SPEAKERS: Patricia L. Holland (919) M. Robin Davis (919) Ann H. Smith (919) SPEAKERS: Patrick H. Flanagan (704) Norwood P. Blanchard (910) Ryan D. Bolick (704)

Terminations for Cause: Winning at the ESC and EEOC

The ESC Process First Step (decision by Adjudicator): Form 500AB/Notice of Claim & Request for Separation Information (due in 10 days) Seeks general explanation of reason for separation: Describe specific work rules or policies violated. Was employee warned that violation could cause disciplinary action or termination? Adjudicator will issue “Initial Determination”

Step 2: Appeal Hearing Must file appeal within 15 days of Adjudicator’s Initial Determination. Hearing may be conducted before an Appeals Referee, Hearing Officer or Special Deputy Commissioner. Both parties have the right to request an “in person” hearing.

Tips for Appeals Hearings Bring witnesses with first-hand knowledge of the incidents at issue. A common problem is that employers will send HR Director, rather than direct supervisor or co- worker who personally witnessed the incidents. Make sure to offer all of your evidence at the hearing. This is the only opportunity to offer testimony or documentary evidence in the process. Bring the required 3 copies of documentary evidence. Try to stick to the narrow issues (see below) for the appeal. You only have 1 hour for most hearings, so time is a factor.

What happens at the Hearing? Appeals Referee will record the hearing on audio tape. The witnesses will be sworn. Claimant and employer will both have the opportunity to present documents, live testimony and cross-examination. The Referee will often have follow-up questions for witnesses. A decision is issued within 2 days.

Issues at the Hearing Hearings typically involve these two issues: Whether the claimant left work without good cause attributable to the employer. Whether the claimant was discharged for misconduct or substantial fault connected with the work.

What is Leaving Work? This issue arises when an employee resigns or otherwise quits. Basic question is whether the worker had a good reason for leaving the job. Important to note that municipalities cannot take advantage of non-charging allowance for leaving work due to a health condition. Different from “discharge” cases because employee has burden of proof. A forced “resignation” is not considered voluntarily leaving work.

What is “good cause attributable to the employer”? “Good cause” is defined as a valid reason “not indicative of an unwillingness to work.” Examples of “good cause” for leaving a job: Being subjected to unlawful harassment or discrimination. Marlow v. ESC, 127 N.C. App. 734 (1997); In re Boulden, 47 N.C. App. 468 (1980). Being directed to violate ethical rules of employee’s profession. In re Clark, 47 N.C. App. 163 (1980). Substantial reduction in work hours by the employer. Couch v. ESC, 89 N.C. App. 405 (1988).

Disqualification for “misconduct” or “substantial fault” When an employee is discharged, the employer must show that the discharge was a result of “misconduct” or “substantial fault” on the part of the employee in order to disqualify the employee from unemployment benefits. See N.C. Gen. Stat. §

Comparing “Misconduct” and “Substantial Fault” Basic idea is that “misconduct” is more serious than “substantial fault.” A finding of misconduct causes complete disqualification for benefits, while “substantial fault” results in a partial disqualification for a period of between 4 and 13 weeks.

What is “Misconduct”? “Misconduct” is defined as “conduct evincing such willful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability... or to show an intentional or substantial disregard of the employer’s interests or of the employee’s duties....” Basic idea is that misconduct is serious wrongdoing, often of the sort that an employee should be aware of even without a specific work rule.

Examples of “Misconduct” Alcohol or drug use at work. N.C. Gen. Stat. § (2). Failing a drug test qualifies even if the drug use did not take place at work, but the ESC requires the employer to offer competent evidence (affidavit or sworn testimony) proving that the statutory requirements of N.C. Gen. Stat. § were satisfied Insubordination can qualify as misconduct if it is sufficiently egregious. See Hagan v. Peden Steel Co., 57 N.C. App. 363 (1982) (employee yelled and called supervisor a “liar” during argument).

What is “substantial fault”? Substantial fault is defined as “those acts or omissions of employees over which they exercised reasonable control and which violate reasonable requirements of the job,” but does not include minor rules infractions (unless repeated after warning), inadvertent mistakes, or failures to perform work because of a lack of skill, ability, or proper equipment. Basic idea is that it is tantamount to termination for cause, but not serious enough to amount to misconduct.

Tips for Proving Misconduct or Substantial Fault Key idea for both misconduct and substantial fault is showing that the employee “knew better.” Stress that the employee’s actions demonstrated an element of willfulness or intentional wrongdoing. Point out that the employee had the ability to comply with the employer’s requirements, but simply chose to do otherwise. Unless the infraction was of a serious nature, you need to show that the employee had been warned about the problem on prior occasions—you can use the Form 500AB (discussed earlier) as a guide for your talking points in the hearing.

What happens after the Appeal Hearing? Next step is an appeal to full ESC. The “record” consists of the documents and evidence offered at the hearing before the Appeals Referee. ESC can affirm, modify or reverse the decision of the Appeals Referee. After ESC issues a decision, the next step is a petition for judicial review to the Superior Court. Further appeals follow the procedure for appealing other civil cases.

Practical Tips for Handling EEOC Charges

Threshold Issues Does the EEOC have jurisdiction in your case? Many smaller employers (less than 15 employees) are not covered by Title VII of the Civil Rights Act, the primary statute enforced by the EEOC. Is the EEOC Charge timely? A charge must typically be submitted within 180 days of the challenged employment action. Addressing these threshold issues may allow you to resolve the situation before you ever have to prepare a detailed response to the Charge.

Initial Steps After Receipt of the Charge Meet with employee’s supervisors and coworkers to investigate the facts. Contact the EEOC Investigator. Ask for an extension for submitting a response. This initial contact with the EEOC will also provide you with an opportunity to ask about any particular issues that the investigator would like for you to address in the position statement.

Preparing the Position Statement The goal of an effective Position Statement is just to explain the situation from the employer’s perspective. Typically, you can treat the EEOC’s “Request for Information” as merely a suggestion. Assemble and submit the documents that are relevant to your explanation first—if the investigator wants additional documents, they will contact you.

Preparing the Position Statement (cont.) In the typical discrimination (disparate treatment) case, the EEOC’s focus will most often be on how the relevant supervisor treats similarly- situated “comparators” that are outside of the Charging Party’s class. Point out instances where the supervisor has taken adverse action against workers outside of the CP’s class and/or where the supervisor has given favorable treatment to others in CP’s class.

Other Pitfalls to Avoid The scope of the EEOC’s investigation defines the scope of any subsequent Title VII lawsuit. Keep your Position Statement as “narrow” as possible so that you can confine the scope of a later lawsuit. Avoid giving conflicting or contradictory explanations of the reasons for an adverse action. Articulate your reasons—all of them—so you can rely on them later. Do not allow the EEOC investigator to interview management employees without having legal counsel present. Watch out for “defensive” Charges. Retaliation claims are frequently much more difficult to defend than the underlying discrimination claims.

Final Observations about the EEOC Process “No news is good news” in the EEOC process. The majority of EEOC Charges end with “no cause” findings.

SPEAKERS: Patrick H. Flanagan (704) Norwood P. Blanchard (910) Ryan D. Bolick (704) SPEAKERS: Patricia L. Holland (919) M. Robin Davis (919) Ann H. Smith (919)