©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 367 Further, quitting does not disqualify the employee for unemployment benefits if the quitting was for good cause. Good cause to quit is a real, substantial, compelling factor causing reasonable person genuinely desirous of retaining employment to leave work under same circumstances.16 A quit generally is for good cause for employees who leave because they have suffered discrimination unlawful under FEHA,17 suffered sexual harassment,18 needed to accommodate the job relocation of a spouse or a domestic partner,19 or left employment to protect their families or themselves from domestic violence.20 15.3 The Claims Process 15.3.1 Determination of eligibility The California Employment Development Department (EDD) makes its initial determination on the basis of the former employee’s claim and the employer’s response. A party dissatisfied with that determination can request a hearing before an administrative law judge (ALJ). The employer has the burden of proof to show that the employee was discharged for misconduct. The ALJ’s decision can be appealed to the UIAB. (See § 1.6.) The UIAB’s determination can be reversed in court. A 2020 Court of Appeal decision prejudicially abused its discretion in refusing to consider additional evidence proffered by a fired employee applying for unemployment insurance benefits. He disputed the chronology of events adopted by the ALJ (who had upheld the denial of benefits) and belatedly sought to submit a declaration setting the record straight. The Court of Appeal held that the UIAB’s refusal to consider the declaration was a prejudicial abuse of discretion.21 15.3.2 Responding to claims Employers often have ignored EDD requests for information about an employee’s separation and sometimes have agreed not to respond to such requests as part of a separation agreement with the employee. A California employer that does so, however, potentially incurs significant penalties. While these penalties have long existed in California,22 they have not frequently been enforced. To address the perceived problem of having unemployment insurance benefits paid in error, Congress passed the Federal Trade Adjustment Assistance Extension Act of 2011, which mandated that all states implement changes to unemployment insurance laws, including new “UI integrity” provisions to penalize employers (as well as their agents and third-party administrators) that (1) were at fault for failing to respond timely or adequately to agency requests for information about claimed unemployment compensation benefits that were subsequently overpaid, and (2) had engaged in a pattern of failing to respond timely or adequately to such requests. The California Legislature thus amended the California Unemployment Insurance Code to provide that if an employer willfully makes a false statement or representation or willfully fails to report a material fact concerning a claimant’s employment termination, the employer is subject to a penalty of “an amount not less than 2 nor more than 10 times the weekly benefit amount of that claimant.”23 If both the employer and the employer’s agent engaged in such conduct, then separate penalties apply to each of them.24 Accordingly, California employers must timely and adequately respond to initial requests for information from the EDD, and should no longer agree with employees to ignore those requests or to provide inaccurate information about the reasons for an employee’s separation. If the employer, as part of a separation agreement, does not want to protest the employee’s unemployment benefits claim, then the agreement should provide that while the employer will not protest any
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