Unemployment Compensation Manual

:: Due Process, Forms, Procedures ::

CAVEAT: SPECIFIC LAWS AND REGULATIONS VARY WIDELY FROM STATE TO STATE. THESE ARE ONLY GENERAL REMARKS. UNEMPLOYMENT TAX ADVISORY CORPORATION DOES NOT RECOMMEND NOR ADVISE ANY MATERIAL CONDUCT ON THE BASIS OF THESE REMARKS. FOR ADVICE RELATING TO YOUR SPECIFIC CIRCUMSTANCES, CALL UTA AT 1 800 998 8822.
 

INTRODUCTION

Unemployment hearings are less formal than trials, and so the rules of evidence are less stringent and the procedure more relaxed. Nevertheless, the parties to a hearing must still get basic due process.

  • They must be given due notice.
  • They must have a fair hearing.
  • The hearings officer must be impartial.
  • His decision must be based on relevant, admissible evidence.
  • Both parties must have had an opportunity to hear and rebut the evidence.

From these basics spring innumerable regulations, time limits, forms, and procedures.

Of course, the Devil is always in the details. When applied to the employer or the claimant, the principle which rules all these innumerable details is this: Form supercedes function. Each time limit is strictly enforced, regardless of consequences. Absent a form, properly stamped, franked, dated and completed, nothing exists. The state agencies' first excuse for any omission or error on their own part always seems to be the large volume of claims which they process. This is an excuse which the state would never accept from either claimant or employer, both of whom are required to conform to each arcane requirement regardless of short time limits and the press of business. Yet they find the same excuse wonderfully convenient for themselves. And they will stick by it.

Thus, regulations such as time limits seem always to run only one way, and to be frequently abused. As an example, in Pennsylvania, an appeal letter must be returned to the state agency within so many days of its mailing to the employer. If the notice arrives late at the employer such that the employer mails his appeal at the last minute, the state is almost sure to say that he missed the deadline. If he shows a postage machine cancellation to prove that he mailed it in time, the state agency does not find that acceptable proof of when it was mailed. If he shows a UPS or FedEx receipt, the state agency does not find that acceptable proof of when it was sent. If he even shows a bar code, printed by the Post Office, the state agency still does not find that acceptable proof. The only acceptable proof is an old-fashioned rubber stamp applied by hand at the post office. That's what the regs say, and so that's what they insist on. And even then, the state agency may well contend that this rubber stamp only proves that the sender sent something, but not what was sent. And if all else fails, the state agency may even just say: "Well and good, but we did not save the envelope on which the postmark on which we make you depend was stamped." In such case, the state maintains that the sending date was the date they received the appeal. What date is that? That's whatever date they say it is.

On the other hand the state need not prove when or whether it mailed the notice of claim to the employer at all, other than to simply say that it did so, on such and such a date.

Many employers have gone to court over these matters and lost.

The frustrated employer frequently finds that his state agency is more than willing to squeeze an illogical and unjust result out of any particularly picky point of punctilio which it can contrive to discover, all in the name of due process. The one most ample fountain of convenient punctilio is always this issue of timeliness in returning appeals letters. See timeliness below.

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Initial Claim Determinations:
Initial claim determinations decide whether a claimant is entitled to benefits. These are not formal adjudications. They are simple determinations, usually made on the basis of a brief interview and a cursory review of records, and done quickly by a claims examiner at the local state agency office.
Appeal Hearings:
If unsatisfied with the initial claim determination, any interested party may generally request an appeal. Appeal proceedings are held before a hearing officer who may be variously called an administrative law judge, referee, appeals examiner, or some other like term. These do constitute fair hearings of record.

Decisions at this level ought to be based upon findings supported by substantial evidence in the record. This phrase, "substantial evidence" means such relevant legal evidence as a reasonable person might accept as sufficient to support a conclusion. The phrase, "in the record" means that the hearings officer can only base his decision on what was brought to the hearing, in terms of witnesses, documents, etc., and cannot include anything else which does not appear in the record of the hearing. Decisions must generally be based upon the whole record. This phrase "whole record" means that the hearings officer must weigh all the evidence in the record, both pro and con, on the issue to be decided, and make his decision on what evidence reasonably predominates, and not just pick and choose from among the evidence.

Important: This record is the only record. From this point on, all further appeals, including court appeals, will be based upon this record made at this appeals hearing. Therefore, any party filing an appeal should present all the evidence they want to have heard at this stage. It is not likely that there will be any chance to present additional evidence or witnesses after this hearing.

One more thing: From this point forward, everything favors the appeals decision. Just like replay review of a call in football, evidence must be strong and compelling to overturn an appeals decision. Courts, especially, always take pains to repeat that they review the evidence in a manner favorable to supporting the decision of the appeals officer.

Board of Review:
If either party is unsatisfied with the decision which comes out of the appeals hearing, they may usually request a hearing by a Board of Review. This hearing may or may not be granted. The board is generally an appointed body working at the behest of the state agency director and renders the final administrative judgment of the state agency. The board itself rarely conducts hearings. It works from written briefs and from the record. Its decision is apt to be based entirely upon the evidence presented at the hearing. Again, the board will generally review the evidence in a manner favorable to the decision of the appeals officer. He is assumed right and must be conclusively proved wrong.
Court Review:
If either party is unsatisfied with the decision of the Board of Review (if there was one), then that party may take the matter to court. The name of this court will vary widely from state to state. It may be called superior court, court of appeals, court of administrative appeals, supreme court, or etc.

In its judicial review, the court will determine whether the state agency’s findings are supported by substantial evidence on the whole record. That record, remember, derives from the hearing. Again, the hearings officer is assumed right and must be conclusively proved wrong. If the court determines that the state agency was wrong, then the court may either make its own findings, or may remand the matter back to the state agency.

Unemployment benefits do not involve large sums of money, and therefore they do not usually warrant spending a lot of money on a lawyer. When you win your case against the state agency in a court of law, nobody pays you back what you spent for a lawyer. The state's lawyer, of course, is paid for by your taxes. This dilemma leads to many instances where a claimant or employer represents themselves, striving against professional counsel paid for by themselves. Many cases with merit are lost for this one reason. Many many more are never brought to court for this reason.

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Court Appeal:
In some states, the decision of one civil court may be appealed to a higher court. A handful of cases have even been appealed to the U.S. Supreme Court.

Beware: Once in court, forms, procedures, and baffling terminology may very well supercede the justice of your case. This is where costly legal representation becomes advisable.

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HEARSAY

A worker should not be denied unemployment compensation on the sole basis of hearsay evidence which he denies. There should be some other evidence.

The above rule of thumb does not mean that hearsay cannot be heard at all in your state. Hearsay evidence may well be admitted in claim determinations, hearings, etc. But the hearsay evidence should be used in addition to some other direct, legally admissible evidence to support the decision. Some findings can even be supported on the basis of hearsay alone, especially if the evidence is not denied. But there must also be substantial legally admissible evidence.

The following conditions usually apply:

  1. Reliable Hearsay: It should be apparently reliable and credible. The hearings officer may infer reliability from the record and from the demeanor of the participants.
  2. Relevant Hearsay: It should tend to prove something relevant. Gossip about matters unrelated to the question at hand won't do.
  3. Reasonable Hearsay: It should be something from which reasonable people might form a conclusion.
  4. Uncontested Hearsay: The hearsay should be understood by the party and not denied by the party.
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CREDIBILITY OF WITNESSES

Many times, the whole issue at a hearing comes down to "Yes he did" versus "No I didn't". Therefore, whether or not a hearings officer believes a witness may be what shapes a final decision. Credibility is key. Credibility is based on a number of factors, such as:

  • The demeanor of the parties and of the witnesses.
  • The inherent probability of the evidence.
  • Other evidence which may corroborate or contradict.
  • The personal interest or probable bias of the person testifying.
  • The originality and reliability of documents.

The phrase "which reasonable people might accept to support a conclusion" recurs time and again when describing methods of evaluating evidence. "Reasonable people" would probably agree that credibility can best be evaluated at in-person hearings. Yet, increasingly, hearings are being held by telephone. State agencies may defend the effectiveness of their telephonic hearings in determining credibility, but the fact remains that their reason for holding hearings by telephone rather than in person has very little to do with effectiveness and much more to do with low cost and convenience.

If and as a case moves from agency to hearing to appeal to review, consistency becomes and important element in judging credibility.

An excellent and detailed example of how credibility may be judged appears in the war story below.

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TIMELINESS

This is the rock upon which innumerable otherwise fine cases sink.

It seems obvious, for instance, that reasonable time limits must be set. It does not seem to be equally obvious, at least not to the state agencies, that reasonable time limits which were set back in the days when the post office used to deliver efficiently no longer work today. Remember that the clock begins on the day when the agency claims that it mailed the notice, and not on the day when the notice arrives at the employer. So, the state of West Virginia set a time limit of 8 days years ago. But if the post office today takes five days to deliver a notice, then at the moment when that letter is being opened, the company is already two days in arrears in its attempt to return an appeal, assuming it will take the same number of days to return to the state agency. Even if the notice were to arrive on the same day it was mailed, what does the company do if the particular supervisor who has knowledge of the termination is on vacation that week?

Nevertheless, time limits set by state agencies are always narrowly construed and rigidly enforced. Whether or not they are reasonable has no bearing upon their effect.

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NOTICES AND DOCUMENTS

Parties should be given sufficient notice of a hearing to reasonably allow them to prepare a response to the issues in question.

Timeliness:
Parties must have a reasonable time to evaluate the issues, assemble their evidence and their witnesses, and prepare a response.
Statement of Issues:
Notices should apprise the parties of what the issues are, and should do so in a reasonably understandable manner. Informed awareness of charges and issues is fundamental to a fair hearing. A party may well have reason to complain if the issue discussed at the hearing is not the one which he was notified to prepare himself for. Yet this is a frequent occurence.
Documents:
Parties should be given a reasonable opportunity to review and respond to documents used as evidence. This is a particular problem in telephone hearings. How does someone object: "That is not my signature!", for instance, when the document is in the hands of someone at the other end of a telephone?
Records:
Evidence introduced at the hearing, such as employer records, lab reports, or state agency documents, should all be made a part of the hearing record. No other evidence should be considered.
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PARTICIPATION IN HEARINGS

Parties must be assured an opportunity for meaningful participation in all administrative proceedings affecting their interests.

The issue of interest can be key. We have seen cases where the employer who had knowledge of the circumstances surrounding a worker's discharge was not allowed to participate because they were not an interested party because their account was not being charged because the worker's base period fell wholly upon a previous employer. What, then, is the charged employer to do? They have no first-hand knowledge, and the one who does is not invited? Conversely, in other states, we have seen cases where the most recent employer was allowed to participate but the charged employer was not.

These are the general rules which ought to govern participation:

Discharges, Quits, Strikes:
If the worker left employment for something other than a plain layoff, such as a quit or for misconduct or as result of a strike, then the interested parties include the worker, the state agency, and the employer.
Charges to Previous Employer:
If a worker is laid off, but an employer previous to the one who actually laid him off falls into the base period so that this previous employer's account is charged, then the interested parties should also include that previous employer.
Representation:
Parties to a hearing are entitled to be represented by an attorney or an agent of their choice. In a handful of states, only attorneys are allowed to represent the parties. In some states, the maximum fees which attorneys may charge their clients for this representation is set by the state agency.
Examination and Rebuttal:
Parties in a hearing should have the right to examine and to rebut the evidence and witnesses. In some states, the hearings officer may also ask questions. In others, not.
Subpoenas:
Parties generally have a right to request that documents and witnesses be subpoenaed. They must be relevant and necessary. Subpoenas are not automatically granted. In a hearing, the discretion to subpoena or not usually rests with the hearings officer. He will judge whether the documents and witnesses are relevant and necessary.
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COURT DECISIONS USED AS EVIDENCE

Findings or decisions made by courts or other agencies, even in actions which involve laws other than the unemployment compensation laws, may be admitted as evidence in unemployment compensation appeals. But these findings are not the last word in the matter. The findings may be persuasive. They may not be controlling. This is true even if the criminal case and the unemployment case concern the same incident or the same activity.

The problem is that a conviction on criminal charges in a court of law does not necessarily determine an issue of misconduct. Consider that misconduct in unemployment compensation cases must be connected with the claimant’s work; whereas a criminal conviction does not include this element.

Likewise, an acquittal does not dispose of the matter, either. Criminal guilt must be established beyond a reasonable doubt. Misconduct connected with the work can be established on the basis of "substantial evidence", which is a lesser degree of proof.

In some instances, certain laws are preemptory. For example, if the National Labor Relations Board finds that a certain action by employees is a strike, that may be binding on a related unemployment case. An unemployment compensation hearings officer may have to accept that finding. But that finding alone may not dispose of the eligibility question in the hearing.

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EX PARTE COMMUNICATIONS

If a hearings officer or review board talks to one party without informing the other, that violates the requirements of a fair hearing.

"Ex parte" is medieval Latin which simply means "one sided". Talking to one side and not the other is not fair. One party to a hearing may call up the hearings officer and ask a question about simple procedure, such as "Can I bring a videotape?" and that's fine. But for the hearings officer to discuss what's on the tape and what he would make of it, without talking to the other side as well, is not fair.

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CLAIM DETERMINATIONS

Claim determinations are not adjudications. They are not subject to the same due process requirements which apply to hearings.
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DEPARTMENTAL ERRORS

It is not at all unusual for the state agencies to obstinately insist upon the outcome of their own errors or omissions. Faulty rate notices, lost or ignored correspondence, claims mistakenly granted, erroneous advice, records mislaid, etc., etc., are not at all uncommon. And this does not include the many irrational, biased, and redundant procedures.

Upon occasion, these errors can be corrected by tedious and costly court action. Often, they cannot. Even if they are, all errors, their outcome, and the costs of recovery, will be paid for by the claimant or the employer. We have yet to find an instance where a state agency was held accountable for the trouble it caused either party.

  1. Benefits mistakenly granted by the state agency and accepted in all good faith by the claimant will have to be returned.
  2. Taxes erroneously demanded by the agency, paid by the employer, can only be recovered without interest after protracted delay frequently lasting many years.
  3. Court costs are virtually never recovered.

This is all standard operating procedure.

Study the examples in the following "War Story".

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CAVEAT: SPECIFIC LAWS AND REGULATIONS VARY WIDELY FROM STATE TO STATE. THESE ARE ONLY GENERAL REMARKS. UNEMPLOYMENT TAX ADVISORY CORPORATION DOES NOT RECOMMEND NOR ADVISE ANY MATERIAL CONDUCT ON THE BASIS OF THESE REMARKS. FOR ADVICE RELATING TO YOUR SPECIFIC CIRCUMSTANCES, CALL UTA AT 1 800 998 8822.