HIGHLIGHTS:

  • In Petrovic v. Department of Employment Security, the Illinois Supreme Court narrowed what constitutes "misconduct" sufficient to disqualify a discharged employee from being eligible for unemployment benefits.
  • Petrovic focused on a situation in which there was no express rule or policy violated but instead the employee violated a "commonsense" rule that every employee should know, limiting the use of this rule to criminal acts and intentional torts.
  • Even though Petrovic raised the bar for establishing misconduct, employers still have the ability to do so with additional diligence.

The Illinois Unemployment Insurance Act (Act) provides that employees who are discharged for "misconduct" are ineligible for unemployment benefits. InPetrovic v. Department of Employment Security, 2016 IL 118562, decided Feb. 4, 2016, the Illinois Supreme Court narrowed what constitutes "misconduct" sufficient to disqualify a discharged employee from being eligible for unemployment benefits.

Case Background

In Petrovic, the plaintiff was discharged from a commercial airline carrier. She was fired because she requested that a bottle of champagne be delivered to a passenger and requested that the passenger be upgraded to first class from business class when the passenger was otherwise ineligible for a free upgrade. The airline was unable to point to a specific rule or policy that the former employee violated. In other words, there was no rule establishing a protocol as to when food or drink can be comped for a passenger or when it was appropriate to request an upgrade for a passenger who was not otherwise entitled to the upgrade. Rather, the airline relied on a couple of general rules about employee conduct, neither of which squarely addressed the reasons for the plaintiff's discharge.

The Petrovic Court started with the established principle that misconduct is limited to "a deliberate and willful violation of a reasonable rule or policy of the employer." This deliberate and willful element "requires evidence that the employee was aware that her conduct was prohibited." The policy the employer uses to support the misconduct must have been communicated to the employee such that the employee was put on notice that any violations may result in termination.

Petrovic focused on a situation in which there was no express rule or policy violated but instead the employee violated a "commonsense" rule that every employee should know. Rather than requiring the employer to establish such a rule by direct evidence, the commonsense exception prior to Petrovic allowed an inference of a rule violation "by a commonsense realization that certain conduct intentionally and substantially disregards an employer's interests."Petrovic clarified and narrowed the scope of the "commonsense exception." The Court held that the commonsense exception could not be reconciled with the statutory requirement that requires evidence of an employer rule or policy violation.

As a result, the Court held "that in the absence of evidence of an express rule violation, an employee is only disqualified for misconduct if her conduct was otherwise illegal or would constitute a prima facie intentional tort." The Court concluded that because the plaintiff's conduct was neither illegal nor an intentional tort, she could not be disqualified for unemployment benefits on the basis of misconduct because there was no specific rule or policy of the airline that she violated.

Employer Considerations

An employer's challenge to a former employee's claim for unemployment benefits rarely involves illegal activity or an intentional tort. Accordingly, employers who seek to protest a claim for unemployment benefits on the basis of misconduct should be prepared to offer evidence of a willful or deliberate violation of an express rule or policy that squarely addresses the former employee's conduct – and of which the former employee was aware. The rule or policy need not be written or formalized, but formalization is helpful not only to show that the rule or policy existed but that the former employee knew about the rule or policy.

Establishing that the employee had notice of the rule or policy can be achieved by having employees sign an acknowledgement form. For example, an employee handbook acknowledgement form can be used to establish that the employee had knowledge of all of the employer's rules and policies in the handbook. Even though Petrovic raised the bar for establishing misconduct, employers still have the ability to establish misconduct with some additional diligence.