In an opinion released April 26 and designated for publication, the Kentucky Court of Appeals held the longstanding Kentucky law allowing a non-lawyer to represent a business entity at an administrative unemployment hearing is unconstitutional.[1] If upheld, this decision will have broad, statewide impact on how unemployment claims are handled in Kentucky.

For decades, Kentucky law has permitted employers who contest former employees’ claims for unemployment benefits to designate a human resources officer, a managerial employee, a third-party company, or another non-lawyer to represent their interests in administrative unemployment hearings.[2] The Court of Appeals decision, if upheld, will put a stop to that practice. The court ruled the law is an unconstitutional effort by the legislative branch to exercise the judicial branch’s exclusive authority to regulate the practice of law.

Under the court’s decision, any employer organized as a legal entity (such as a corporation or limited liability company) must now be represented by a licensed attorney in any unemployment hearings. A non-lawyer attempting to represent a company could be accused of the unauthorized practice of law.

Unemployment hearings in Kentucky are often relatively informal. They are typically conducted by telephone and usually last an hour or less. The question of whether an employee is entitled to unemployment benefits often hinges on (1) whether the employee was terminated or voluntarily quit, (2) whether the employee was discharged for certain kinds of misconduct, or (3) whether the employee was employed long enough to qualify for unemployment benefits. If the court’s decision is upheld, Kentucky employers will have to make a choice between incurring the expense of hiring a lawyer to contest unemployment claims or declining to contest claims.