by W. Anthony Andrews (Summer 2016)

A recent decision by the Illinois Supreme Court will make it easier for fired employees to receive unemployment benefits. In February, the state’s high court determined that if an employer fires someone for violating company policy, that policy must be well-established and the employee must know about it. Otherwise, the former worker can collect unemployment benefits. The court revisited this issue in May, adding that an employer must prove the misconduct.

In Petrovic v. Department of Employment Security, 2016 IL 118562, an employee of American Airlines asked a flight attendant to upgrade a passenger to first-class, as a favor for a friend. She then asked the catering department to give the passenger a bottle of champagne. Petrovic’s bosses did not authorize those changes, so they fired her, saying she violated company policy. The company policy was not codified in a specific rule, however.

Petrovic filed for unemployment benefits, but American Airlines protested because she was fired for workplace misconduct. According to the Unemployment Insurance Act (820 ILCS 405/600), employees who were fired for misconduct, as well as those who quit voluntarily, cannot claim benefits. The employment board of review sided with the employer, even though Petrovic did not break a specific rule. The board said her actions were “commonly accepted as wrong” and were “unacceptable by any standard.” Several appeals later, the case came before the Illinois Supreme Court.
The court reversed the board’s decision, deciding that a fired employee must violate a specific rule to be denied benefits. The court looked at the Act’s definition of misconduct: “the deliberate and willful violation of a reasonable rule or policy of the employing unit.” (820 ILCS 405/602(A)) The seven justices agreed that American Airlines did not have an official rule or policy on requesting upgrades for a passenger.

Even if American Airlines had a policy against issuing upgrades, the court said that would not have been enough. An employer also needs to show that an employee knew about the policy before violating it. The evidence only showed that Petrovic asked for an upgrade, while another employee arranged the upgrade. Without an established policy, Petrovic could not have known her actions were forbidden.

The key to being disqualified from unemployment benefits is knowledge. The Act does not want employees to game the system by getting fired in order to collect benefits. If an employee knows that an action would lead to her termination, she cannot receive unemployment assistance afterward. This includes violating company policy, committing crimes, and causing property damage or personal injuries. If, however, an employee acts without realizing she could get fired, she is still entitled to benefits.

American Airlines attempted to argue that there are some obvious acts of misconduct that should be enough to disqualify fired employees. The court, however, said the General Assembly went beyond commonplace misconduct and specifically referred to violations of rules and policies. The legislature passed the Act to help families wrestling with health and welfare concerns. Limiting disqualification allows more unemployed workers to receive benefits needed by the employees and their families.

In May, the court modified its opinion to make it even more difficult for employers to avoid paying unemployment benefits. After the original decision, some employers still questioned whether the former employee has the burden to prove that they are eligible for benefits. The altered opinion, Petrovic v. Department of Employment Security, 2016 WL 3023197, makes it clear that the employer must prove that an employee violated a known rule. The employee is basically presumed innocent.

Therefore, for employers to reduce the likelihood of having to contribute to the unemployment benefits of a terminated employee, employers should have carefully crafted and circulated formal policies, forbidding even the most commonplace misconduct.