Unemployment Compensation Challenge, Quirky Question # 45

Quirky Question # 45:

We recently had an employee voluntarily resign because she found employment with our company “unbearable.”  She then sought unemployment benefits.  It is my understanding that an employee in Washington who quits is not entitled to unemployment benefits.  Do we have grounds to challenge her claim?

Dorsey’s Analysis:

Washington law does not disqualify from unemployment benefits all workers who voluntarily leave their jobs, only workers who leave “voluntarily without good cause.”  The State Legislature, however, has never defined “good cause,” although it has listed eleven specific reasons why a worker could leave voluntarily and still receive benefits.  Those reasons include relocation of a military spouse, protection of a claimant or immediate family member from domestic violence or stalking, a 25 percent or more reduction in pay, a 25 percent or more reduction in hours, a change in the worksite resulting in increased distance or difficulty in travel, an unsafe workplace, illegal activities on the worksite, a change in work that violates a claimant’s religious or moral beliefs, or taking an apprenticeship approved by the Washington state apprenticeship training counsel.

In Spain v. Employment Sec. Dep’t (consolidated with Batey v. Employment Sec. Dep’t), decided by the Washington Supreme Court on June 19, 2008, two claimants sought unemployment benefits.  Spain stated that she left because she suffered “daily verbal abuse” on the job.  Batey said she left her job with a battered women’s shelter after “sharply disagreeing with management on how their clients should be treated, among other things.”

On its first pass, the Department concluded in both cases that it did not have the statutory authority to grant unemployment benefits if the reasons the claimant voluntarily left his or her job was not among the eleven reasons listed above.  The claimants appealed and the Washington Supreme Court granted review to decide whether the eleven reasons for which a claimant could quit and still receive benefits were the only reasons, or whether they were simply a non-exhaustive list.  The Court held that the list was non-exhaustive, and remanded to the Employment Security Department to “determine, based upon the individual facts of the case . . . whether these employees had good cause to leave their jobs.”

In sum, if you do decide to challenge a former employee’s claim for unemployment benefits, the fact that they quit may not be enough to defeat the claim by itself.  Until either the Legislature or case law provides more guidance, the likely outcome of employer objections under these circumstances is unclear.

The other question you should consider is whether it is wise to challenge the former employee’s request for benefits.  Some things to think about:

(1)        What risk do you run that the former employee will file some type of wrongful termination suit against your business in the future?  If the former employee feels that they were fired for a discriminatory reason, but you have evidence that they were fired for misconduct, you may want to defend against the unemployment insurance claim.  If you win, it shows that you have support for your position and may discourage the former employee from pursuing any other claims, and provide additional evidence to bolster your defense if they do file a lawsuit.  Of course, an opposite result at the unemployment compensation stage, especially if it turns on collateral conduct (e.g., an employee claiming sexual harassment) may embolden the employee.

(2)        How much is contesting the claim going to cost in lost productivity and out-of-pocket costs?  The process of contesting an employee’s unemployment compensation claim can be distracting and a drain on the employer’s human resources, as many times lawyers do not represent employers at such proceedings.

(3)        How likely is it that contesting the unemployment benefits will make the employee more likely to sue?  An employee who receives his/her benefits may have a more favorable feeling about the employer and more quickly move on with his/her life.   Your analysis of this factor will depend largely on how well you know the former employee.

Dorsey & Whitney

Dorsey is a business law firm, applying a business perspective to clients' needs. We make it our first priority to know the context in which you do business - your market, your competitors, your industry.

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