A state appeals court has ruled that a fired Walgreens cashier was not at “substantial fault” and is entitled to unemployment compensation. Credit: Associated Press

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A fired Walgreens cashier who made eight mistakes over 20 months was not at "substantial fault" and is entitled to unemployment compensation, the state Court of Appeals ruled Thursday.

The sharply worded decision rebuked the Labor and Industry Review Commission's expansive reading of a new standard for denying the payments, adopted by the Legislature in 2013 and aimed at saving employers millions of dollars.

"This is an important decision to working men and women in Wisconsin," said Marilyn Townsend, the Madison lawyer who represented Lela Operton, the fired Walgreens cashier, who now lives in Chicago and works at Walmart. "She's only one of thousands who've been denied unemployment under this new standard," Townsend said.

Operton worked full-time at the Walgreens on S. Park St. in Madison from July 2012 to March 2014. Over that time, she had eight cash errors, such as accepting 17 cents in cash as the balance of a $6.17 bill paid mostly with a Women, Infants and Children check, or taking a WIC check before its date of validity.

Her last error was not asking to see ID from a customer who used a credit card, that turned out to be stolen, on a $399 purchase.

Wisconsin law clearly states the kind of job misconduct that bars a fired worker from compensation, things such as theft, drug use, excessive absenteeism or tardiness, or harassment.

Concerned that too many fired workers were getting unemployment benefits, which left a large deficit in the fund to pay them, the state adopted a second standard — "substantial fault" — that would support denial.

But the new law identified only three examples of what would not meet the standard: One or more inadvertent errors; one or more minor rules infractions, unless the infraction is repeated after a warning; and a failure to perform because of insufficient ability or equipment.

The LIRC argued that the court should defer to its experience and judgment in employment issues, but the court said because the question of what amounts to substantial fault is new, it could review it without any deference to prior administrative findings.

The court said the LIRC's only two prior cases on the issue contradict the Operton denial. It found that LIRC, without basis, had declared Operton had committed a major infraction.

At earlier hearings, Operton's Walgreens supervisor had said she was a very conscientious employee, well liked and willing to work on her off days. The court noted that the eight errors came amid some 80,000 transactions Operton handled as a cashier.

The court found Operton's mistakes were more like the inadvertent errors that specifically do not qualify as substantial fault.

"The Legislature statutorily determined that an employee does not lose their unemployment benefits for making unintentional errors," the court said.

Townsend said Operton was making about $8 an hour at Walgreens, and her unemployment would have amounted to about $150 a week. If the decision stands, Operton would be entitled to the payments up to the time she gained new employment.

"Even if its only $700, that's a lot of money to people like Ms. Operton who are just on the edge," Townsend said. The court noted in its opinion that Operton was homeless during part of the time she was working at Walgreens.

"Whenever we get an opinion favoring working people, we're nervous it will go to the Supreme Court and we might not be able to hang on," said Townsend, a longtime employment lawyer who took Operton's case for free after she came to an unemployment benefits clinic where Townsend was supervising law students.

Thursday's ruling was from the Madison-based District 4 Court of Appeal, but written by Judge Paul Reilly, normally assigned to District 2 in Waukesha. He was joined by Judge Kitty Brennan of District 1 in Milwaukee. Judge Paul Lundsten of District 4 wrote a concurring opinion.