H. Unemployment Hearings

After firing a worker for a valid reason (i.e., for cause), many companies out of kindness regularly fail to oppose the ex-employee's application for unemployment benefits. Such a move sometimes comes back to haunt them when the terminated worker files a lawsuit asserting a variety of legal causes of action stemming from the firing, and it is determined that the failure to oppose the unemployment claim constitutes a waiver of a legitimate reason for the firing or represents an employer's tacit admission of wrongdoing. When companies do not know how to defend themselves at unemployment hearings and lose the case, they risk additional legal exposure. For example, if a company argued that a minority worker was terminated due to misconduct and loses the unemployment hearing, this makes it easier for a disgruntled ex- employee to file a lawsuit claiming that he or she was fired due to discrimination. Furthermore, the company faces a direct economic result of losing its case by being charged a higher rate and paying more for unemployment insurance coverage.

Companies often underestimate the importance that unemployment hearings can play in reducing other forms of post-termination litigation. This section will instruct employers how to prepare properly and assert strategies to maximize the chances of success at the initial hearing.

State Requirements

Each state has different standards for collecting unemployment benefits and the standards of proof required from the employer in denying such benefits. Your company must know all of the essential details to properly contest any claim, such as how quickly to respond to the ex-employee's application for benefits, whether a detailed written statement must be submitted and made a part of the employer's file, whether the company has the opportunity to review the employee's position and other documentation submitted in favor of his/her request for benefits before the hearing, whether a stenographic record or tape recording will be made at the hearing, whether the company has the right to be represented by counsel, whether the decision can be appealed, and what formal rules of evidence, if any, will be followed at the hearing. A proper defense begins by planning ahead and being aware of all essential details before the hearing date; contact the nearest unemployment office for pertinent information when in doubt.

Standards For Benefits

In most states, a terminated worker may receive unemployment benefits as a result of a business reorganization, massive layoff, job elimination and other "no-fault" reasons. In some situations, this also includes.findlaw being unsuited or unskilled for the job and even for overall poor work performance. However, a worker generally may not collect benefits caused by a voluntary resignation or a termination due to misconduct. The following are common examples of acts that often justify the denial of unemployment benefits based on misconduct:

• Insubordination or fighting on the job;
• Habitual lateness or excessive absence;
• Intoxication or drug abuse on the job;
• Disobedience of company work rules or policies;
• Gross negligence or neglect of duty;
• Dishonesty or unfaithfulness.

Although these examples appear to be relatively straightforward, employers often have difficulty proving that such acts reached the level of misconduct. This is because hearing examiners typically seek to determine whether a legitimate company rule was violated and whether that rule was justified.

TIP: To maximize the company's defense, it is best to have a clear rule in place against the kind of behavior that resulted in the firing. The rule should be reasonably related to the orderly operation of the employers' business, and the employer should be able to produce credible witnesses who can prove the charges and demonstrate that the employer administered and enforced the rules fairly and consistently.

The Hearing

Most unemployment hearings are no different from a trial. Witnesses typically testify under oath. Documents, including personnel infor- mation, warnings, performance appraisals, etc. are submitted as exhibits. The atmosphere is rarely friendly. Thus, it is essential to prepare in advance what you will say and how your company will handle tough questions from the worker and judge.

When preparing for the hearing, be certain that all your friendly witnesses (if any) will attend and testify on the company's behalf. If necessary, ask a representative from the unemployment office to issue a subpoena compelling the attendance of key disinterested witnesses who refuse to attend and testify voluntarily. Appoint one person responsible for organizing the company's defense before the hearing day to maximize your chances of success. Collect all evidence so it can be produced easily a the hearing. Discuss the testimony of co-workers and other witnesses to help organize and prepare the important facts. It is also wise to prepare an outline of key points to be discussed and questions to ask the ex-employee.

Arrive early on the day of the hearing and advise a scheduling clerk of your company's appearance. When the case is called, wait until the judge asks a question or requests information. Speak directly and with authority. Make your answer direct and to the point. Avoid arguing with the ex-employee and avoid interrupting his or her presentation. Once the ex-employee finishes testifying, a company representative or attorney may cross-examine such testimony and refute what was said.

Counsel Comment#145: Labor lawyers are mindful of the standards that hearing examiners, judges and arbitrators use in making decisions at unemployment hearings and arbitrations. Since many of these guidelines are relevant to understanding and successfully defending an ex-employee's claim for unem- ployment benefits as well as prevailing at arbitration hearings and trials, they are repeated here:

• Did the employer have a clear rule against the kind of behavior which resulted in the firing?
• Is the rule reasonably related to the orderly, efficient and safe operation of the employer's business?
• Did the employer provide all employees with a reasonable opportunity to learn the company's rules?
• Did the employer provide all employees with reasonable notice regarding the consequences of violating such rules?
• Has the employer administered and enforced the rules consistently and without discrimination among all employees?
• Did the employer take steps to fairly investigate the circumstances involved in the alleged offense?
• Did the employer obtain substantial evidence of the alleged act through this investigation?
• Was it proper to discharge the employee for the incident or should a warning or suspension have been given?
• Does the worker have a history of committing similar acts?
• Did the employer do anything to contribute to the employee's offensive act (i.e., a supervisor provoking an employee to fight by directing racial slurs at the worker)?
• Did such acts meet the standard of law required to prove misconduct?
• Are there mitigating factors which reasonably explain the employee's conduct?
• Was the firing fair under all of the circumstances?
• In cases alleging theft, did the company prove its case clearly and convincingly by the evidence?
• Were the employer's witnesses credible in proving the action taken?

At unemployment hearings and arbitrations, the employer typic- ally has the burden of proving the facts and demonstrating that the acts are serious enough to rise to the level of misconduct. Often, where it appears that the facts seem to be equally balanced in favor of and against the ex-employee, the employee will probably win since the employer was unable to sustain its burden of proof.

These and other considerations demonstrate the degree of sophistication that is often required to prevail at unemployment hearings (and arbitrations and trials). Due to the res judicata effect unemployment verdicts cast on subsequent litigation, it is often advantageous for employers to be represented by competent counsel at all stages of the unemployment hearing.

Obtaining A Decision

Decisions are not usually obtained immediately after the hearing. Your company will probably be notified by mail a few weeks later. If you lose the decision, read the notice carefully. Most judges and hearing examiners give specific, lengthy reasons for their rulings. If the ruling was incorrect or you disagree with the judge's opinion, consider filing an appeal and have the case reheard, particularly if new material facts come to light or new relevant witnesses are willing to come forward and testify at the appeal hearing.

Seek Legal Advice

Speak to an experienced labor attorney for an opinion because appeals are not granted automatically. In many states, if a group of judges on the Appeals Board believe that the hearing judge's decision was correct factually and/or as a matter of law, the decision will go undisturbed. Often, the amount of time needed to review the transcript or tape of the proceeding(s), prepare an appeal brief, and re-argue the case makes it too expensive and time-consuming.

TIP: Depending on the particular facts of the case and the consequences of not appealing (such as the possibility that the unfavorable decision will impact on another significant case brought by the ex-employee or create a harmful precedent), appealing the matter may not be justified. That is why it is important to sufficiently prepare for the first hearing to maximize the chances of obtaining a successful decision the first time around.