An Unemployment Benefit Analysis of Misconduct

Jul 25, 2018 | Employment Law, Featured, News

By: David Barry

For the most part, most people reading this blog are not fond of or looking forward to the prospect of having to discuss, consider or participate in the process of terminating or being terminated from one’s employment. But the fact of the matter is that sometimes this outcome is unavoidable.

When this event occurs, what is usually of high importance to both the employer and the employee is the eligibility of the terminated employee to receive unemployment benefits. Depending upon what occurred, the employer may want to see the benefits denied, while the dismissed employee would prefer to be eligible for unemployment benefits.

While there are many factual scenarios intertwined in the ultimate determination as to whether a fired employee may be eligible for unemployment benefits, most of the reasons for the grant or denial of benefits center upon whether the employee is guilty of misconduct which justifies the denial of benefits. While the word misconduct may have broad usage and definition in everyday speech, in an unemployment benefits analysis, its definition is far more confined.

Pursuant to T.C.A. 50-7-303(a)(2), misconduct is a willful or controllable breach of the employee’s duties, responsibilities, or behavior that the employer has the right to expect. The misconduct may be an act or omission that is deliberately or substantially negligent and adversely affects the employer’s legitimate business interests. The burden of proving that the acts or omissions of an employee meet this definition is on the employer.

While the above statute defines misconduct in an unemployment benefits setting, T.C.A. 50-7-303(b)(D) details what is not misconduct:

(D)  “Misconduct” does not include:

(1)  Inefficiency, or failure to perform well as the result of inability or incapacity;

(2)  Inadvertence or ordinary negligence in isolated instances; or

(3)  Good faith errors in judgment or discretion;

Recently, I have represented two employees in actions seeking unemployment benefits in which the employer sought to deny benefits based on the alleged misconduct of the employee. In both of these cases, I was able to establish that the conduct complained of by the employer did not meet the statutory definition of misconduct permitting the denial of unemployment benefits and that the employee was entitled to benefits.

In the first case, an employee was discharged for alleged dishonesty for not immediately answering questions posed to the employee regarding an incident not connected with the performance of established job duties. The employee was terminated for misconduct and dishonesty. During the hearing, it was established that the employee had a spotless record with the employer, had never been reprimanded, and had overall been a model employee.

The only blemish was not answering questions that were personal to the employee and had no bearing on job performance. It was held, that even if the employee had been dishonest, such an isolated incident, unrelated to the employee’s job, may have been grounds for termination but it was not grounds to deny unemployment. As such, the employee was granted benefits by the appeals tribunal.

In another case, an employee was terminated for unsatisfactory job performance after verbal and two written warnings. Evidence was submitted on behalf of the employee that the employee had a satisfactory record until roughly one year before termination. During that last year, the employee’s department had been restructured, the workforce was reduced, hours changed and new responsibilities were added with no reduction of prior responsibilities.

It was admitted that under the new realities of the position, the employee could not produce work of the quantity and quality the employer demanded. Once again, the appeals tribunal did not find that this was indicative of misconduct. It was held that the employee was putting forth a solid and best effort to accomplish the requirements of the job, but was unable to meet the new demands. Unsatisfactory job performance, absent proof of a willful intent not to perform does not establish misconduct and the employee was entitled to unemployment benefits.

What can be taken away from the language of the applicable statutes and their interpretation is that to justify the denial of unemployment benefits based on misconduct requires more than an isolated incident or unsatisfactory job performance and the employer must be able to demonstrate that the misconduct was driven by the employee’s desire to harm the employer’s business interest. Absent such proof, benefits are likely to be awarded and an employer must be prepared and able to document and properly prove the allegations in the event of a termination.

David Barry, Associate in the Chattanooga office, focuses on Litigation (Arson and Fire, Civil Rights, Construction and Real Estate, Employment Practices, Insurance Coverage and Bad Faith, Insurance Defense, Property and Casualty, and Trucking/Transportation), Liability (Automobile, Government, Premises, and Products), Appellate Practice, Employment, Medical and Pharmacy Malpractice, and Insurance Subrogation law.