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May 27, 2015

Unemployment Claims, Part One

Category: Employment

This message will provide a lead up to the Central Maine Human Resources Association meeting on June 16, 2015, from 7:45 a.m. to 9:30 a.m., at the Ramada Inn in Lewiston, which will feature Elizabeth Wyman, Chief Hearings Officer at the Bureau of Unemployment Compensation.  She will provide the Department of Labor’s view of the unemployment claims process.  She will also be there to talk to individuals.  One of the things that the Maine DOL has done so well recently is make itself accessible.  Meet the folks who work there and then call them up, or email, for advice.  Your tax dollars pay for that guidance; make use of it.

Before we get into the nitty-gritty of unemployment claims themselves, why are such claims perhaps more than they seem in terms of impact?  The answer goes back in part to the earlier mailing about documentation.  Unemployment claims present one area where employers often provide information that is not consistent with what may be needed in a different context, such as a discrimination claim.  For example, suppose you don’t mind if the employee gets unemployment and you just write “laid off” or “not a good fit” for an employee who actually had a long list of bad behaviors?  If that employee then files a claim with the Maine Human Rights Commission, claiming that they were let go because of discrimination, you can’t then, for the first time, argue that the employee was terrible at what they did and they were let go because of bad performance.  It won’t be believable; you will have your paperwork saying layoff or not a good fit shoved in front of you to explain how the company’s answer changed so much.  The answers and the message need to be the same in any process at all involving the employee.  Bottom line:  even if winning or losing the unemployment claim makes no difference to you, make sure to keep the paperwork consistent across the boards.

And a final key point in these procedures:  the focus will be on the conduct that was the straw that broke the camel’s back.  That is particularly true in unemployment claims but will also bear out in other employment claims as well.  In an unemployment claim, the focus will be on the straw that broke the camel’s back (where did that saying come from and why do we use that in Maine?).  Let’s say you have an employee who routinely violated clearly stated rules about safety.  You documented the events and gave warnings but had not yet fired them.  But it’s the day that they came in 10 minutes late that you just lost it.  That’s it; you’ve had enough.  You fire them.  Others have come in late or early and you’ve ridden it out but this is just all you can take of this person and you end it.  The problem?  The focus will be on whether the employee, in coming in 10 minutes late, violated a clearly stated rule that other employees were held to and that had been made clear to the employee . . . and that showed an intentional disregard for the interests of the employer.  If the employee is just a knucklehead with an alarm clock that malfunctioned that day, that test could be hard to meet.  The bottom line:  never make a decision to terminate without some time to think it out and decide without emotion and make sure the decision is based on a pattern of misconduct.  In the area of unemployment claims, that rule of thumb will be particularly useful.

So…. assuming you documented misconduct, and have not terminated in the heat of the moment, one of the first questions is whether to oppose a claim.  Whether an employer hires a lawyer or goes to the hearing itself, it will cost the company money or occupy the time of supervisors who would otherwise be working.  If benefits are allowed, the only financial consequence to the former employer is that its experience rating will be changed so that its rate of contribution to the unemployment insurance fund will increase.  An employer's experience rating is determined every year by the Commission in accordance with a complex formula.  If an employer has been contributing relatively substantial amounts with few claims over a period of several years so that its reserves are high, the impact of an additional claim may be marginal.  If the reserve excess is a negative number, the impact of a claim could be significant.  (The reserve excess number can be found on the notice of contribution form that is sent to employers on a yearly basis after the end of the State’s fiscal year, which means they usually arrive in July or August.)  For assistance in learning some of the factors that affect a rating, call the “tax” division of the Unemployment Bureau at 621-5120.  Another option is to call your field advisor.

Some employers oppose unemployment claims because they feel that, if benefits are allowed, there is an implication that they did something wrong.  This is not true.  A claimant who has been fired will receive benefits unless the employer can prove that he or she was guilty of "misconduct."  Because unemployment insurance is a safety net for persons who have no income, the Commission will allow benefits unless the claimant's misbehavior was relatively serious as well as intentional.  Therefore, a claimant may get benefits even if an employer has good cause for terminating them.  A claimant who is just not getting it or can’t figure out how to do the job will get unemployment.  The question is not how well they were performing but whether they were intentionally not doing what they should be and the rules they were violating were clearly stated.

If the employee's termination may involve future litigation (on, for example, whether there was discrimination or harassment), an employer should consider the benefits and dangers of the hearing available upon appealing an initial decision to award benefits.  Because the employee/claimant will have to testify, an employer can gain valuable information ("discovery") about the position the employee is taking and may be able to get useful admissions out of the employee (the hearings are taped).  At the same time, testimony on behalf of the employer will also be available to use against it in any subsequent trial so statements made at an unemployment hearing must be made with caution and advance planning.  The evidence from unemployment hearings is routinely one of the requests made by the Maine Human Rights Commission.  What happens at one agency may well be shared with another.  Because the second level of unemployment hearings are taped, that presents a risk for any employer as well.  The first level – the phone call to each side separately – is not so risky and is not either taped or under oath.  After that, the risk is much higher.  Make the decision strategically whether to appeal, attend, and/or hire an attorney.  Larger companies with more persons involved in employee issues will need to figure out how to coordinate decisions about any one employee that could affect workers compensation, discrimination, unemployment, discipline, leaves, and benefits.

The next mailing will focus more on the process itself.  If there are questions that you would like to see Elizabeth Wyman address, but you can’t be there to hear her and question her, send an email to and we’ll try to get that answered!

This article is not legal advice but should be considered as general guidance in the area of employment and corporate law.  Rebecca Webber is an employment attorney; others at the firm handle business and other matters.  You can contact us at 784-3200 (telephone).  Skelton, Taintor & Abbott is a full service law firm providing legal services to individuals, companies, and municipalities throughout Maine.  It has been in operation since its founding in 1853.