The beginning of the new year is a good time for employers to assess how they handle Unemployment Compensation claims.Once employers know and understand the process and institutional prejudices of the Employment Development Department (EDD), then it can be determined whether or not to contest a claim.
As attorney Geoffrey Westbrook recently noted:
The EDD is in the business of awarding benefits, so expect that in most cases that is just what the EDD will do. That is, most terminations will not disqualify a former employee from an award of unemployment benefits.
The EDD denies claims for unemployment benefits based on a very narrow definition of serious misconduct. If the basis for a termination is a broken rule or noncompliance with a policy, the rule or policy must be important to the business. If the employee did not harm the company, then the discharged employee will likely win an award of benefits. An isolated one time mistake usually will not preclude an award and poor job performance—unless highly egregious and persisting after multiple warnings and a clear threat of termination—will probably not result in a denial of benefits.
To obtain a denial of benefits the employer must prove acts of serious misconduct, such as embezzlement, workplace violence, or harassment. The EDD will require convincing proof, such as documents and credible testimony, before the employer has any chance of prevailing in its request for a denial of unemployment compensation to the terminated employee. Thus, most terminations will not disqualify a former employee from an award of unemployment benefits.
Another downside of contesting unemployment compensation benefits – an employer who opposes a terminated employee’s request for unemployment compensation benefits is more likely to be sued for wrongful termination.
The EDD’s claims process is complex, and most often both sides are represented by legal counsel. None of the parties’ communications with the EDD are privileged. Thus, interviews, position statements, etc. filed with the EDD are all discoverable, as are the documents submitted and the testimony given at the EDD hearing. In a later lawsuit, the EDD’s entire file, which frequently includes an audio recording of the hearing, can be subpoenaed and the terminated employee’s counsel has the opportunity to search for inconsistencies or admissions to use against the employer in litigation.
Whenever a termination poses a significant risk of a claim or litigation, employers should consult with their legal counsel so they can make strategic decisions with professional guidance through the process in order to minimize the risks and losses that may arise from employment terminations.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
