Why Employers Have No Reason to Smile Over the Smiley Decision

Contributed by Rebecca Dobbs

Susan Smiley, a 10-year employee, was terminated for insubordination.  Smiley’s employer had a policy requiring non-exempt employees to take a 30-minute lunch.  Employers familiar with Illinois and federal wage and hour laws typically have similar policies because Illinois law generally entitles non-exempt employees to a 20-minute meal period, and federal law indicates that non-compensable breaks should be at least 30-minutes in length.  Practically speaking, this results in a 30-minute unpaid meal period for non-exempt employees.  According to the decision, Smiley’s employer apparently recognized that employees cannot waive their wage and hour rights (i.e. employers cannot allow an employee to forego a lunch break). 

Smiley’s employer also had a “no food at your desk” policy, which Smiley often ignored by eating breakfast at her desk.  Such policies are common because eating can result in spills that damage documents, equipment, etc., and it can appear unprofessional to customers/suppliers–such as in Smiley’s situation because her desk was located near the front door.  Such policies also help avoid a situation where an employee claims to have worked during the lunch period (this can result in liability unless the employer can prove no work was performed during that time).  In Smiley’s case, the policy was in the handbook and had been in practice for Smiley’s entire 10 years with the company.

Smiley’s refusal to follow the rules came to a head when Smiley wouldn’t obey her supervisor and refused to take a lunch.  During a meeting with her supervisor and the HR Director, she became confrontational.  She was ultimately terminated for insubordination.

Smiley filed for unemployment benefits.  The IDES Hearings Referee determined that Smiley was discharged for misconduct based on her refusal to obey her supervisor’s directive to take a lunch break despite her knowledge of the handbook and legal requirements to do so, and, therefore, was ineligible for unemployment benefits.

Smiley appealed to the IDES Board of Review, but the Board agreed with the Hearing Referee.  Smiley then filed for administrative review where the judge reversed the IDES determination.

The IDES appealed to the First District Appellate Court of Illinois.  The appellate court issued a decision on January 11, 2012, approximately two years after Smiley’s termination, and upheld the lower court’s decision resulting in Smiley receiving unemployment benefits.

This decision has garnered some media attention often invoking sympathy for Smiley because she was allegedly terminated just for being a hard worker.  However, a thorough reading of the appellate court’s decision indicates that Smiley had a history of performance issues and insubordination—this may not be a person who was diligently trying to give up her lunch hour just to get work done.

The saying goes, “bad facts lead to bad law” and this decision is yet another example.  Employers trying to discipline/terminate an employee for not taking a lunch period – something required law – can result in an employee being eligible for unemployment benefits, which, of course, often leads to a higher tax rate for the employer.