When you present an employee with a performance review or disciplinary action form and ask that employee to sign it, his refusal constitutes “insubordination.” That is, by itself, grounds for firing the employee. But, is it also “misconduct” within the meaning of Section 1256 of the Unemployment Insurance Code such that you can also challenge the employee’s later claim for unemployment benefits? The answer is “Yes,” according to a recent California court opinion.
In Paratransit, Inc. v. Unemployment Insurance Appeals Board, the employee was in a union. The union contract required that the employer obtain the signature of the employee on all disciplinary action notices, but the notices had to have a disclaimer saying that the employee is only acknowledging receipt of the document. So, when the employee was rude to a customer, the employer called a meeting with the employee and attempted to present him with a disciplinary notice. The employee refused to sign the notice, even though it contained the required disclaimer, because the employee feared it would be deemed an admission of guilt. The employer told the employee that he would be fired if he refused to sign the document. The employee refused, and the employer fired him.
The employee then filed for unemployment benefits. The employer contested the benefits on the grounds that the employee’s refusal to sign constituted “misconduct” within the meaning of Section 1256. An administrative law judge agreed with the employer and denied benefits. The employee appealed to the Unemployment Insurance Appeals Board, who overturned the decision and granted benefits. The employer then appealed to the Superior Court, who agreed with the employer and ordered no benefits were payable. The employee then appealed to the Court of Appeal.
The Paratransit Court held that the employee’s failure to sign constituted a violation of the employee’s legal duties to the employer under California Labor Code §2856 (which states that “an employee shall substantially comply with all the directions of his employer concerning the service on which he is engaged, except where such obedience is impossible or unlawful, or would impose new and unreasonable burdens upon the employee). Accordingly, the employee’s refusal to sign amounted to “insubordination” and, thus, was a terminable offense. The next question, then, was whether such insubordination amounted to “misconduct” under Section 1256. The Court ruled that it did. Because the employee’s refusal “directly disobey[ed] the employer’s command,” the refusal amounted to “misconduct” under Section 1256. The employee was therefore denied unemployment benefits.
The Court’s opinion is available here.