Termination, Misconduct and Unemployment Benefits « Law Offices of Timothy Bowles | Top Employment Law Firm in Los Angeles

Termination, Misconduct and Unemployment Benefits

Refusal to Sign a Disciplinary Memo
Disqualifies a California Worker

In California, an employee terminated for “misconduct” is disqualified from receiving unemployment benefits.  In Paratransit Inc. v. Unemployment Insurance Appeals Board (Medeiros) (May 31, 2012), the Court of Appeal found an employee’s declining to sign a “receipt” line at the bottom of a disciplinary notice constituted such misconduct.  Thus terminated over the refusal, that employee, Mr. Medeiros, was not eligible for unemployment.

The consequence is ironic as the discipline that Paratransit driver Mr. Medeiros was to receive was only two days suspension without pay (for a reported incident with a passenger).  For declining to sign the memo describing that discipline, he lost his job and his “out-of-work benefits” to boot.

California Labor Code section 2856 specifies that an “employee shall substantially comply with all the directions of his [her] employer concerning the service on which he [she] is engaged, except where such obedience is impossible or unlawful, or would impose new or unreasonable burdens upon the employee.”  The Court of Appeal found that Mr. Medeiros violated his section 2856 obligations by failing to sign the memo.  However, this insubordination did not by itself disqualify him from collecting unemployment.

California Labor Code section 1256 bars unemployment benefits for an employee terminated for misconduct.  The California Supreme Court has found such misconduct to include action showing wilful or wanton disregard of an employer’s interests “as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee … On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed ‘misconduct’ within the meaning of the statute.” Amador v. Unemployment Ins. Appeals Bd. (1984) 35 California Reports, third series (Cal.3d) 671, 678

Mr. Medeiros asserted he qualified for unemployment as his refusal to sign was supposedly a “good faith error in judgment” since he thought signing the “receipt” line was his admission of guilt on the alleged offense. Although the employer’s representatives sought to assure him this was not the case, Mr. Medeiros claimed he believed those representatives were lying.  However, the Court of Appeals ruled against him. In this context, where the employer was only presenting a memo with the results of a prior investigation, including the ensuing decision on discipline, refusing to sign a simple acknowledgment of receipt of that memo was sufficient deliberate disregard of the company’s directives to constitute “misconduct.”

While this Paratransit decision involved other issues (including whether the company had to use more specific language in the memo on “non-admission of fault” due to Mr. Medeiros’s union agreement – it did not), its fundamental lessons are:

• An employer can and must conduct any investigation over substantial employee rule violations deliberately and fairly, providing the subject worker ample opportunity to respond to any charges before the company makes its findings and any disciplinary decision;

•  Once the company completes such deliberate process, the findings and decision should be presented to the subject employee in writing; and

• As long as any acknowledgment the employee is to sign concerning that “findings and decision memo” only establishes that he or she has received that memo (and does not require that worker to agree with the findings), then that employee may be disqualified for unemployment if the company terminates him/her for refusing to sign that acknowledgement.

Obviously, handling terminations for violations of workplace standards and rules can be a touchy subject.  For assistance, contact an experience employment law attorney.