Tag Archives: Adams v. Aspen Water

March 4, 2011

Avoiding Policy or Reimbursement Liability for Unemployment Benefits

by A. Dean Bennett

To determine whether a former employee is eligible for unemployment benefits, the State of Idaho applies the “standard of behavior test.”  Under this test, an employer can contest a former employee’s claim to unemployment benefits if it can show:  “(1) the employee’s conduct fell below the standard of behavior expected by the employer; and (2) the employer’s expectations were objectively reasonable under the circumstances.” 

But practically, how does the State apply the test, and how can employers make sure that under-performing employees do not continue to cost the employer money—even after being terminated?  The Idaho Supreme Court recently addressed the standard, and gave employers some helpful guidance.  See Adams v. Aspen Water, Inc., No. 36501, 2011 WL 322362 (Idaho Feb. 3, 2011). 

The Court hurried past the first prong of the test, labeling it “subjective.”  Whether an employee’s conduct falls below the standard of behavior expected by an employer is determined only by what the employer expected of the employee.  Were the “standard of behavior test” limited to the first prong, no employer would ever lose a case contesting a claim for unemployment benefits. 

The second prong of the test, however, is objective.  Whether the employer’s expectations were objectively reasonable under the circumstances will likely turn on whether the employer communicated its expectations to the employee.  The Court noted that it will sometimes recognize uncommunicated expectations as reasonable if they “flow naturally from the employment relationship.” But the safer route, and the route that will avoid protracted litigation and the associated costs, is for the employer to expressly communicate its expectations to the employee. 

As with most liability-limiting advice—get it in writing.  The best way to communicate employer expectations is through a written job description and/or an employment policy manual setting forth expectations for employee conduct.  If an employee fails to meet the written expectations, the employer will be in a position to quickly and effectively contest an unemployment claim.