STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF BERRIEN OPINION AND ORDER. The Claimant appeals from a decision of the Michigan Employment

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1 .. '. ( A.D. No. B W s.s. No. J:o. No. 12 STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF BERRIEN 3A RANDY BONGIORNO, Claimant-Appellant, v ORCHARD FORD/LINCOLN an'd MICHIGAN EMPLOYMENT SECURITY COMMISSION, Appellees. ~ ~ / RICHARD G. SAMMIS (P30597) Attorney for Appellant FRANK J. KELLEY, Attorney General for the State of Michioan By: CATHERINE M. FLEMING (P27050) Assistant Attorney General Attorneys for Michigan Employment Security Commission! Case No AL-Z non. ZOE S. BURKHOLTZ OPINION AND ORDER The Claimant appeals from a decision of the Michigan Employment Security Commission 1 s Board of Review \vhich denied his application for unemployment compensation benefits. The 'Bo ard affirmed the referee 1 s decision which denied the Claimant's application pursuant to Sec. 29(l)(a) of the Michigan Employment Security Act whi.ch states that : An individual shall be disqualified for benefits in the f ollowing cases in which the individual: (a) Left vjork voluntarily \vithout good cause attributable to the employer or employing unit. M CL ( 1 ) (a) J. -

2 The Board adopted by reference the referee's decision and concluded t.nat ' it was in conformity with the la~~ and the facts. The referee conc luded 'that: The parties agreed the claimant had been employed by the above entitled employer as a car salesman from September of 1985 up to February 13, 1987 when he resigned his position. Claimant argued that his quitting was with good cause attributable to the employer, and the claimant presented a lengthy narrative regarding practices.utilized by the employer which the claimant c ontended were fraudul ent and dishonest. The claimant stated that addendum stickers on automobiles were referred to by the employer as 11 the average price 11 the automobile sells for nationwide, when in fact this sticker is simply a mark-up price initiated by the dealer. The claimant also testified that he and other salesmen were encouraged to misrepresent to customers that certain life and disability insurance packages that were available Ln conjunction with a new. car sale were required by financing institutions.when in fact they were not. Claimant also asserted that he and other employees were humiliated in sales meetings with remarks to the effect that they could 11 go back to K-Mark [sic] or Penny's 11 if t hey couldn't take the pres'sures of selling in an automobile dealership. Claimant also testified that on one occasion he was directed by his sales manager to charge a customer for an extended warranty, then to inform the customer that the warranty extention [sic] was free. Claimant testified that on many occasions the employer charged varying prices for identical extended warranties, and he stated that on one additional occasion his credibility was undermined by the sales manager when he was compelled by the manager to tell a customer that the dealership would not repair a dent which the customer discovered on the tailgate of a truck he had purchased, and yet when the customer confronted the sales manager, the sales manager readily agreed to fix the dent atid made it appear as though the claimant of his own volition had refused to mak~ the re?air. -2-

3 Testimony was _also received from Mr. Tom Bongio.uo, the claimant's brother, and Mr. Neil Vernasco,_ both of whom were former sales persons with this same dealership. They essestially confirmed the testimony presented by the claimant with regard to the employer's sales practices. The employer position was presented by Mr. Brian Burke, Sales Manager, and Mr. Bill Bebon, General Manager. In response to the claimant's testimony these gentlemen pointed out that all of the warranty information and pricing as well as cost for various insurance policies are contained in writing on the sales agreements executed between the dealership and the customer. Mr. Bebon asserted that the claimant quit without notice to the employer, and in fact the claimant did not even acknowledge that. he had quit until inquiry was made by the employer of the claimant's wife. Mr. Bebon also stated that all of the practices complained of by the claimant had been in effect from the beginning of the claimant's employment up. to the date that he left, and while they acknowledged that cust~mers are regularly misinformed with regard to the addendum stickers, he characterized this practice as an easy way to explain a higher price to the cornsuner, and he asserted that it is a practice that is used throughout the industry. Mr. Bebon also explained that there is different pricing with regard to warranty prices so as.to accommodate financing with local lending institutions, and he indicated that circumstances frequently occur whereby a financing source will provide financin~ only up to a certain limit, and pricing over that limit is frequently charged off as extended warranty costs. Mr. Bebon stated that it is not at all unusual for two identical cars to be sold at different prices, that is simply the nature of negotiations between consumers and the dealership. Mr. Bebon also asserted that at no time prior to the claimant's leaving did he raise any of these issues with t:ha employer, nor did he give the employer any opportunity to respond to his concerns. Mr. Bebon stated that the claimant's resignation carne shortly after the death of his father. Mr. Bebon indicated that he felt that the claimant has simply reevaluated his goals in life and decided to remove himself from the pressures of retail sales in the automobile business. -3-

4 , Having carefully reviewed the testimony ~resent~~ in this matter and the material contained in the file, the Referee concludes that the voluntary leaving disqualification imposed against the claimant must be affirmed. The claimant has painted a rather disgusting picture of sales practices in the automobile industry which has been substantially confirmed b y the employer, but the fact remains that these practices have all been in effect since the claimant's day of hire, and the claimant was apparently able to live with himself and these sales practices in excess of two years. While the Referee is willing to accept at face value the clai mant s contentions that he was regularly encouraged to mislead the customers, the fact remains that all of the deals executed between the dealership and its customers are reduced to writing and this is a classic buyer beware type of relationship. It would appear that the claimant simply got fed up with what is apparently regular business practices in the trade and decided to quit. Claimant has not establi shed that the terms and conditions of his employment were significantly alt ered from t h e inception of that employment, and on this record he has not established that his quitting was with good cause attributable to the employer. His quitting appears to be an exercise of his free will and his desire to remove himself from a business environment, the ethics of which he could no longer live with. Claimant asserts that the Board's decision must be reversed bec ause it is not supported by the record. The Claimant argues t hat he had good cause to leave his employment in that his employer required him to use illegal and/or unethical sales techniques during the course of his duties as a salesman for Orchard Ford auto dealership. A decision of the Board of Review may be reversed where it is. contrary to law or not supported by competent, material and substantial ~ vidence on t h e whole record. MCLA (1); MSA (1). A claimant -4-

5 . Tl-J.o voluntarily. leaves her employment has the burden of proving that L.1e voluntary leaving is- with good cause attributable to the employer. Carswell v Share House, Inc, 151 Mich App 392 (1986). "Good cause compelling an employee to terminate his employment should be found where an employer's actions would cause a reasonable, average, and otherwise qualified worker to give up his or her employment." carswell, supra, at Furthermore, the Claimant argues that requiring an employee to engage in illegal practices constitutes good cause. In reference to his claim, the Claimant relies upon Duew eke v Moran g Drive Greenhouses, Inc, 411 Mich 670 (1981), wherein t~e Michigan Supreme Court wrot~ in. addressing _the criteria for "suitable work" under MCL "~.. an offer of work involving working conditions which are illegal would 1der the work unsuitable" at 678. rn Dueweke, supra, claimant was offered work that would result in an overtime payment procedure in violation of federal and state statute. Similarly, in Garrelts v Emp1 oymen t Division, 535 P.2d 115 (1975) the Oregon Court of Appeals held that an employee's termination of employment was for good cause where an.employer refused to make proper deductions from the employee's chec~ and the employee was then faced with either continuing working under conditions which the IRS informed him would subject him to personal liability for deductions not made, or with leaving work voluntarily. Lastly, Claimant relies upon Zinm an v Unemployment Compensation Board of Review, 305 A.2d 380 (1973) wherein good cause was defined as necessftous circumstances such as pressures of necessity, family -5-

6 obl:j..gation and legal duty. rn Zinman, supra, the court held that an 1!il. '".. ployee' s refusal to return to 'work becau~ e of her di-sapproval of office practices, including the illegal practice of recording telephone conversations absent permission of all parties, constituted good cause. The Appellee relies upon the case of' O'Brien V E~ployment Division and Oregon. Lun~ Associat ion L Oregon Court of Appeals No. 78-AB-249 (1978), wherein the Oregon Court of Appeals wrote that where a claimant is not required to perform unconscionable acts there is not good cause unless the employment situation is so morally offensive that remaining would be intolerable to a rea sonable person. In O'Brien, supra, claimant, an employee of the Oregon Lung Association, voluntarily quit her employment alleging misuse of donated funds and _questionable management practices. Claimant, herself, was.never directly invol~ed in obtaining the question-, le donations. Arguably, 0' Bri'en, stipra, supports the claimant's position rather than the appellee's; i.e., that requiring an employee to participate in unethical business practices constitutes good cause. Caselaw clearly supports the proposition that voluntary quitting due to illegal practices constitutes good cause. The Claimant claims that the addendum sticker added on life/accident insurance and extended warranties all are illegal sales techniques. However, there is no support in the record and counsel cites no authority.to support his allegation that the sales techniques outlined by Claimant are illegal. The O'Brien, supra, case cited by Appellee states that good cause will be found when an employee is required to perform unconscionable acts. This Court agrees with the referee that the Claimant painted a disgusting -6-

7 r... ture of sales practices in the automobile industry which were... substantially confirmed by the employer. However, this Court does not find that the Board of Review abused its discretion by affirming the referee's findings and conclusions of law. The referee decision, as. adopted by the Board of Review, is not contrary to law. and is supported by competent, material and substantial evidence on the whole record. The disgusting sales techniques employed py Orchard Ford dealership are not unconscionable nor would they cause a reasonable, average and otherwise qualified worker to give up his employment without notice and without effort to appropriately object to the reprehensible sales technique. Unfortunately, these sales techniques which are common in the industry do not constitute "good cause" as envisioned by the Michigan Unemployment Security Act, MCL (l)(a). The MESC Board of Review decision is affirmed. App ellee may present an Order for the Court's signature in accordance with and incorporating this Opinion by reference. The legislature should act to correct these shoddy practices. Dated : II -7-