2017 WI 46
SUPREME COURT OF WISCONSIN
CASE NO.: 2015AP1055
COMPLETE TITLE: Lela M. Operton,
Plaintiff-Appellant,
v.
Labor and Industry Review Commission,
Defendant-Respondent-Petitioner,
Walgreen Co. Illinois,
Defendant.
REVIEW OF A DECISION OF THE COURT OF APPEALS
369 Wis. 2d 166, 880 N.W.2d 169
(2016 WI App 37 – Published)
OPINION FILED: May 4, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: November 10, 2016
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Dane
JUDGE: John C. Albert
JUSTICES:
CONCURRED: ABRAHAMSON, J. concurs, joined by BRADLEY, A.
W., J. (opinion filed).
ZIEGLER, J. concurs (opinion filed).
BRADLEY, R. G., J. concurs, joined by GABLEMAN,
J. and KELLY, J. (opinion filed).
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the defendant-respondent-petitioner, there was a brief
by William Sherlin Sample and Labor & Industry Review
Commission, Madison, and oral argument by William Sherlin Sample
For the plaintiff-appellant, there was a brief by Marilyn
Townsend, and Law Offices of Marilyn Townsend, Madison, and oral
argument by Marilyn Townsend.
For Amicus Curiae Wisconsin Employment Lawyers Association,
a brief was filed by Victor Forberger, Madison.
For Amicus Curiae Wisconsin State AFL-CIO, a brief was
filed by Matthew R. Robbins, Sara J. Geenen and The Previant Law
Firm, Milwaukee.
2
2017 WI 46
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2015AP1055
(L.C. No. 2014CV3050)
STATE OF WISCONSIN : IN SUPREME COURT
Lela M. Operton,
Plaintiff-Appellant,
v.
FILED
Labor and Industry Review Commission, MAY 4, 2017
Defendant-Respondent-Petitioner, Diane M. Fremgen
Clerk of Supreme Court
Walgreen Co. Illinois,
Defendant.
REVIEW of a decision of the Court of Appeals. Affirmed and
cause remanded.
¶1 PATIENCE DRAKE ROGGENSACK, C.J. This is a review of
a published decision of the court of appeals1 reversing a circuit
court order that affirmed a determination by the Labor and
Industry Review Commission (LIRC).2 LIRC determined that Lela
Operton (Operton) was ineligible for unemployment benefits
because she was terminated for substantial fault.
1
Operton v. LIRC, 2016 WI App 37, 369 Wis. 2d 166, 880
N.W.2d 169.
2
The Honorable John C. Albert of Dane County presided.
No. 2015AP1055
¶2 We conclude that LIRC incorrectly denied Operton
unemployment benefits. Operton was entitled to unemployment
benefits because her actions do not fit within the definition of
substantial fault as set forth in Wis. Stat.
§ 108.04(5g)(a)(2013-14)3. Stated more fully, Operton was
terminated for committing "One or more inadvertent errors"
during the course of her employment, and therefore pursuant to
Wis. Stat. § 108.04(5g)(a)2., she was not terminated for
substantial fault. We further conclude that, as a matter of
law, Operton's eight accidental or careless cash-handling errors
over the course of 80,000 cash-handling transactions were
inadvertent.
¶3 Accordingly, we affirm the court of appeals and remand
to LIRC to determine the amount of unemployment compensation
Operton is owed.
I. BACKGROUND
¶4 The following undisputed facts, unless otherwise
noted, are based on the findings of the Department of Workforce
Development's (DWD) administrative law judge (ALJ) that LIRC
adopted. From July 17, 2012 to March 24, 2014, Operton worked
as a full-time service clerk for Walgreens. Operton's
employment sometimes entailed more than one hundred cash-
handling transactions in a day during the twenty months she was
3
All subsequent references to the Wisconsin Statutes are to
the 2013-14 version unless otherwise indicated.
2
No. 2015AP1055
employed full-time by Walgreens. She completed an estimated
80,000 cash-handling transactions4 throughout her employment.
¶5 During her period of employment, Operton made various
cash-handling errors. First, on October 19, 2012, Operton
accepted a Women, Infants, and Children (WIC) check for $8.67
when the check should have been for $5.78. As a result,
Walgreens lost $2.89 and gave Operton a verbal warning as
punishment for her mistake.
¶6 Next, on February 12, 2013, Operton accepted a WIC
check for $14.46, but did not get the customer's signature on
the check. On March 6, 2013, she gave a $16.73 check back to a
customer, and Walgreens suffered a $16.73 monetary loss as a
result. Walgreens was unable to process these two checks and
gave Operton a written warning for these two errors.
¶7 A few months later, Operton took a WIC check for
$27.63 before the date on which it was valid. Walgreens was
unable to process the check, and Operton received a final
written warning.
¶8 On January 1, 2014, Operton returned a WIC check for
$84.95 back to a customer that the customer had tried to use to
purchase $84.95 worth of goods. Walgreens suffered a monetary
loss of $84.95 because of this error and gave Operton an
additional final written warning. And, on January 29, 2014,
Operton received another final written warning as well as a two-
4
Neither side disputes that this is roughly the number of
cash-handling transactions that Operton completed.
3
No. 2015AP1055
day suspension after she accepted a check for $6.17 even though
it was valid for $6.00, thereby causing Walgreens to lose
seventeen cents. Soon after, a customer attempted to pay for
$9.26 worth of items using a food share debit card, but the
customer left the store without completing the transaction on
the pin pad, which caused Walgreens to suffer a monetary loss of
$9.26. Operton was issued another final written warning, which
stated that any additional cash-handling errors would lead to
her termination.
¶9 Furthermore, on March 22, 2014, Operton allowed a
customer to use a credit card to purchase $399.27 worth of
items, but did not check the customer's identification in
violation of Walgreen's policy that employees must check a
customer's identification on credit card purchases over $50. As
a result, Walgreens suffered a monetary loss of $399.27.
Walgreens later found out that the credit card was stolen when a
manager was contacted by police.
¶10 As a result, on March 24, 2014, Walgreens terminated
Operton's employment. Walgreens indicated that Operton was
terminated due to multiple cash-handling errors as well as her
inability to improve despite the accompanying warnings.
Walgreens did not contend that any of Operton's errors were
intentional or malicious.
¶11 After being terminated, Operton filed for unemployment
benefits. Walgreens contested her request and contended that
she was terminated due to an inability to perform her job. And,
4
No. 2015AP1055
initially, the DWD denied Operton unemployment benefits based on
misconduct.
¶12 Operton appealed and an ALJ for the DWD held an
evidentiary hearing. At the hearing, the ALJ concluded that
Operton was ineligible for unemployment benefits. The ALJ found
that there was "no evidence that the employee intentionally or
willfully disregarded the employer's interests by continuing to
make cash-handling errors. Additionally, her actions were not
so careless or negligent so as to manifest culpability or
wrongful intent."5 Accordingly, the ALJ concluded that Operton
had not committed "misconduct connected with her employment."6
¶13 However, the ALJ denied Operton unemployment benefits
and concluded that Operton was terminated for substantial fault.
The ALJ reasoned that Operton "did not dispute that the
transactions for which she was given disciplinary action
occurred, nor did she provide any testimony to establish that
she did not have reasonable control over the actions that led to
her discharge. She was aware of the employer's policies,
including the cash-handling and WIC check procedures, but
continued to make cash-handling errors resulting in actual
financial loss to the employer, after receiving multiple
warnings."7
5
In the matter of Lela Operton, Hearing No. 14001606MD
(June 4, 2014).
6
Id.
7
Id.
5
No. 2015AP1055
¶14 On September 19, 2014, LIRC adopted the findings and
conclusions of the ALJ. Referring to the instance in which
Operton failed to check an individual's identification when
processing a credit card payment, LIRC stated: "This major
infraction, taken together with the final warning regarding
earlier cash transactions, persuades the commission that the
employee's discharge was due to substantial fault."8
¶15 The circuit court affirmed LIRC's decision. In doing
so, the circuit court deferred to LIRC in its entirety.
¶16 The court of appeals set aside LIRC's decision. The
court concluded that LIRC "erred in its construction and
application of 'substantial fault' to the facts presented."9 The
court of appeals reasoned that LIRC was owed no deference, and
therefore de novo review was appropriate. Next, the court
concluded, consistent with Wis. Stat. § 108.04(5g)(a), that an
employee's multiple errors do not automatically transform the
errors from inadvertent into intentional.10
¶17 This court granted LIRC's petition for review. We now
affirm the court of appeals and remand to LIRC to determine the
amount of unemployment compensation Operton is owed.
8
Lela Operton v. Walgreen Co., ERD No. 14001606MD (LIRC,
September 19, 2014).
9
Operton, 369 Wis. 2d 166, ¶1.
10
Id., ¶32.
6
No. 2015AP1055
II. DISCUSSION
A. Standard of Review
¶18 "When there is an appeal from a LIRC determination, we
review LIRC's decision rather than the decision of the circuit
court." Masri v. LIRC, 2014 WI 81, ¶20, 356 Wis. 2d 405, 850
N.W.2d 298. "LIRC's findings of fact are upheld if they are
supported by substantial and credible evidence." Brauneis v.
LIRC, 2000 WI 69, ¶14, 236 Wis. 2d 27, 612 N.W.2d 635 (citing
Hagen v. LIRC, 210 Wis. 2d 12, 23, 563 N.W.2d 454 (1997)).
¶19 In contrast, this court is "not bound by an agency's
interpretation of a statute." Harnischfeger Corp. v. LIRC, 196
Wis. 2d 650, 659, 539 N.W.2d 98 (1995). However, "depending on
the circumstances, an agency's interpretation of a statute is
entitled to one of the following three levels of deference:
great weight deference, due weight deference or no deference."
Cty. of Dane v. LIRC, 2009 WI 9, ¶14, 315 Wis. 2d 293, 759
N.W.2d 571.
¶20 "Which level is appropriate 'depends on the
comparative institutional capabilities and qualifications of the
court and the administrative agency.'" UFE Inc. v. LIRC, 201
Wis. 2d 274, 284, 548 N.W.2d 57 (1996) (quoting State ex rel.
Parker v. Sullivan, 184 Wis. 2d 668, 699, 517 N.W.2d 449
(1994)). "Our basis for giving even due weight deference to an
agency's statutory interpretation is bottomed on two required
assumptions: the statute is one that the agency was charged
with administering and the agency has at least some expertise in
the interpretation of the statute in question." Racine Harley-
7
No. 2015AP1055
Davidson, Inc. v. Wis. Div. of Hearings & Appeals, 2006 WI 86,
¶107, 292 Wis. 2d 549, 717 N.W.2d 184 (Roggensack, J.,
concurring).
¶21 "In according due weight deference, we defer to an
agency's statutory interpretation only when we conclude that
another interpretation of the statute is not more reasonable
than that chosen by the agency." Id., ¶105. As such, under due
weight deference, the court is tasked with determining whether
there is a more reasonable interpretation of the statute. "In
order to decide that question, we make a comparison between the
agency's interpretation and alternate interpretations. This
comparison requires us to construe the statute ourselves." Id.
¶22 "We note here that there is little difference between
due weight deference and no deference, since both situations
require us to construe the statute ourselves. In so doing, we
employ judicial expertise in statutory construction, and we
embrace a major responsibility of the judicial branch of
government, deciding what statutes mean." Cty. of Dane, 2009 WI
9, ¶19 (internal quotations omitted).
¶23 In the present case, the level of deference we afford
LIRC is inconsequential as LIRC did not provide an articulated
interpretation of Wis. Stat. § 108.04 in denying Operton
unemployment benefits.11 LIRC adopted the conclusions of the
11
It is not entirely clear what role the substance of an
agency's interpretation does or should play in determining the
level of deference. Many of our cases discussing the levels of
deference focus not on the presence or substance of an agency's
interpretation; rather, they focus on the institutional
(continued)
8
No. 2015AP1055
DWD's ALJ. But the ALJ did not describe its interpretation of
the statute at issue, Wis. Stat. § 108.04(5g)(a).
¶24 Specifically, there are three types of actions
exempted from the definition of substantial fault. However, the
ALJ concluded that Operton's conduct did not fall within any of
these categories without reasoning through each provision
individually. Importantly, the ALJ never examined Operton's
errors to determine if the errors were "inadvertent" under Wis.
Stat. § 108.04(5g)(a)2.12 The ALJ stated that "Operton was aware
of the employer's policies, including the cash-handling and WIC
check procedures, but continued to make cash-handling errors
resulting in financial loss to the employer, after receiving
capabilities of the agency as well as factors that pertain to
the nature of the legal issue before the court. For this
reason, perhaps our standard of review analysis in cases
involving an agency's interpretation of a statute should include
a threshold determination of whether the agency has articulated
its interpretation of the statute. If the agency has not
provided the court with an articulated interpretation of the
statute, then the level of deference the agency is afforded is
not at issue; we simply interpret and apply the statute.
However, if the agency provided an articulated interpretation of
the statute, we would proceed under our well-established
framework to determine the level of deference to which the
agency is entitled. Such a requirement seems intuitive.
Nevertheless, we need not address this tension for purposes of
the present case.
12
As discussed more in depth below, Wis. Stat.
§ 108.04(5g)(a)2. exempts inadvertent errors by an employee from
the type of conduct included in substantial fault.
9
No. 2015AP1055
multiple warnings."13 It is unclear which prong of Wis. Stat.
§ 108.04(5g)(a) the ALJ was considering.
¶25 LIRC's decision adopting the findings and conclusions
of the ALJ provided no clarification. Importantly, LIRC also
did not discuss whether the errors that Operton committed were
inadvertent and therefore a type of error exempted from the
definition of substantial fault. LIRC merely stated:
The employee did not offer any explanation for not
checking the ID which would lead the commission to
conclude that she lacked the ability to conform her
conduct to the employer's reasonable requirement to
check ID for large credit card transactions. This
major infraction, taken together with the final
warning regarding earlier cash transactions, persuades
the commission that the employee's discharge was due
to substantial fault.[14]
Absent from this reasoning is any discussion of "inadvertent
errors" or the conduct the legislature explicitly exempted from
the definition of substantial fault.
¶26 Accordingly, LIRC did not provide an articulated
interpretation of the statute that it then applied. As such,
whether we afford LIRC due weight deference or no deference is
of no consequence. See deBoer Transp., Inc. v. Swenson, 2011 WI
64, ¶36, 335 Wis. 2d 599, 804 N.W.2d 658 ("However, we agree
with the court of appeals that we need not decide the applicable
13
In the matter of Lela Operton, Hearing No. 14001606MD
(June 4, 2014).
14
Lela Operton v. Walgreen Co., ERD No. 14001606MD (LIRC,
September 19, 2014).
10
No. 2015AP1055
standard of review here because LIRC's statutory interpretation
and application is unreasonable, and therefore, it will not
withstand any level of deference." (citation omitted)).
Therefore, we interpret Wis. Stat. § 108.04 under well-
established principles of statutory interpretation to clearly
explain the law.
B. Statutory Interpretation, General Principles
¶27 It is axiomatic that "the purpose of statutory
interpretation is to determine what the statute means so that it
may be given its full, proper, and intended effect." State ex
rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58, ¶44, 271
Wis. 2d 633, 681 N.W.2d 110. "We assume that the legislature's
intent is expressed in the statutory language." Id. For this
reason, "statutory interpretation 'begins with the language of
the statute. If the meaning of the statute is plain, we
ordinarily stop the inquiry.'" Id., ¶45 (quoting Seider v.
O'Connell, 2000 WI 76, ¶43, 236 Wis. 2d 211, 612 N.W.2d 659).
"Statutory language is given its common, ordinary, and accepted
meaning, except that technical or specially-defined words or
phrases are given their technical or special definitional
meaning." Id., ¶45.
¶28 "Context is important to meaning." Id., ¶46.
Accordingly, "statutory language is interpreted in the context
in which it is used; not in isolation but as part of a whole; in
relation to the language of surrounding or closely-related
statutes; and reasonably, to avoid absurd or unreasonable
results." Id. (citations omitted).
11
No. 2015AP1055
¶29 Moreover, we need not consult extrinsic sources of
interpretation if there is no ambiguity in the statute. Id.
And, "a statute is ambiguous if it is capable of being
understood by reasonably well-informed persons in two or more
senses." Id., ¶47 (citing Bruno v. Milwaukee Cty., 2003 WI 28,
¶19, 260 Wis. 2d 633, 660 N.W.2d 656). After all, "the court is
not at liberty to disregard the plain, clear words of the
statute." Id. (quoting State v. Pratt, 36 Wis. 2d 312, 317, 153
N.W.2d 18 (1967)).
¶30 These principles guide our interpretation and
application of Wis. Stat. § 108.04 in the present case.
C. LIRC'S Interpretation of Wis. Stat. § 108.04(5g)
¶31 Wisconsin's unemployment compensation statutes embody
a strong public policy in favor of compensating the unemployed.
This policy is codified in Wis. Stat. § 108.01, which provides:
"In good times and in bad times unemployment is a heavy social
cost, directly affecting many thousands of wage earners. Each
employing unit in Wisconsin should pay at least a part of this
social cost, connected with its own irregular operations, by
financing benefits for its own unemployed workers." Wis. Stat.
§ 108.01(1).
¶32 Consistent with this policy, Wis. Stat. ch. 108 is
"liberally construed to effect unemployment compensation
coverage for workers who are economically dependent upon others
in respect to their wage-earning status." Princess House, Inc.
v. DILHR, 111 Wis. 2d 46, 62, 330 N.W.2d 169 (1983).
12
No. 2015AP1055
¶33 Nevertheless, not all employees are entitled to
unemployment benefits. Under Wis. Stat. § 108.04, an individual
may be disqualified from receiving unemployment benefits.
¶34 In 2013, the legislature changed the standard an
employer must meet to disqualify an employee from receiving
benefits. The legislative amendment created a two-tier system
for determining when an employee is disqualified from receiving
unemployment benefits. See Wis. Stat. § 108.04(5) & (5g). The
first tier, disqualification for misconduct, existed prior to
these amendments and is codified in § 108.04(5). This provision
operates to prevent any employee discharged for misconduct from
obtaining unemployment benefits. The legislature defined
misconduct as:
one or more actions or conduct evincing such willful
or wanton disregard of an employer's interests as is
found in deliberate violations or disregard of
standards of behavior which an employer has a right to
expect of his or her employees, or in carelessness or
negligence of such degree or recurrence as to manifest
culpability, wrongful intent, or evil design of equal
severity to such disregard, or to show an intentional
and substantial disregard of an employer's interests,
or an employee's duties and obligations to his or her
employer.
§ 108.04(5). The statute then provides examples of several
actions that constitute misconduct. § 108.04(5)(a)-(g). If an
employee is terminated as a result of any of the statutorily
delineated actions or under the general definition of
misconduct, then the employee's termination was for misconduct,
and the employee is ineligible for unemployment benefits.
13
No. 2015AP1055
¶35 After the legislative amendments to the unemployment
benefits statutes in 2013,15 an employee who has not committed
misconduct may nevertheless be ineligible for unemployment
compensation. Stated otherwise, when an employee's conduct does
not rise to the level of misconduct, the employee may be denied
unemployment benefits if the employee was terminated for
substantial fault. See Wis. Stat. § 108.04(5g). The statute
provides:
An employee whose work is terminated by an employing
unit for substantial fault by the employee connected
with the employee's work is ineligible to receive
benefits until 7 weeks have elapsed since the end of
the week in which the termination occurs and the
employee earns wages after the week in which the
termination occurs equal to at least 14 times the
employee's weekly benefit rate under s. 108.05(1) in
employment or other work covered by the unemployment
insurance law of any state or the federal government.
For purposes of requalification, the employee's
benefit rate shall be the rate that would have been
paid had the discharge not occurred.
§ 108.04(5g)(a).
¶36 Wisconsin Stat. § 108.04(5g) defines substantial fault
broadly. It includes "acts or omissions of an employee over
which the employee exercised reasonable control and which
violate reasonable requirements of the employee's employer."
Id. However, the legislature did not disqualify every employee
who commits such errors from receiving unemployment benefits.
15
Though enacted in 2013, these amendments became effective
on January 5, 2014.
14
No. 2015AP1055
¶37 Instead, the legislature provided three types of
conduct that are explicitly exempt from the definition of
substantial fault. Under the statute, substantial fault does
not include:
1. One or more minor infractions of rules unless
an infraction is repeated after the employer warns the
employee about the infraction.
2. One or more inadvertent errors made by the
employee.
3. Any failure of the employee to perform work
because of insufficient skill, ability, or equipment.
Wis. Stat. § 108.04(5g)(a). Accordingly, if an employee is
terminated for conduct that falls within any of the types of
actions described by the legislature in para. (a), an employee's
termination was not due to the "substantial fault" of the
employee. § 108.04(5g)(a)1-3.
¶38 The burden is on the employer to show that the
termination was due to the substantial fault of the employee.
This is consistent with our past cases interpreting the
unemployment benefits statutes in which we have held that "the
party (the employer here) resisting payment of benefits has the
burden of proving that the case comes within the disqualifying
provision of the law. . . ." Brauneis, 236 Wis. 2d 27, ¶22; see
also Consolidated Const. Co., Inc. v. Casey, 71 Wis. 2d 811,
820, 238 N.W.2d 758 (1976) (reasoning the burden is on the
employer to show that "some disqualifying provision . . . should
bar the employee's claim." (citing Kansas City Star Co. v. ILHR
Dep't, 60 Wis. 2d 591, 602, 211 N.W.2d 488 (1973)).
15
No. 2015AP1055
¶39 Each of the provided-for exceptions are similar in
nature insofar as they remove a type of conduct from what is
considered substantial fault. Specifically, the statute exempts
from the definition of substantial fault conduct that suggests
the employee was prone to accidental errors or simply unable to
adequately perform his or her job.
¶40 A review of the three types of actions the legislature
exempted from substantial fault gives context to the definition
of substantial fault. Wisconsin Stat. § 108.04(5g)(a)1. removes
minor infractions from the type of conduct that is substantial
fault, unless the employee had previously been warned about the
infraction. An analysis of the proposed changes by the DWD
states that this exception was intended to exempt "[m]inor
violations of rules unless employee repeats the violation after
receiving a warning." Department of Workforce Development,
Analysis of Proposed UI Law Change, D12-01 (October 24, 2012).
As such, employees who are terminated for a repetitive type of
minor violation are not at substantial fault for their
termination. If, however, the employee is warned about minor
violations of an employer's rules and continues to commit the
same violation, then the employee's termination may be due to
the substantial fault of the employee.
¶41 Likewise, Wis. Stat. § 108.04(5g)(a)3. provides that
an employee was not at substantial fault for his or her
termination if the employee was incapable of performing the work
the employment required. By its plain language, this provision
16
No. 2015AP1055
includes employees who are terminated for a lack of skill as
well as employees who are not able to master job performance.
¶42 Operton does not contend that her conduct is exempt
from substantial fault under either Wis. Stat. § 108.04(5g)(a)1.
or § 108.04(5g)(a)3. Rather, Operton contends that her conduct
does not fall within the definition of substantial fault because
the errors for which she was discharged were "inadvertent"
errors.
¶43 Accordingly, at issue in the present case is LIRC's
interpretation of Wis. Stat. § 108.04(5g)(a)2., which exempts
from substantial fault, "One or more inadvertent errors made by
the employee." As discussed above, LIRC's decision contains no
articulated interpretation of this subparagraph. Accordingly,
we determine the proper meaning of the statutory provision in
order to apply the law.
¶44 Under Wis. Stat. § 108.04(5g)(a)2., an employee's
termination is not for substantial fault if the termination
resulted from one or more inadvertent errors. Inadvertence is
defined as "[a]n accidental oversight; the result of
carelessness." Inadvertence, Black's Law Dictionary, 827 (9th
ed. 2009); see also Queen Ins. Co. of America v. Kaiser, 27
Wis. 2d 571, 577, 135 N.W.2d 247 (1965) (concluding that "an
inadvertent act of omission" was only "passive negligence" or
"the failure to do something that should have been done"). The
DWD's comment about these substantial fault provisions explained
that this paragraph exempts "[u]nintentional mistakes made by
the employee" from the definition of substantial fault.
17
No. 2015AP1055
Department of Workforce Development, Analysis of Proposed UI Law
Change, D12-01 (October 24, 2012). Consequently, the words of
the statute require courts to examine the circumstances
surrounding an employee's error to determine if it was careless
or unintentional.16
¶45 It is important to view Wis. Stat. § 108.04(5g)(a)2.
in context to ascertain the types of conduct to which it
applies. Notably, § 108.04(5g)(a)1. makes a distinction that
§ 108.04(5g)2. does not. Specifically, § 108.04(5g)(a)1.
provides that one or more minor infractions does not constitute
substantial fault unless an infraction is repeated and the
employer has previously warned the employee about the
infraction. In contrast, § 108.04(5g)(a)2. contains a different
definition. There, an employer's warning is not dispositive of
whether errors were inadvertent under § 108.04(5g)(a)2. That is
not to say an employer's warning can never be relevant to
whether an employee's error was inadvertent. However, an
employee who is warned about an inadvertent error is not
necessarily terminated for substantial fault even if the
employee subsequently makes another error.
¶46 Finally, the statute does not state whether there is a
limitation on the number of inadvertent errors an employee may
commit before the employee's errors are no longer inadvertent.
16
This definition of inadvertent is not inconsistent with
the way in which the court of appeals defined inadvertent in
Easterling v. LIRC, 2017 WI App 18, ___ Wis. 2d ___, ___ N.W.2d
___.
18
No. 2015AP1055
However, we need not determine if a numerical limit exists.
Under the facts of this case, it suffices to interpret the
statute to mean that multiple inadvertent errors, even if the
employee has been warned about the errors, does not necessarily
constitute substantial fault.
D. Application of Wis. Stat. § 108.04(5g)
¶47 In the present case, we must determine whether
Operton's errors are exempted from the statutory definition of
substantial fault. Specifically, we must determine whether
Operton was terminated by Walgreens for "one or more inadvertent
errors" during the course of her employment. We conclude that
she was, and therefore her actions are exempted from the
definition of substantial fault, and she is entitled to
unemployment compensation.
¶48 At the outset, we note that LIRC's findings of fact
within its misconduct analysis support our conclusion. LIRC
found that none of Operton's errors was intentional or willful.
Specifically, LIRC found that "there is no evidence that the
employee intentionally or willfully disregarded the employer's
interests by continuing to make cash handling errors."17
Moreover, LIRC also found that Operton's "actions were not so
careless or negligent so as to manifest culpability or wrongful
intent."18 As discussed below, there is nothing in the record
17
Lela Operton v. Walgreen Co., ERD No. 14001606MD (LIRC,
September 19, 2014) (adopting DWD administrative law judge's
findings).
18
Id.
19
No. 2015AP1055
that suggests these findings are erroneous. Accordingly, LIRC's
factual findings support our conclusion that Operton's conduct
falls within the "one or more inadvertent errors" provision, and
therefore was the type of conduct the legislature exempted from
the definition of substantial fault.
¶49 However, despite these findings, LIRC concluded that
Operton was not entitled to unemployment compensation because
she was terminated from Walgreens for substantial fault.19 LIRC
cited Operton's eight cash-handling errors and reasoned that she
was aware of Walgreen's procedures but continued to make errors.
¶50 However, Operton's eight cash-handling errors were not
so egregious as to warrant the conclusion that the errors were
transformed from inadvertent to reckless or intentional under
the facts of this case. Her errors occurred over a 21-month
time period when Operton completed approximately 80,000 cash-
handling transactions. Accordingly, we conclude that Operton's
eight accidental or careless errors were, as a matter of law,
"inadvertent errors" because Operton made these errors over the
course of 80,000 cash-handling transactions during a 21-month
period.
¶51 The length of time between Operton's errors supports
this conclusion. Operton went months without making an error.
19
We agree with LIRC that Operton's actions fall within the
general definition of substantial fault before the exceptions
are considered. Operton exercised reasonable control over the
cash-handling transaction, and Walgreens' expectation that she
handle such transactions properly was reasonable.
20
No. 2015AP1055
For example, after Operton's cash-handling error on October 19,
2012, she did not commit another error until February 12, 2013.
Likewise, after her cash-handling error on July 26, 2013, she
did not commit another error until January 1, 2014. Therefore,
there were substantial periods of time in which Operton
performed the duties of her job error-free.
¶52 Moreover, Operton was not repeatedly making the same
error.20 Yes, the errors were similar in nature; all of the
errors were cash-handling mistakes. Yet, for the most part,
Operton violated different rules or procedures each time.
Operton's first error occurred when she accepted a WIC check for
$8.67 worth of items even though the check was worth only $5.78.
Operton committed a different type of error when she accidently
gave a check back to a customer who had made a purchase for
which the check was to serve as payment. This was the only time
during her employment when she made this type of error. And, on
a different occasion, a customer left without finishing the
transaction on the pin pad. Again, this was not an error
Operton made more than once. Finally, the error that she was
ultimately terminated for——not checking identification of an
individual using a credit card for a purchase over $50——was a
different type of error than those she had previously made.
20
It is worth noting that LIRC found that Operton was a
conscientious employee, and her supervisor offered to serve as a
reference for her following her termination from Walgreens.
21
No. 2015AP1055
¶53 Accordingly, the length of Operton's employment, the
number of transactions Operton handled throughout her
employment, and the variety of the errors she committed compels
the conclusion that she was not terminated from Walgreens for
substantial fault. While all of the errors fell within the same
general cash-handling duties of her employment, the errors were,
nevertheless, inadvertent.
¶54 Consequently, as a matter of law, Operton's errors are
the type of conduct the legislature intended to exempt from
substantial fault.21 And, as a result, the LIRC improperly
denied Operton unemployment benefits.
III. CONCLUSION
¶55 In light of the foregoing, we conclude that LIRC
incorrectly denied Operton unemployment benefits. Operton was
entitled to unemployment benefits because her actions did not
fit within the definition of substantial fault as set forth in
Wis. Stat. § 108.04(5g). Stated more fully, Operton was
terminated for committing "One or more inadvertent errors"
during the course of her employment, and therefore pursuant to
Wis. Stat. § 108.04(5g)(a)2., she was not terminated for
substantial fault. We further conclude that, as a matter of
law, Operton's eight accidental or careless cash-handling errors
21
We leave open whether there is a point at which the
number of errors that seem inadvertent in isolation cease to be
inadvertent when viewed in their totality. Because we conclude
that, under the facts of this case, Operton's eight errors were
inadvertent, we need not reach this issue.
22
No. 2015AP1055
over the course of 80,000 cash-handling transactions were
inadvertent.
¶56 Accordingly, we affirm the court of appeals and remand
to LIRC to determine the amount of unemployment compensation
Operton is owed.
By the Court.—The court of appeals is affirmed, and the
cause is remanded to the Labor and Industry Review Commission.
23
No. 2015AP1055.ssa
¶57 SHIRLEY S. ABRAHAMSON, J. (concurring). Wisconsin
was the first state in the nation to have an unemployment
compensation law.1 We should get this decision right.
¶58 I agree with the court's mandate. The employer has
the burden of proving that Lela Operton is not eligible for
unemployment benefits. It has not met this burden. Lela
Operton wins.
¶59 I do not join the majority opinion for two principal
reasons: (1) This is a "no deference" case.2 (2) The majority
opinion injects extra-statutory considerations into its analysis
of Wis. Stat. § 108.04(5g)(a)2.
(1)
¶60 This is a "no deference" case. The court of appeals
got it right: De novo review is appropriate because LIRC "is
applying a new statute to a new concept." Operton v. LIRC, 2016
WI App 37, ¶20, 369 Wis. 2d 166, 880 N.W.2d 169.3 This court
1
See Brief of Amicus Curiae Wisconsin State AFL-CIO; Brief
of Amicus Curiae Wisconsin Employment Lawyers Association.
2
I have difficulty with footnote 12 of the majority
opinion. I do not understand the nature and scope of the
majority opinion's reference to the "facts that pertain to the
nature of the legal issue" or to the "substance of an agency's
interpretation," which it refers to as a "threshold question."
Nothing suggestive of this remark has been raised or briefed in
the instant case.
3
See also Racine Harley-Davidson, Inc. v. State, Div. of
Hearings & Appeals, 2006 WI 86, ¶20, 292 Wis. 2d 549, 565–66,
717 N.W.2d 184 (footnotes omitted):
Thus, due weight deference and no deference to an
agency's interpretation of a statute are similar.
(continued)
1
No. 2015AP1055.ssa
independently decides how to interpret Wis. Stat.
§ 108.04(5g)(a)2. Regardless of the deference issue, LIRC
erred.
(2)
¶61 The majority opinion's analysis of Wis. Stat.
§ 108.04(5g)(a)2. significantly strays from the statutory text.
It injects two extra-statutory considerations into its analysis
of § 108.04(5g)(a)2.
¶62 The first statutory misstep is that the majority
opinion adds the idea of a "warning" to Wis. Stat.
§ 108.04(5g)(a)2. The court of appeals got it right, concluding
that "[t]he ALJ and LIRC erred in merging the 'warning'
component set forth in the 'infraction' exception in
§ 108.04(5g)(a)1. with the 'inadvertent error' exception in
§ 108.04(5g)(a)2. . . . Inadvertent errors, warnings or no
warnings, never meet the statutory definition of substantial
fault." Operton, 369 Wis. 2d 166, ¶¶24, 28.
Under both due weight deference and no deference, the
reviewing court may adopt, without regard for the
agency's interpretation, what it views as the most
reasonable interpretation of the statute. When due
weight deference is accorded an agency, however, a
reviewing court will not reverse the agency's
statutory interpretation when an alternative
interpretation is equally reasonable. In contrast, in
a no deference review of an agency's statutory
interpretation, the reviewing court merely benefits
from the agency's determination and may reverse the
agency's interpretation even when an alternative
statutory interpretation is equally reasonable to the
interpretation of the agency.
2
No. 2015AP1055.ssa
¶63 Although the majority opinion concedes that the
"inadvertent errors" language in § 108.04(5g)(a)2. (in contrast
with the language in § 108.04(5g)(a)1.)4 contains no language
regarding warnings to employees, the majority opinion tells
readers, with a straight face, that "an employer's warnings" are
"relevant" in § 108.04(5g)(a)2. Majority op., ¶45.
¶64 I agree with Judge Lundsten's concurrence in the court
of appeals: "Warnings are not relevant under the 'inadvertent
errors' alternative." Operton, 369 Wis. 2d 166, ¶45 (Lundsten,
J., concurring).
¶65 The second statutory misstep occurs when the majority
opinion "leave[s] open whether there is a point at which the
number of errors that seem inadvertent in isolation cease to be
inadvertent when viewed in their totality. . . . " Majority
op., ¶54 n.21. By reserving this question, and thus including
this extra-statutory consideration in its analysis, see majority
op., ¶¶51-53, the majority opinion once again performs a
statutory analysis that is not tethered to the statutory
language.
4
Compare Wis. Stat. § 108.04(5g)(a)1. (Substantial fault
does not include "[o]ne or more minor infractions of rules
unless an infraction is repeated after the employer warns the
employee about the infraction.") (emphasis added) with
§ 108.04(5g)(a)2. (Substantial fault does not include "[o]ne or
more inadvertent errors made by the employee."). See also
Operton, 369 Wis. 2d 166, ¶45 (Lundsten, J., concurring) ("This
omission [of warnings], on the heels of express warning language
in the rules infractions alternative, supports the conclusion
that warnings are not relevant under the 'inadvertent errors'
"alternative.").
3
No. 2015AP1055.ssa
¶66 The statutory language provides that substantial fault
does not include "one or more inadvertent errors . . . ." Wis.
Stat. § 108.04(5g)(a)2. According to this text, the
"inadvertent errors" analysis contains no numerical limits.
¶67 I agree with Judge Lundsten's concurrence in the court
of appeals: "[T]he statute tells us that, if all we have is
repeated . . . 'inadvertent errors,' we do not have 'substantial
fault.'"5
¶68 These missteps demonstrate that the majority opinion
does not apply the rule that the unemployment compensation law
is to be "liberally construed to effect unemployment
compensation coverage for workers who are economically dependent
upon others in respect to their wage-earning status." Princess
House, Inc. v. DILHR, 111 Wis. 2d 46, 62, 330 N.W.2d 169 (1983).
¶69 For the reasons set forth, I conclude that Lela
Operton prevails, but I do not join the majority opinion.
¶70 I am authorized to state that Justice ANN WALSH
BRADLEY joins this opinion.
5
Operton, 369 Wis. 2d 166, ¶43 (Lundsten, J., concurring).
4
No. 2015AP1055.akz
¶71 ANNETTE KINGSLAND ZIEGLER, J. (concurring). I join
the court's opinion. I write separately to make a brief
observation about agency deference. While the subject of agency
deference may currently be a "hot button" issue, the law in
Wisconsin on the subject is well-established: under proper
circumstances this court will defer, to varying degrees, to an
agency's interpretation of a statute. See, e.g., Wisconsin
Dep't of Revenue v. Menasha Corp., 2008 WI 88, ¶¶47-50, 311
Wis. 2d 579, 754 N.W.2d 95. The parties in this case did not
ask the court to address whether changes to that approach are
warranted. There is little doubt that ending the court's
practice of according deference to agency interpretations of
statutes would constitute a sea change in Wisconsin law, and
many interested parties would likely wish to weigh in.
Consequently, I would want to see the issue set forth, briefed,
and argued before expressing an opinion on the merits of such a
change.
¶72 For the foregoing reasons, I respectfully concur.
1
No. 2015AP1055.rgb
¶73 REBECCA GRASSL BRADLEY, J. (concurring). Although I
join the majority opinion, I write separately to question
whether this court's practice of deferring to agency
interpretations of statutes comports with the Wisconsin
Constitution, which vests judicial power in this court——not
administrative agencies. The Labor and Industry Review
Commission (LIRC) asks this court to give "great weight"
deference to its interpretation of the term "substantial fault"
in Wis. Stat. § 108.04(5g)(a) (2013-14). Because "LIRC did not
provide an articulated interpretation of § 108.04 in denying
Operton unemployment benefits," the majority properly conducts
an independent interpretation of § 108.04 without giving
deference to LIRC. Majority op., ¶¶23-26. The doctrine of
deference to agencies' statutory interpretation is a judicial
creation that circumvents the court's duty to say what the law
is and risks perpetuating erroneous declarations of the law.
Because the court in this case fulfills its interpretive duty, I
join the majority opinion but urge the court to reconsider its
decades-long abdication of this core judicial function.
¶74 This court's current deference framework arises out of
two cases from the mid-1990s. In Harnischfeger Corp. v. LIRC,
196 Wis. 2d 650, 539 N.W.2d 98 (1995), the court identified
"three distinct levels of deference to agency interpretations:
great weight, due weight and de novo review." Id. at 659-60
(citing Jicha v. DILHR, 169 Wis. 2d 284, 290, 485 N.W.2d 256
(1992)). "Great weight" deference applies when four conditions
are met:
1
No. 2015AP1055.rgb
(1) the agency was charged by the legislature with the
duty of administering the statute; (2) [] the
interpretation of the agency is one of long-standing;
(3) [] the agency employed its expertise or
specialized knowledge in forming the interpretation;
and (4) [] the agency's interpretation will provide
uniformity and consistency in the application of the
statute.
Id. at 660 (citing Lisney v. LIRC, 171 Wis. 2d 499, 505, 493
N.W.2d 14 (1992)). If an agency's interpretation of a statute
qualifies for great weight deference, then the "interpretation
must [] merely be reasonable for it to be sustained," and an
interpretation is unreasonable only "if it directly contravenes
the words of the statute, [] is clearly contrary to legislative
intent or [] is without rational basis." Id. at 661-62.
¶75 In UFE Inc. v. LIRC, 201 Wis. 2d 274, 548 N.W.2d 57
(1996), this court elaborated on the "due weight" deference
standard. "Under the due weight standard, 'a court need not
defer to an agency's interpretation which, while reasonable, is
not the interpretation which the court considers best and most
reasonable.'" Id. at 286 (quoting Harnischfeger, 196 Wis. 2d at
660 n.4). Courts give due weight deference when an agency has
"some experience" interpreting a statute but not so much as to
"develop[] the expertise which necessarily places it in a better
position" than a court "to make judgments regarding the
interpretation." Id. An agency lacking special knowledge or
expertise nevertheless might receive some deference if "the
legislature has charged the agency with the enforcement of the
statute in question." Id. A court giving due weight deference
to an agency interpretation "will not overturn a reasonable
agency decision that comports with the purpose of the statute
2
No. 2015AP1055.rgb
unless the court determines that there is a more reasonable
interpretation available." Id. at 286-87.
¶76 Examination of the pre-Harnischfeger standard for
reviewing agency interpretations of statutes suggests that the
Harnischfeger court did not simply apply existing law——it recast
it.1 Before Harnischfeger, this court often articulated a
slightly different standard of review: "[I]t is a well-
established principle of statutory construction that the
construction and interpretation of a statute adopted by an
administrative agency charged with the duty of applying the law
is entitled to great weight." Schwartz v. DILHR, 72
Wis. 2d 217, 221, 240 N.W.2d 173 (1976). Tracing that
principle's development in Wisconsin law backwards from
Harnischfeger leads to its source: Harrington v. Smith, 28 Wis.
43 (1871).2
¶77 Harrington presented this court with a dispute over
the interpretation of a statute. Observing that "[t]he statute
1
For a more complete evaluation of the court's
characterization of existing law in Harnischfeger Corp. v. LIRC,
196 Wis. 2d 650, 539 N.W.2d 98 (1995), see Patience Drake
Roggensack, Elected to Decide: Is the Decision-Avoidance
Doctrine of Great Weight Deference Appropriate in This Court of
Last Resort?, 89 Marq. L. Rev. 541, 548-61 (2006).
2
See, e.g., Lisney v. LIRC, 171 Wis. 2d 499, 505-06, 493
N.W.2d 14 (1992); West Bend Educ. Ass'n v. WERC, 121 Wis. 2d 1,
12, 357 N.W.2d 534 (1984); Pigeon v. DILHR, 109 Wis. 2d 519,
524-25, 326 N.W.2d 752 (1982); Schwartz v. DILHR, 72
Wis. 2d 217, 221, 240 N.W.2d 173 (1976); City of Milwaukee v.
WERC, 43 Wis. 2d 596, 599-601, 168 N.W.2d 809 (1969); Mednis v.
Indus. Comm'n, 27 Wis. 2d 439, 444, 134 N.W.2d 416 (1965);
Trczyniewski v. City of Milwaukee, 15 Wis. 2d 236, 240, 112
N.W.2d 725 (1961).
3
No. 2015AP1055.rgb
in question was enacted and has been continuously interpreted,
understood and acted upon by the executive department of the
government, the officers appointed by law to carry its
provisions into effect, . . . for a period of over twenty-one
years, and during twelve successive administrations of the
state," the court concluded that "[g]reat weight is undoubtedly
to be attached to a construction which has thus been given."
Id. at 68-69. Accordingly, the Harrington court explained:
"Long and uninterrupted practice under a statute, especially by
the officers whose duty it was to execute it, is good evidence
of its construction, and such practical construction will be
adhered to, even though, were it res integra,[3] it might be
difficult to maintain it." Harrington, 28 Wis. at 68. In
support of that proposition, this court cited, among other
authorities, Edwards' Lessee v. Darby, 25 U.S. (12 Wheat.) 206
(1827), which stated that, "[i]n the construction of a doubtful
and ambiguous law, the contemporaneous construction of those who
were called upon to act under the law, and were appointed to
carry its provisions into effect, is entitled to very great
respect." Id. at 210.4
3
Latin for "an entire thing," as a legal term res integra
refers to an "undecided question of law" or a "case of first
impression." Res Integra, Black's Law Dictionary 1503 (10th ed.
2014) (citing Res Nova, id. at 1504).
4
In Chevron U.S.A. Inc. v. Natural Resources Defense
Counsel, Inc., 467 U.S. 837 (1984), the Supreme Court also cited
Edwards' Lessee v. Darby, 25 U.S. (12 Wheat.) 206 (1827), among
many other cases, when constructing the two-step framework that
has become the cornerstone of judicial review of agency
determinations at the federal level. Chevron, 467 U.S. at 844
(continued)
4
No. 2015AP1055.rgb
¶78 By recognizing the value of executive interpretations
without entirely ceding interpretive authority to the executive,
these older cases reflect a more nuanced appreciation for
judicial interaction with agency interpretation than this
court's post-Harnischfeger deference standards permit. The
prevailing scheme of deference hamstrings a court of last
resort——with self-imposed shackles——from independently
interpreting the law, thereby thwarting the constitutional
structure of dispersing power among the three branches of
government. Because this structure has long been recognized as
the essential safeguard of individual rights and liberty,5 this
n.14. Although I will not, in this writing, endeavor to conduct
a comprehensive review comparing federal agency deference to
Wisconsin law, it suffices for now to note that federal
administrative deference under Chevron seems to raise separation
of powers concerns under the United States Constitution similar
to those I identify in Wisconsin. See, e.g., Michigan v. EPA,
135 S. Ct. 2699, 2712 (2015) (Thomas, J., concurring) (arguing
that transferring "ultimate interpretive authority" to the
Executive "is in tension with Article III's Vesting Clause,
which vests the judicial power exclusively in Article III
courts, not administrative agencies"); City of Arlington v. FCC,
133 S. Ct. 1863, 1879 (2013) (Roberts, C.J., dissenting) ("It
would be a bit much to describe the result as 'the very
definition of tyranny,' but the danger posed by the growing
power of the administrative state cannot be dismissed."); see
also Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1152 (10th Cir.
2016) (Gorsuch, J., concurring) ("Transferring the job of saying
what the law is from the judiciary to the executive
unsurprisingly invites the very sort of due process (fair
notice) and equal protection concerns the framers knew would
arise if the political branches intruded on judicial
functions.").
5
"In the compound republic of America, the power
surrendered by the people is first divided between two distinct
governments, and then the portion allotted to each subdivided
among distinct and separate departments. Hence a double
(continued)
5
No. 2015AP1055.rgb
court should reinforce that structure as a check against the
concentration of power in the executive branch. "The doctrine
of separation of powers, a fundamental principle of American
constitutional government, is embodied in the clauses of the
Wisconsin Constitution providing that the legislative power
shall be vested in a senate and assembly, the executive power in
a governor . . . , and the judicial power in the courts." State
v. Washington, 83 Wis. 2d 808, 816, 266 N.W.2d 597 (1978)
(citations omitted). No less than in the federal system, in
Wisconsin "[i]t is emphatically the province and duty of the
judicial department to say what the law is." State v. Williams,
2012 WI 59, ¶36 n.13, 341 Wis. 2d 191, 814 N.W.2d 460 (quoting
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803)); see also
State ex rel. Wis. Senate v. Thompson, 144 Wis. 2d 429, 436-37,
424 N.W.2d 385 (1988).
¶79 Acknowledging respect for a longstanding
interpretation of a statute is a far cry from a judicial
doctrine of "great weight" deference that relinquishes the
court's responsibility to independently interpret statutes.
Equally troubling is the possibility that seven elected
justices——or, indeed, any elected judge accountable to the
people of Wisconsin——might give "great weight" deference to an
agency decision by a single, unelected administrative law judge
or hearing examiner against whom the people have no recourse.
Administrative rulemaking already shifts some lawmaking power to
security arises to the rights of the people." The Federalist
No. 51 (James Madison) (Clinton Rossiter ed., 1961).
6
No. 2015AP1055.rgb
unelected officials and away from the processes of passage and
presentment contemplated by our constitution. Judicial
deference to executive interpretations further widens the gap
between the people and the laws that govern them.
¶80 The framers of our constitutions chose to disperse
authority within the federal Republic and our state because they
recognized that "[t]he accumulation of all powers, legislative,
executive, and judiciary, in the same hands . . . may justly be
pronounced the very definition of tyranny." The Federalist
No. 47 (James Madison) (Clinton Rossiter ed., 1961). As this
court has recognized since Harrington, no harm comes to that
separation when the judicial branch treats a well-developed
executive interpretation of a statute as "some evidence of what
the law is." Harrington, 28 Wis. at 69. But when the
legislature delegates broad authority to an executive agency,
which in turn interprets and enforces that delegated authority,
the judiciary risks the liberty of all citizens if it abdicates
its constitutional responsibility to check executive
interpretations of the law. Because no such abdication occurs
here, I join the majority opinion and respectfully concur.
¶81 I am authorized to state that Justices MICHAEL J.
GABLEMAN and DANIEL KELLY join this concurrence.
7
No. 2015AP1055.rgb
1
Operton v. Labor & Industry Review Commission
Court: Wisconsin Supreme Court
Date filed: 2017-05-04
Citations: 375 Wis. 2d 1, 2017 WI 46, 894 N.W.2d 426, 2017 WL 1743039, 2017 Wisc. LEXIS 236
Copy CitationsCombined Opinion