Don’t Turn Unemployment Compensation Into Unemployment Complication

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Unemployment comp.  Not the sexiest of topics.  But I get a lot of questions from employers on the issue, the appropriate resolution of which would spare me a lot of stress when a termination-related case lands on my desk.  (After all, this is all about me, right?)

The proper handling of unemployment compensation claims also might save an employer – and its EPLI carrier – a fair bit of moolah if the termination ends up the subject of litigation.  So, even if you don’t care about my well-being, you’ll still want to read on.

Should Employers Appeal UC Decisions?
First, the most common question I get is:  Should I appeal an adverse unemployment comp determination?

Employers often ask how far an adverse UC decision will follow them, wondering whether to appeal a decision granting benefits to the employee.

The Eastern District of Pennsylvania in Mathis v. Christian Heating and Air Conditioning (Civ. No. 13-3740, Mar. 12, 2015), recently made the answer to that question very clear (at least under Pennsylvania law).  The employer argued that because the state court found that the employee was ineligible for UC benefits because he voluntarily quit, the employee should be precluded from arguing in his separate discrimination case that he was involuntarily terminated.  (Hmmm . . . be careful what you ask for.)

Fortunately, the Court did not agree the with employer.  Relying on Pennsylvania’s UC law (43 P.S. §  829, for those of you that care), the Court held that “[n]o finding of fact, judgment, conclusion or final order made with respect to a claim for unemployment compensation . . . may be deemed to be conclusive or binding in any separate or subsequent action or proceeding in another forum.”

Why do I say “fortunately,” you ask?  Aren’t the employers the “good guys?”

Yes, but let’s think of the greater good, here.  (Too bad you can’t get those pesky ethics credits by reading blogs…)

I’m sure employers can think of a few examples of employees who received unemployment comp when they had no business doing so.  Often (and sometimes inexplicably so), egregious employee conduct resulting in termination doesn’t preclude eligibility for UC benefits.

So, can you imagine if the employer was stuck with an adverse decision in subsequent litigation?  It would certainly give juries yet another reason to disbelieve the legitimate, nondiscriminatory reason for the employee’s termination.  Most cases have enough issues without piling that one on as well.

The first takeaway?  If the unemployment board finds that an employee is eligible for comp, the employer (in Pennsylvania, at least) does not need to take an appeal at every level in order to avoid that finding being held against it later on.  There may be other reasons to pursue an appeal, but that is not one of them.

unemployment-compensation-claimWhat Information Should I Include on a UC Form?
Second, the question I rarely get from employers, but wish I did is:  What should I write on an unemployment compensation claim form?

In Mathis, the employer apparently filled out the unemployment paperwork to reflect the actual reason for employee’s departure.  Seems straightforward enough, right?  But you would be surprised at the problems that improperly completed UC forms can create.

Think big picture.  We know that the form will play a direct role in the actual comp determination (or at least we hope so).  But what employers may not think about is how that form will impact any subsequent litigation.  It can be a huge deal for the employer if it’s not done right.

This is particularly true when the individual responsible for completing the paperwork had no involvement with the termination.  Operating under a tight deadline, that person may quickly complete and submit the form without first getting the full story.

I’m sure the employers reading this take great care to ensure that all discipline is thoroughly documented.  But, let’s be realistic – sometimes that documentation slips through the cracks.

I’ve had situations where the employer’s UC response form is the only document that sets out a reason for the termination.  And what if that reason is contradicted by the testimony of the individual who made the decision to terminate the employee?  Or what if there is documentation in the file and it’s inconsistent with the UC paperwork?

Can you see the problem here?

The second takeaway?  Taking a couple of minutes to accurately complete UC forms can help save employers a couple of years of litigation.

(And my life has enough complication without adding that, too.)

Carmon Harvey (Bio | LinkedIn | Twitter) is a shareholder resident in our Newark and Philadelphia office. Carmon has run more than 25 marathons, which allows her to indulge in her second and third most important hobbies: eating lots of delicious food and drinking great craft beers.

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