El Paso Court Holds Employee Abandoned Job --Did Not Quit for Good Cause

Posted on March 1, 2010 by Russell Cawyer

Last week, the El Paso Court of Appeals affirmed a judgment in favor of an employer on an unemployment benefit eligibility issue where the employee, abandoned his job.  The employee was a Nationwide Financed Agent from January 2003 until November 2005.  A Financed Agent is an employee-agent of Nationwide who starts an insurance agency and operates it to the point of economic self-sustainability.  At that point the Financed Agent becomes an independent contractor. 

In June 2005, the employee's supervisor met with the employee to discuss his poor job performance.  The employee continued to under perform and the employer attempted to meet with the employee on three successive occasions to address the continued poor performance; however, the employee failed to attend those meetings.  Ultimately, the supervisor telephoned the employee and left a message for him to return the call immediately.  The call went unreturned.  Further investigation revealed that the employee had not been to the office in two months and that he had removed computer equipment and all of his personal belongings from the office.  The supervisor wrote the employee to advise that Nationwide considered his employment to have been abandoned. 

The employee filed for unemployment benefits claiming he quit with good cause.  He contended that he quit with good cause because: 1) he was require to work overtime without being paid time -and-a half; 2) he believed he was about to be laid off; and 3) supervisor acted in bad faith to create a record for his eventual discharge.  The appellate court affirmed the judgment for the employer because:

Uranga had been employed by Nationwide from January of 2003 to November 2005. As an agent, Uranga would have a full day but he was able to set his own office hours. Uranga was aware at the time he was hired of the job responsibilities and the required time commitment. When Uranga's job performance became a problem, Scott met with him to discuss the deficiencies in his operation. Uranga's job performance did not improve and Scott attempted to meet with him again, but Uranga did not attend the scheduled meetings. Scott subsequently discovered that Uranga had been absent from the office for most of the two previous months and he had removed computer equipment and personal belongings. Scott determined Uranga had abandoned his employment and wrote Uranga a letter notifying him that Nationwide considered his employment at an end.

Given these facts, there is nothing surprising or controversial about about the fact the appellate court affirmed the conclusion that the claimant resigned without good cause.  Similarly, the opinion doesn't state any new rules of law.  However, the opinion emphasizes a few points about eligibility for unemployment benefits under Texas law including:

  • Leaving a job when work is still available (even when a definite notice of layoff is given) constitutes a voluntary resignation.
  • Claimant working under objectionable conditions for a prolonged period of time weighs against a finding that his eventual resignation was for good cause.

A copy of the court's opinion is available here.

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Lower Your Texas Unemployment Taxes

Posted on July 8, 2009 by Russell Cawyer

I've described how Texas calculates an employer's state unemployment tax rate.  (See post here).  In this post I want to outline a series of steps an employer can implement that may decrease its unemployment tax rate and taxes.  The state unemployment tax rate is the only tax rate that an employer can effectively control.  Because the tax rate is calculated over a three year rolling average, it may take a year or two to start realizing these savings.  Here are the steps. 

  • Document employee problems and rule violations at the time those issues occur.  Keep thorough, accurate records of these issues in the employee's personal file.  An even better record is one where the employee signs, at the time the performance is documented, that he has had an opportunity to review the documentation.
  • Make solid hires and don't over hire.  Turnover can dramatically increase your unemployment tax rate.  Consequently, make sure that you take all reasonable steps to ensure you are hiring good, qualified candidates for employment.  Do background checks (but comply with the Fair Credit Reporting Act) and check references.  Don't hire more employees than you think you will need for the foreseeable future. 
  • Designate a specific person to receive and review unemployment claims.  Ensure all employees responsible for receiving and distributing company mail know where to route correspondence from the Texas Workforce Commission.  Ensure that when the designated person is away from work for vacation or leave of absence that another person is responsible for timely receiving and reviewing claims.
  • Review every claim immediately.  Ensure that all information on the claim form is correct.  Errors in the employee's stated compensation or termination date can result in the Texas Workforce Commission paying at incorrect rates or for improper periods.  
  • Timely respond to the TWC's requests for information.  This seems obvious, but the deadline for opposing unemployment benefit claims is jurisdictional and it is difficult to convince the Commission that good cause exists for a late response.  Moreover, keep in mind that the deadline for the response runs from the date of mailing; not the date you receive the claim or determination.
  • Timely appeal determinations that incorrectly award benefits.  Some reasons for benefit ineligibility include: 1) misconduct connected with the work (this includes policy violations and intentional acts --not general poor performance); 2) voluntarily leaving work (i.e., a resignation that is not a constructive discharge or due to injury, illness or pregnancy); 3) aliens not authorized to work in the United States; 4) failure to apply for, accept or return to work; 5) leaving work pursuant to a labor dispute (i.e., union strike); 6) any periods where the employee is receiving wages in lieu of notice or is receiving workers' compensation benefits for temporary or permanent disability.
  • Attach evidence to support the reasons for benefit disqualification.  For example, in a resignation case, attach the letter of resignation.  In misconduct cases, attach copies of the policies the employee violated; evidence that the employee received notice of and/or training on those policies (e.g., handbook acknowledgments signed by the employee); and any copies of written warnings the employee received related to the ultimate reasons for termination.
  • Appear at the telephone appeal hearing.  Provide supporting evidence to the hearing officer several days prior to the hearing and bring witnesses that can testify and support the reasons that the employee should be disqualified from the receipt of benefits.

One final word of caution.  If you think the former employee is likely to file a lawsuit or charge of discrimination against the company and the employee shows up at the appeal hearing with a lawyer (Remember: appeal hearings are recorded testimony under oath), the employer should seriously consider whether it might be prejudiced by moving forward with the hearing in the absence of counsel.  Stated another way, consider whether it is worth winning an unemployment benefit hearing only to give the employee's lawyer a preview of the company's defenses that might be used in later litigation.  Some plaintiff's lawyers use unemployment benefit hearings as opportunities to conduct early free discovery and they know that most employers use nonlawyers to appear and attend these hearings.

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