Tips for Contesting Unemployment Benefits

By Paul Edwards & Jennie McLaughlin, J.D.

What should you do when an employee resigns but later changes their story in an attempt to receive unemployment benefits? We get questions about this quite often. The employee resigns because they are moving, got a new job, want to go back to school, or didn’t think it was a good fit – or maybe they didn’t even give a reason for resignation. When this happens, you should definitely dispute the unemployment eligibility, if for no other reason than to clear up the record as to why the employee stopped working at your practice.

When an employee resigns, generally the only way that the employee will be eligible for unemployment is if it was a “constructive discharge.” Meaning, circumstances were so unbearable that the employee had no reasonable choice but to resign. An obvious example of a constructive discharge would be if the employee was subjected to ongoing harassment in the workplace and nothing was being done about it. In a situation of that sort, the employee shouldn’t have to put up with that unlawful behavior, and therefore it’s reasonable to resign and unemployment benefits may be available.

Imagine that the employee tells unemployment that she quit because the doctors were disrespectful to her and it was not a comfortable working environment. If you don’t dispute it, and the employee tries going even further and files a discrimination complaint, you can count on the employee’s attorney using the record from the unemployment hearing to show that the practice did not bother to dispute what the employee was claiming. This can certainly make it look like the practice was in the wrong, and that it was a constructive discharge. That fuels the discrimination complaint, and does not put the practice in a good light for the judge or jury.

Knowing that you should fight the unemployment eligibility, how do you go about doing that? At unemployment hearings, the only real issue is the reason for separation from employment. The unemployment office does not make rulings about other matters – although they might point the disgruntled employee in the right direction so that she can pursue another claim, which is another reason to be there to share your side of the story.

While at the hearing, or in a written response to the benefits application, don’t get caught up in details of disputing everything the employee says. A lot of he-said she-said back and forth is hard for the unemployment judge to follow, and the judges don’t like to get caught up in that. The more on point and clear the employer is, generally the more success the employer is likely to have.

If the employee is holding fast to a story involving the practice doing something wrong, you should simply explain that the employee never brought that to your attention, and that no one is aware of what she is saying being true. If you have policies asking employees to report workplace issues to you, and promising that the employer won’t retaliate in response, you should bring a copy of those policies as well. This way, you can show that if the employee had actual concerns, she could have and should have brought them to your attention. That helps call the employee’s claims into question, and makes it easier for the unemployment office to deny benefits.

(Note that all employees should have received a copy of your employee handbook, containing those policies, and signed their acknowledgment upon hire and whenever updates are made. If you haven’t followed these steps, or if your handbook doesn’t contain policies stipulating that employees must report their concerns and can do so safely, please give CEDR a call – we can help.)

Your Best Response to Employee Resignation: A Separation Letter and an Exit Interview Form

Whether you are responding to the unemployment claim by mail or attending a hearing, you want to provide documentation of the employee’s departure. Whenever an employee separates from employment – by termination, layoff, or resignation – the practice should be drafting a separation from employment letter and giving it to the departing employee. This letter should very briefly state the date and reason for the separation. It’s usually worthwhile to write your own confirmation of resignation letter rather than pushing the employee to write one. That way, the practice has control over how the resignation is initially framed in writing.

With this letter, you will want to enclose an exit interview form and a self-addressed stamped envelope, inviting the employee to send feedback to you. This packet of material ensures that you have documentation of the reason for leaving. If the employee doesn’t send back the exit interview form disputing the reason, it can go further toward establishing that what is stated in the letter is correct.

About The Author

Paul Edwards has over 25 years’ experience as a manager and owner. As CEO and Co-Founder of CEDR HR Solutions, Paul is an expert in human resources. His employment litigation avoidance techniques and customized employee handbooks have helped hundreds of medical offices in all 50 states successfully solve employee issues. He is also a featured writer for various medical publications.