Employment & Labor Insider

You may remember that I stirred up some contentiousness a few weeks ago when I suggested that employers should not challenge unemployment claims except in the worst cases. So I hate to bring it up again (not really -- I like debates in the comments!), but I received a very good question from an attorney reader a while ago, and he gave me permission to run his question here.

Ms. Shea,

I enjoyed your blog post dated January 30, 2015.

I have for some time questioned the practice of “we will not contest your unemployment claim,” however. Depending on the state and the documents filed and served on the employer, it seems that this can be an implied false statement to a government agency. If eligibility for the benefit requires lack of misconduct by the employee, but misconduct was the grounds for termination, isn’t it a false statement to not dispute the employee’s version of events as being terminated for no fault of her own?

Which, one might add, could also be used against the employer later.

Maybe you can cover this in a future blog post.

All the best!

So many good points! Where do I begin?

First, I would never recommend being untruthful to a government agency, and the reader is talking about an employee who is discharged for misconduct. The unemployment laws vary from state to state, but in my state, "misconduct" is a fairly high standard. It requires a termination offense, or performance or bad attendance only if the employee has been progressively warned before being fired.

(By contrast, if an employee is terminated in a reduction in force, he or she will win the unemployment claim. But I've never heard of an employer who tried to fight an unemployment claim based on a RIF.)

NOTE TO READERS: Blogging may be sparse for the next week or so because of my work schedule. But I will try to have at least a Friday posting on February 27, and should be more or less back to normal the first week of March.

If an employee (let's call him "Jimmy") is being terminated for "misconduct," I'd fill out the unemployment paperwork giving the true reason for the termination. If you want Jimmy to be able to collect, you may want to be gentle with the details. But by all means be honest. And then add, "Employer does not intend to contest Claimant's claim for unemployment."

Depending on the (truthful) reason you gave for the termination, Jimmy may be initially disqualified from receiving benefits. But he will have a right to appeal that determination. If you want Jimmy to be able to collect, all you have to do is notify the hearing officer that you do not plan to participate in the appeals hearing. And then don't show up. Jimmy will still have to attend the hearing (or participate by telephone). Since you won't be there, Jimmy can say that you were wrong or that you framed him, or whatever. You will not be providing any evidence to the contrary, so usually Jimmy wins by default. (Although there are no guarantees, and I've seen a few cases where employees were denied benefits even when the employer stood down -- based solely on the employee's undisputed incriminating testimony.)

Jena McGregor of The Washington Post interviewed me as well as some other employment lawyers for a column about workplace romance. If you haven't OD'd on Valentine's Day yet, go over and take a look!

Which brings us to the reader's next question: Isn't it a false statement to not dispute the employee's version of events (assuming he lies)?

The good news (if you want the employee to get unemployment) is no, it is not. It's more like settling a lawsuit than like providing false information to a government agency. All it means is that you have chosen not to contest the claim. It's not legally an "admission" of anything, and you did provide the truthful information to the agency before saying that you would not contest the claim. If Jimmy chooses to lie in the appeals hearing, he's the one who committed perjury, not you.

And the great thing is that Jimmy's testimony (even assuming that it's perjured) can never be used against you in another proceeding. For example, if Jimmy files a discrimination charge with the EEOC or a state agency, the unemployment finding will be completely irrelevant to his charge. And Jimmy can't impeach you with your prior testimony because you didn't appear and didn't testify. All of this applies equally to a lawsuit alleging some type of unlawful termination.

And you (as opposed to Jimmy) never told a lie.

Unemployment is a pretty sweet deal even for the employer. In my opinion. A number of readers obviously disagree with me.

If you refuse to fight, you increase the chances that Jimmy will be satisfied with his benefits and will never file anything else against you. That's great. But even if he does, the fact that you chose not to fight is (1) not evidence of an unlawful discharge, and (2) not evidence at all. That's great, too.

In some states, even the hearing testimony (in addition to the finding) is inadmissible, and a party can be sanctioned for using unemployment testimony in another proceeding. Not all states take that hard a line, and they may let you use unemployment testimony for impeachment. But that works against the party who testifies, not the party who doesn't.

Thanks very much to the reader who sent this great question!

. . . AND ALSO OF INTEREST . . .

*There's still time to register for Cara Crotty's webinar on the new LGBT Rule issued by the Office of Federal Contract Compliance Programs. The program is from 1 to 2 p.m. Eastern, Tuesday, March 10. You can even submit your questions in advance!

*Susan Bassford Wilson from our St. Louis Office tells us all about the latest arbitration decision from the Missouri Court of Appeals. If you have operations in Missouri, you need to read this.

*Do you feel lucky? Then you won't want to miss the February Employment Law Blog Carnival: "Kick-A** Action Movie Lines" by our #ELBC founding father, Eric B. Meyer of The Employer Handbook blog. (Note - Eric uses actual lines from action movies, including profanity without asterisks. You've been warned!)