Employees Terminated for Negligent Conduct are Entitled to Unemployment Compensation Benefits

There is frequent confusion amongst employers and employees concerning entitlement to unemployment compensation benefits. While an employee without an employment contract is considered an employee at will, who can be terminated for any reason or no reason at all unless the termination constitutes discrimination based on age, race, religion, sex, national origin, a disability, or violation of a federal or state law protecting employees, employees who are terminated for any reason are entitled to unemployment compensation benefits unless the employee engages in willful misconduct at the workplace.

Section 402(e) of the Unemployment Compensation Law provides that employees who engage in willful misconduct are not entitled to unemployment compensation benefits. The burden of establishing willful misconduct is on the employer. Willful misconduct is conduct that evidences: (1) the wanton and willful disregard of the employer’s interest, (2) the deliberate violation of rules, (3) the disregard of standards of behavior which an employer can rightfully expect from his employee, or (4) negligence which manifests culpability, wrongful intent, evil design or intentional and substantial disregard for the employer’s interests or the employee’s duties and obligations. An employer cannot demonstrate willful misconduct by merely showing that an employee committed a negligent act, but instead must present evidence indicating that the conduct was of an intentional and deliberate nature.

A recent Commonwealth Court decision, Clark v. Unemployment Compensation Board of Review (Commw. Court January 6, 2016), illustrates that negligent conduct in the workplace does not constitute willful misconduct. In Clark, the employee was employed by the Pennsylvania Liquor Control Board as a Liquor Store General Manager. The employee was suspended pending an investigation into his alleged violation of the employer’s return policy and eventually terminated. The employer’s stated reason for the termination was “processing a fraudulent return of merchandise.” The employer’s written policy regarding the handling of returned items provided that a customer returning merchandise must show the liquor store clerk a copy of the original receipt and if the customer wishes to keep the original receipt, the clerk must write the original receipt number on the return receipt, which the store retains for its records. When a customer returns an item without a receipt, the clerk must issue the refund as a gift card, rather than cash. Additionally, if an item priced over $50 is returned without a receipt, the return must be approved by the district manager. The employee processed a return of two bottles totaling $114 as a cash refund and did not collect an original receipt or obtain approval for the refund from his district manager.

In Clark, the employee testified that the customer had an original receipt for the two bottles of vodka, so he processed the return as a cash refund, the customer wanted to keep the original receipt, the employee forgot to write down the receipt number and he believed he put the return receipt in the office as required by store policy and that it must have been lost thereafter.

The Commonwealth Court found that the employee’s wrongdoing was failing to record the original receipt number and making a return of cash in excess of $50 without approval of the District Manager. Therefore, the Court determined that the issue was whether the employee’s departure from the employer’s directions on record keeping constitutes willful misconduct. The Court found that while the employee violated the employer’s return policy because he did not obtain the District Manager’s approval for a cash refund, there was no evidence the employee stole the money which was refunded and instead the evidence was that the employee was responsible for the lost return receipt not being maintained. As a consequence, the Court concluded that the employer had not shown that the employee’s conduct constituted willful misconduct. As such, the Court reversed the Unemployment Compensation Board and found that the employee was entitled to unemployment benefits because negligence does not result in the denial of unemployment commendation benefits.

Abramson Employment Law represents employees who are denied unemployment compensation benefits. For more information about Pennsylvania unemployment compensation claims and Abramson Employment Law see http://www.job-discrimination.com/lawyer-attorney-1491925.html

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Filed under Unemployment, Wrongful Termination

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