Fired Employee Ineligible for Unemployment Benefits

Takeaway: Employees who are terminated for work-related misconduct that they know is problematic are ineligible for unemployment benefits.

The Supreme Court of Idaho held that an employee was discharged for refusing to meet with a supervisor, a performance expectation that had been communicated to her, and therefore, she was not entitled to unemployment benefits because her refusal amounted to misconduct. In so ruling, the court reversed the finding of the state Industrial Commission.

A co-owner of Evans Chiropractic in Pocatello, Idaho, hired a receptionist in June 2019. Following a workplace incident between the other co-owner and the employee, there were efforts between the owners and the employee to resolve some workplace issues, including the employee’s unwillingness to meet with the latter co-owner to discuss her performance.

In April 2022, again after the employee refused to meet with the co-owner, he fired her. The co-owner said he terminated her for various reasons, but primarily because she refused to meet with him.

The employee applied for unemployment benefits, and the Idaho Department of Labor (IDOL) ruled her eligible for the benefits. Evans Chiropractic appealed the ruling to the Industrial Commission, arguing that the former employee was ineligible for benefits because she was fired for job-related misconduct.

The commission affirmed IDOL’s decision but on different grounds. Evans Chiropractic appealed the commission’s ruling to the Idaho Supreme Court.

According to the court, “IDOL agreed the commission misapplied the law in reaching its decision, but it argued that this conclusion requires a remand to the commission for further proceedings.” The court, however, declined to remand the case.

The court said that under Idaho regulations, misconduct is defined as: “1) a willful, intentional disregard of the employer’s interest; 2) a deliberate violation of the employer’s reasonable rules; or 3) a disregard of a standard of behavior which the employer has a right to expect of its employees.” Because the co-owner said he fired the employee for insubordination/misconduct, the court applied the “standards of behavior” test in this action.

The court said the Industrial Commission was incorrect in maintaining that an employee “ ‘can only be held accountable for breaching those expectations that he or she understood, explicitly or implicitly, and was capable of satisfying.’ ” The court countered that “under the standards of behavior test, an employer’s expectation is objectively reasonable when it is either: a) communicated to the employee; or b) flows naturally from the employment relationship.” Further, the court said that an expectation “that flows naturally, as in this case, need not be communicated to an employee to be objectively reasonable.”

The court clarified that the commission misapplied the standards of behavior test when it concluded that Evans Chiropractic failed to establish the employee breached an expectation that had been communicated to her.

The court also held that the commission’s conclusion that the employer failed to prove the employee had been fired for job-related misconduct “is not supported by substantial evidence in the record.” The court noted that the employee “committed insubordination by repeatedly refusing to meet with [the co-owner].”

Likewise, the court said, the record does not support the commission’s finding that the employee was not warned that her job might be in jeopardy if she refused to meet with the co-owner.

Again, according to the court, the test for misconduct in a standards of behavior case requires the commission to determine both of the following: 1) the claimant’s conduct fell below the standard of behavior expected by the employer; and 2) the employer’s expectation was objectively reasonable. The court found that both prongs of the test were met.

First, the court held that as the employer required the employee to meet with the co-owner, and she refused to do so on several occasions, her conduct “fell below the standard of behavior expected” by her employer.

Second, the court found that the co-owner directly asked the employee to meet with him several times, and “the record on this point shows that [the employee] violated a clearly communicated expectation” that she meet with her employer. Therefore, the commission “based its decision in this case on undisputed facts but reached an incorrect legal conclusion.”

Both parties also presented additional arguments. The court noted that as it held that the employee’s refusal to meet with the co-owner constituted misconduct, there was no need to address any other legal grounds advanced by Evans Chiropractic or IDOL.

The commission’s finding was reversed.

Shumway v. Evans Chiropractic, Idaho Supreme Court, No. 50045 (Dec. 28, 2023).

D.M. Fera is a freelance writer in the Washington, D.C., area.