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In recent cases, the Alabama Supreme Court has held that an unemployment compensation (UC) agency hearing officer’s ruling can have a preclusive effect on the claims and defenses of both employees and employers in subsequent litigation. Let me explain this with an example. Jane Smith is fired from her job at company X. She applies for UC and goes to her hearing. She says that they fired her because she refused to put up with her boss’s sexual harassment. Company X says that she was fired because she was missing too much time from work.

The UC hearing officer agrees with the company and denies her compensation request. Because Jane has quickly gotten another job, and because it was not a lot of money to start with, Jane moves on with her life and forgets about the UC. She does not forget about the sexual harassment and hires a lawyer who takes her through the EEOC process and then files a lawsuit in federal court. After interviewing witnesses and reviewing documents, her lawyer tells Jane that she has the best sexual harassment lawsuit that she has ever seen. The next thing both of them know, Jane has been thrown out of court. The reason – the UC hearing officer’s ruling had a final and preclusive effect on her claim for sexual harassment. Had the story been reversed, the employer may have no defense to Jane’s sexual harassment lawsuit.

This seems like, and is, an awfully unfair result. Most workers, and many employers, go to these hearings without attorneys and have no idea how much impact the UC hearing finding can have on other claims. If you are the employee, you are forced to choose between giving up UC benefits or risking your ability to seek relief for unlawful conduct by your employer. If you are the employer, you risk having the employee use a favorable decision against you in a later lawsuit.

Over the past year, Alabama lawyers for both employees and employers have been quietly working together to come up with a bill that would resolve this problem. Their plan is a simple amendment to the UC statute that would limit the preclusive affect of the UC decision to the UC matter only. Hopefully, their effort will become law this year.

In the mean time, if you find yourself out of a job, you have a decision to make. If you need UC benefits to put food on the table for your family, that is that. Just be aware that an unfavorable result will not only deprive you of UC benefits, it may also deprive you of any claim for unlawful conduct by your employer – unlawful discrimination, retaliation for filing a worker’s compensation claim or violations of any number of federal laws intended to protect workers. The following tips may be helpful:

  • · If you are fired and you believe that you are the victim of unlawful conduct by your employer, contact an attorney immediately.
  • · Visit your local unemployment office and be very clear on all deadlines that need to me for filing for UC benefits.

· Keep your lawyer in the loop. If you are going to be pursuing UC benefits, your lawyer needs to know. He or she may well be willing to accompany you to the hearing.

· If you lose your UC hearing at any level, appeal it as long as you legally have the right to do so. Perhaps an appellate panel or court will overturn your loss. Perhaps the company will give up. Just don’t do the employer a favor by not following through.

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