Debate grows over ‘gross misconduct’ by employees

The state’s new unemployment compensation law that goes into effect on Labor Day does not give employees the license to steal – those who are caught swiping so much as a dime from their employer will not collect benefits if they are fired for that reason. Nor would the victims of their theft see their individual unemployment tax rate go up because of that firing.But under the new law, those workers who steal as much as $499.99 from their previous employer will be able to collect benefits if they are laid off from their next job. In other words, the time they worked at the place from which they stole could count in determining future unemployment benefits.Some business groups, who see what they say is the rising problem of employee theft, are not happy about that.”We are disappointed,” said John Dumais, president of the New Hampshire Grocers Association. “Employee theft is an acute issue for us because of the low profit margins and high volume. To say that anything under $500 is acceptable in any way is to go down a slippery slope.”The law, passed by the House and Senate with little debate and virtually no press – except for a few mentions in NHBR – has suddenly captured media attention, thanks to Andy Sanborn, owner of The Draft in Concord, who has made it a campaign issue in his bid for the state Senate. But thus far the focus has more on the “license to steal” rhetoric and less on the change in the bill itself.Defining dishonestyOne cause of the confusion is the bill’s title: “Clarifying the definition of gross misconduct for the purposes of unemployment bill.”The clarification: substituting the phrase “dishonesty” with the phrase “theft of an amount greater than $500” as among the definitions of “gross misconduct.”Before the new law, “gross misconduct” was defined as “arson, sabotage, felony, assault which causes bodily injury, criminal threatening” as well as “dishonesty connected with his or her work.” Of course, in ordinary discourse, dishonesty could mean anything from telling your boss you like an ugly tie to saying you didn’t come in to work because you were sick when you were actually Christmas shopping, to pocketing thousands of dollars from the cash register to feed your drug habit. In practice, however, the department interpreted “dishonesty” to mean theft. But you don’t need to prove gross misconduct in order to fire someone without them being able to collect unemployment benefits (and thereby being charged yourself on your tax rate). Plain ordinary misconduct is enough, and it doesn’t have to be theft, either. The misconduct can involve a worker’s refusal to follow company rules. A worker can be fired for simply showing up late, or missing work without a good reason, or refusing to use gloves when handling food, or for loafing on the job. And, obviously, stealing in any form from the workplace constitutes misconduct.However, if a worker is engaged in gross misconduct, that time would not count in determining future benefits, should he or she be laid off (through no fault of their own) from his or her next job.This, said Deputy Employment Services Commissioner Darrell Gates, could be a pretty tough penalty. If a worker gets another job after being fired for gross misconduct and gets laid off two months later because the new employer shut down, the worker would either receive a much smaller weekly unemployment check or no unemployment check at all – because the previous employment would not be counted in determining benefits.”It’s a pretty severe penalty for pretty severe things,” said Gates.How often does the department determine that a worker is ripping off his or her boss? Less than 3 percent of department determinations involved gross misconduct. But that still comes out to 386 such determinations a year – an average of more than one a day. Department statistics don’t reveal the quantity of the thefts.Thus, adding the term, “Theft of an amount greater than $500” was an attempt to “clarify” the law, Gates said, since that is the threshold for a felony, putting it in the same league as the other felonies listed.’Too much aggravation’Attorneys who represent unemployed people collecting benefits like the change.”It’s appropriate,” said Jon Meyer, an attorney with Backus, Meyer & Branch in Manchester. “It was too broad beforehand.”But business is uneasy. Employee theft is a widespread and growing problem, according to industry statistics, accounting from 40 to 60 percent of “shrinkage.” One of every 30 employees was apprehended for theft from their employee in 2008, according to the latest retail theft survey by Jack Hayes International, a widely quoted industry source.Survey participants apprehended 72,000 dishonest employees in 2008, an increase of 3 percent, the fifth straight annual increase. Recoveries from dishonest employees totaled over $69.8 million in 2008, an increase of nearly 10 percent – again, the fifth such increase. And the average case value in 2008 jumped from $908 to $969 in one year.Indeed, the problem is so prevalent that many employers often don’t report it, either to police, or even to the state Department of Employment Security, said Alan Cote, loss prevention manager at Associated Grocers of New England. “Not as many contest unemployment claims as they should,” said Cote. “It’s too much aggravation. If they catch Sally, they are just glad to get rid of the person.”Similarly, a large number of those who are caught stealing don’t file for benefits thinking they won’t be able to get them, said Gates. That means the whole question of a $500 limit on gross misconduct may have little meaning in real life. If the fired worker never applied for benefits, then there would be no gross conduct on record no matter what amount was stolen. And then, if that person was laid off from a subsequent job, all the time he or she had worked at the previous job would count because DES would have no reason to check.They would be charging the subsequent employer for unemployment benefits, not the victim of the theft.David Juvet, vice president of policy at the Business and Industry Association of New Hampshire, said the BIA monitored the bill and did not take a position on it. He said he did see the department’s point of view.”Part of the definition was the law was so vague, it was a problem for employees. It used the word ‘dishonest,’ but what does that mean, coming in sick and not for work? But I think for employers, there is little or no impact on this.”‘A bad thing’Some opponents are trying to compare the new “gross misconduct” definition to the now-repealed LLC tax, which literally was introduced in the 2009 session as part of a massive budget bill.Senate Bill 1168, however, went through the normal legislative process. The Senate was a bit more last-minute in dealing with the measure. It held a hearing on April 13, one of the last days for hearings. The committee voted for the bill, 2-1, so there was apparently some opposition, but the whole Senate approved it with a voice vote. “We had a sense it was a bad thing,” said Senate Minority Leader Peter Bragdon, who added that the day the bill was heard in committee, the committee was running late and he had to attend an Education Committee meeting. “But nobody really had a chance to process it, and it was in a rush.”(Sen. Maggie Hassan, who chaired the Commerce committee, could not be reached by deadline.)Bragdon said he now wishes he had opposed the measure. “If you stole from an employer, you should not get credit for working for that employer,” he said. Even though it won’t mean that much, it is just one more drain on the unemployment fund, which has dipped so low, all employers’ taxes have been increased, he said.”It’s a small thing, but it’s death by a thousand cuts,” he said.Bob Sanders can be reached at