JOB CITES: The art of defending unemployment claims

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A common dilemma for employers is contesting an unemployment claim now and possibly a discrimination claim by the same former employee later.

It can be a dilemma because of the varying speeds at which these claims progress. While a former employee generally has 300 days to file a discrimination complaint, they might very well visit the unemployment office the day after termination.

Contesting a questionable unemployment claim can keep costs down and discourage similar claims. But if an employer is not cautious in defending the more rapidly moving unemployment claim, it might also expose itself to some risks in a future discrimination claim.

Employers who expect future discrimination claims should account for that when deciding whether and how to contest the unemployment claim. If an employer chooses to contest, it typically will assert the employee was fired for misconduct and submit various supporting documents.

While it typically is true that no determination, decision or judgment made during the unemployment proceeding is admissible or binding in any future discrimination claim (Wis. Stat. §108.01), sworn testimony could be used.

An employer must be careful not to bind itself to a certain theory that might be contradicted in the defense against the discrimination claim.

Such conflicting testimony impedes the ability to defend against a future discrimination claim.

So if it appears likely the former employee may file a discrimination claim, it is important the employer conduct a thorough investigation at the onset of the unemployment claim to identify an honest and consistent reason.

Often, an employee’s supervisors, because of mere human nature, might try to sugarcoat a less-than-favorable situation, especially if the supervisors feel it reflects poorly on them. Similarly, co-workers also might believe they are doing the employer a favor by sugarcoating a situation and “protecting” the company. But the employer needs the truth.

The employer also should keep in mind that if discrimination is suspected during the course of the investigation, it is too late to prevent it. Rather, it is in the employer’s best interest to gather all information possible and conduct an honest analysis to find a consistent reason for the termination.

If discrimination is believed to have occurred, take the appropriate disciplinary and remedial steps and gather and preserve all evidence relevant to the possible future claim so the defense has the highest chance of success.

That analysis and consistency offer the best chance that the rewards of defending an unemployment claim outweigh any risks.