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09/16/94 EVE L. KIEFER v. ILLINOIS DEPARTMENT

September 16, 1994

EVE L. KIEFER, PLAINTIFF-APPELLANT,
v.
ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, DIRECTOR OF ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, BOARD OF REVIEW AND HEALTHNETWORK, INC., DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE MARY M. CONRAD, JUDGE PRESIDING.

McNAMARA, Egan, Rakowski

The opinion of the court was delivered by: Mcnamara

JUSTICE McNAMARA delivered the opinion of the court:

Plaintiff, Eve L. Kiefer, appeals from an order of the circuit court of Cook County, which affirmed the decision of the Board of Review of the Illinois Department of Employment Security ("the Board") denying her unemployment benefits under section 602A of the Unemployment Insurance Act (Ill. Rev. Stat. 1991, ch. 48, par. 432) on the ground of misconduct. Plaintiff contends that the finding of misconduct is against the manifest weight of the evidence, and contrary to the law.

The relevant facts are as follows. Plaintiff was employed by HealthNetwork, Inc. from July 1990 until April 26, 1991, as a marketing associate and assistant to the company's president, George C. Phillips, Jr. HealthNetwork is a preferred provider organization (PPO) which offers discounts to persons who have purchased health insurance policies from Association Life Insurance Company, provided those persons obtain their healthcare from doctors, dentists and hospitals who are members of HealthNetwork. HealthNetwork is not itself an insurance company.

While working for HealthNetwork, plaintiff also sold health insurance for Association Life. The commissions plaintiff earned for selling the insurance were paid by Association Life to HealthNetwork, who passed them on to plaintiff. Plaintiff was licensed by the State of Illinois to sell health insurance, and had been authorized by a HealthNetwork superior to sell Association Life insurance after being hired by HealthNetwork. HealthNetwork paid for plaintiff's insurance license, and when she applied for her broker's license with Association Life, HealthNetwork supplied her with a copy of its own insurance license to use as part of her application. Plaintiff received her license after she became Phillips's special assistant.

According to plaintiff, no one at HealthNetwork, including Phillips, informed her she could not sell insurance while working for the company. Two other employees, Joy Myers and Donna Willard, who also worked in Phillips's office, were aware that she was selling insurance for Association Life.

In connection with her selling insurance for Association Life, plaintiff drafted a form called a "Request for Quote." Plaintiff sent the form to a group of dentists -- collectively referred to as the Center Point IDA -- who were members of the HealthNetwork PPO, and who were looking for health insurance for their employees. The heading on the request-for-quote form read:

"CENTER POINT IDA REQUEST FOR QUOTE ASSOCIATION LIFE/HEALTHNETWORK HEALTH INSURANCE"

Plaintiff sent the form to the Center Point dentists so that they could supply her with the census information she needed to quote to the dentists prices on Association Life health insurance policies. She stated that the form was merely for information gathering purposes, providing her with details about the dentists' employees and the coverage they desired. The form did not purport to be a contract binding HealthNetwork or Association Life in any manner. Upon receipt of the completed forms, plaintiff would follow up with the applicants to verify that the information was correct and to obtain additional information, when necessary. She would then call Association Life for a quote.

At the hearing before the Department of Employment Security referee, conducted after the claims adjudicator denied plaintiff benefits on the ground of misconduct, plaintiff explained that she inserted the HealthNetwork name into the form's heading only for the purpose of indicating to the dentists that she worked for both Association Life and HealthNetwork. Phillips, upon learning that plaintiff had included HealthNetwork's name in the heading, discharged her. Phillips told plaintiff that she was terminated for misrepresenting HealthNetwork's name and potentially obligating it to pay insurance claims. Plaintiff sold no insurance policies as a result of her use of the form.

Phillips testified that the form had not been authorized by anyone at HealthNetwork, despite plaintiff's knowledge of the company's unwritten policy requiring all forms to be approved by the staff committee. Phillips acknowledged that he never spoke with plaintiff specifically about the policy or about her selling insurance. Phillips stated that, in addition to plaintiff being terminated for violating the policy and for subjecting the company to potential contractual liability, she was also terminated for selling insurance while acting as his personal assistant. Phillips did not mention the latter reason to plaintiff when he discharged her. Phillips also testified that there was no indication that plaintiff's use of the HealthNetwork name on her form caused the company any actual harm.

The referee concluded that plaintiff's act of creating and circulating the request-for-quote form, although possibly negligent, did not constitute a wilful violation of a company policy causing harm to the company. Accordingly, the referee held that plaintiff was entitled to unemployment benefits.

HealthNetwork appealed the referee's finding to the Board, which reversed. The Board found that plaintiff was not authorized to sell insurance while fulfilling her duties as Phillips's assistant, and that she distributed the request-for-quote form without HealthNetwork's authorization. The Board held that plaintiff "wilfully and deliberately distributed misleading * * * information about her employer, its services and products to third parties to the employer's detriment." The Board concluded that the act complained of constituted "misconduct" under section 602A, and accordingly found plaintiff ineligible for unemployment benefits. Plaintiff filed a complaint for administrative review of the Board's ...


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