Avoiding Employment Lawsuits–Part II

I began this subject by dealing with the manner in which an employee is discharged (what to do vs. what not to do).

Now, let’s focus on the role that unemployment compensation can play in avoiding employment lawsuits. What should you do–or not do–when a terminated employee files for unemployment compensation?

Even when you have a basis for opposing a terminated employee’s claim for unemployment compensation, it may very well be that you don’t. Why?

Let’s suppose that the employee is in a protected class (because of race, sex, religion, national origin, disability or age). Let’s suppose that your documentation in support of the employee’s misconduct (which may justify opposition to the employee’s claim for unemployment) isn’t the strongest in the world. Maybe the smart thing to do is to simply walk away–for at least two reasons.

First, you have the potential of a discrimination charge being filed because the employee is in a protected class. If you oppose the unemployment claim, particularly when your proof of misconduct is somewhat lacking, you’ll make the employee mad, you’ll probably lose on the unemployment compensation claim, and you may in the process encourage the employee to pursue a discrimination claim.

Second, if you oppose the unemployment claim, there may be a hearing.  You’ll have to testify at the hearing.  If the employee has already decided that she is going to sue you for discrimination (which you won’t necessarily know at that point), she may have retained a lawyer, and the lawyer may be present at the hearing.  You will be cross-examined not only to help the employee win the unemployment claim but also to help the employee lay the groundwork for a subsequent discrimination claim.

What if you have a lot of evidence that demonstrates the employee’s misconduct? Is there any reason not to oppose the unemployment compensation claim? Maybe.

Once again, if the employee is in a protected class, that fact alone presents the possibility of a discrimination charge being filed against you. Accordingly, you should weigh the impact that fighting the unemployment claim will have on the employee and her possible discrimination claim. That is, will fighting the claim make her more likely to file a charge of discrimination?

But hold a minute, you’re saying. If I have good evidence of misconduct, I can successfully fight the unemployment claim. If I don’t fight it, my unemployment compensation premiums will increase. Therefore, why in the world wouldn’t I fight it? Because you may decide it’s more important and less costly to try to avoid a discrimination lawsuit than it is to try to defeat an unemployment compensation claim.

All disagreements and different points of view are welcome.