"without Good Cause": the Case for a Standard-based Approach to Determining Worker Qualification for Unemployment Benefits

• Jurisdiction: Washington,United States
• Citation: Vol. 89 No. 2
• Publication year: 2021

"WITHOUT GOOD CAUSE": THE CASE FOR A STANDARD-BASED APPROACH TO DETERMINING WORKER QUALIFICATION FOR UNEMPLOYMENT BENEFITS

Emily Toler(fn*)

Abstract: Under Washington's Employment Security Act, workers who voluntarily quit their jobs are qualified to receive unemployment benefits only if they establish "good cause" for leaving work. For forty years, the agency that administers the statute and the courts had substantial discretion to find good cause under the statute's flexible, standard-based approach. However, beginning in 1977, the legislature began to restrict the scope of that discretion by moving toward a rule-based approach. This trend reached its apex in 2009, when the legislature stripped the agency and the courts of all discretion and limited good cause to eleven reasons enumerated in the statute. This Comment argues that Washington should restore administrative and judicial discretion and return to a standard-based approach to determining whether claimants have good cause for voluntarily leaving work. First, a standard is more theoretically sound than a rule because workers' reasons for leaving work vary significantly and because the usual rationales for rules do not justify their use in the voluntary quit statute. Second, the rule disqualifies claimants who leave work for reasons consistent with the purpose of the Act. Finally, a standard is necessary to advance the purpose of the Act and of unemployment compensation generally.

INTRODUCTION

Unemployment benefits provide a critical buffer against the social and economic consequences that can befall people who are out of work. Despite the important role these benefits play, not all unemployed people are eligible to receive them. In Washington, workers who voluntarily leave their jobs must establish "good cause" for quitting to qualify for benefits.(fn1) For forty years after Washington first provided unemployment benefits, the "voluntary quit" statute provided a flexible, standard-based definition of good cause. However, in the 1970s, the legislature began to narrow the definition of good cause and restrict the discretion that decision-makers had to determine whether workers established good cause. This trend ultimately transformed the voluntary quit statute from a flexible standard to a rigid rule that has disqualified thousands of people, even those who left work for reasons consistent with the purpose of Washington's Employment Security Act.(fn2)

Part I of this Comment briefly summarizes the history of unemployment compensation in Washington and outlines the basic structure and procedure of a claim for unemployment benefits. Part II summarizes the differences between rules and standards, discusses the legal contexts in which each approach is more appropriate, and explains the importance of this distinction. Part III reviews the history of good cause for leaving work and traces the evolution of the voluntary quit statute. Part IV argues that the current rule-based approach to making good cause determinations is inappropriate because a standard-based approach is more theoretically sound and is necessary to promote both the goals of the Employment Security Act and of unemployment compensation generally. Finally, Part V proposes standard-based language to amend the voluntary quit statute and restore administrative and judicial discretion to find good cause for leaving work.

I. UNEMPLOYMENT COMPENSATION IN WASHINGTON

A. Historical Context and Background

Before the 1930s, no state provided unemployment compensation.(fn3) However, as the Great Depression ground on, the national unemployment rate remained stubbornly high, reaching its peak of 25.2% in 1933 and remaining above 15% for virtually the entire decade.(fn4) Many people seeking work were chronically or "hard-core"(fn5) unemployed: they had been jobless for a year or more, and employers- for reasons as varied as skepticism about their skills to outright racism- refused to hire them.(fn6) This "irreversible structural unemployment"(fn7) effectively barred "10 percent of the labor force"(fn8) from finding work.(fn9) Other marginalized people, including older, nonwhite, and unskilled workers, were far more likely to be unemployed.(fn10) Many people found work only through the New Deal's work relief programs(fn11) and were unable to find private employment until World War II.(fn12)

Despite this crisis, and despite a "rapidly growing interest in unemployment insurance throughout the country,"(fn13) the states remained reluctant to enact unemployment compensation legislation.(fn14) To induce the states to adopt such laws, Congress introduced a cooperative federal-state system to administer unemployment compensation(fn15) as part of the Social Security Act of 1935.(fn16) The strategy proved successful, and in just two years, every state had passed unemployment compensationlaws.(fn17)

Washington was by no means among the first states to act,(fn18) but in 1937, the legislature passed the Unemployment Compensation Act.(fn19) In the Act's statement of purpose, the legislature recognized that "economic insecurity due to unemployment is a serious menace to the health, morals and welfare of the people of this state,"(fn20) and enacted the legislation "to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker and his family."(fn21) The Act was to protect unemployed people "against this greatest hazard of our economic life,"(fn22) and it was to "be liberally construed for the purpose of reducing involuntary unemployment and the suffering caused thereby to the minimum."(fn23)

Notwithstanding this sweeping language, national debates about unemployment compensation had already made it clear that benefits would not be available to all workers. Instead, they would be available only to workers who (in addition to other eligibility criteria) had not committed some disqualifying act:Whatever the plan, such [unemployment] insurance is based upon the assumption that society and industry bear a responsibility for the failure of the economic system to provide men with an opportunity to support themselves by their own work. For those who, on the other hand, are unemployed because they prefer idleness to labor, the insurance measures accept no responsibility. The problem of framing a practical scheme to separate the wheat from the chaff thus centers in a definition of compensable unemployment.

If a man voluntarily leaves a job without reasonable cause, or is discharged for misconduct, his unemployment presents the clearest kind of case for which no social responsibility is assumed.(fn24)

Washington's Unemployment Compensation Act reflected those same concerns. The Act disqualified claimants who received certain other public benefits (e.g social security),(fn25) were out of work because of a labor dispute,(fn26) failed to search for or accept suitable work without good cause,(fn27) were discharged for work-connected misconduct,(fn28) or voluntarily left work without good cause.(fn29)

The current statute retains these disqualification provisions(fn30) and adds disqualifications for misrepresentation,(fn31) attending school,(fn32)and failing to attend a mandatory "job search workshop" or other training course.(fn33)

Most of the current disqualification provisions are substantially the same as their 1937 counterparts.(fn34) However, the legislature has enacted significant changes to two of the provisions: discharge for work-connected misconduct(fn35) and voluntarily leaving work without good cause.(fn36) This Comment focuses on the disqualification for voluntarily leaving work without good cause.(fn37)

B. The Basic Structure and Procedure of a Claim for Unemployment Benefits in Washington

The Employment Security Department (ESD) is the agency that administers the Employment Security Act.(fn38) The ESD is, in turn, administered by a Commissioner(fn39) who has the authority to delegate various ESD functions as necessary.(fn40)

A worker who is separated from a job may apply for unemployment benefits by filing a claim with the ESD.(fn41) The ESD then contacts the claimant and the claimant's former employer to determine why the job ended.(fn42) After finishing its investigation, the ESD sends both parties an initial determination notice that explains whether the claimant will receive benefits.(fn43)

To be eligible for benefits, claimants must have worked at least 680 hours in their base years(fn44) in qualifying employment.(fn45) Claimants must also show that they are able to work, available to accept work, and actively seeking suitable work,(fn46) and that their jobs did not end for a disqualifying reason.(fn47) Disqualifying reasons include discharge for misconduct(fn48) and voluntarily leaving work without good cause.(fn49)

Any party that disagrees with the ESD's initial determination has the right to appeal(fn50) and to appear at a hearing in front of an Administrative Law Judge (ALJ).(fn51) The ALJ conducts the hearing and issues an initial order.(fn52) The initial order can be appealed to the Commissioner's Review Office,(fn53) which issues final agency decisions.(fn54) The Commissioner can choose to publish some decisions, which gives them precedential value with the Commissioner's Review Office and makes them binding on ALJs.(fn55) All Commissioner's decisions are subject to judicial review under Washington's Administrative Procedure...