By: James B. Sherman, Esq. & Chad A. Staul, Esq.
All too often we hear from employers who complain that challenging an applicant's eligibility for unemployment compensation benefits is a waste of time; that the law is stacked in the employee's favor. This perception seems to be particularly strong when it comes to employees discharged for attendance issues. Someone recently went so far as to say they were "through with" challenging eligibility for unemployment benefits based on absenteeism because the employee always wins, no matter how poor their attendance. Employers in Minnesota need to know that this perception simply is not the case as we routinely assist clients in winning unemployment eligibility decisions based on attendance. The secret is in understanding the particular burdens of proof required under the law and getting one's "ducks in a row" with the right evidence necessary to win a decision upholding a termination based on absenteeism/tardiness. A very recent decision of the Minnesota Supreme Court is instructive although hardly textbook of what employers need to show to prevail on unemployment compensation. Stagg v. Vintage Place, Inc., No. A-09-949, Minn. April 20, 2011.
The case involved an employee discharged for excessive absenteeism, a routine occurrence in the workplace. Although the employer initially won a determination that the employee was disqualified from receiving benefits, the Court of Appeals reversed and granted the employee unemployment compensation because the employer had not properly followed its progressive discipline policy in its employee handbook. The policy provided for verbal then written warning, followed by suspension and ultimate discharge for absent/tardy "occurrences" over a stated maximum allowed in a given year. The employee in this case blew well past the number of occurrences to justify his termination under the policy; however, the employer did not keep up with its progressive discipline policy and jumped straight from the written warning to termination without suspending the employee. In the eyes of the lower appellate court, the employer's failure to suspend the employee (step #4 under the policy) left him "unaware" that further absences placed him at risk of losing his job.
Thankfully for this employer, the Minnesota Supreme Court bailed them out stating that the focus in unemployment eligibility determinations should not be on the employer but on "the employee's conduct." Therefore, the employer's failure to follow its disciplinary policy was irrelevant to determine unemployment benefits. The spotlight should have been squarely on the employee's actual absences and the circumstances surrounding them. We would caution against anyone thinking this decision is a "green light" for sloppy administration of workplace policies; it is not. For instance, had there been evidence that this employer applied its attendance policy differently between employees, it not only could have lost the unemployment compensation issue, it may well have faced a lawsuit for discrimination.
For employers who do not want to have to take their case all the way to the Supreme Court for a shot at winning on unemployment compensation, we have some practical advice when it comes to terminating employees for poor attendance (absenteeism/tardiness):
1. It all starts up front with written policies; they should be clearly stated and easy to understand and apply. Employers who routinely find that supervisors and managers do not consistently follow, for example, an elaborate or progressive disciplinary system should ask the question: "Maybe we need to simplify our policy so that it actually works in practice?"
2. Documentation of absence "occurrences" or "points" under an attendance policy needs to be consistent with the policy (see above) and consistently applied between employees. Consider removing supervisors or managers who cannot do this from the documentation process as they do more harm than good.
3. Most importantly - regardless of the policy used - employers should not and cannot count legally protected absences/tardy attendance toward discipline. Of course most employers realize this - e.g. not counting protected FMLA leave, etc. under an attendance policy - but the real issue in practice comes down to whether such attendance problems are correctly identified in the first place. Employers (particularly those with the fatalistic views on challenging eligibility expressed in the first paragraph of this article) often defend a termination over attendance only to learn, for the first time at a hearing, that some of the employee's absences involved illness and other circumstances - claimed or actual - that excuse their absences or, minimally, suggest that they were outside the employee's control.
4. We recommend adopting practices and procedures designed to: (a) get whatever excuses employees may have for attendance issues up front, before any termination occurs, and (b) require a sufficient basis in fact to support those excuses. Determining legitimate excuses or ruling out illegitimate excuses should always be done before termination occurs.
5. Finally, responses to an application for unemployment compensation benefits and, of course, preparation for any hearing on eligibility must have the aim of demonstrating the applicant/former employee knew of the attendance requirements and failed to meet them for no legitimate reason. Again, taking the time to preempt any excuses that may be offered belatedly by an applicant will go a long way toward winning.
Unemployment judges have told us on numerous occasions that cases are won and lost based on the evidence supporting an employer's expectation and how the case is prepared and presented at the hearing. For example, the employer's own notation of sick or ill on an attendance record is likely to take a particular absence out of play and it will not be considered misconduct. It is also recommended that employers present evidence of the importance to the business of having employees be on time and/or present in their position and the consequences to the company for failing to do so. Judges have frequently explained that without this information they cannot determine how serious an absence is in a particular industry or work place, making it more difficult to find in an employer's favor. Remember, for purposes of unemployment compensation eligibility, the employee's conduct must be shown to have been knowing and detrimental to their employer's business. While this showing does not require proof of lost profits, etc., it does signal the need to respond with some evidence that the employee's conduct is not good for business. Frankly, this is pretty easy to establish in attendance termination cases unless the employer is shown to tolerate excessive absenteeism or tardiness from its workforce.
In conclusion, employers should not assume that unemployment compensation cases based on absenteeism, or any other reason, cannot be won. The key to success depends on the facts of the case and the ability to review the evidence while knowing what an unemployment judge needs to make a favorable decision. It all starts with good policies, consistent application of those policies and solid documentation. After that, all that is required to win is to put all the above "evidence" into a concise case to the Department of Employment and Economic Development (DEED) showing that the employee was aware that their conduct would result in termination and that any belated excuses they offer are too little, too late.
For assistance in developing solid attendance and other disciplinary policies, training supervisors and/or managers on how to implement policies through solid documentation, or developing a winning presentation to DEED in response to an application or hearing on unemployment compensation, contact Attorney James B. Sherman or Attorney Chad Alan Staul.