Misconduct MC 350
This section relates to discharges due to the claimant's conduct away from the employer's premises and during off-duty hours, or actions not related to the claimant's job, or activities prior to the claimant's working for the employer.
A. General Rule
Under Section 1256 of the UI Code, an individual may not be disqualified for misconduct unless it can be shown that the misconduct is connected with his or her work. When a claimant is discharged for an activity away from the employer's premises and during off-duty hours, and not related to his or her job, the first consideration is whether the discharge is in connection with the claimant's work. As discussed below, an individual's off-the-job conduct could be considered connected with his or her work and could be misconduct.
Title 22, Section 1256-33(b)(1) provides:
Usually, the off-the-job activity of an employee does not injure or tend to injure the employer's interests. If there is no injury or potential injury to the employer's interests, the employer cannot reasonably impose the employer's standards of behavior on an employee during his or her off-duty time. However, there are off-the-job situations where the interests of an employer are either injured or tend to be injured by the conduct of an employee during these off-duty periods, usually involving illegal or criminal activity.
Generally, what an employee does during off-duty hours is of no concern to the employer. Also, an employee's off-duty actions usually do not adversely affect the employer's interest and, hence, the employer has no basis for holding such employee accountable for such off-duty actions.
Example - Off-Duty Drunk Driving Offense:
In P-B-191, the claimant was employed as a janitor by the Mather Air Force Base. He was arrested for drunken driving and he paid a fine of $250. Subsequently he was discharged by the federal service on the ground of serious misconduct while off-duty. The Board found the claimant eligible and stated:
[T]he fact that the claimant had been discharged because he had been convicted of drunken driving while off duty constituted misconduct under federal regulations. However, whether such conduct would also be considered as misconduct connected with the claimant's work under California Unemployment Insurance Code section 1256 is not a question of fact to be conclusively determined by the federal agency . . .
We have previously held that, in order to constitute misconduct within the meaning of code section 1256, the claimant must have materially breached a duty owed the employer under the contract of employment, which breach tends substantially to injure the employer's interests. . . . In the present case, the incident occurred while the claimant was off duty and did not tend substantially to injure the employer's interest. Accordingly we find that the claimant was discharged for reasons other than misconduct connected with his ork.
Example - Off-Duty Gambling:
In P-B-189 the claimant, during the seven years he worked for the employer, had engaged in various gambling activities on the employer's premises during working hours. The claimant had been warned on many occasions to cease such practice as it was in violation of company rules.
He obtained a leave of absence for one week to take care of certain domestic and personal responsibilities. During the last few days of the leave, the claimant engaged in gambling activities. When the employer learned about this, the employer requested the claimant to resign because of the claimant's disregard of repeated warnings about his gambling activities. The Board found the claimant eligible and stated:
The employer has not shown that the claimant's absence in any way affected the employer's interests, and any gambling activities the claimant may have engaged in during this period were not on the employer's premises or under circumstances connecting the claimant with the employer. . . We have no disagreement with the employer's statement that the claimant was discharged because of his record . . . of frequent violations of the company rule prohibiting gambling during working hours on the company premises . . .
However, the acts complained of occurred over a period of years and though the claimant had been warned that one more violation of the rule would result in his discharge, this warning was given with respect to the claimant's activities during working hours and while on the company premises. The occasion for the claimant's discharge was not for violation of this rule for he was on leave of absence at the time and away from the employer's place of business. . . .
Example - Off-Duty Drinking:
The claimant had only a third grade education. He had a history of reporting to work under the influence of alcohol and in no condition to perform his job, and was discharged for this reason.
Due to intervention by the claimant's union, the employer reinstated the claimant after he agreed to refrain from drinking any alcoholic beverages at all times. The claimant testified that he did not understand the import of the agreement. He believed the agreement provided that he should refrain from drinking alcoholic beverages while on duty and should not report to work under the influence of alcohol.
The claimant was arrested for driving without a driver's license and was jailed for 10 days. After his release, the employer held a conference with the claimant to ascertain the reason for his incarceration. During the conference, the employer asked the claimant if he had drunk any alcoholic beverages since signing the agreement. The claimant told the employer that during his off-duty hours he had on occasion had a beer. He was then discharged not because he was incarcerated but because he had violated the agreement.
The claimant did not understand that the agreement was to refrain from drinking alcoholic beverages at all times. He was discharged because he admitted drinking an occasional beer off the job. After signing the agreement, the claimant did not report for work under the influence of alcohol nor did he report with the odor of alcohol on his breath. There is no showing that the claimant’s off-the-job drinking adversely affected the employer's interest. The discharge would not be for misconduct.
There are, however, exceptions to this general rule as discussed below.
- Adverse Effect on Employer's Interests
As pointed out in Section 1256-33 (b) (1) of Title 22, there are situations where the employer's interests are injured or tend to be injured by the off-the-job conduct of an employee. If the employee is discharged for such conduct, the discharge would be for misconduct. An employer's business may be such that the actions of his or her employees while off duty may adversely affect the public trust and confidence on which the employer's business is based. For example, if a bank vice president were arrested and convicted of theft, public trust in the bank could be seriously weakened even though the theft was not directed against the bank and was not committed during working hours. On the other hand, the arrest and conviction of a janitor of the same bank on a similar charge would have little if no effect on the public trust in the bank.
Example - Public Trust in Employer Affected:
In P-B-217, the claimant worked as a registered pharmacist. He did not report for work on January 14 because he had been arrested and jailed for illegal possession of narcotics. He was released on bond on January 17, and returned to work on January 18. His supervisor suspended him pending the outcome of his arrest. About five weeks later, the employer interviewed the claimant, who admitted to the illegal possession of the narcotics. The employer decided to discharge the claimant because it felt that the publicity surrounding the claimant's arrest was detrimental to its interests. The Board ruled that the claimant was discharged for misconduct in connection with his work, and stated:
We have . . . consistently followed the rule . . . that an act which occurs while the worker is off duty and which is not related to his employment is not misconduct 'connected with his work. . . . In the present case, the claimant was a registered pharmacist who, because of his occupation, was aware of the laws governing the possession of narcotics and was serving the public on behalf of the employer in a position of trust which called for the preparation and sale of drugs and narcotics upon prescription. This was a position which placed the health and, at times, even the life of the employer's customers under the claimant's control. As such, it was imperative and vital to the employer's interests that the public have complete faith and confidence in the employer's pharmacy. Such faith and confidence was, of course, largely dependent upon those individuals who represented the employer in its dealings with the public.
Here, we are of the opinion that the claimant's illegal possession of narcotics was an offense which was so closely related to his occupation with the employer as to destroy his suitability for employment and that the offense constituted misconduct in connection with his work.
Had the claimant in the above decision been a janitor in the drug store, his off-duty activities could not reasonably be said to destroy the public's confidence in the pharmacy. In such a position he would not be serving the public on behalf of the employer in a position of trust. Therefore his illegal possession of narcotics could not tend to injure the employer's interests, unless, of course, it had been shown that he had stolen the narcotics from the employer.
In the above case, the claimant was discharged for misconduct because of illegal activities committed during off-duty hours. However, it is not necessary that the claimant's off-the-job activity is illegal before misconduct can be found. Title 22, Section 1256-33(b) (2) provides:
While the off-the-job conduct which creates problems is usually illegal or criminal activity, other behavior by an employee may injure or tend to injure the employer's interests.
Example - Not Illegal Activity off the Job:
The claimant was a camp counselor for youth camps. The employer had warned the claimant to avoid conduct which might reflect his qualifications to guide youth. Despite the warnings, the claimant frequently patronized a pornographic retail sales outlet. There were adverse community reaction and protests causing the employer to discharge the claimant.
The discharge was for misconduct connected with the work since the employer's interests in a favorable business reputation were injured.
- Use of Information Obtained from Work
If an employee uses information obtained from his or her work to carry out illegal activities and is discharged for the activities, the discharge would be for misconduct, even though the employer's interests may not be injured. On this, Title 22, Section 1256-43(b) provides:
However, an employee's criminal act or other violation of law outside of working hours and away from the employer's premises can be misconduct if the employee uses information obtained from the work to carry out the crime or other violation of law, or there is any other substantial connection with the work.
Example - Use of Information Obtained From Work:
The claimant, a television repairman, while repairing a customer's television set in the customer's home, noted the layout of the home, access characteristics, and the nature and location of property in the home. That night, he returned and stole property from the customer's home. The claimant was later convicted of the theft and was discharged.
In this case, even though the claimant's activities might not be known by the public and there was no adverse publicity, and even though the act was off-duty and away from the employer's premises, the discharge would be for misconduct since the claimant used information obtained from his work to commit an illegal act.
B. Collecting Unemployment Insurance Benefits While Working
Similar to using information obtained from work to commit illegal acts, an employee may take advantage of his or her employment relationship to collect unemployment insurance benefits while working. If the employee is subsequently discharged by the employer, the resultant discharge is for misconduct "connected with the work."
Example - Collecting Benefits While Working:
In General Motors Corporation v. California Department of Employment, the claimant had been employed by General Motors for a number of years. During a temporary layoff, he filed a claim for benefits and after his return to work continued to claim and receive benefits for three weeks. He wilfully failed to inform the department that he was working and earning more than his weekly benefit amount. The claimant's deception was discovered by the department, and he was subsequently discharged by the employer, based entirely on the fact that he had fraudulently drawn unemployment insurance benefits. The employer contended that this was detrimental to his interests, since his reserve account was potentially chargeable for the benefits paid.
The court held that under the definition of misconduct contained in the Maywood case, the claimant's actions were "wilful and wanton disregard of an employer's interest as is found in deliberate violations or disregard of behavior which the employer has the right to expect of his employee." The court said that the employer has the right to expect his employees not to cheat the state, and therefore, the claimant was guilty of misconduct. In deciding that the claimant's action was work connected, the court said:
[O]ne test of whether misconduct was 'connected with his work' is whether the employee took advantage of the employment relationship in order to commit the act. Certainly, such is the case here, as without the employment relationship there could have been no basis for (the claimant) to make his false claims.
C. Off-the-Job Traffic Violations
This discusses the claimant's traffic violations that occur during nonworking hours and in his or her private vehicle. If the violations occur on the employer's premises or during working hours or in the employer's vehicle, see Manner of Performing Work, MC 300, or Violation of Employer Rule, MC 485.
An employee may lose his or her driver's license due to traffic violations which he or she commits during nonworking hours and in his or her private vehicle. If the employee drives for the employer or is required to drive a company vehicle as part of the work, the employer may discharge the employee because there is no other work for the employee. Such a discharge is considered constructive quit and is disqualifying. This is the decision in P-B-288. In that case, the claimant, a driver, was convicted of driving a private automobile while intoxicated. He was terminated when the employer learned that the claimant's license to drive had been suspended for one year as a consequence, and no work other than driving was available. The Board held that the claimant left employment voluntarily without good cause, having voluntarily set in motion events whose natural and probable result was the loss of the claimant's employment. For a discussion on the concept of constructive quit, see General, VQ 5.
What if the suspension of the claimant's driving license does not apply to the claimant's privilege of driving the employer's vehicle in the course of the claimant's employment? It may happen that the employee can still drive the company vehicle, but the employer terminates him or her because the employer's insurance carrier will not cover the employee under the employer's policy because of his or her driving record or license suspension. Such a situation is considered in the following precedent benefit decision.
Example - Cancellation of Insurance Coverage:
In P-B-471, the claimant was a field service representative. His duties consisted of responding to customer complaints and making minor repairs in the field. He drives the employer's truck in the course of his work. He last worked on March 9.
He was issued two routine traffic citations two years ago, one while driving the company truck and one while driving his own car while off duty. In July of the prior year, he was involved in a traffic accident while driving his own vehicle, and was cited for driving without insurance. As a result, his driver's license was suspended provisionally; it, however, was not suspended for purposes of driving at work.
In a letter to the employer, the employer's insurance carrier announced that it was excluding the claimant from coverage under the employer's policy because of the claimant's driving record and particularly because of the license suspension. As a result, the employer discharged the claimant. The Board found the claimant eligible and stated:
The claimant in the case before us was discharged when the employer's insurance carrier refused to continue carrying the claimant on the employer's policy. The employer states that its insurance carrier's action alone necessitated the claimant's discharge. Whether the insurance company's deletion of the claimant from the employer's policy triggers the operation of the doctrine of constructive leaving is the primary issue for our resolution.
We must conclude that a discharge brought about by an insurer's cancellation of an individual employee's coverage under the employer's motor vehicle liability insurance policy will not, as a matter of unemployment insurance law, require a finding of a voluntary leaving without good cause. As stated in the Steinberg case, three elements must be present before a discharge can be considered a voluntary quit. In our view, only the first of these requirements, the commission of a voluntary act, has been met by a preponderance of the evidence in the case before us.
(See VQ 5 for a discussion on constructive quit.)
The Board could not ascertain from the record whether the employer could have alternative insurance or other work for the claimant. Moreover, the claimant could not reasonably have known that the suspension of his license to drive his private automobile would have jeopardized his employment. Section 670 of the Insurance Code provides in part:
"(a) No admitted insurer licensed to issue motor vehicle liability policies, as defined in section 16450 of the Vehicle Code, shall cancel, or refuse to renew, a motor vehicle liability insurance policy covering drivers hired to drive by a commercial business establishment . . . for the reason that those drivers have been convicted of violations of the vehicle code or the traffic laws of any subdivision of the state which were committed while operating private passenger vehicles not owned or leased by their employer."
The law thus specifically provides that an insurance carrier shall not cancel from an employer's policy an individual who is hired to drive because that individual had been cited for traffic violations while driving his or her private car. The Board believes that the legislature did not intend that an individual who drives for a living and who fails to maintain his or her own automobile insurance, should lose his or her job because of that failure.
After deciding that the separation is not a constructive quit, the Board held that the discharge was not for misconduct, because the claimant's driving record and his alleged failure to disclose the driving record to the employer do not constitute a wilful and substantial breach of an important duty owed to the employer. Moreover, the Board cannot "see any credible connection between the claimant's driving to work on a suspended license and his discharge."
Note that this case is distinguishable from P-B-288 mentioned above. In P-B-288, the claimant's license to drive had been suspended, and the claimant could not continue to drive at work.
D. Preemployment Activities
What if the claimant was discharged because of his or her preemployment activities? Title 22, Section 1256-33(c)(1) provides the general rule as follows:
In situations involving preemployment activity, the claimant is discharged for conduct occurring before the employment relationship was begun. Usually this is not connected with the most recent work.
However, Title 22, Section 1256-33(c)(2), cautions:
In other situations, a claimant's preemployment activity may be the basis for a newly-hired employee to be denied insurance or a surety bond. In such cases, if there are no alternative means for insuring or bonding the employee, a subsequent discharge for lack of a bond or insurance policy is not connected with the work. However, if the claimant has falsified his or her work application and concealed information which would have precluded the initial hiring, the discharge may be for misconduct. . . .
Example - Insurance Denied:
The claimant was hired as a truck driver by a lift truck service firm. He filled out a job application and gave the pertinent information including his driver's license. The employer made it a policy to be sure that drivers had good records because insurance was important and drivers with poor records could not be insured. The claimant had a prior driving under the influence conviction, but did not disclose the information to the employer. Had he disclosed the information, he would not have been hired. After working there about two months, the insurance carrier notified the employer that the claimant would not be covered under the employer's motor vehicle liability insurance policy because of the conviction. The claimant was then discharged.
The discharge was for misconduct. The claimant was denied insurance because of the conviction. The claimant did not disclose the conviction when he applied for the job. The claimant is ineligible because he falsified his work application. For a discussion on falsification of work application, see Dishonesty, MC 140.
E. Wage Garnishment
An employee has a responsibility to arrange his or her financial affairs so that they do not interfere with the employer's business. When an employee's wages are attached, it disrupts or imposes a burden on the employer. The employer is required to spend time and money making separate payroll checks for the employee and his or her creditors. An employee discharged due to the garnishment of his or her wages may be discharged for misconduct.
Title 22, Section 1256-35 provides:
An employee's discharge due to the garnishment of his or her wages causing a disruption to or a burden on the employer is a discharge for misconduct if all of the following conditions are met:
- The employee's wages have been previously garnished for a different judgment on a different debt while employed by the discharging employer.
- The employee has been expressly forewarned by the employer's rules, prior warnings, or prior reprimands, of the possible action to be taken by the employer resulting from a writ of garnishment for a different judgment.
- The employee knew or could reasonably know that a wage garnishment would be instituted for a different judgment by a creditor.
- The employee has not made a good-faith effort to meet his or her financial obligations or the employee has made a goodfaith effort to meet obligations but failed to take reasonable action that would have prevented the garnishment for a different judgment."
The four conditions are discussed below:
- Previous Garnishment due to a Different Debt While Employed by the Discharging Employer.
When garnishment(s) result from a single judgment or debt, the employer is
prohibited by federal law from discharging the claimant. Title 15, Section 1674 of the Federal Code states in part:
No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness.
State law (Labor Code Section 2929) carriers the same prohibition. If the claimant was discharged because of garnishments on a single judgment or debt, the discharge would not be for misconduct.
- Warning or Reprimand of Possible Consequence From a Different Judgment
Unless a claimant has been expressly forewarned by the employer of the possible action the employer may take resulting from a wage garnishment, the discharge is not for misconduct. The employer's rules or any prior warnings or reprimands show that the claimant was aware of the possible discharge resulting from a wage garnishment. If there is no such forewarning, the discharge is not for misconduct, since there is no wilful or wanton disregard of the employer's interests.
Example - No Warning:
The claimant had previously worked for the employer and had been terminated. Following the claimant's termination, and unknown to her, the employer had received a writ of attachment. The claimant was not told of the attachment but was rehired with the understanding that she had cleared up her debts. The claimant was discharged when her wages were subsequently attached by a collection agency.
The discharge was not for misconduct since the claimant's action was not wilful. The claimant was not aware of the company's policy or rules on wage garnishments and had not been warned that she would be discharged if repeated garnishments occurred.
Knowledge That There Would be Another Garnishment
Generally, the claimant would know that a garnishment could be instituted against him or her when a debt has been incurred and the creditor has sought payment from the claimant. If the claimant could not reasonably know that the garnishment would be instituted against him or her, regardless of employer rules, prior warnings or reprimands, the discharge would not be for misconduct.
Example - No Knowledge of Another Attachment:
In the above example, the collection agency attached the claimant's wages because of a bill for attorney's fees incurred over a three year period. The claimant said her husband had agreed to pay the bill and she had not been notified that the bill was still unpaid.
The discharge was not for misconduct. The claimant relied upon her husband to pay the obligation involved in the subsequent attachment. She could not have reasonably anticipated the proceedings instituted against her.
- Good-Faith Effort to Meet Financial Obligations
When the claimant sincerely tries to make satisfactory arrangements with his creditors to meet his or her financial obligations, and garnishments still result from circumstances beyond his or her control, the resulting discharge would not be for misconduct.
Example - Sincere Effort to Meet Obligations:
An employer required the discharge of employees whose wages were attached more than three times. The claimant had two garnishments because he failed to pay debts due to temporary unemployment, illness, and domestic problems. The third garnishment resulted from unpaid federal income tax. The claimant was unaware that he owed the tax until he was informed of the attachment. He arranged to pay his creditors at a reduced rate so that no further garnishments would be issued. However, one of the creditors, due to an error, issued a fourth notice of garnishment which resulted in the claimant's discharge.
The discharge was not for misconduct. The claimant was making a sincere effort to meet his financial obligations. He was unsuccessful only as the result of circumstances beyond his control.
Other examples of circumstances beyond the claimant's control would include a substantial loss in income due to wage cut, demotion, loss of outside income, serious family illness requiring a large financial outlay etc. As long as the claimant explains his or her situation and tries to make satisfactory arrangements with the creditors, the discharge is not for misconduct.
On the other hand, if the claimant's wages have been attached and he or she makes no serious effort to meet his or her debts or make arrangements with the creditors, the resulting discharge is for misconduct.
Example - Lack of Sincere Effort:
The claimant was discharged because of excessive wage attachments. He had been warned that continued wage attachments would result in disciplinary action. However, in an eight month period, eleven writs of attachment were served on the employer, and two assignments were made. The employer also received several letters requesting cooperation in persuading the claimant to pay his debts to avoid claims against him. At least twice the claimant took time off to arrange to have his wages released. In most cases, he was successful in obtaining an immediate release of his wages by paying the amounts due. Finally he was warned that another attachment would result in discharge. When another attachment was served, he was discharged.
The discharge was for misconduct. The claimant was aware of the existence of debt and the possibility that the creditor would attempt to insure its collection. He had the ability to pay. In almost all instances where the creditors took steps to enforce payment, the claimant was able to obtain an immediate release of his wages by arrangements with his creditors.
The nature of a purchase resulting in the garnishment is rarely significant in determining misconduct. The fact that a garnishment stemmed from the purchase of a luxury item does not usually establish misconduct. However, if a claimant has had several garnishments, has been warned that another garnishment can result in discharge, and still creates a frivolous new debt which results in garnishment, his or her actions are not those of a reasonably prudent person who wants to preserve his or her employment.