Changes to Florida Unemployment Compensation benefits will Increase Litigation

Traditionally, Florida unemployment compensation benefits were not difficult to obtain. When an employee was laid off or even terminated for cause there was a presumption that the employee was still entitled to unemployment compensation benefits. Stated differently, the employer had to prove to the satisfaction of the unemployment appeals referee that the employee was terminated for misconduct.

“Misconduct”, under the old law included, but was not limited to, the following,

(a)

Conduct evincing such willful or wanton disregard of an employer’s interests as is found in deliberate violation or disregard of standards of behavior which the employer has the right to expect of the employee; or

(b)

Carelessness or negligence of such a degree or recurrence as to manifest culpability, wrongful intent, or evil design, or to show an intentional and substantial disregard of an employer’s interests or of the employee’s duties and obligations to the employer.

These two descriptions of behavior were considered to stand alone as independent types of misconduct, Trinh Trung Do v. Amoco Oil Company, 510 So.2d 1063 (Fla. 4th DCA 1987). In other words, the misconduct had to be of sufficient severity under (a) or (b) alone and not in combination. Unemployment benefits could not be denied for some violation (a) added to some violation of (b) to deny benefits.

There were many situations where an employee may have not acted in the employer’s best interest which would justify termination but the employee’s actions did not rise to the level of willful or wanton disregard of an employer’s interests which were in deliberate violation of standards of behavior which the employer had the right to expect. For instance, an employee may have abandoned their job leaving no coverage in an emergency situation to attend to their sick child. They could certainly be terminated but still get unemployment benefits.

Likewise, while the employee may have been negligent warranting termination, the conduct did not rise to the level of manifest culpability, wrongful intent, or evil design, or show an intentional and substantial disregard of an employer’s interests or of the employee’s duties and obligations. For example, the employee may have wrecked the company truck and be terminated but still receive unemployment benefits.

Effective August 1, 2011 the Florida legislature passed CS/HB 7005 which amended the definition of misconduct in F.S. 443.036(29) in an effort to reduce costs to employers. The statute is now renumbered to F.S. 443.036(31). It provides:

“Misconduct,” irrespective of whether the misconduct occurs at the workplace or during working hours, includes, but is not limited to, the following, which may not be construed in pari materia with each other:

(a)

Conduct demonstrating conscious disregard of an employer’s interests and found to be a deliberate violation or disregard of the reasonable standards of behavior which the employer expects of his or her employee.

(b)

Carelessness or negligence to a degree or recurrence that manifests culpability or wrongful intent or shows an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations.

(c)

Chronic absenteeism or tardiness in deliberate violation of a known policy of the employer or one or more unapproved absences following a written reprimand or warning relating to more than one unapproved absence.

(d)

A willful and deliberate violation of a standard or regulation of this state by an employee of an employer licensed or certified by this state, which violation would cause the employer to be sanctioned or have its license or certification suspended by this state.

(e)

A violation of an employer’s rule, unless the claimant can demonstrate that: 1. He or she did not know, and could not reasonably know, of the rule’s requirements; 2. The rule is not lawful or not reasonably related to the job environment and performance; or 3. The rule is not fairly or consistently enforced.

While under the old law there was a presumption of entitlement to unemployment compensation benefits, the employee no longer enjoys that presumption. Nevertheless, at least twice in the Legislative Staff analysis of the law, the staff note that the employer still must prove that the employee is not entitled to unemployment compensation benefits. The analysis should prove to be persuasive authority regarding the application of the new statute.

Under sub-subsection (a) the employee’s misconduct need only be in “conscious” (as opposed to willful and wanton) disregard of reasonable standards set by the employer. What this means remains to be seen. For example, where an employer has raised production quotas, the inability to meet those goals may not be willful or wanton, although the employee is conscious of not meeting those goals. Litigation will apparently result as to whether the new production standard was reasonable.

Changes to sub-subsection (b) are not self evident other than to remove the language “or evil design”. Legislative Staff analysis is unclear as to how an employer could prove an employee had an “evil design” and what might constitute that term. Perhaps, since evil “design” implies intention and planning it was considered redundant to intentional disregard of employer’s interest still contained in sub-subsection (b).

The new sub-section (c) will prove to be a hotly litigated issue in unemployment claims. “Chronic absenteeism or tardiness” is not defined. Does it mean 3 offenses or 5?  In “deliberate” violation of the employer’s known policy will also be the subject of litigation. If an employee has to take five days off to care for his ill fiance and the employer has a three-day-absent termination policy, is this a deliberate violation? The employee deliberately stayed home but did he have a choice?

Also, the “one or more unapproved absences following written reprimand for more than one unapproved absence” provision seems to support a three-strikes-and-you’re-out attendance policy. Apparently, an employer simply needs to issue a written reprimand for two unapproved absences, then an employee, regardless of the reason for the third absence, may be terminated unilaterally if the employer doesn’t approve of the reason for the third absence. For instance, the employee calls in sick for two days, both of which are considered unapproved by the employer for whatever reason. If the employee is hit by a train on the way to work and the employer doesn’t “approve” of the employee getting hit by a train, unemployment benefits are lost.

The new sub-subsection (d) allowing for denial of unemployment benefits when the employee willfully and wantonly subjects the employer to sanctions or loss of licensure is redundant since it was adequately covered under the old law in sub-subsection (a).

Apparently saving the best for last, the legislature enacted sub-subsection (e) which provides for denial of unemployment benefits when the employee violates an employer’s rule. To avoid this result the employee must show:

  1. He or she did not know, and could not reasonably know, of the rule’s requirements. (Posted signs in the work place or signed sets of rules or signed employee handbooks will defeat this element. The Legislative Staff analysis points out that rules don’t even have to be in writing, just known or reasonably should have been known);
  2. The rule is not lawful (perhaps a rule in violation of OSHA safety rules or product/tool warnings will suffice) or not reasonably related to the job environment and performance (examples of violation of this standard are hard to imagine since employers rarely pass unnecessary rules that are unrelated to the job), or
  3. The rule is not fairly or consistently enforced. Exception number 3 to sub-subsection(e) will prove to be the lion’s share of litigation in sub-subsection (e)

Sub-subsection (e) is frought with the potential for abuse. For instance, an employee flips burgers at a restaurant. When hired he signed a set of employee rules that require him to wear a hat for hygiene purposes. On any given day, if he forgets to put on the hat he can be fired and lose unemployment benefits unless the employee can prove the rule is not fairly or consistently enforced. This is never an easy task since co-workers won’t testify on the fired employee’s behalf for fear of losing their job. As a result, the employee is left in a swearing contest against an employer who in most cases is more sophisticated, smoother and more believable at an unemployment compensation hearing, and often the employer is represented by counsel.

When the Legislative Staff analysis discusses changes to the definition of “misconduct” it refers to conduct that adversely affects the employer”s “ability to stay open”. If the court’s adopt this interpretation, much of the changes to the law may be muted.

Finally, the amended statute provides ” irrespective of whether the misconduct occurs at the workplace or during working hours”. Again no guidance is given for this feature in the legislation. A plain reading of the language shows that “misconduct” away from the workplace and after work hours can still disqualify an employee from unemployment benefits. Conduct away from the workplace and after work hours demonstrating conscious disregard of an employer’s interests can be rather far reaching. Can a secretary who works for the state Democratic party be terminated for placing a sign in her yard supporting a republican candidate for governor? Is a rule by the employer prohibiting the secretary from supporting the opposition reasonable? Maybe yes. Is it unlawful to the extent it may invade the worker’s freedom of speech? Probably so.

The net effect of these changes is three-fold. First, the ability of employers to deny and defeat unemployment claims is easier. Secondly, unscrupulous or vindictive employers can manufacture reasons to deny unemployment benefits. Thirdly, an unintended effect will be an increase in litigation of unemployment claims.

Unemployment compensation benefits are intended to be a stop gap source of income to assist the unemployed worker which acts as a safety net while he finds new employment. The litigationalization of unemployment benefits will have profound effects on the unemployed worker. In the end, it may not have the intended effect of saving employers money.