Fighting Unemployment can Backfire on Employer

In a recent case from Pennsylvania involving a retaliation claim under Title VII involving an employer who opposed a former employee’s claim for unemployment compensation who had also filed a charge of discrimination, the court found that the employer could be liable.

Under Title VII of the Civil Rights Act, an employer engages in unlawful retaliation when, in response to an employee complaint of discrimination, it acts in a way that may dissuade a reasonable worker from making or supporting a charge of discrimination.  A federal district court in Pennsylvania held that an employer’s request that its agent contest the employee’s claim for unemployment compensation and state that the employee was “discharged for gross negligence causing a financial loss to the employer,” amounted to retaliation under Title VII.  The employee claimed that this appeal prevented her from continuing to receive unemployment compensation benefits and made it impossible to find new employment.

The employer argued that there was no adverse employment action in contesting the employee’s unemployment benefits claim because it occurred after her employment had already ended.  Even though the employer cited previous case law where a court found no adverse employment action because contesting unemployment came after employment ended (the case involved the Age Discrimination in Employment Act and not Title VII), it noted that in this case the employee was already collecting benefits then lost them, suffering economic harm and damaged her chances of procuring future employment.

For whatever reason, it seems that employers are contesting unemployment more often these days. However, as this case points out, there can be some risk for an employer who does so, thereby exposing themselves to liability under Title VII of the Civil Rights Act (a federal law that applies to employers with 15 or more employees).

The case is STEZZI v. CITIZENS BANK OF PENNSYLVANIA, Dist. Court, ED Pennsylvania 2012, Case No. Civil Action No. 10-4333.

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About the author: Bruce Coane is an attorney who specializes in labor and employment law and immigration law, with offices in Florida and Texas. He may be reached at houstonlaw@aol.com, 713-850-0066 or 305-538-6800.

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