UNEMPLOYMENT ISSUES – WHAT’S UP?

UNEMPLOYMENT ISSUES – WHAT’S UP?
Michelle Morgan, Partner, Shackelford, Melton, Mc Kinley Law Firm – 214.780.1400

Although Texas’ unemployment rate has fared a bit better than the national rate, the Texas job market is expected to continue slowing this year as businesses tighten up and eliminate more jobs. Those who lose their job through no fault of their own (e.g. they’re laid off, their position is eliminated, etc.) are eligible to receive unemployment benefits through Texas’ unemployment insurance system. However, losing your job doesn’t automatically entitle someone to receive benefits; the Texas Workforce Commission (“TWC”) decides who is entitled to benefits and, oftentimes, the TWC’s decision is based on factors that occurred prior to the employee’s termination. In a struggling economy, it is all the more important to avoid unnecessary chargebacks against your company, which ultimately raises your unemployment insurance rate. How to avoid unnecessary chargebacks starts during the employment relationship.

In short, employees in Texas are entitled to unemployment benefits following the loss of a job unless (i) the employee voluntarily resigned, or (ii) the employee was terminated for “misconduct” (as that term applies to the Texas Labor Code and unemployment benefits).
As far as employees who are “terminated for misconduct,” it is the employer’s burden to convince the TWC that the employee was fired for violating a company policy or for other behavioral reasons (e.g. refusal to work as scheduled, constant tardiness, failure to follow procedures, etc.). In contrast, performance issues (e.g. number of placement made per month, etc.) may only be a basis for “terminated for misconduct” if you can show that the employee refused to perform at a level at which they are capable of performing.

When terminating an employee for misconduct, consider following what I call the “three strikes concept.” This involves three factors: (1) define your strike zone: identify what policy your employee is violating that inspires you to “call a strike,” (2) call your strikes consistently: do not let some employees get away with violating company policy while expecting others to follow those same policies, and (3) on the last strike, call your employee “Out!”: in other words, there should be a triggering incident that immediately precedes the decision to terminate (as opposed to a randomly timed moment of termination). In addition to these three factors, you should also try to give your wayward employee at least three warnings, each of which provide the employee with clear notice of what behavior is unacceptable, and what they should do to resolve the problems.

How to Call Strikes: The first strike may be treated with either a verbal or written warning, however, if the warning is done verbally, you should still include a memo about the situation in the employee’s personnel file. The second strike should be addressed with a written reprimand. Have the employee sign an acknowledgement that they received the reprimand. The next to last strike that you are willing to give them should come with the clear statement, preferably in writing, that their failure to abide by the warning or reprimand will result in termination from the job. At each reprimand stage the employer should make very clear what is expected from the employee. By following these steps, the employer can show the Texas Workforce Commission that (i) the employee was warned that their behavior was contrary to company policy, (ii) the employee was giving multiple warnings, and (iii) the company gave the employee clear guidance as to what must improve, and told the employee that if improvement does not occur, then the employee will lose their job.

Following such a system will help avoid having the TWC grant unemployment benefits to employees who were unwilling to fix problem behaviors in the workplace. It also allows the employee to have a better understanding of what must be fixed, and how, so that the employee can try to modify their behavior and keep their job.