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“Unsatisfactory Work Performance” Can Be “Willful Misconduct” Under The Unemployment Compensation Law And Disqualify A Terminated Employee From Receiving Unemployment Compensation Benefits

April 2012
David F. O'Leary, Esquire

As a general rule, employees terminated for unsatisfactory work performance receive unemployment compensation benefits.  An employer may be justified in terminating an employee for unsatisfactory work performance, but the employer’s right to terminate an employee is not relevant in determining whether or not the employee is eligible for unemployment compensation benefits. 

When an employer terminates an employee, the employer must be able to prove that the terminated employee engaged in “willful misconduct” in order to justify denying unemployment compensation benefits to the employee.

Employers know that it is far easier to prove “willful misconduct” if the employer can prove the employee was insubordinate, violated a work rule, was excessively absent, disobeyed an employer’s reasonable order, or engaged in any number of behaviors which indicate that the employee is willfully disregarding the employer’s interest.  On the other hand, an employee who is terminated for unsatisfactory work performance is more likely than not going to receive unemployment compensation benefits because the default position of the PA Department of Labor and Industry is that employees do not willfully perform their job unsatisfactorily.  If an employee does not measure up to the employer’s standards it is presumably because of the employee’s inexperience, incompetence, or inability to perform the work or because of the employee’s honest mistakes, none of which amount to “willful misconduct.” 

But a recent case from the Commonwealth Court, Scott v Unemployment Compensation Board of Review, 36 A.3d 643 (Pa. Cmwlth. 2012) illustrates when an employee’s unsatisfactory work performance rises to the level of “willful misconduct”, thereby disqualifying the employee from receiving unemployment compensation benefits.

The Claimant was employed in a hospital for approximately 20 years.  His job consisted of inspecting surgical trays and the instruments on the tray before the tray was loaded into a sterilization machine and delivered to an operating room.  The inspection required ensuring that the surgical trays were free of any “foreign materials” such as bone, cement, and “bio burden.”  Over the years he had received excellent job performance evaluations.  However, during the two years leading up to his termination, his job performance deteriorated, as evidenced by numerous warnings and two suspensions for failing to properly inspect trays that arrived at surgery with “foreign material” on the trays.  In May 2010, he was again suspended and received a final warning that if there was another incident where he allowed a tray to go to an operation with foreign material on it, he would be disciplined up to and including termination. 

On August 18, 2010, the hospital’s operating room returned a tray that had been processed through the sterilization machine by the Claimant with “suture material from the previous surgical operation.”  The hospital terminated the Claimant. 

The Commonwealth Court, affirming a decision by the Unemployment Compensation Referee and Board of Review, said that the employer had proved that the Claimant was capable of performing the job competently and that the deterioration in his work as evidenced by the multiple warnings and suspensions was proof that the Claimant was not working to the best of his ability, was indifferent to whether or not he performed his job well, and showed an intentional disregard of the employer’s interests or an intentional disregard of the Claimant’s obligations and duties to the employer. 

Did the fact that the Claimant was employed in a safety sensitive job in a hospital make a difference in this case?  Perhaps.  But the Commonwealth Court cited two cases for the proposition that unsatisfactory work performance can be “willful misconduct,” Sacks v Unemployment Compensation Board of Review, 74 Pa.  Cmwlth. 31 (1983) and Cullison v Unemployment Compensation Board of Review, 66 Pa. Cmwlth. 416 (1982).  In those cases, the Claimants worked as a tailor and order filler in a warehouse, respectively-hardly jobs whose unsatisfactory performance triggered life or death consequences.  

Tip for employers. To prevail on an unemployment compensation case where an employer terminates an employee for unsatisfactory work performance, the employer should be prepared to prove the following:

First, that the employee was capable of performing the job and had successfully performed the job for many months, if not years.

Second, that the employee’s job performance deteriorated substantially for which the employee was disciplined (by written or verbal warnings, suspensions, etc.) over the course of months.  It is also extremely helpful if an employer can prove that the employee was consciously taking short cuts in his or her work or engaging in other bad work habits which contributed to the employee’s unsatisfactory work performance. 

Third, the employer put the employee on notice (preferably in writing) that if the employee’s performance did not materially improve, the employee’s job was in jeopardy.

Fourth, the incident that triggered the termination was a continuation of the deteriorating status quo – another example of the employee’s indifferent attitude – and not an honest mistake or simple accident.

Basically, the employer is trying to prove that at the time the employer terminated the employee, the employee no longer cared about his or her job and was indifferent to whether or not he or she performed the job to the standards that the employee once performed, and that the employee was not working to the best of his or her ability.