Last April, we reported on a case where an employer fired an employee for helping herself to a bag of potato chips without paying. The employee argued that she is diabetic and needed the chips because of low blood sugar. The EEOC, striking a blow for the rights of snack food thieves everywhere, filed suit on the employee’s behalf and, as we reported, the court denied the employer’s motion for summary judgment.

Now, as reported by our colleagues at the Employment Discrimination Report, the employer has settled for $180,000. The law provides scant guidance for employers on how to address misconduct that the offending employee attributes to a disability. And as this case shows, a misstep can be expensive. So employers facing these decisions have a choice. They can get legal guidance at the decision-making stage or they can just wing it and let the chips fall where they may.

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With increasing frequency, employees are relying on disabilities to excuse work-related misconduct. While we’ve been writing about this for years (some suggested that my 2011 post “To What Extent Are California Employers Required To Accommodate Violent Nutjobs” was insensitively titled), a recent decision out of California takes the cake, or in this case, the bag of potato chips.

As reported earlier this month by Mary Kissel in the Wall Street Journal‘s Political Diary (subscription required), Walgreens fired an employee for helping herself to a bag of potato chips without paying. The employee argues that she is diabetic and needed the chips because of low blood sugar. She says she went to pay for them later but no one was around. (The Walgreens I go to always seem to have cashiers around. Taking money for the stuff you buy seems to be a key aspect of their business model.)

Well the EEOC apparently thinks that its time someone stood up for the rights of potato chip thieves and filed suit. Rather than settling (which is usually cheaper than battling government agencies in court), Walgreens took a stand. It said it loses over $350 million each year to employee theft and needs to be able to enforce a neutral, nondiscriminatory policy prohibiting that conduct. But when it asked the court to toss the case on summary judgment, the court declined to do so, putting Walgreens in the unenviable position of letting a jury weigh the rights of a large corporation against those of a terminated individual.

These disability misconduct decisions follow no particular pattern. So it may be a long time before employers have clear guidance on where their obligation to accommodate disabilities gives way to their right to enforce basic standards of behavior. Like so much of the law in this area, employers are told to make individualized determinations based on the impairment, the nature of the job, and the work environment, but given little guidance on how to do so.

I’ll be giving a webinar on this topic and other reasonable accommodation issues on May 6th. You can get more information here. Sadly, because it’s a webinar, you’ll have to provide your own snacks.

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Let’s say you have good reasons for termination. Perhaps the employee has well documented performance issues, has fallen asleep on the job, or has violated the harassment policy. Many employers seem to think “good cause” for termination equals good reasons to fight unemployment. A good idea? Not necessarily. Here’s why.

The standards for receiving unemployment are low. There are many circumstances where there is plenty of justification for termination, yet the employee still qualifies for unemployment. To be denied unemployment, the employee must have engaged in “misconduct” as that term is defined by the EDD.

For example, what if the employee falls asleep on the job? Is that misconduct? Quite notably, the EDD makes a distinction between deliberate sleeping (misconduct) and presumably non-deliberate “dozing off” (not misconduct). What if the employee is fired based on a customer complaint? Is that misconduct? According to the EDD, only if the employer also submits proof that the complaint was accurate.

Many employers think they must dispute unemployment to prove that the termination was justified. However, denying someone unemployment can make them just desperate enough financially to seek out a plaintiff’s attorney.

Plus, I have seen many disputed unemployment claims come back to haunt employers, especially if they go to hearing. When an Administrative Law Judge sides with the employee in a disputed claim, that employee is emboldened to sue. I have heard many plaintiffs testify at deposition that they weren’t sure they had a good claim until after winning at the unemployment hearing.

It is fine to contest a claim for an employee who has resigned (preferably with a resignation letter), but for a termination, think twice. Pushing back on unemployment may result in pushing the employee to file a lawsuit.

 

Let’s say you fire an employee for violating a very reasonable company policy, such as the harassment policy, or a safety policy, or even misappropriation of company property.  Does that mean that the employee should be prevented from getting unemployment in California?  The answer very well may be NO, and a recent case explains why.

In Robles v. EDD (pdf) the employee was terminated for attempting to use his safety shoe allowance to buy shoes for a friend in need.  The store clerk would not let him buy the shoes for his friend and informed his employer of the attempted purchase.  The employee wrote a statement indicating that he didn’t understand the limits of what he could do with his safety shoe allowance, he had two pairs of safety shoes already, he deeply regretted his attempt to buy shoes for his friend, and promised not to do it again.  He was fired anyway.

Whether an employee is entitled to unemployment depends on whether the reason for his termination rises to the level of “misconduct” as that term is defined in Section 1256 of the Cal. Unemployment Insurance Code.  The Robles case explains that to rise to the level of misconduct, the conduct must be willful, volitional, and intentional.  Conduct may be harmful to the employer’s interests, and certainly justify termination, yet still not equate to misconduct under the Code.  In fact, the Court of Appeal found that given this employee’s lack of understanding of the shoe policy and his words of regret, that his actions did not rise to the level of misconduct, and that he was entitled to unemployment.

The Court also explains that circumstantial evidence can be used to prove intent, such as multiple warnings to an employee about a particular type of policy violation.  Therefore, if you have proof that the employee knew of the applicable policy and intentionally disregarded it, then the misconduct standard may be met.  Even so, it is important to keep in mind that many (if not most) terminations will not result in the denial of unemployment.  Moreover, fighting an unemployment claim and losing it, may result in the disgruntled ex-employee feeling vindicated – indeed, just vindicated enough to sue you.

The lessons here? (1) Think twice before fighting a losing battle; and (2) don’t underestimate the power of an apology.