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A Service of OnQue Technologies, Inc. |
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The Gross Misconduct Exception to the
Termination Rule |
November 21, 2002
Santa Rosa, CA |
When an employee is terminated
for "gross misconduct," the employee, covered spouse and dependent children are
not entitled to COBRA benefits because no qualifying event has occurred. COBRA
legislation does not define the term "gross misconduct," and courts have not
agreed on when it is proper to apply this exception to the COBRA rules.
Employers who terminate workers for gross misconduct may run the risk of being
sued for wrongfully denying COBRA benefits.
What is the definition
of "gross misconduct"?
Although illegal or dangerous acts committed in
the workplace are likely to qualify as gross misconduct, the acts need not be
criminal or otherwise unlawful in nature. In some instances, even acts that
occur away from the workplace have qualified as gross misconduct. A definition
widely used by the courts goes something like this: Acts of gross misconduct
are intentional, wanton, willful, deliberate, reckless, or in deliberate
indifference to an employer's interest. Often, acts that will prompt an
employer to terminate an employee are those done in deliberate violation of the
employer's known standards. However, those acts may not constitute gross
misconduct for COBRA purposes unless they go beyond simple negligence or
incompetence.
What are examples of gross
misconduct?
A look at some court cases that have challenged the
denial of COBRA benefits for gross misconduct yields a wide variety of
acts:
Airline attendant strikes coworker during a flight.
Teacher arrested for sex crimes.
Repeated warnings to properly perform job ignored.
High school math teacher misappropriates funds.
Why it is important to use caution when denying COBRA benefits for
gross misconduct.
Terminations for
gross misconduct, by their nature, run a high risk of being challenged in the
courts. If a terminated employee successfully sues for denial of COBRA benefits
and the act for which he was fired is ruled not to be gross misconduct, the
employer may be liable for ERISA penalties, IRS taxes, medical expenses, courts
costs and attorney's fees.
As always, consult
competent counsel before changing your COBRA administration
policies. |
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This information is provided by
OnQue Technologies, Inc. for educational purposes only and does not constitute
legal advice. If legal advice or other professional assistance is required, the
services of a competent professional should be sought.
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