold the state Legislature established in 2013 to tighten eligibility for unemployment benefits.

Under the law, employees can’t receive benefits immediately if they’re terminated for misconduct or “substantial fault,” defined as acts that violate reasonable employer requirements. Misconduct involves “wanton disregard” of an employers’ interests, such as drug and alcohol use, theft or falsifying business records.

Substantial fault, however, is a nebulous concept. The law doesn’t explain what does constitute substantial fault, instead laying out three categories that don’t: minor infractions of rules unless repeated after a warning; inadvertent errors; and any failure to perform work because of insufficient skill, ability or equipment.

In the case before the appeals court, Lela Operton was a full-time service clerk at Walgreens who made eight “cash handling errors,” mostly related to federal assistance checks for the Women, Infants and Children program. She received multiple warnings throughout the two years during which those errors occurred. Walgreens terminated her employment in March 2014 and objected to her request for unemployment benefits.

The Department of Workforce Development denied Operton’s benefits on the grounds of misconduct. On appeal, an administrative law judge affirmed the denial of benefits but on the grounds of substantial fault, a decision the Labor and Industry Review Commission and Dane County Circuit Court both affirmed on appeal.

The appeals court reversed that decision Thursday, ruling that Operton’s actions were inadvertent errors and therefore don’t constitute substantial fault.

“Repeated inadvertent errors do not statutorily morph into ‘infractions’ if warnings have been given,” Judge Paul Reilly wrote in the opinion. “Inadvertent errors, warnings or no warnings, never meet the statutory definition of substantial fault.”

Labor and Industry Review Commission general counsel Maria Gonzalez Knavel said the commission is reviewing the decision and considering its options.

Operton’s attorney, Marilyn Townsend, said the ruling would “impact favorably on thousands and thousands of working men and women, for whom obtaining unemployment is the difference between being homeless and paying their rent.”

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