A New York Times article headline flashes Contesting Jobless Claims Becomes a Boom Industry. Yup, that's right, corporations fire people and then hire attorneys, who are assuredly expensive, just to deny you your merger unemployment check.
With a client list that reads like a roster of Fortune 500 firms, a little-known company with an odd name, the Talx Corporation, has come to dominate a thriving industry: helping employers process — and fight — unemployment claims.
Talx, which emerged from obscurity over the last eight years, says it handles more than 30 percent of the nation’s requests for jobless benefits. Pledging to save employers money in part by contesting claims, Talx helps them decide which applications to resist and how to mount effective appeals.
Why do companies do this, and add insult to injury? Because for each claim, their insurance rates goes up.
How can companies get away with this? By claiming the firing is the worker's fault. Nice, so on top of losing your job, you are blamed for it.
Obviously there are some instances where the worker is to blame, such as embezzlement or criminal behavior and so on. But that's just not the reason these companies go to court to stop you from getting unemployment benefits. Those workers who really did something egregiously wrong, are few and far between.
The New York Times cites this case:
Gerald Grenier, 47, who spent four years as a night janitor at a New Hampshire Wal-Mart and was fired for pocketing several dollars in coins from a vending machine. Mr. Grenier, who is mentally disabled, told Wal-Mart he forgot to turn in the change. Talx, representing Wal-Mart, accused him of misconduct and fought his unemployment claim.
After Mr. Grenier waited three months for a hearing, Wal-Mart did not appear. A Talx agent joined by phone, then seemingly hung up as Mr. Grenier testified. The hearing officer redialed and left an unanswered message on the agent’s voice mail. The officer called Mr. Grenier “completely credible” and granted him benefits.
Talx appealed, claiming that the officer had denied the agent’s request to let Wal-Mart testify by phone. (A recording of the hearing contains no such request.) Mr. Grenier won the appeal, but by then he had lost his apartment and moved in with his sister.
How many unemployment claims are denied? You're not going to believe this figure, I saw quoted, as high as 60 percent, national average.
Getting accurate data on what the rate of denial of benefits is, nationwide, of all those who file a claim, is amazingly difficult. It seems the DOL will not let these records be public. There are two programs, a BAM and a DCA, which one could derive the figure, but after searching high and low, I could not locate the raw statistics. Believe this or not, the DOL website was password protected.
Fortunately we have a researcher, Economist Waye Vroman, who did manage to dig out some statistics and facts.
From this overview post, with data from 2007, we have a 26% disputed claim rate when they are otherwise valid and eligible. Remember, it's 2010, not 2007, and very obviously trying to deny someone unemployment benefit is on the rise, from the horror stories and press reports.
From this study in 1999, the denial rate was 27.4%:
Of the 14.8 million ``monetarily eligible'' initial UC claims in 1999, 27.4 percent were disqualified. This figure subdivides into 4.9 percent not being able to work or available for work, 7.3 percent voluntarily leaving a job without good cause, 4.9 percent being fired for misconduct on the job, 0.3 percent refusing suitable work, and 10.1 percent committing other disqualifying acts. The total disqualification rate ranged from a low of 11.0 percent in Kentucky to a high of 94.9 percent in Nebraska, with Colorado the next highest at 86.8 percent.
In 2009, about 51 percent of all claims were denied and 49 percent were approved. In 2008, 53 percent of claims were denied and 47 approved.
According to this overview, about 30% are denied.
Where I live, I started hearing about the local grocery, firing people for absolutely trivial or non-existent reasons, then sending attorneys to court, all to deny them unemployment benefits. Can you imagine that? You show up to work, do your best, get fired over something trivial and then have to fight a team of lawyers to try to receive unemployment when there are no new jobs out there? Attorneys charge $150 an hour and up. You're broke, trying to get an unemployment check, not even close to your salary in amount. Can you afford a $300 an hour lawyer to help you out? I didn't think so.