Use unemployment comp decision to defend a bias lawsuit
Here’s another good reason to aggressively contest unemployment compensation claims when you have strong evidence that the company fired the employee for a good cause (such as lying or stealing): You can use an unemployment compensation ruling to prove, in a later discrimination lawsuit, that you fired an employee for a valid, nondiscriminatory reason.
To use the unemployment comp decision later in court, you must show that the employee had the opportunity to present evidence and the unemployment compensation decision was final.
It’s best to obtain a certified copy of the final decision for your records in case the employee files a discrimination case.
Recent case: Kerry Ann Holster’s employer fired her for lying about jury duty. She told her boss that she’d received a jury summons, but she didn’t bother to explain that she only had to call the court’s message line each evening for a week. As it turned out, she skipped work but never actually went to court.
Holster’s supervisors found out and confronted her when she returned to work. She tried to excuse her absence, saying her boss had given her the week off to relax.
After her termination, she filed for unemployment compensation but was denied benefits.
The claims examiner concluded that she was guilty of misconduct and her story about being given the week off was untrue.
She appealed and lost, so the decision was final.
Then, Holster sued for age discrimination, claiming that age was the real reason the company fired her. But the federal court wouldn’t let her argue about her boss giving her the week off or her alleged lying as being just an excuse to fire her.
Because she’d already litigated whether she had the week off during the unemployment hearing, she couldn’t argue the point in a later lawsuit. (Holster v. McMaster-Carr Supply Company, No. 04-1791, DC NJ, 2006)
When can you use unemployment rulings in later legal disputes?
You can use unemployment compensation findings as conclusive proof of some facts if:
- The decision was final, meaning the appeal went as high as possible or the employee didn’t appeal a lower-level finding.
- The employee had legal representation.
- The employee and the employer testified about the facts, and the unemployment compensation decision ruled on what the facts were. (In the case above, the fact in question was whether she’d been given a week off with permission or she was supposed to be off only for jury duty.)