Employee Fired for Working Additional Hours Eligible for UC Benefits Despite Prior Warning

This post was contributed by Joseph S. Sileo, an Attorney in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Scranton, Pennsylvania.

In a recent unreported decision, the Pennsylvania Commonwealth Court considered a part-time employee’s eligibility for Unemployment Compensation ("UC") benefits after she was fired for disregarding her employer’s prior directive to not work past the end of her shift after punching out. The unemployment claim yo-yoed through the administrative process: after the claimant was initially determined eligible for UC benefits, the Referee reversed that decision and determined the claimant ineligible, and then the Board of Review reversed the Referee’s decision and determined the claimant eligible for benefits.

On appeal to the Commonwealth Court, the record contained credible evidence submitted by the employer that the claimant-employee was informed during a morning meeting that working past her scheduled hours, after punching out, violated both wage and hour laws as well as the employer’s policy, and that she must stop the practice immediately. Despite this, at the end of her shift that same day, the claimant once again continued to work beyond her scheduled shift after punching out. She was terminated as a result.

Although acknowledging that her employer in fact had at least mentioned that working after punching out was in violation of wage and hour laws, the claimant downplayed that part of the discussion, claiming that the primary topic of the meeting was the claimant’s recent history of reporting to work late. The claimant further testified that because the meeting made her very upset and anxious, she simply forgot the discussion about working past her scheduled shift and therefore she did not act willfully or deliberately disregard the employer’s directive when she again worked past the end of her scheduled shift after punching out later that day.

The Commonwealth Court agreed with the Referee and found that the record "amply supported" the factual finding that the claimant simply "forgot" the discussion only a few hours earlier that morning about working off the clock hours because she was stressed and distraught. Consequently, the Court ruled, the Board of Review did not commit an error of law when it determined that the claimant’s failure to comply with the employer’s directive prohibiting working after punching out was not intentional or deliberate; meaning that, because the claimant’s separation from employment was not due to "willful misconduct," she was eligible for UC benefits under Section 402(e) of the Law.

Although the employer in this case did the right thing from a wage and hour perspective, by informing its employee that working "off the clock hours" was prohibited, its good intentions and correct approach in that respect failed to carry the day in the unemployment compensation arena. In that regard, this case is but another example of how the eligibility standards for unemployment benefits are applied very liberally in favor of employees. Although we do not view this decision as well reasoned, balancing the potential risks and liabilities, the employer nonetheless took the better approach by addressing the more significant and potentially more costly wage and hour issue in spite of, and even if doing so compromised, the unemployment eligibility outcome. One recommendation: confirm similar directives to employees in writing.

If you have any questions regarding this post or need assistance with an unemployment compensation matter, please contact any member of our Labor and Employment Practice Group.