WI Court of Appeals Overturns LIRC: Employee’s Off-Duty Use of Alcohol That Violated Last Chance Agreement Constitutes “Misconduct”

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October 11, 2006

On September 26, 2006, the Wisconsin Court of Appeals overturned the Labor and Industry Review Commission in deciding that an employee’s violation of a last chance agreement was sufficient to warrant a denial of unemployment benefits. Patrick Cudahy, Inc., v. Daryl Cross, 2005AP2074 (Wis. Ct. App. Sept. 26, 2006.)

Facts of the Case: Daryl Cross worked for Patrick Cudahy, Inc. (“Cudahy”). His duties included operating a high rise material handling truck on the 12:00 a.m. to 8:00 a.m. shift. In the Spring of 2004, Cross hit one of his co-workers with his truck, injuring him. Cross was given a drug test following the incident and was found to have had cocaine metabolites in his system. As a result of the positive cocaine test, Cross was allowed to continue his employment with Cudahy only if he agreed to participate in an Employee Assistance Program (EAP), which included attending a substance abuse course. Cross was also required to sign a “last chance agreement” presented to him by an EAP nurse. The last chance agreement process for dealing with substance abuse was a negotiated provision of the collective bargaining agreement between Cudahy and the union. As part of the agreement, Cross agreed that his “voluntary admission of continued use of and/or a positive substance abuse test for drugs and/or alcohol” would be “cause for immediate dismissal from employment.” Cross also “personally guarantee[d] that [he] will never again use illegal drugs and/or alcohol as long as [he is] employed at Patrick Cudahy.” Approximately six weeks after signing the Last Chance Agreement, Cross had his first substance abuse class. On his shift following that class, at approximately 1:30 a.m., Cross was approached by his supervisor because of Cross’s slowness in loading his assigned truck. The supervisor smelled alcohol on Cross’s breath and asked Cross if he had been drinking. Cross admitted that he had two beers at 4:00 p.m. In a subsequent meeting with Human Resources, Cross also admitted that he had drunk a twelve pack a few weeks earlier. Cudahy discharged Cross for violating the Last Chance Agreement.

Court’s Decision: The court reviewed several LIRC cases discussing misconduct in the context of drug and alcohol use, noting “LIRC has been inconsistent regarding use of drugs (alcohol and controlled substances) in or outside the workplace and whether such use constitutes misconduct justifying termination.” In this case, LIRC had concluded that “the employer did not establish a relationship between the employee’s off-duty consumption of alcohol, a legal substance, and its interests” and that therefore the employer failed to “establish that the employee’s actions constituted an intentional and substantial disregard of the employer’s interests.” The court disagreed, finding that the last chance agreement was “reasonably related to job safety and protection of all employees” and therefore the employee’s violation of this agreement in his off-duty consumption of alcohol constituted misconduct.

What WI Employers Need To Know: As this case illustrates, an employee may be denied unemployment benefits if he violates a last chance agreement that is “reasonably related to job safety and protection of all employees.” Here, the court found a relationship between the off-duty consumption of alcohol and the employer’s interests; however, this employee operated heavy machinery and had already injured a co-worker. Had the employee been in a white-collar job and had not been involved in an accident it is unclear whether there would have been the same result. Employers should continue to tailor last chance agreements to ensure that the provisions meet legitimate safety concerns.
If you have questions regarding the above, please contact Sara Ackermann, the author of this article, or any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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