Focus on Unemployment. 

March 2010

There is significant news coming out of Tallahassee with regard to unemployment. The State Unemployment Trust Fund has been broke since last Summer and has been borrowing from the Federal Government (as have many other states with large populations) in order to stay solvent. Unless these loans are forgiven, they will have to be repaid at some point in the future and Florida employers can expect to get their share of the bill. The Florida Legislature will likely approve, early in March, legislation to delay for two years certain changes to the unemployment law (e.g., raising the base rate of taxable wages from $7,000 to $8,500 and raising the “trigger” or automatic increase that occurs when the Fund drops to a certain level) that would have raised rates considerably for most employers. There will be an increase, even if the legislation passes, but the increase will be less than called for in last year’s legislation.

All of this has caused some employers to take another look at how they are handling unemployment claims to see if any changes are warranted in their procedures. Unemployment compensation is a public policy safety net designed to help those who have become unemployed through “no fault of their own.” Thus, a separated employee ordinarily will be eligible unless he or she left employment without good cause attributable to the employing unit (e.g., a voluntary quit or job abandonment) OR the employee committed misconduct, defined by the law as a willful or wanton disregard for the employer’s interests or deliberate violation of the standards of behavior the employer has the right to expect. However, as shown in two recent cases decided by two different Florida Courts of Appeal, it is not always easy to classify an employee’s behavior as misconduct.

In both cases, the employee failed to report to work because of car trouble and was terminated. However, one case upheld benefits and the other denied them. In the first case, the Court reversed the Unemployment Appeals Commission, which had reversed the Appeals Referee’s determination that it was the employee’s responsibility to make alternative plans to get to work and, therefore, he voluntarily left his employment without good cause attributable to his employer and was not entitled to benefits. The Court noted that the Commission did not have authority to substitute its judgment for the Referee and that it had to uphold the Referee’s decision if there was competent, substantial evidence to support it (the Referee’s findings of fact are presumed correct). In the second case, the Referee denied benefits to the worker who could not perform his job duties due to car trouble because it was not his “fault” that his car broke down. The Commission reversed but the Court again backed the Referee, noting that transportation problems ordinarily are not considered “misconduct” sufficient to disqualify a worker from receiving unemployment benefits. 

The key to understanding the seemingly indistinguishable results in these two cases, it would appear, is that the second case was decided on the issue of whether the failure to show up was “misconduct” (the Court ruled it was not) whereas the first case was decided on the basis of whether the employee voluntarily abandoned the job by failing to show up. Misconduct was not the issue in the first case, which is important because misconduct is difficult to establish and the employer has the burden of showing it. The lesson is that the employer may have better success with an argument that failure to show up at work is a voluntary quit or job abandonment rather than misconduct. Such legal technicalities can be indecipherable to the untrained eye but how an employer presents its case to the Referee can make a difference in the outcome and it may be advisable to seek legal counsel in some of these situations even though the unemployment process was designed to be handled primarily by non-lawyers. The quality of evidence presented to the Referee also can make a difference in the outcome since a Referee’s factual findings will be upheld on appeal if there is any evidence in the record to support them. Employers should make sure they have witnesses with first hand knowledge of the events (written statements from them are not enough) and sufficient documentation at the hearing to support its position.