Category Archives: Unemployment

Misconduct & Unemployment Benefits

Contributed by Noah A. Frank

Finally!  As of 1/3/2016, Illinois statutorily enhanced employers’ rights to conduct business through enacting statutory misconduct as a basis for terminating an employee and denying unemployment benefits.  Other jurisdictions may follow suit to protect business rights.

Statutory misconduct now includes:

  • Falsification of employment information (application, references, education/work history, SSN) is now terminable misconduct and allows denial of benefits.
  • Failure to maintain reasonably required licenses, registrations, etc.
  • “Insubordination” – refusal to obey reasonable and lawful instructions.
  • Attendance, provided that there is a written policy and employee has received at least one prior written  warning. This is a “two strike” policy.
  • “Grossly negligent” conduct that damages employer property or endangers the employee or coworkers (the Act is silent as to endangering third-parties, such as customers)
  • Drugs & Alcohol – use of, or reporting to work under the influence of any impairing substance (including off-label use of lawful medication).

Of course, there are exceptions and circumstances which may cause the administrative agency to still allow benefits.  These include:

  • Employer delay between discovery of misconduct and termination;
  • Government shutdown delaying issuance of a license;
  • “Significant” time passing between attendance issues, or circumstances beyond the employee’s control;
  • Employer forcing an unscheduled/not on-call employee to report for work after the employee has disclosed he/she is impaired (legally or otherwise);
  • Employee refusal to obey instructions which are unsafe or not legal, or where the employee is not appropriately trained;

While laws are evolving, employers should still follow best practices:

  • Have employment policies/handbooks that are enforceable, understandable, and acknowledged by the employees. This includes attendance, licensure, and acceptable conduct standards policies.
  • Just as employers should have faithfully done before these amendments, documentation is the lynchpin of demonstrating misconduct, including prior warnings.
  • Investigate the misconduct.  Determine in good-faith that the employee is “at fault” (so to speak), and that there are no mitigating exceptions which might allow benefits, or worse, set the company up for a potential discrimination/retaliation claim.
  • Consider non-statutory bases for misconduct termination.  Just because it is not statutory, does not mean the employer may not safely terminate. Examples include overt threats of violence, fraud, and other obvious types of misconduct.
  • Terminate when the misconduct occurs. Avoid post-discovery delay in investigation or termination that would cause the administrative agency (or plaintiff’s counsel) to question the true motivation behind the termination.
  • Protect the workforce. Do not let fear of an employee receiving benefits prevent you from correctly terminating to protect the rest of the workforce.  Similarly, do not allow anger to lead you to protest benefits that are properly allowed.
  • Apply policies equally. Consistency avoids questions regarding favoritism, discrimination, and retaliation.
  • Seek the advice of counsel. Formulating a simple plan of action and reviewing the basis of termination can lead to more successful unemployment protests and avoid headaches associated with discrimination and/or retaliation claims.

The Unemployment Trap

Contributed by Terry Fox

We have seen a recent uptick of terminated employees getting counsel involved in the unemployment fight.  When the employer lodges a protest, particularly based on misconduct, there is normally a telephonic hearing.  Testimony is taken in that hearing under oath.  The proceedings are to be confidential.  However, the factual basis asserted by the employer for the protest can be and is more frequently used outside of the unemployment context by the employee, including in employment litigation against the employer.

This presents a conundrum for the employer, who wants to efficiently handle the unemployment dispute.  Resolution of unemployment contests are designed to be quick, efficient, and inexpensive. A cottage industry has grown up in Illinois where non-lawyers represent employers in these telephonic hearings.  Sometimes they charge per hearing, sometimes per dispute. 

We recently experienced such a dispute, handled by a non-lawyer, where the results were less than ideal.  First, this consultant dealt with “custom” of the unemployment agency, not bothering to pay close attention to the administrative procedures of the agency.  Second, the consultant refused to provide witness statements to the employee’s attorney prior to the hearing.  Third, the consultant refused to provide identities of the employer’s witnesses prior to the telephonic hearing. 

Result- the employee appealed, got the employer’s win reversed and set for a second hearing.  In addition to the time and expense, the employer is faced with differing versions of its witnesses’ testimony under oath.  If there are multiple versions of the reasons for termination, the employer will never get out of the main age discrimination claim this employee has filed, absent a jury trial.

Suggestion – if the employer is contesting unemployment benefits on misconduct grounds, think seriously about getting legal counsel involved prior to any hearings, especially if the employee has made threats of a discrimination or other wrongful termination claim.