You should respond within 10 days of the mail date at the top of the notice. Failure to respond in a timely manner waives your right to appeal any determination as to eligibility. This is especially important if you believe the claimant is ineligible due to a disqualifying event, as discussed below.1 This is the first opportunity to provide eligibility information.

A timely response guarantees:

• A written Notice of Determination/Ruling from the EDD
• The employer’s rights to appeal the EDD’s determination

The Notice of Determination/Ruling advises you of the EDD’s decision regarding the claimant’s eligibility. This document provides a reason for the decision, charges to the employer reserve account, and appeal rights.

The EDD can deny you reimbursement for any overpayments made from your reserve account, if the overpayment resulted from your failure to respond to or provide adequate information to the EDD.

If you disagree with EDD’s eligibility determination, file your appeal in writing within 30 days of the mail date at the top of the Notice of Determination/Ruling.

If you disagree with the EDD’s final determination, you have the right to protest the claim by filing an appeal. An administrative law judge (ALJ) will hear the protest. If the ALJ allows the claimant benefits but you still believe the decision is incorrect, you can appeal to the California Unemployment Insurance Appeals Board. You can take further appeals to the courts, starting with the California superior courts.2

• Ensure that any reason given for the separation from employment is accurate, well-documented and consistently explained. The reason you provide to the EDD should be consistent with the reason you provided to the employee and any other outside agency seeking information.

For more information on responding to UI claim notices, visit the EDD’s website.

Ineligibility for UI Benefits

A claimant is considered ineligible for UI benefits if they’re out of work for one of the following reasons:

• Voluntary quit without good cause
• Termination for misconduct
• Refusal to perform suitable work

Termination for Misconduct

Unemployment Insurance Code section 1256 disqualifies an employee from receiving unemployment compensation benefits if terminated for misconduct. Misconduct under this section of the code has been defined as “willful or wanton disregard of an employer’s interests or such carelessness or negligence as to manifest equal culpability.”3

Mere inefficiency, unsatisfactory conduct, failure in good performance due to inability or incapacity, inadvertent errors or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion are not deemed “misconduct.”4 Also, an employee’s inability to perform essential job duties generally does not meet the definition of misconduct.

Firing an employee for misconduct or violating company policy does not automatically bar the employee from receiving unemployment insurance. The actual misconduct at issue will need to be examined to see if it meets the above criteria.

A California Supreme Court case has established that an employee's termination for misconduct will not necessarily prevent the employee from receiving UI benefits; the underlying misconduct will be at issue.5

The case involved an employee who refused to sign a disciplinary notice, was terminated, and then filed for UI benefits. The court held that the employee made a mistake of judgment in refusing to sign the disciplinary notice, and should not be barred from receiving UI benefits. The court held that there was no dispute over whether the employer was within its rights to fire the employee for insubordination, acknowledging that the employer could justifiably terminate the employee. Instead, the sole question was whether the employee’s refusal to sign a disciplinary notice amounted to misconduct barring him from receiving UI benefits after termination. The court held that it did not amount to such misconduct.

In another case, a California court held that an employee who was fired for attempting to buy shoes for a friend at the company's expense was not disqualified from receiving benefits. According to the court, whether termination for “misconduct” will bar UI benefits depends on the reason the employee was fired.6

The court found that there was no evidence of willful or intentional disobedience. The employee was, “[a]t most ... guilty of a good faith error in judgment. At the least, the employee misunderstood the limits of what he could do with the safety shoe allowance, which he was entitled to as a benefit of employment.”

The court also emphasized that the law presumes that an employee was not discharged for misconduct. It is up to the employer to submit evidence that misconduct occurred. In this case, the employer did not oppose benefits, did not speak with EDD investigators and did not submit any evidence of the employee’s misconduct.

The court’s decision may have been different if the employer had provided evidence of the employee’s misconduct.

• Consult with legal counsel if you have any questions regarding claimant eligibility or how to respond to a UI claim.

Each employee’s termination will need to be examined on a case-by-case basis considering all the circumstances. Some questions to ask are if there was:

• Willful misconduct?
• Disregard of the employer’s interests?
• A pattern of refusing to follow orders?

Or, on the other hand, was it:

• Mere inefficiency?
• A good faith error in judgment?
• An isolated incident?

1. UI Code sec. 1327