Employer Lying in the Unemployment Benefit Process

Since 2014, more than 350,000 Coloradans have applied for unemployment benefits though the Colorado Department of Labor and Employment (CDLE), a process designed to provide economic security for Coloradans involuntarily unemployed through no fault of their own.  According to CDLE, since 2014, about 12,700 Coloradans have been “disqualified” from receiving unemployment benefits because, their employer alleges, they were fired for violating a serious work rule or law. And since 2014, only about 23% of disqualified benefit applicants have challenged their former employer’s reason for firing them by requesting an appeal hearing.

And so, what happens when employers submit false information to CDLE to disqualify their former employees from receiving unemployment benefits?

Think about it: the unemployment system has built-in incentives for employers to lie–the more unemployment claims charged against their account, the higher next year’s unemployment tax rate. Better yet, the odds are in their favor, given that only about 23% of claimants request hearings to dispute employer-submitted false information. And yet, submitting false information to cheat an otherwise deserving unemployment claimant out of benefits is a form of economic violence perpetrated by employers against employees, by strong against weak, by HAVE’s against HAVE NOT’s, by . . .

 Do Colorado employees have any recourse when their former employers submit false information to disqualify them from receiving benefits? 

Last Tuesday, I asked that question in oral argument before a panel of the Colorado Court of Appeals, almost facetiously. After all, Colorado law–e.g., Section 8-81-101(1)(c), C.R.S. (2017)–states that:

If any employer makes or causes to be made a false statement as to the reason for a claimant’s separation from employment . . ., which statement or offer shall result in a delay in the payment of benefits to any such claimant, such employer shall be penalized by having his account charged with one and one-half times the amount of benefits due during the period of the delay . . .

Section 8-81-101(1)(c), C.R.S. (2017) (emphasis added). Thus, the plain language of the statute seems to suggest that if an employer makes false statements that cause CDLE to deny benefits, claimants are entitled to a nominal monetary remedy. Right?

Not so fast. Since CDLE has started taking data, it has never awarded this penalty in a claimant’s favor for one simple reason: CDLE and its appellate bodies have interlineated (i.e., written in) a requirement for former employees to prove that their employers intentionally made false statements to cheat them out of benefits, an almost impossible evidentiary hurdle for claimants to surmount in an abbreviated administrative process. In adding in this “intent” requirement, CDLE reached back to a 1962 decision requiring proof of intent under a predecessor version of the unemployment statute. This 1962 decision, however, predates the development of every major employment right enacted to protect American workers, such as:

  • 1963: Equal Pay Act
  • 1964: Title VII of Civil Rights Act of 1964
  • 1967: Age Discrimination in Employment Act
  • 1970: Occupational Safety and Health Act (OSHA)
  • 1974: Employee Retirement Income Security Act (ERISA)
  • 1978: Pregnancy Discrimination Act
  • 1990: Americans with Disabilities Act (ADA)
  • 1991: Civil Rights Act of 1991 (enhancing litigation remedies)
  • 2008: Americans with Disabilities Amendments Act (broadening definition of “disability”),

As a civil rights geek, I could persist . . . but the point is, relying on a 1962 decision about worker rights is like relying on a 1962 computer science textbook: SO much has changed since then.

At the oral argument (and in our briefs), we asked for a strange kind of relief–namely, the right to address the issue to the Colorado Supreme Court. Unfortunately, under Colorado’s unemployment statute, the Court of Appeals is the final level of appellate review. Worse, the Court of Appeals cannot overturn a decision of the Supreme Court; only the Supreme Court can overturn a prior Supreme Court decision. Unless we get to the Colorado Supreme Court on this issue, therefore, we’re stuck with a status quo that permits employers to lie to CDLE to trounce unemployment claims, to avoid the consequences of their mendacity by refusing to cooperate in the CDLE  process, and to skirt a nominal penalty by saying “Gee, we sure did not mean to submit false information, repeatedly, to mess up this guy’s unemployment claim!”

In our case, we proved through the testimony of the employers’ own witnesses that the employer had submitted information to CDLE that was “false in several particulars.” In fact, the employer concocted an entire false (but imaginative) narrative about a performance rehabilitation process that never happened. It responded falsely to every question posed by CDLE to ensure that an employee has a fair opportunity to rehabilitate before getting fired. The employer even lied about the scope and duties of my client’s job, a fact easily refuted by his job description. And the employer’s attorney even admitted that the reason stated on the termination paperwork was “less than completely accurate.” During these proceedings, we proved (and forced the employer to concede) that the information provided by the employer was simply not true.

Yet, the CDLE hearing officer, CDLE’s administrative appellate body (i.e. the Industrial Claims Appeal Panel in Colorado), and likely the Colorado Court of Appeals maintain that even though we proved the falsity of the employers statements (again, using the employer’s own documents and management witnesses), we still did not prove that the employer intentionally lied. Even though the ostensible decision-maker’s testimony expressly contradicted his written statement in the termination document, we somehow still did not prove that he intentionally lied. Even though my client’s former boss testified that she disagreed with the termination decision and that it occurred without her input while she was away on vacation, we allegedly did not establish that the employer intentionally lied. And, even though the employer acknowledged submitting inaccurate, false information that had a directly negative impact on my client’s unemployment claim, apparently all it takes for employers to avoid any consequence is the statement,

“Aw, shucks, Andy, I sure did not mean to lie.” 

In this case, “winning” means getting a shot to plead the case to the Colorado Supreme Court–e.g., writing long briefs and enduring the theater of oral argument. But in many ways, I do not expect to win this battle before the Colorado Court of Appeals. I still hope, however, to win the war by shining a spotlight on an issue that affects so many workers. If you’d like to read our Opening Brief, click HERE.  If you’re really geeky and would like to read our Reply brief, click HERE.

And so, what should employees DO if they feel like their claim for unemployment benefits has been denied and they’re not sure why?

APPEAL

Never fret, but never capitulate either: instead, unemployment claimants should consider the possibility that their former employer LIED to disqualify them from getting benefits, just so that their tax rate stays steady in the next year. Thus, immediately after getting any notice from CDLE denying benefits, unemployment claimants must file out the appeal paperwork, gather documents and witnesses, and prepare to tell a story to a CDLE administrative judge. In most cases, EMPLOYEES win following these hearings and get the unemployment benefits they deserve, unless they did something patently illegal, overtly dangerous, or downright stupid. And in 95% of unemployment matters, folks do NOT need an attorney; in fact, given how contemptuously CDLE administrative judges treat real litigators, I’m increasingly persuaded that we are liabilities to our clients in that process. Real folks telling real stories works better.

Employer lying in the unemployment process is a form of ECONOMIC VIOLENCE against employees, a crippling blow delivered when employees are most vulnerable. No doubt, most employers tell the truth to governmental agencies, including relatively powerless ones like CDLE. Some employers, however, lie. The problem is, they always get away with it to the detriment of employees, who suffer crippling anxiety and economic insecurity.

At the end of Tuesday’s oral argument, I asked my panel of judges:

don’t Colorado employees deserve to have some confidence in the unemployment benefit adjudication process?

I suppose we will find out soon . . . MSA

 

Merrily Archer, Esq., M.S.W., 8/3/17