Tuesday, February 9, 2016

Supreme Court Sets New Misconduct Standard

Traditionally, Illinois employers have always understood that “misconduct” necessary to warrant denial of unemployment compensation benefits requires proof either of a violation of an express workplace rule or of conduct detrimental to the employer that is commonly accepted as being wrong.  The Illinois Supreme Court has now changed that understanding.

In Petrovic v. The Department of Employment Security, ___Ill.2d___ (Feb. 4, 2016), the Supreme Court found a former employee of American Airlines eligible for benefits despite conduct that was described by the referee as being “so commonly accepted as wrong that employers need not have rules covering [such conduct].”  The case involved the termination of an employee for upgrading a friend to first class and providing the friend with a free bottle of champagne.  

After the IDES Board of Review sustained the denial of benefits, the circuit court reversed the Board of Review and the appellate court then reversed the circuit court, reinstating the Board of Review’s decision.  The Supreme Court reversed again, finding that a “commonsense” standard for determining misconduct did not square with the statute and holding that “in the absence of an express rule violation, an employee is only disqualified for her misconduct if her conduct was otherwise illegal or would constitute a prima facie intentional tort”.  Thus, if the employee’s conduct, however wrong it may seem, does not violate an express rule, the employee is entitled to benefits unless the “employee’s behavior would constitute a crime, such as theft or assault, a civil rights violation, such as sexual harassment, or a prima facie intentional tort”.
The Petrovic case underscores the importance of having clear and clearly communicated workplace rules that have been tailored to the types of misconduct likely to occur and that are updated to deal with changes in operating procedures.  The “everybody knows it’s wrong” standard will no longer prevail in unemployment compensation cases in Illinois.