Hair Today, Gone Tomorrow

A new opinion from the Delaware Superior Court sheds light on when off-duty conduct justifies an employee’s termination for purposes of denying unemployment benefits. Because Delaware is an at-will state, it is well established that an employer may terminate an employee for off-duty conduct. However, an employer must have “just cause” for termination in order to avoid payment of unemployment benefits. The Superior Court’s opinion clarifies that an employee’s off-duty conduct must have a non-speculative impact on the employer’s business in order to constitute “just cause” for termination.

A Hairy Situation

The case of Michael Christopher Designs v. Willey (PDF) revolves around the termination of a receptionist at the Michael Christopher Salon (the “Salon”). The Court’s recitation of facts indicates that the receptionist, Nicole Willey, engaged in a “heated and profane” argument with one of her co-workers, Dottie. The argument occurred during non-work hours, via text message, and stemmed from an incident where the Salon management had confronted the women about alleged sharing of prescription medication with another employee. The two employees then exchanged a string of profane and aggressive comments going in both directions, but Willey’s text messages included threatening language, such as “Hope u aint at work 2mor. Ur gonna b sorry.”

Following the employees’ heated exchange, Dottie went to work and shared select text messages with her supervisor, John Przbylski. Mr. Przbylski then shared the messages with his supervisor, Betty Armstrong. Both Mr. Przbylski and Ms. Armstrong spoke with Willey and Dottie, and then terminated Willey’s employment. Willey subsequently filed for unemployment benefits.

A claim for unemployment benefits receives several levels of administrative review by the Delaware Department of Labor, before it is reviewed by a Court. Benefits will be denied only if an employer had “just cause” for its decision to terminate an employee. Just cause may exist where an employee engages in “a willful or wanton act in violation of the employer’s interest.”

Willey’s claim was reviewed first by a Claims Deputy, and later by an Appeals Referee, both of whom denied benefits. The Appeals Referee found that the Salon had terminated Willey for just case, arising out of her frequent tardiness and harassment of other employees via text message. Willey then appealed to the Unemployment Insurance Appeals Board (the “UIAB”). The UIAB reviewed the evidence, and concluded that the Salon did not have just cause, because it did not present sufficient evidence to show that Willey’s conduct had an actual detrimental impact on any of its interests as an employer. The salon appealed the UIAB’s decision to the Superior Court.

Hair Me Out

In its appeal, the Salon raised several issues, including whether there was a sufficient nexus between Willey’s off-duty conduct and her workplace performance. In analyzing whether Willey’s conduct was sufficiently detrimental to the Salon to constitute just cause for termination, the Court considered several factors.

First, the Court noted that neither Mr. Przbylski nor Ms. Armstrong found Willey’s text messages to be so threatening that they called the police, or undertook any measures to keep her out of the Salon. Consequently, the Court concluded that the threats had not impacted the employer in a substantive way.

Second, the Court considered past practice. Willey testified before the UIAB that the Salon had a general policy of allowing employees to work their differences out without resorting to supervisors. Willey bolstered her position by emphasizing that she and Dottie had engaged in a previous off-duty argument, several months before her termination. In that case, the employees resolved their dispute the next day at work, and were able to continue working together successfully. The Court emphasized that there was no reason to doubt that the same outcome would result after this argument. Importantly, the text-message argument “took place outside of work, and had yet to manifest itself within the workplace or effect job performance.”

Bottom Line

While Delaware employers may terminate their employees for off-duty conduct, they may still be liable for unemployment benefits if the off-duty conduct does not have a sufficient nexus to the employee’s workplace performance. Employers should think twice before they wade into employees’ petty squabbles. In order to avoid finding themselves on the hook for unemployment benefits, employers should consider whether an employee’s off-duty conduct has any actual impact on the employer’s business interests.