In the closing days of its January term, the Illinois Supreme Court agreed to hear a case from Division 5 of the First District, Petrovic v. The Department of Employment Security. Petrovic presents an interesting issue on the merits – exactly what has to be proven to trigger the exception to unemployment compensation for employees terminated for misconduct. But it’s possible the Supreme Court may never reach that issue, because Petrovic presents a preliminary standing issue: the plaintiff’s former employer isn’t challenging the award. The Department, the Director and the Board of Review of the Department are.

The plaintiff was a tower planner for an airline. In 2012, she was terminated for allegedly facilitating a gift and a first class upgrade for a passenger without authorization. When the plaintiff filed a claim for unemployment benefits, her employer filed a letter in response, arguing that she had been terminated for violation of a “reasonable and known policy.” The claims adjudicator denied plaintiff’s request for benefits, finding that she had been dismissed for work-related misconduct. Plaintiff appealed to the Department’s referee. During a telephone hearing, she testified that she did not upgrade the passenger herself, no one had objected to her conduct, and her actions did not meet the definition of misconduct. The referee affirmed the decision that the plaintiff was ineligible, and the Board affirmed as well. But the plaintiff filed a petition for administrative review with the trial court, and the court reversed, holding that there was no evidence of misconduct in the record.

On appeal, the plaintiff challenged the standing of the Department, Director and Board to appeal the trial court’s order. The Appellate Court disagreed, holding that the Department was the guardian of the unemployment insurance fund, and as such, has an interest in disputing questionable claims. The court noted that particularly when cases reach the appellate stage, it will often be cheaper for a claimant’s former employer to simply pay the claim than to continue to litigate.

The court then turned to the issues. The Appellate Court pointed out that under the circumstances, the decision before them for review was the administrative decision, not the trial court’s judgment on the petition for administrative review. The court found that to establish misconduct, three elements must be shown: (1) a deliberate and willful violation of a rule or policy of the employer; (2) the rule was reasonable; and (3) the violation either harmed the employer or was repeated by the employee despite explicit instructions from the employer.

The plaintiff argued that she was unaware of any rule or policy contrary to her conduct. But the Appellate Court held that reasonable rules need not be proven by direct evidence. Rather, a rule or policy can be proven by a “commonsense realization that certain conduct intentionally and substantially disregards an employer’s interests.” The Appellate Court held that plaintiff’s conduct satisfied this standard: the upgrade had potentially cost the airline a significant sum, as well as raising alleged safety concerns. Accordingly, the Appellate Court found that the Board’s determination that plaintiff had been dismissed for misconduct was not clearly erroneous. The Appellate Court reversed the Circuit Court’s order, reinstating the Board’s decision.

We expect Petrovic to be decided in eight to twelve months.

Image courtesy of Flickr by Jen Light (no changes).