Pros and Cons of Unemployment Appeals
What are common considerations a Minnesota employer faces when determining whether to oppose a former employee’s application for unemployment compensation?
Let’s say the employee was involuntarily terminated for continuous workplace rule violations but when told, the employee accused you of discrimination or retaliation or some other wrongful discharge. You then get the notice of filing for UI benefits from the Minnesota Department of Employment and Economic Development, which will provide you the opportunity to determine whether you will oppose benefits. There are definitely pros and cons to opposing unemployment benefits. Here are some factors to bear in mind:
- Are you likely to win? The standard for disqualification for benefits because of “misconduct” is either: (i) a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee; or (ii) a substantial lack of concern for the employment. See Minn. Stat. § 268.095, Subd. 6. Simple unsatisfactory conduct does not satisfy the standard. It’s important to remember that unemployment compensation is an insurance plan the employee has paid into and, therefore, the presumption is that benefits are payable if he or she didn’t “reject” employment by quitting or willful misconduct.
- Do I need to “build a record” of my reasons for termination at the unemployment compensation stage in case the employee subsequently files a discrimination charge or sues? Probably not. The Minnesota Unemployment Compensation Statutes provide that there is no “collateral estoppel” applied to unemployment compensation hearings – in English that means that a determination made in an unemployment compensation matter cannot legally bind a finding in a subsequent wrongful discharge or discrimination case between the parties. Testimony from an unemployment hearing also generally cannot be used in other proceedings, except proceedings initiated by a local, state, or federal human rights agency with enforcement powers (like the Equal Employment Opportunity Commission or the Minnesota Department of Human Rights) or by the Department of Employment and Economic Development. As a result, there is some limited risk that sloppy, inaccurate or otherwise damaging testimony could come back to haunt you in certain types of proceedings. See Minn. Stat. § 268.105, Subd. 5–6.
- Will opposing unemployment compensation be prudent? If you have a good basis to oppose the applicant’s eligibility and can put the effort into preparing your case, challenging unemployment compensation could enflame the former employee and send him or her to the EEOC, MDHR, or an attorney to start litigation on some wrongful discharge basis. Angry terminated employees may lose their ardor to sue if they are getting unemployment compensation and getting on with their life. Sometimes “penny wise/pound foolish” is the deciding factor for the prudent employer.
Takeaway: These and several other important considerations should be taken into account when an employer is determining whether to oppose unemployment compensation after a volatile or complex employment termination. Counsel can always help with the “think-through.”