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August 04, 2010

Unemployment Insurance Board may apply the doctrine of collateral estoppel to reject an individual’s application for benefits

Unemployment Insurance Board may apply the doctrine of collateral estoppel to reject an individual’s application for benefits
Obafemi v Comm. of Labor, Appellate Division, 250 A.D.2d 905

Suppose an employee who has been dismissed from his or her position following a disciplinary hearing applies for unemployment insurance benefits. May the Unemployment Insurance Board deny unemployment insurance benefits on the doctrine of “collateral estoppel?”

The doctrine of collateral estoppel allows a court or administrative body to apply the judgment in a earlier action in a subsequent action based on the same events but brought as a different “cause of action,” thereby obviating the need for a new hearing.

Disciplinary charges were filed against Thkikuma D. Obafemi, a toll collector, alleging that he was discourteous to customers. The arbitrator had found Obafemi guilty of being rude to a customer despite prior warnings to refrain from such inappropriate behavior. The penalty imposed was dismissal.

Following his termination Obafemi applied for unemployment insurance benefits. When the Unemployment Insurance Appeals Board ruled that he was disqualified for such benefits because he was terminated for misconduct, he appealed. Obafemi claimed that he was not given a hearing as to his eligibility for unemployment insurance benefits. The Appellate Division dismissed his appeal, commenting that the board could give “collateral estoppel” effect to the findings of the arbitrator. After all, the court said, Obafemi had been given a “full and fair opportunity” to litigate the issue of his misconduct at the arbitration hearing.

In another unemployment insurance case, Joyce v Commissioner of Labor, 250 A.D.2d 901, the Appellate Division said that the Unemployment Insurance Board had substantial evidence that Stephen M. Joyce had voluntarily left his employment with the U.S. Postal Service without good cause.

Joyce was directed to leave work after an outburst during which he shouted racist remarks. The Postal Service’s psychiatrist found Joyce “not fit for duty” and advised him to seek “outside psychiatric treatment.” Joyce was also told that he could not return to work until he obtained treatment. Joyce told the Service that he was unwilling to seek outside psychiatric treatment.

The Court agreed with the Board, pointing out that “it is well settled that when a claimant fails to take a step that is reasonably required as a prerequisite to continued employment, the claimant will be deemed to have left his [or her] employment without good cause.”

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