Employer Quick Tips-Minimizing Exposure to Unemployment Compensation Claims in Tennessee

Charles D. Lawson

Unemployment in the U.S. has reached historically high levels and the Tennessee unemployment rate continues to be higher than the national average.1 That's bad news not only for those looking for work, but also for Tennessee employers who bear increasing costs related to frequent unemployment claims.

In this environment, Tennessee employers who fail to take the proper steps in their hiring, disciplinary and firing processes face an increased risk of paying unemployment claims to former employees who would not otherwise be entitled to benefits. Following a few simple steps can help employers avoid paying unnecessary amounts in unemployment benefits.

1. Recognize the two most common things that disqualify an employee from benefits under Tennessee law.

A. Employees who voluntarily resign without good cause connected to their work are disqualified.

B. Employees who are terminated for intentional work-related misconduct are disqualified.

2. Implement workplace policies that are clear and easy to understand, distribute them to all employees, and keep careful records showing employee awareness of all workplace policies.

When challenging a claim for unemployment by an employee terminated for workplace misconduct, an employer must be able to prove three main things*:

(1) The employer adopted a workplace rule prohibiting the conduct in question;

(2) The terminated employee was aware of the rule; and

(3) The employee violated the workplace rule.

Step 1 requires employers to think carefully about their workplace and the proper rules that should be implemented to create and maintain a safe, efficient, and productive working environment. Rules regarding attendance, conduct, and safety, just to name a few, must be crafted in a clear and easy to understand manner.

Step 2 requires an employer to keep records showing that employees were made aware of all workplace rules. Such records can include a signed form acknowledging receipt of an Employee Handbook containing workplace policies, signed "acknowledgment forms" showing receipt of policies that are particularly important or tend to come into play more frequently than others (attendance policies, for example), or "training attendance sheets" signed by employees who attend training sessions held by the employer in which particular policies are discussed in detail. The more exposure to workplace rules the employer can prove its employees have had the better.

Step 3 requires an employer to demonstrate a violation of the rule in question. An admission by an employee that he or she violated a rule, or the identification of witnesses to the violation, and other evidence may be used to prove the violation.

[*It has been the author's experience that, in addition to the above three things, it is important for the employer to advise the employee at the time of termination exactly what violation(s) led to the discharge decision. (As one example only, the State-required "Separation Notice" should clearly state the precise rule violated leading to discharge.) This prevents the employee from arguing before the unemployment office that he or she "had no idea" why the termination decision was made, something Department of Labor officials may rely on as evidence that the employer did not terminate for the suggested offense.]

3. Document all disciplinary decisions, including warnings, suspensions, and terminations.

When defending a claim for unemployment benefits, employers need to have kept careful documentation of all disciplinary decisions. This will make it far easier to convince the Department of Labor that an employee was terminated for the reason claimed by the employer. When appropriate, all disciplinary documents should specifically cite the workplace rule that was violated by the employee receiving the discipline. A record of prior discipline for the same rule violation that led to discharge can be particularly helpful when defending a claim.

BOTTOM LINE

Unemployment claims appear likely to remain high for the foreseeable future. Employers should therefore adopt a thoughtful strategy for defending claims by those employees who are arguably ineligible for benefits. Following the steps outlined herein will help.

Should you need assistance in assessing a particular workers' eligibility for benefits (the two disqualifying situations discussed herein are not the only things that can affect eligibility), help defending a claim before the Department of Labor, or if you simply wish to discuss the best approach to defending a claim, please contact the Author or any member of our Labor and Employment Group.

About the author: Mr. Lawson received his B.S. from the University of Tennessee at Chattanooga, magna cum laude, in 1994, and his J.D. from Vanderbilt University in 1997 where he was elected to the Order of the Coif. He is a member of GKH's Labor and Employment group and specializes in all phases of the employer-employee relationship, including wage and hour, FMLA, ADA, unemployment compensation, and discrimination/harassment law. He provides regular employer counseling on issues ranging from workplace policy development and labor law compliance to non-competition and confidentiality issues. He also defends employment claims filed with administrative bodies such as the EEOC and the Tennessee Human Rights Commission, as well as claims filed in state and federal court. Mr. Lawson's work with employers is designed to educate them about particular areas of the law governing the employment relationship, with a focus on minimizing exposure to employment-related claims and providing cost-effective litigation strategies should litigation arise.

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