Iowa Supreme Court takes up unemployment case involving jailed employee

By: Administrator on November 18th, 2015

Have you in effect quit your job if you spend nearly a month in jail on charges that are later dismissed?

That’s the question that the Iowa Supreme Court will face when it it convenes for oral arguments on Thursday.   The answer could reverse 40 years of Iowa unemployment insurance policy decisions and affect future cases where employees miss work for reasons that are not of their own making.

Sondra Irving, who was employed full time as a medical assistant at the University of Iowa, was jailed in November 2013 on a felony domestic violence charge. The complaining witnesses later withdrew the allegations, but Irving spent nearly a month behind bars. In the meantime, Irving, through her mother, kept her employer informed of the reason for her absences.

After leaving jail, Irving’s criminal troubles were replaced by a new problem: While she was incarcerated, the university terminated Irving’s employment because of her absence from work while in jail (she had no prior unexcused absences.)  As a result of the termination, Irving applied for unemployment benefits, but Iowa Workforce Development denied her application and both the Employment Appeal Board and the Linn County District Court affirmed that decision.

The state agency ruled that Irving was disqualified for benefits because she quit her job or, in the alternative, because her excessive absences from work could qualify as misconduct.

Irving argues in her appeal to the Iowa Supreme Court that while she obviously was not “available to do her job while she was incarcerated” (she was in jail) she should be eligible for unemployment insurance benefits if the employer did not hold open her job during her month-long absence.  There is an administrative rule that “specifies that a claimant who is simply incarcerated without any finding of culpability or intent, is disqualified from receiving benefits,” but Irving says the agency exceeded its authority in creating the administrative rule.  Because her absence from work was due to circumstances beyond her control, Irving contends that it was not due to actions on her part that were “voluntary, foreseeable or intentional.”

The Employment Appeal Board defends the rule and Irving’s denial as consistent with longstanding policy of the agency in unemployment cases. It cites numerous examples of cases where benefits were denied to workers who were deemed to have quit their jobs or were dismissed for misconduct because of being jailed.

The board likens Irving’s case to other unforeseeable excuses for absences, including problems with transportation or babysitters. It’s not the employer’s responsibility to investigate the foreseeability of an employee’s excuse for not showing up for work, the board argues: “The claimant was in jail for issues of personal responsibility and thus the agency did not err by finding that the absences cannot be unexcused.” “This is so,” the board says, “even if the claimant is innocent.”

The board cites Iowa court cases where unsuccessful claimants had unexcused absences because of a late bus or car trouble for which they had no responsibility. “So too with the inability to make bail,” the board explains. “It is unfortunate but no more a reasonable ground for missing work – and here it was a lot of work – than late buses or late babysitters or car trouble.”

The agency’s “widely applied and long standing regulation, as applied in this case, means that if a claimant loses work because the claimant is in jail then the claimant is deemed to have left employment without good cause attributable to the employer,” the board argued. “This interpretation is not irrational.”

It’s possible, though, that the Iowa Supreme Court might not reach the question.  The board contends the case is moot (and should therefore be dismissed) because Irving is disqualified from receiving unemployment benefits from her University of Iowa job in the first place: She was simultaneously dismissed from her part-time job at a nursing home and denied unemployment benefits from that job, as well. But, because she did not appeal that denial beyond the District Court, the agency argues that under state law and administrative rule she is ineligible for any benefits from any other job held at the same time.

Irving disputes that argument and urges the court to decide the case on the merits because of compelling public policy implications.

That policy issue, to some degree, comes down to the following question: When an employee is terminated for missing work (through no fault of her own), who should bear the financial responsibility?  The employer (who is also not to blame), or the employee?

Irving cites language in state law explaining that the purpose of unemployment insurance is to provide financial stability to workers who lose employment through no fault of their own. But as the board points out (in quoting from a 1983 Iowa Supreme Court decision) there is a countervailing consideration:

The unemployment compensation statute . . . touches upon more than just the recipient. It provides for the creation of a fund produced by contributions from private employers. The rate of an employer’s contribution to the fund varies according to benefits paid to that employer’s eligible employees. Any action with regard to disbursements from the unemployment compensation fund thus will affect both the employer and the fiscal integrity of the fund.

The board therefore argues that the jail rule properly balances the workers’ interests against the interest of employers who pay into the unemployment insurance fund and who are not at fault when an employee loses his or her job.

If the court does decide the case on the merits, the outcome will be of great interest to Iowa employers and employees alike.

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On Brief is devoted to appellate litigation, with a focus on the Iowa Supreme Court, the Iowa Court of Appeals, and the United States Court of Appeals for the Eighth Circuit.
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