Reasons to Contest Unemployment Claims

by Chris Hinson

What should you do if a fired employee makes an unemployment claim -- contest it or forget about it? The answer really depends on your reason for firing the person and whether or not you can defend it.

If you fired the employee for some reason other than misconduct, you probably shouldn't bother to contest the unemployment claim. This includes firing someone because you just don't have enough work for them to do or because they just "didn't work out."

On the other hand, if you had a good reason for firing the employee, you want to consider contesting the claim. Did you fire the employee for stealing, coming to work intoxicated, violating company rules, insubordination, excessive absences or any other type of misconduct? If so, you may want to contest the employee's claim for unemployment benefits.

If you fired the employee for misconduct, the next consideration is whether or not you can prove it. Don't expect the person to show up at the unemployment hearing and admit to stealing from the company or never making it to work on time. You'll need documentation and/or witnesses to back up your position. This documentation should be created before the employee is fired. Read the article on Procedures for Documenting Disciplinary Problems for information on how to do this. If the employee was fired over a particular incident, such as stealing or being intoxicated on the job, you'll need to rely on witnesses. Who saw the employee? Who did they report it to? If you investigated the incident, be prepared to present the results of your investigation as well as the procedure you used to investigate.

Unemployment claims that are paid to your former employees cause your business' unemployment tax rate to go up. That should provide you with motivation to contest frivolous claims for unemployment insurance.

Whatever your reason for firing the employee, you must also consider the risk that the person will file some type of wrongful termination suit against your business in the future. For example, if the employee feels that he or she was fired for a discriminatory reason, but you have solid proof that he or she was fired for misconduct, you probably should defend against the unemployment insurance claim. If you win, it shows that you have support for your position and may discourage the other person from pursing any other claims. On the other hand, if your proof isn't so great and you lose, it may encourage your former employee to sue you for discrimination.

If you don't have solid documentation of your reasons for firing the employee, you may want to try obtaining a release. Or you may decide it is in your best interest not to contest the claim. See a lawyer who practices employment law to weigh the options.

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