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Koerkel v. Board of Review

October 2, 2009


On appeal from the Board of Review, Department of Labor, Docket No. 183,810.

Per curiam.


Submitted September 23, 2009

Before Judges Axelrad and Espinosa.

Leona Koerkel was discharged from her employment as a procurement specialist in March 2008. Initially, she was awarded unemployment benefits. Her employer, BKM Resources, Inc. ("BKM"), appealed. The Appeal Tribunal reversed that decision, and disqualified her from receiving six weeks' benefits pursuant to N.J.S.A. 43:21-5(b) on the grounds that she was discharged for misconduct connected with her work. The Board of Review affirmed the Appeal Tribunal's decision. She appeals from that final determination. We reverse.

Koerkel was employed as a procurement specialist, earning approximately $36,000, from May 2, 2005 to March 5, 2008. The only witness for the employer at the appeal hearing was Joyce Mayo, BKM's general manager. She testified that the reason for the discharge was Koerkel's "performance on an IBM bid" that was submitted in November 2007. Koerkel was required to comply with guidelines for the purchasing department regarding pricing. Mayo explained that in the bidding process the procurement person gets all the costs from the vendor in question and then bases the price offered to the customer on those costs. If a bid resulted in a profit of less than $300 per order, management approval was required. Mayo had no personal knowledge as to whether Koerkel communicated with the president of the company regarding the IBM bid.

Mayo stated that Koerkel had received emails alerting her that fuel surcharges must be included in the sale price quoted to IBM. The contract with ChemTrade, the supplier supplying the sulfuric acid for the IBM contract, included a fuel surcharge that was not incorporated in the price to IBM. As a result, BKM would lose money on every order. Mayo stated that BKM "wanted to make sure that it wasn't the vendor that made the error and we found out that it was [Koerkel] that made the error with all the back up information." Although BKM knew as early as January 2008 that the product was "under bid" in the IBM contract, BKM's president signed the final contract in March 2008, knowing that it would result in a financial loss. Mayo stated that BKM had to go ahead with the contract because it could not obtain another source for the product to be sold to IBM. The initial loss was $40 per shipment. However, Mayo stated that the supplier has since increased the price on the product and, as a result, BKM was losing close to $4000 a shipment at the time of the hearing. No evidence was presented to support a conclusion that an error by Koerkel was the cause of anything more than the initial $40 per shipment.

Mayo testified that Koerkel made an error on a different order in August 2007. She told Koerkel that she would be terminated if she made a similar error. However, Mayo admitted that she did not think that Koerkel intentionally submitted a bid to undermine the company and cause it financial loss.

Koerkel testified that she was told that she was discharged for "job performance." She admitted that she failed to ask the vendor if there was going to be a fuel surcharge because BKM had never paid a fuel surcharge to that vendor in the past. Koerkel also admitted that the failure to incorporate the fuel surcharge in the IBM contract resulted in a loss of approximately $40 per delivery.

Koerkel maintained that the only error was in the failure to address the fuel surcharge in the contract. She stated that the pricing to the customer was not below BKM's cost and, further, that the pricing was approved by BKM's president, Reche Kirkland:

The pricing was negotiated with Reche Kirkland. He sat with me and went over all of the prices before I put it in for the last round. He actually was involved in negotiations with a few of the products. He was involved in negotiations with one of the other products to IBM with another vendor.

I spoke with him at least five or six times.

One on one he sat in my office. He went over all the prices. He went over all of the profit margins and he actually approved them.

In fact, Koerkel testified that Kirkland told her, "[D]o whatever you need to do to get this business." She stated that she told Kirkland that she did not negotiate the fuel surcharge. He said, "[O]kay. Fine." He crossed it out of the contract and sent it in. He suggested that they could switch vendors in the following year. The contract was never executed by ChemTrade. As noted, ...

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