SPEAKERS:
Patrick H. Flanagan
(704) 940-3419
pflanagan@cshlaw.com
Norwood P. Blanchard
(910) 332-0944
nblanchard@cshlaw.com
Ryan D. Bolick
(704) 940-3416
rbolick@cshlaw.com
SPEAKERS:
Patricia L. Holland
(919) 424-8608
Patricia.holland@jacksonlewis.com
M. Robin Davis
(919) 424-8609
Robin.davis@jacksonlewis.com
Ann H. Smith
(919) 424-8610
Ann.smith@jacksonlewis.com
Terminations for Cause:
Winning at the ESC and EEOC
The ESC Process
First Step (decision by Adjudicator):

Form 500AB/Notice of Claim & Request for
Separation Information (due in 10 days)
Seeks general explanation of reason for
separation:
 Describe specific work rules or policies
violated.
 Was employee warned that violation could
cause disciplinary action or termination?
Adjudicator will issue “Initial Determination”
Step 2: Appeal Hearing
Must file appeal within 15 days of Adjudicator’s
Initial Determination.
Hearing may be conducted before an Appeals
Referee, Hearing Officer or Special Deputy
Commissioner.
Both parties have the right to request an “in
person” hearing.
Tips for Appeals Hearings
Bring witnesses with first-hand knowledge of the
incidents at issue. A common problem is that employers
will send HR Director, rather than direct supervisor or coworker who personally witnessed the incidents.
Make sure to offer all of your evidence at the hearing.
This is the only opportunity to offer testimony or
documentary evidence in the process. Bring the
required 3 copies of documentary evidence.
Try to stick to the narrow issues (see below) for the
appeal. You only have 1 hour for most hearings, so time
is a factor.
What happens at the Hearing?
Appeals Referee will record the hearing on
audio tape. The witnesses will be sworn.
Claimant and employer will both have the
opportunity to present documents, live
testimony and cross-examination. The
Referee will often have follow-up
questions for witnesses.
A decision is issued within 2 days.
Issues at the Hearing
Hearings typically involve these two
issues:


Whether the claimant left work without good
cause attributable to the employer.
Whether the claimant was discharged for
misconduct or substantial fault connected with
the work.
What is Leaving Work?
This issue arises when an employee resigns or
otherwise quits.
Basic question is whether the worker had a good reason
for leaving the job. Important to note that municipalities
cannot take advantage of non-charging allowance for
leaving work due to a health condition.
Different from “discharge” cases because employee has
burden of proof.
A forced “resignation” is not considered voluntarily
leaving work.
What is “good cause attributable
to the employer”?
“Good cause” is defined as a valid reason “not
indicative of an unwillingness to work.”
Examples of “good cause” for leaving a job:



Being subjected to unlawful harassment or
discrimination. Marlow v. ESC, 127 N.C. App. 734
(1997); In re Boulden, 47 N.C. App. 468 (1980).
Being directed to violate ethical rules of employee’s
profession. In re Clark, 47 N.C. App. 163 (1980).
Substantial reduction in work hours by the employer.
Couch v. ESC, 89 N.C. App. 405 (1988).
Disqualification for “misconduct”
or “substantial fault”
When an employee is discharged, the
employer must show that the discharge
was a result of “misconduct” or
“substantial fault” on the part of the
employee in order to disqualify the
employee from unemployment benefits.
See N.C. Gen. Stat. § 96-14.
Comparing “Misconduct” and
“Substantial Fault”
Basic idea is that “misconduct” is more
serious than “substantial fault.”
A finding of misconduct causes complete
disqualification for benefits, while
“substantial fault” results in a partial
disqualification for a period of between 4
and 13 weeks.
What is “Misconduct”?
“Misconduct” is defined as “conduct evincing such
willful or wanton disregard of an employer’s interests
as is found in deliberate violations or disregard of
standards of behavior which the employer has the
right to expect of his employee, or in carelessness
or negligence of such degree or recurrence as to
manifest equal culpability . . . or to show an
intentional or substantial disregard of the employer’s
interests or of the employee’s duties . . . .”
Basic idea is that misconduct is serious wrongdoing,
often of the sort that an employee should be aware
of even without a specific work rule.
Examples of “Misconduct”
Alcohol or drug use at work. N.C. Gen. Stat. § 9614(2).
Failing a drug test qualifies even if the drug use did
not take place at work, but the ESC requires the
employer to offer competent evidence (affidavit or
sworn testimony) proving that the statutory
requirements of N.C. Gen. Stat. § 95-232 were
satisfied
Insubordination can qualify as misconduct if it is
sufficiently egregious. See Hagan v. Peden Steel
Co., 57 N.C. App. 363 (1982) (employee yelled and
called supervisor a “liar” during argument).
What is “substantial fault”?
Substantial fault is defined as “those acts or
omissions of employees over which they
exercised reasonable control and which violate
reasonable requirements of the job,” but does
not include minor rules infractions (unless
repeated after warning), inadvertent mistakes, or
failures to perform work because of a lack of
skill, ability, or proper equipment.
Basic idea is that it is tantamount to termination
for cause, but not serious enough to amount to
misconduct.
Tips for Proving Misconduct or
Substantial Fault
Key idea for both misconduct and substantial fault is
showing that the employee “knew better.”
Stress that the employee’s actions demonstrated an
element of willfulness or intentional wrongdoing. Point
out that the employee had the ability to comply with the
employer’s requirements, but simply chose to do
otherwise.
Unless the infraction was of a serious nature, you need
to show that the employee had been warned about the
problem on prior occasions—you can use the Form
500AB (discussed earlier) as a guide for your talking
points in the hearing.
What happens after the
Appeal Hearing?
Next step is an appeal to full ESC. The “record”
consists of the documents and evidence offered
at the hearing before the Appeals Referee.
ESC can affirm, modify or reverse the decision
of the Appeals Referee.
After ESC issues a decision, the next step is a
petition for judicial review to the Superior Court.
Further appeals follow the procedure for
appealing other civil cases.
Practical Tips for Handling
EEOC Charges
Threshold Issues
Does the EEOC have jurisdiction in your case?
Many smaller employers (less than 15
employees) are not covered by Title VII of the
Civil Rights Act, the primary statute enforced by
the EEOC.
Is the EEOC Charge timely? A charge must
typically be submitted within 180 days of the
challenged employment action.
Addressing these threshold issues may allow
you to resolve the situation before you ever have
to prepare a detailed response to the Charge.
Initial Steps After Receipt
of the Charge
Meet with employee’s supervisors and
coworkers to investigate the facts.
Contact the EEOC Investigator. Ask for
an extension for submitting a response.
This initial contact with the EEOC will also
provide you with an opportunity to ask
about any particular issues that the
investigator would like for you to address
in the position statement.
Preparing the Position Statement
The goal of an effective Position Statement is
just to explain the situation from the employer’s
perspective.
Typically, you can treat the EEOC’s “Request for
Information” as merely a suggestion. Assemble
and submit the documents that are relevant to
your explanation first—if the investigator wants
additional documents, they will contact you.
Preparing the Position Statement
(cont.)
In the typical discrimination (disparate treatment)
case, the EEOC’s focus will most often be on
how the relevant supervisor treats similarlysituated “comparators” that are outside of the
Charging Party’s class.
Point out instances where the supervisor has
taken adverse action against workers outside of
the CP’s class and/or where the supervisor has
given favorable treatment to others in CP’s
class.
Other Pitfalls to Avoid
The scope of the EEOC’s investigation defines the scope
of any subsequent Title VII lawsuit. Keep your Position
Statement as “narrow” as possible so that you can
confine the scope of a later lawsuit.
Avoid giving conflicting or contradictory explanations of
the reasons for an adverse action. Articulate your
reasons—all of them—so you can rely on them later.
Do not allow the EEOC investigator to interview
management employees without having legal counsel
present.
Watch out for “defensive” Charges. Retaliation claims
are frequently much more difficult to defend than the
underlying discrimination claims.
Final Observations about the
EEOC Process
“No news is good news” in the EEOC
process.
The majority of EEOC Charges end with
“no cause” findings.
SPEAKERS:
Patrick H. Flanagan
(704) 940-3419
pflanagan@cshlaw.com
Norwood P. Blanchard
(910) 332-0944
nblanchard@cshlaw.com
Ryan D. Bolick
(704) 940-3416
rbolick@cshlaw.com
SPEAKERS:
Patricia L. Holland
(919) 424-8608
Patricia.holland@jacksonlewis.com
M. Robin Davis
(919) 424-8609
Robin.davis@jacksonlewis.com
Ann H. Smith
(919) 424-8610
Ann.smith@jacksonlewis.com