Appeals Court affirms that concealment must be intentional . . . for now

The District One Appeals Court issued a decision today in DWD v. LIRC (called Wallemkamp, after the claimant at issue in the case, Appeal No. 2015-AP-716, affirming the Labor and Industry Review Commission’s requirement that unemployment concealment be an intentional act.

In this case, the claimant was confused for thirteen weeks by questions about how to report her wages from two different employers and about her unemployment reporting requirements in general. Rather than counseling her about her mistakes and having her payback the difference in unemployment benefits from what she received with what she should have received, the Department charged her with concealment and wanted her to repay all unemployment benefits received plus a concealment penalty and to forfeit a sizable amount of future unemployment benefits as additional punishment for her confusion and lack of understanding.

An administrative law judge affirmed the concealment charges. The Commission, however, noted that the claimant in her testimony truly was confused because the questions she was asked were confusing and that she actually lacked a basic understanding of how unemployment law works. Accordingly, the Commission found no concealment because her mistakes were NOT intentional.

The Department appealed that decision to circuit court and then to the appeals court, making a host of arguments about how concealment in general really was not an intentional act, that the Commission was misapplying and did not actually understand unemployment law in matters of unemployment concealment, and that the evidence did not show confusion and misunderstanding but actual intent to defraud the Department.

Two courts have now rejected these arguments. But, the Department is slated to get its way with how it thinks concealment should be applied with a change to the statutory definition of concealment that will make claimants strictly liable for their mistakes. While the statutory definition of concealment will still have the word “intent” in it, there will no longer be any requirement for the Department to show that the claimant has an intent to conceal. The intent in the new definition of concealment will be presumed, and claimants will in the future have to demonstrate that their mistakes were either not their responsibility or beyond their control. Being confused or not understanding unemployment law will no longer suffice. So, the Department may have lost Wallenkamp for now, but the Department is rewriting the statute to get its desired result: strict liability for any claimant mistakes deemed serious enough by the Department to constitute concealment.

2 thoughts on “Appeals Court affirms that concealment must be intentional . . . for now

  1. Pingback: DWD implementing its new concealment definition | Wisconsin Unemployment

  2. Pingback: Beres: Agency discretion to undo a statutory scheme | Wisconsin Unemployment

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