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Vt.: Gross Misconduct No Bar to Unemployment Claim

By Kirk Rafdal   10/30/2013
A worker fired for gross misconduct was entitled to benefits under the law in effect when he filed his initial claim despite a subsequent change to the law, the Vermont Supreme Court ruled.

On March 2, 2011, the Windham County Sheriff's Department (WCSD) terminated a deputy sheriff for theft of office equipment, who soon thereafter filed a claim for unemployment insurance benefits. While the Vermont Department of Labor (VDOL) determined the deputy had committed “gross misconduct,” it nevertheless approved his claim as existing state law did not disqualify workers who had been fired for wrongful behavior.  As a “reimbursable employer” — one that does not pay an unemployment fund tax, but rather reimburses the state only when a valid claim is filed by a former employee — the WCSD was ordered to repay the VDOL accordingly.

Meanwhile, the Vermont legislature passed a revised statute that went into effect on July 1, 2011, that disqualified unemployment claimants whose terminations were based on gross misconduct. Citing the new law, the WCSD appealed the VDOL’s approval of the deputy’s eligibility for unemployment insurance. The WCSD argued that the date on which the deputy became eligible to start receiving benefits, which occurred after July 1, should be the controlling issue and not the date of his original application.

A hearing was held before an administrative law judge, who upheld the VDOL’s decision. The Vermont Employment Security Board likewise affirmed the deputy’s eligibility and WCSD’s liability.

On appeal to the Vermont Supreme Court, the WCSD again urged that the focus be on the date on which the deputy began to receive unemployment compensation — which occurred after July 1, 2011, and after the law was amended to exclude applicants terminated for gross misconduct. The court rejected this reasoning, however, and noted that according to established state law, an employer’s “obligation to pay is governed by the law in force at the time of the initial claim.” The pre-July 1, 2011 version of the statue therefore was in force when the deputy made his original claim.

The court affirmed the deputy’s unemployment award and the WCSD’s liability to reimburse the state.

Windham County Sheriff's Dep't v. Dep't of Labor, Vt., No. 12-460 (Sept. 27, 2013).

Kirk Rafdal, J.D., is a staff writer for SHRM.

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