Legislation would make it more difficult for laid-off workers to obtain benefits

by Eric Ginsburg


Few people are watching the unemployment insurance bill as it makes its way through the NC General Assembly — including the lawmakers who are voting on it. Few people besides employment lawyers, that is.

Last year the state legislature redefined the definition of misconduct that would bar fired workers from receiving unemployment more broadly, and when Gov. Bev Purdue vetoed it the lawmaking body overruled her. The Employment Security Commission suspended some of the provisions in the law after the US Labor Department rejected changes by the assembly that lawyers say would have made it more difficult for fired workers to obtain unemployment insurance.

The way the law was written, the labor department said, would preclude North Carolina from federal unemployment insurance subsidies, defeating part of the purpose of changing the law in the first place. Last week the General Assembly revisited the law, turning some legal definitions into examples in an attempt to maintain federal funding and maintain some of last year’s changes.

The bill passed its first two House readings nearly unanimously, with Rep. John Blust (R-Guilford) as one of the two lone votes against it on one of the readings. The bill and its Senate counterpart are still making their way through the General Assembly and are currently in a conference committee made up of House and Senate members to resolve the differences between the two bills.

Rep. Marcus Brandon (D-Guilford) acknowledged that unemployment wasn’t one of his key issues and said he followed the leadership of the Black Caucus, including two caucus leaders who co-sponsored the bill. Blust and Sen. Pete Brunstetter (R-Forsyth), who co-sponsored the Senate bill, did not return calls for comment.

Despite strong support in the house and senate, Greensboro employment lawyer Jon Wall said he hopes the governor vetoes the bill or that parts of it are suspended again.

“I find this extremely unfair how it would define misconduct,” said Wall, who represents employers and employees. “It would be extremely easy for an employer to sustain a finding of misconduct.”

Like many other employment lawyers, Wall takes issue with the original language of the changes, which would have denied workers unemployment for things such as receiving three written warnings in the previous year, violating the absentee policy, or getting arrested on certain charges.

The law didn’t state that the warnings had to be related to each other or the reason the employee was terminated, or that employees had to willfully violate the absentee policy or be found guilty of the charges they were arrested on.

Chuck Montieth, an employment lawyer who worked for the state Employment Security Commission for 24 years and who was the chief appeals referee for part of his tenure, said it was difficult to predict how the changes would impact workers.

“I’m concerned that there’s no requirement that the employers absentee policy be reasonable,” Montieth said. “Generally speaking, I think the changes have made it more difficult for individuals to receive unemployment benefits.”

Some employment lawyers said the changes marked a significant improvement over the re-definition of misconduct last year. David Puryear, an employment lawyer in Greensboro, said it showed that cooler heads were prevailing.

If an employee was late for work… because their car broke down on the highway on the way to work, that would be misconduct. It could cover someone who punched in one minute late. That places a premium on hard rules and hard enforcement. I don’t think that’s what the people of North Carolina intended in creating the unemployment system in the first place.’

— Employment lawyer David Puryear

“The way the law was rewritten in the last session of the General Assembly created certain presumptions about misconduct by an employee that in most instances would have been practically impossible for an employee to overcome in an unemployment hearing,” he said. “I think the way that they have proposed to go back and revamp that change in this session may correct some of that overreaching.”

Puryear wrote a letter to Purdue a year ago calling on her to veto the original legislation. The letter said the proposed law was “deeply unfair to North Carolina workers” and “allows employers to manipulate the system.” The letter was signed by 14 other lawyers throughout the state.

“The law was not in need of the revision,” the letter reads. “There is no evidence that the unemployment system in North Carolina was being widely abused by displaced workers. Nor is there any evidence that the rates paid by North Carolina’s employers are unfairly high, so that relief is needed…. The deleterious consequences of this bill, if not vetoed, are going to be felt in the social services departments and homeless shelters and food banks of this state for years to come.”

Proponents of the bill, including its primary sponsors, could not be reached for comment. Wall said the changes likely came after heavy lobbying from business interests.

Employers pay different unemployment tax rates to the state and the rate increases as the number of former employees who successfully claim unemployment rises. Puryear said calls to change the definition of misconduct to deny unemployment didn’t begin until 2008, when employers felt the impacts of the economic collapse and often had to lay off or fire workers.

“Some employers attempted to mitigate that unemployment tax increase by attempting to [wrongfully] dismiss people for misconduct,” Puryear said. “In some instances that plan of action didn’t work — they were thwarted. That, I believe, is one of the reasons that we see this effort to rewrite this law.”

According to a press release from the NC Justice Center last month, the state’s unemployment rate is “among the highest in the country.” Absenteeism is the primary reason employees are fired in North Carolina, Montieth said. Even offering absenteeism as an example of misconduct — instead of as part of the definition as the previous legislation did — could make it much harder for people to receive unemployment insurance, Puryear said.

“If an employee was late for work… because their car broke down on the highway on the way to work, that would be misconduct,” Puryear said of the previous legislation. “It could cover someone who punched in one minute late. That places a premium on hard rules and hard enforcement. I don’t think that’s what the people of North Carolina intended in creating the unemployment system in the first place.”

Richard Rutledge, an employment lawyer in Winston-Salem and one of the signees on Puryear’s note said the austerity measures flew in the face of what unemployment insurance was supposed to do.

“The [original legislation] made it a lot easier for employers to disqualify you,” Rutledge said. “They took away the elements of reasonableness that were left to the discretion of the adjudicator. It gave the employer a very easy way to give you a paper trail out the door.”

Rutledge agreed with Puryear that the new legislation was a significant improvement.

“As I understand it, what it will do is make it easier for an adjudicator who tends to favor employers to disqualify people,” he said. “If they are evenhanded, it won’t matter.”