Should Company Oppose Employee's Claim for Unemployment Insurance Benefits?

There is much more information needed to advise on this.  Generally, unless the employee has engaged in misconduct that would disqualify them from UI benefits that would permit them to obtain free “discovery” in a hearing, it generally is not worth opposing an employee’s claim for unemployment insurance benefits for several reasons. 

  • First, although the decision is inadmissible in a civil case, the sworn testimony is admissible.  This becomes an issue when the employer, not represented by counsel, sends a representative to the hearing whose testimony and evidence binds the employer.  When the same issues are presented in a subsequent civil action, the prior sworn testimony can and will be used against them.  Since the employer has not fully investigated the issues at the time of the unemployment appeals hearing, it is better to resist the urge to attend. 
  • Second, employees and employers contribute to unemployment.  Employers who challenge an employee’s application for unemployment benefits that the employee is in fact entitled to often times encourages employees to sue the employer civilly. Unemployment insurance benefits are minimal and capped such that the costs of opposing it often will cost more than the benefits at issue.
  • Third, unless an employee has voluntarily quit and is not claiming constructive discharge or engaged in serious misconduct, the employee is entitled to and will be awarded unemployment benefits so any such appeal is a waste of time, money and serves no benefit to the employer since the unemployment insurance award is inadmissible in a civil action.

If the stated reasons for denial of UI benefits reported by the employee raises unlawful employment actions, the employer is on notice of anticipated legal action, and is strongly advised to retain counsel immediately to launch an investigation of such claims.

Lisa Sherman
California Labor & Employment Attorney