LABOR LAW - UNEMPLOYMENT BENEFITS - DISBARMENT
A FELONY "IN CONNECTION WITH" EMPLOYMENT INCLUDES CONDUCT WHICH BREACHES
AN EXPRESS OR IMPLIED DUTY THE EMPLOYEE OWES THE EMPLOYER REGARDLESS OF
WHETHER OR NOT THE FELONIOUS CONDUCT WAS COMMITTED AGAINST THE EMPLOYER
OR COMMITTED IN THE COURSE OF EMPLOYMENT.
] | [ISSUE & DISPOSITION
| [AUTHORITIES CITED
] | [COMMENTARY
An attorney who was working for a title abstract company was convicted
of submitting a false insurance claim for alleged theft of personal property.
As a result of the conviction, the attorney was disbarred and terminated
by his employer. The Commissioner of Labor denied the attorney's application
for unemployment insurance benefits. The Commissioner's denial of benefits
was sustained by an Administrative Law Judge, the Unemployment Insurance
Appeal Board, and the Appellate Division.
ISSUE & DISPOSITION
Labor Law § 593(4)
precludes unemployment benefits where the claimant
is convicted of a felony committed neither against the employer nor in
the course of employment.
Yes. A felony is "in connection with" employment for purposes of N.Y. Labor
Law § 593(4) if it results in breach of an express or implied duty
the claimant owes the employer.
Cases Cited by the Court
Punter v. Ross, 43 N.Y.2d 743 (1977).
De Grego v. Levine, 39 N.Y.2d 180 (1976).
Rosedietcher v. Levine, 33 N.Y.2d 377 (1974).
Bruggeman v. Roberts, 477 N.Y.S.2d 449 (N.Y. App. Div. 1984).
Caryl v. Roberts, 466 N.Y.S.2d 825 (N.Y. App. Div. 1983).
Markowitz v. Roberts,464 N.Y.S.2d 262 (N.Y. App. Div. 1983).
Other Sources Cited by the Court
State of the Law Before Sinker v. Sweeney
New York courts have previously interpreted Labor
Law § 593
to disqualify an employee from unemployment insurance
benefits in cases where the employee is discharged for engaging in conduct
that is in "willful disregard" of reasonable employer expectations. In
Punter v. Ross
, 43 N.Y.2d 743 (1977), the Court of Appeals held
that the claimant, a credit and collection clerk for a department store,
was disqualified from unemployment benefits due to her intentional completion
of an insurance form on behalf of her employer without authorization. Such
misconduct "bears materially on claimant's fitness and integrity to serve
in the capacity of a credit and collection clerk." Id
. at 744. In
DeGrego v. Levine
, the Court of Appeals similarly determined that
denial of unemployment benefits is appropriate in situations where the
employee engaged in misconduct or provoked discharge. 39 N.Y.2d 180 (1976).
In that case, an employee was terminated for wearing a political button.
The court ruled the employee was eligible for the unemployment benefits
because there was no evidence that the employee's conduct was "detrimental
to the employer's interest or in violation of a reasonable work condition
so as to constitute misconduct." Id
. at 184. The court denied unemployment
benefits to an employee who was terminated for falsification of his employment
application by not reporting a prior arrest. Rosedietcher v. Levine
33 N.Y.2d 377 (1974). The court held that in the interest of the employer
an audit clerk for a stockbroker should be trustworthy, thus requiring
full disclosure of any previous arrests.
Furthermore, the New York Appellate Division held in three cases that
claimants were properly disqualified from receiving unemployment benefits
even though their misconduct was not directly related to their employment.
See Bruggeman v. Roberts, 477 N.Y.S.2d 449 (1984) (holding that
an employee's felonious misconduct committed during nonworking hours reflected
negatively on the employee's integrity and on the employee's relationship
to his employer and precluded the employee from recovering unemployment
benefits); Caryl v. Roberts, 466 N.Y.S.2d 825 (1983) (ruling that
an employee's intentional disregard of reasonable standards of behavior
at an employer awards dinner constituted misconduct that disqualified the
employee from unemployment benefits); Markowitz v. Roberts, 464
N.Y.S.2d 262 (1983) (determining that an employee's felonious actions committed
during nonworking hours prohibited the employee from receiving unemployment
benefits because the employee has an obligation to adhere to standards
of behavior that an employer may reasonably expect of an employee).
Effects of Sinker v. Sweeney On Current Law
The Court of Appeals' holding expands the scope of activities which would
prevent a former employee from collecting unemployment benefits. Prior
to this case, a felony committed "in connection with" employment had been
interpreted as a covering a variety of acts which violated a duty to the
employer. The scope of this duty varies in accordance with "the nature
of the duty involved" Sinker v. Sweeney
, at 2. (For discussion of
cases defining this duty see above section on State of Law Before Sinker
. See particularly Bruggeman v. Roberts
The common requirement for denial of benefits is "wilful disregard of
standards of behavior which employers have a right to expect of their employees."
Sinker, at 2. The Sinker court found that the claimant's
submission of a false insurance claim for loss of personal items demonstrated
disregard for employer standards and was a breach of duty with a resulting
harm to the employer. The employer in this case was a title abstract company
and had to maintain its reputation as a trustworthy and reliable business.
Claimant's actions jeopardized his employer's reputation. This result affirms
the reasoning of the Third Department in Bruggeman v. Roberts. Under
Sinker, future claimants will be denied unemployment benefits when
their off-hours misconduct risks either the professional qualifications
of the claimant or the reputation of the employer's business.
The court bases its decision to deny unemployment insurance benefits on
appellant's violation of a duty owed to his employer; however, the boundaries
of the duty are unclear. How far does this duty extend, and what events
constitute a breach of this duty? Is the duty based on a reasonable standard
in accordance with the type of job or may the employer set the duty himself?
For example, may an employer say that an employee's duty consists of never
being convicted of any crime?
One possible interpretation of the court's decision is that a duty to
the employer is breached when the conviction is related to the employee's
current position. This interpretation of the decision limits the reach
of the duty. See Markowitz v. Roberts , 464 N.Y.S.2d 262 (1983)
(holding a government agency's integrity was affected when its employee,
a high agency official, was convicted of bribery); DeGrego v. Levine,
39 N.Y.2d 180 (1976) (holding that unemployment insurance benefits may
be denied where the employee's actions are "detrimental to [the] employer's
Survey of the Law in Other Jurisdictions
Individuals are generally entitled to unemployment benefits only when their
unemployed status arose through no fault of their own. In keeping with
this general policy a number of states have enacted statutes which deny
benefits to individuals who lose their employment through misconduct in
connection with their employment. A Washington State statute, Wash.
Rev. Code § 50.20.060
(1990), has nearly identical language to
that of N.Y.
Labor Law § 593(4)
. Washington courts seeking to clarify the language
of the statute have required the employer to show that a reasonable person
would find a nexus between the employee's misconduct and the work of the
employer. Nelson v. Department of Employment Sec.
, 655 P.2d 242
(1982). The "in connection with employment" stated in Maryland Code §
8-1003 (1991) has been construed as not requiring that the conduct occur
during work hours or on the employer's property, but there must be a breach
of a duty to the employer and not just an adverse effect upon the employer.
Employment Sec. Bd. v. Lecates
, 145 A.2d 840 (1958). Louisiana courts
have stated that the misconduct need not occur during work time or on the
employer's premises. Rather, the misconduct must show a willful or wanton
disregard for an employer's interests and such disregard is shown where
the conduct leaves the employee unable to come to work or to perform the
requirements of his employment. Grimble v. Brown
, 171 So. 2d 653
Several other state statutes are more explicit and do not require that
the misconduct be "in connection" with the employment. For example, the
Maine statute provides for the disqualification from benefits for unemployment
due to the conviction of any felony or misdemeanor. Maine Rev. Statutes
Ann. 26 § 1193 (West 1964). Similarly, Cal.
Unemployment Insurance Code § 1256.1 (West 1986) states that if
an individual is absent from work for a period in excess of twenty-four
hours due to incarceration or conviction of an offense, the individual
is deemed to have left work voluntarily and is therefore disqualified from
receiving benefits. However, where an employee is discharged for criminal
activity occurring during non-work hours, the off-duty activity must harm
the employer's interests. American Federation of Labor and Congress
of Indus. Organizations v. Unemployment Ins. Appeal Bd., 23 Cal.App.4th
Scott M. Davies, 97
Andrew Fowler, 98
John A. Jeziorski, 98
Anita J. Lee, 98
Michael Smith, 98
Reese E. Solberg, 97
Joymarie Torres, 98