Thursday, March 2, 2017

Can you quit your job and still get unemployment compensation benefits?

If an employee is facing certain discharge from employment, can s/he quit, instead of being fired and still receive unemployment compensation benefits? 
The quick answer is yes:
"[A] claimant [for unemployment insurance compensation] who voluntarily leaves his or her position in the face of disciplinary charges may qualify for unemployment benefits if the actions did not amount to misconduct."  (Claim of De Benedetto (NYAD 3rd Dept. 1997)).
But, it's not that simple.
There are two provisions in New York State's Unemployment Insurance Law which speak to this question.  One provision states that employees are not entitled to unemployment compensation benefits after an employee's "voluntary separation without good cause from employment."  (Unemployment Insurance Law § 593(1)(a)).  This means that a worker cannot quit his/her job and receive unemployment compensation benefits unless he/she quit for "good cause." 
Further down in the same section of the Unemployment Insurance Law, it states that an employee is not entitled to unemployment compensation benefits if they lose unemployment "through misconduct in connection with his or her employment."  (Unemployment Insurance Law § 593(3)).
In many cases where an employee quit his/her job instead of being terminated for misconduct the New York courts have held the employee ineligible for unemployment compensation benefits -- because they engaged in misconduct and were, therefore, not eligible under § 593(3).  For example, where an administrative coordinator for a college quit her job after being warned repeatedly about tardiness and absences, and after she is given a final warning and is facing almost certain termination, the court held that she was ineligible for benefits.
"Inasmuch as a resignation in anticipation of discharge does not constitute good cause for leaving one's employment, the Board's decision that claimant left her employment under disqualifying circumstances will not be disturbed."  (In re Seiglar (NYAD 3 Dept. 2008).
Similarly, where a toll collector quit after being advised that his supervisor wished to terminate his employment, the court found him ineligible for benefits.
"Substantial evidence supports the Board's decision disqualifying claimant from receiving unemployment insurance benefits because he voluntarily left his employment without good cause. The evidence is undisputed that claimant left his position as a toll collector after he was informed that his manager wished to terminate him, but prior to receiving an official notice of termination. In view of this, we find no reason to disturb the Board's decision."  (Claim of Wilson (NYAD 3 Dept. 1996).
However, New York Courts allow employees to resign in lieu of termination provided that the underlying offense which formed the basis of the likely discharge is not "misconduct" under the Unemployment Compensation Law.  One example is the case In re Straw (NYAD 3rd Dept. 2006) where a guidance counselor employed by a public school was suspended following several complaints about her work performance, including allegations that she had engaged in inappropriate physical contact with various students.  Soon after the District's superintendent advised claimant that he intended to recommend to the Board of Education at its next meeting that she be terminated, claimant entered into a written agreement whereby she withdrew her grievance and resigned and the District expunged from her record the proposed discharge and its basis.  The court in this case set out the important legal proposition that:
"[A] claimant 'who voluntarily leaves his or her position in the face of disciplinary charges may qualify for unemployment benefits if the actions did not amount to misconduct.'  Here, the Board concluded that claimant agreed to surrender her right to continue the grievance process and resign pursuant to a negotiated settlement as a means of accepting the penalty of dismissal in order to protect her employment record.  The Board further determined that the District failed to demonstrate that claimant's actions rose to the level of misconduct."
As a result, the court upheld the employee's entitlement to unemployment benefits.
Similarly, in the case Claim of Bateman (NYAD 3rd Dept. 1989), which was relied upon by the court in In re Strawthe claimant was employed as a correction officer in a county jail when one of the prisoners escaped from the tier to which claimant had been assigned. As a result, claimant was served with a notice of discipline alleging certain infractions and stating that claimant would be dismissed from her employment effective at the end of the work day January 10, 1986. The notice also advised claimant that she had the right to file a grievance. At the time claimant was served with the notice of discipline, the county sheriff advised claimant that instead of pursuing a grievance, she could resign for "personal reasons" to protect her employment record and that, if she resigned, he would help her find other employment within the County. Claimant elected to resign, effective January 10, 1986, and, with the Sheriff's permission, stayed out of work on January 8, 9 and 10, charging those days to her accrued leave time.

The court upheld the employee's right to unemployment benefits. 
"[The] claimant . . . resign[ed] as an acceptance of the penalty of dismissal to protect her employment record. [A]lthough claimant may have been careless or negligent in the performance of her duties, she was not guilty of misconduct within the meaning of the Labor Law and, therefore, she lost her employment under nondisqualifying conditions."
It is worth noting that it is not uncommon for severance/separation agreements in the employment context to include provisions that convert a discharge to a resignation (to protect the employee's personnel record) while also stating that the employer will not challenge the employee's claim for unemployment insurance benefits.  As you can see from the cases discussed above, although this may seem contradictory, it is actually consistent with New York's Unemployment Insurance Law.  Once such an agreement is executed, the employer will make not challenge or submission to the unemployment insurance compensation board and, as a result, the question of "misconduct," which might otherwise have created a problem for the employee, will not be raised -- and the employee will receive unemployment compensation benefits.
If you would like assistance or counsel on negotiating such a deal, contact me by email or call my office at 845-802-3247.

Nathaniel K. Charny

Tuesday, February 7, 2017

Independent Contractor or Employee?

The New York State Court of Appeals, New York's highest court, recently issued an interesting decision that provides a simple explanation of the difference between an employee and an independent contractor.  In sum, the Court found that the question was how much control the employer has over the individual both as to the methods by which they do their work and the form and content of their work results.

In the case, In Re Empire State Towing Association (Octoboer 2010), the Court considered an attorney who was hired by an organization as its Executive Director.  The facts included:
  • The Executive Director did adminstrative duties such a staffing a phone, mailings, and coordinated publication of the group's journal;
  • He attended board meetings, maintained a bank account, and had check writing authority up to $500;
  • The Executive Director performed all these services from his own law office, was free to set his own schedule, and was not working exclusively for the association; and
  • Several years ago a part-time assistant was hired to help the Executive Director who was considered an employee of the association.
The Court applied the "control" test to decide whether the Executive Director was an employee or an independent contractor.  This test looks at whether the employer (here the association) exercises control over the results produced or the means used to achieve the results.

The Court concluded that the few things the association did that could be considered "control" over the Executive Director were incidental and not indicative of employee status:
"Although the record before us extensively details O'Connell's duties, it lacks substantial evidence of any control exercised by the association over O'Connell.  The requirement that the association's treasurer had to approve and co-sign on checks for over $500 does not support a finding that O'Connell was an employee.   The check approval authority was a form of incidental control over results that is 'a necessarily wise business decision' (Matter of Ted Is Back Corp., 64 N.Y.2d at 725).   Moreover, the fact that O'Connell had to submit periodic reports and attend meetings 'is a condition just as readily required of an independent contractor as of an employee and not conclusive as to either' (Matter of Hertz Corp., 2 NY3d at 735)."
This case was in the context of unemployment insurance compensation.  While the tests are similar depending on the context (unemployment, workers compensation, pension and/or health benefits, employment discrimination), they are different and always fact specific.

Nathaniel K. Charny

Saturday, December 31, 2016

Retaliation and "Temporal Proximity"

Here's an interesting fact pattern from a recent federal appeals court case (Walid el-Sayed v. Hilton Hotels (10-453-cv, 12/17/2010)): 

Employee complains of a discriminatory work environment based on his race and national origin. Employer begins an investigation into the employee and discovers that the employee had failed to report a prior job with one of the employer's other hotels in his job application.  Three weeks later the employee is discharged from employment.  The employee claims it was in retaliation for complaining of the discriminatory hostile work environment.  The employer claims it was because the employee had ommitted the prior-employment information from his job application.

As discussed below, the Court dismissed the case finding that mere "temporal proximity" is not sufficient to prove a case of retaliatory discharge.

Both federal and state law protect employees from being retaliated against because they file complaints of discriminatory conduct about themselves or others.  The courts use a "shifting burdens" standard to determine if their are sufficient facts to allow a retaliation claim to go to a jury. This shifting burdens standard requires the employee to make out, first, a "prima facie" case which includes four components:

(1) The employee was engaged in protected activity, such as complaining of discriminatory conduct;
(2) The employer was aware of that activity;
(3) The employee suffered an adverse employment action; and
(4) There was a causal connection between the protected activity and the adverse employment action.
Once the employee makes out a prima facie case, the burden then shifts to the employer to:  articulate a legitimate non-retaliatory basis for the adverse employment action.  Employers often rely upon their personnel manuals for proof that their is a legitimate non-discriminatory basis for the adverse employment action.

Once the employer satisfies that burden, the burden shifts again, back to the employee to prove that the articulated reason for the adverse employment action is a lie -- that it is "pretext."  If that burden is met, then the case is allowed by the courts to proceed to a jury.

In the recent Second Circuit case, the Court found that the "temporal proximity," that is the short period of time between the complaint of discrimination and the adverse employment action is sufficient to show the fourth element of the prima facie case (a causal connection between the protected activity and the adverse employment action). 

The Court found also that the employer had satisfied its burden when it showed that the omission in the job application was a dischargable offense.

Once the burden returned to the employee to show pretext -- that the employer's reason is not the real reason --, the Court dismissed the case finding that temporal proximity, while enough to satisfy the prima facie case burden, was insufficient, with nothing else, to prove pretext. 

The Court explains: 
"The temporal proximity of events may give rise to an inference of retaliation for the purposes of establishing a prima facie case of retaliation . . ., but without more, such temporal proximity is insufficient to satisfy appellant's burden to bring forward some evidence of pretext." 
Keep in mind that these facts have two interesting distinctions.  First, there was no question that the employee engaged in the misconduct (omitting the information on his job application) that the employer used as its justification for the discharge.  Second, the employee conceded that omitting this information from his job application was a dischargable offense.

Nathaniel K. Charny

Tuesday, October 18, 2016

Defamation in the Workplace

Here's a common question: Can I take legal action against my employer for defamation in the workplace? The answer is: maybe.

Under New York law, the elements of a defamation claim are: 
(i) a false statement; (ii) published to a third party without privilege or authorization; (iii) with fault amounting to at least negligence; (iv) that caused special harm or defamation per se.
In order to have a claim for defamation, the employee must be able to prove all four of these elements.  In the employment context, the most difficult element is the second element:  whether or not a special privilege applies to the communication.

New York Courts have long recognized a "common interest" privilege for otherwise defamatory statements within the employment context.  (Lieberman v. Gelstein, 80 NY2d 429 (1992)).  So, for example, a committee determining whether or not a college professor is going to receive tenure or the managers of a business making personnel decisions have some leeway in what they can say about the person, even if it is false.  The rationale for this privilege is that "so long as the privilege is not abused, the flow of information between persons sharing a common interest should not be impeded."  Constantine v. Teachers College, 116528/08 (2010).

But this leeway has limits.  When the offending statements are made "with malice," which means "with spite or ill will," the privilege is waived and you may have a claim for defamation.  Similarly, the privilege is waived if the statements are "made with a high degree of awareness of their probable falsity" (Liberman) and as with "malice," there will be no privilege protection and you may have a claim for defamation.

If you have a possible claim for defamation in the workplace, call Charny & Associates (845-876-7500) and let us give you a free consultation -- we'll listen to the facts and let you know what we think.

Nathaniel K. Charny

Wednesday, September 14, 2016

Misconduct and Eligibility for Unemployment Compensation

Here's a common question:  I was fired from my job because of alleged misconduct.  Am I entitled to unemployment compensation?  The answer is:  maybe.

In New York, a discharged employee is entitled to unemployment compensation unless they either quit or engaged in misconduct.  Misconduct for purposes of unemployment compensation is defined as "willful and wanton disregard of the employer's interest."  (In re Wlos, 839 N.Y.S.2d 330 (NYAD 2007)).  Just because you did not get along with your boss is not enough for a finding of misconduct. Even where a former employee's "personal traits provided a basis for discharge, but unless those traits rise to the level of misconduct, they are not a proper basis for the denial of unemployment insurance benefits."  (Llano v. Levine, 377 N.Y.S.2d 808 (NYAD 1976)).  Hence, just because the boss "didn't like your attitude and you didn't like hers," Raven v. Levine, 338 N.Y.S.2d 183 (NYAD 1972), a finding of misconduct is not warranted.

In order to find misconduct, the unemployment compensation board will look to whether or not the alleged misconduct adversely affected the employer's interest.  For example, if your job is taxicab driver and you refuse to accept a fare, you will be found to have engaged in misconduct.  (AB A-750-1284).

Another thing to consider is whether your conduct would "sustain a finding that the claimant should have realized that her conduct would probably provoke her discharge and there is certainly no substantial evidence to support an inference that the claimant desired to have her employment cease." (Raven, supra).  This notion of engaging in conduct that "provoked" your discharge is found only when the employee knew or should have known that his/her conduct would result in dismissal and engaged in the conduct anyway.

And what if the employer is claiming actual misconduct but it is just not true?  Well, the unemployment compensation process affords you the opportunity to participate in a hearing (usually by telephone) with an administative law judge, who will take testimony from both the employee and the employer and determine whether or not the misconduct occurred. 
The question of whether or not conduct in the workplace rises to the level of "misconduct" or "resignation" is a fact specific question.  Give Charny & Associates a call for a free consultation (845-876-7500) and we will let you know what we think and whether you have a claim for unemployment compensation benefits.

Nathaniel K. Charny

Tuesday, August 16, 2016

Wrongful Discharge for Filing a Complaint with Your Employer

The recently commenced Supreme Court term will address a conflict among the federal courts about what is required

Tuesday, March 8, 2011

Discriminating Supervisors and Employer Liability

The Supreme Court just answered the question of whether an employer can be held responsible for employment discrimination based on the discriminatory animus of an employee who influenced, but did not make, the ultimate employment decision.

In Staub v. Proctor Hospital (March 1, 2011), an 8-0 decision written by Justice Scalia, the Supreme Court found that the employer will be held liable for such discrimination in the workplace if: (1) a supervisor of the worker takes a step (writing up a negative evaluation, for example) that is done for a biased reason; (2) that supervisor intends to get the worker fired, demoted or otherwise penalized; and (3) the supervisor’s step is found to be the proximate cause of the ultimate decision -- even if the executive or supervisor who actually carries out the firing or other penalty is someone else, and that person was not at all biased.

The Supreme Court posed the question as follows:
The central difficulty in this case is construing the phrase “motivating factor in the employer’s action.” When the company official who makes the decision to take an adverse employment action is personally acting out of hostility to the employee’s membership in [a protected class such as military service, race or gender], a motivating factor obviously exists. The problem we confront arises when that official has no discriminatory animus but is influenced by previous company action that is the product of a like animus in someone else.
The Court answered the question in favor of the employee, finding that the employer can be held liable for discrimination:
[I]f a supervisor performs an act motivated by [illegal] animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under [the statute].
The Court did provide one caveat, finding that if the ultimate decision maker conducts his/her own investigation and then takes the adverse employment action "for reasons unrelated to the supervisor’s original biased action" then the employer is not liable.

If you have any questions about a workplace issue, call Charny & Associates, 845-876-7500.