July 19, 2002
EMPLOYER'S RIGHTS IN UNEMPLOYMENT COMPENSATION APPEALS PROCESS
By: John Moran, Research Analyst
You asked the following questions about cases when a former employee appeals an unemployment compensation ruling denying him unemployment benefits:
1. What are the employer's rights in employee appeals?
2. Is the employer required to appear at appeals hearings or other proceedings?
3. Are employers required to obtain an attorney?
4. Can an employer collect legal fees from a former employee if the employee loses the appeals?
Former employees (claimants) denied unemployment compensation in an initial ruling by the Department of Labor (DOL) have two stages of administrative appeals within the department: (1) the appeals referee, and (2) the Employment Security Board of Review (ESBR). Both employer and the claimant must be notified in advance of any hearings on the matter, both are given a set period to appeal decisions at either appeals stage, and, once the administrative appeals process is exhausted, either party can appeal in Superior Court.
Labor Department policy says employers should appear in person at hearings, but it allows testimony via telephone in some situations. Also, the presiding officials at both administrative appeals stages can require an individual's appearance through a subpoena, although this is not often used.
Employers are not required to have an attorney representing them in the unemployment claims appeals process, and the Labor Department suggests that an employer can handle the steps himself if he takes time to become familiar with the process. The Employer's Guide to the Appeals Process supplies a list of registered independent hearing agents who specialize in representing employers in these cases (on the DOL web page: http://www.ctdol.state.ct.us/appeals/applemp.htm or see Attachment 1). The guide provides a detailed description of the appeals process. DOL also has a free video describing the appeals process available at any Job Center/Connecticut Works office.
State unemployment compensation law does not provide for an employer to collect legal expenses from a former employee who loses his claim appeal.
Initial claims are reviewed by an examiner in the Labor Department's Unemployment Compensation Division. The examiner gathers written evidence, may hold a hearing for testimony, and considers other possible information as described in DOL regulations. Upon his decision on the claim, the examiner must notify the employer (or employers) and the claimant. Both the employer and the claimant have 21 days following the notification date to file an appeal. (There are certain exceptions to the 21-day deadline including if the appealing party can show good cause for a late filing.)
APPEALS TO A REFEREE (STAGE 1)
A claimant denied benefits after initial application may first appeal to an appeals referee in the state Employment Security Appeals Division. The referee is not bound by the examiner's initial claim decision (the Appeals Division is independent from the Unemployment Compensation Division) and is not restricted by the standard courtroom evidentiary requirements or procedures. The statutes require the referee to promptly hear the claim, de novo (as a new case), including scheduling a hearing at a time and place “reasonably convenient” for all parties (Conn. Agencies Reg. § 31-237g-17). The referee may cross-examine any witness or require any evidence he deems necessary in order to make a complete and proper decision. All testimony at the hearing is given under oath. The DOL appeals process guide suggests that this hearing is each party's best opportunity to explain his position.
Regulations state that hearings with participants appearing in person are preferred for cases with in-state parties, but arrangements may be made for a telephone hearing if a party shows good cause. The regulations specify some examples of good cause including (1) excessive distance to the hearing location, (2) physical disability, (3) transportation problems, and (4) testimony will be taken only on a procedural or marginal issue.
Hearings may be rescheduled for good cause at the request of any participating party. The requests need not be in writing initially, but they should be made promptly following the scheduling of the hearing. The Appeals Division may deny a postponement request if it is not timely or good cause is not shown. Parties may petition for a review of a decision on a postponement request.
Once the hearing is set, it is the responsibility of each party to present all appropriate witnesses, testimony, and evidence related to their case. Any party who does not provide all the witnesses or other evidence material to its case, without just cause for the absence, may be deemed to have agreed to the referee's decision based on what was actually presented at the hearing.
If the appealing claimant appears at the hearing and the employer, without good cause, does not, the referee must proceed with the hearing and take evidence and testimony from those present (Conn. Agencies Reg. § 31-237g-26(c)). If the employer shows good cause for the absence, the referee may reschedule the hearing. (The DOL Employer's Guide to the Appeals Process states that forgetting the hearing date, having an unexpected business appointment, saying your secretary forgot to remind you, or that you lost the hearing notice are not considered good cause.)
A party is considered to have failed to appear if he shows up at the hearing more than 10 minutes after the appointed time. If a party's attorney or other agent appears before the 10 minutes is up, the party is considered to have properly appeared.
Rights of Parties at Hearings
Each party at a referee hearing has the right to:
1. present an opening statement, rebuttal, and concluding statement;
2. testify on any material matter and introduce material evidence,
3. call and examine any witness on any material issue;
4. cross-examine any opposing party or witness; and
5. object to any evidence, questions, responses to questions, or any aspect of how the hearing is conducted.
At the close of a hearing, the referee may grant a party an extension to provide additional information if the referee deems it necessary to the proceedings.
After a referee decides a case, he must notify both the employer and the claimant. They both have 21 days following the date the notification was sent to file an appeal (as with the initial appeal there are certain exceptions to the 21-day deadline). An aggrieved party has 21 days to either file (1) a motion to have the referee reopen, vacate, set aside, or modify the decision or (2) an appeal to the Employment Security Board of Review. Usually motions to reopen a case are granted only if new information is available that for some good reason was not available at the hearing.
APPEALS TO THE EMPLOYMENT SECURITY BOARD OF REVIEW (STAGE 2)
Appeals Based on the Record
The Employment Security Board of Review (ESBR) decides appeals based on the entire record, including the initial decision and the referee decision. The ESBR usually does not conduct its own hearing, but a party can request an ESBR hearing when he files an appeal. (The ESBR, like the appeals referees, are part of the Appeals Division). The board may decline a hearing request if it finds there is no just cause for one. Also, the board can decide on its own that the interests of justice necessitate an additional hearing. The board can hold the hearing itself or order a referee to do so. All involved parties must submit their arguments to the board in writing.
Appeal Before the Full Board
As part of an appeal, a party can request the entire ESBR consider his appeal and not just the bare majority of the board (the board has three members and at least one alternate). Usually decisions are made by a majority of the board.
If the ESBR decides to hold a hearing the hearing rules are the same as those for the referee hearing (see above) for (1) scheduling, (2) in-person and telephone hearings, (3) postponements, (4) subpoenas, (5) failure to appear on time, (6) duty to represent evidence and testimony, and (7) rights of a party at the hearing.
Before making a decision, the ESBR reviews the entire record of the case and either listens to the tape or reads the transcript of the referee's hearing. The board decisions can affirm, reverse, or modify the referee's decision. The board may also send the case back to the referee for a hearing or back to the Labor Department examiner for further investigation and a new decision. After the ESBR decision, any party has up to 30 calendar days to either file (1) a motion asking the ESBR to reopen the case, or (2) an appeal in Superior Court. In any appeal to Superior Court, an attorney must represent a corporation. If the case moves on to Superior Court, then the usual court procedures and evidentiary rules will apply.