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North Carolina Court of Appeals Raises Threshold for Disqualifying Unemployment Benefits

    Client Alerts
  • February 08, 2008

Last month, the North Carolina Court of Appeals reviewed an unemployment benefits case involving an employee who was disqualified from receiving benefits for nine weeks after the employer discharged her for excessive tardiness. In Applewhite v. Alliance One International, Inc., the court reversed the Superior Court’s decision in favor of the employer, and may have raised the disqualification standard that it had previously established in 2006.


The plaintiff was discharged after three attendance infractions within a twelve-month period, the last of which occurred when she became sick and returned to work 15 minutes late from her lunch break. North Carolina law provides that an employee’s unemployment benefits shall be partially forfeited if he was discharged for “substantial fault on his part…not rising to the level of misconduct.” As previously interpreted by this court, “substantial fault” includes excessive absences or tardiness of employees where they “exercised reasonable control” over the situation. In a 2006 opinion, however, the Court of Appeals held that employees do not have reasonable control over the effects of an illness on their attendance; therefore, the standard does not include an employee’s failure “to attend work because of serious physical or mental illness.”


In Applewhite, the Court of Appeals held that since the plaintiff’s tardiness was “due to illness…[she] did not have reasonable control over her failure to conform” to the employer’s attendance policy and her behavior “cannot rise to the level of substantial fault.”


The court had previously applied the “serious physical or mental illness” standard in a case where the employee suffered from bipolar disorder and was not “medically capable” of compliance with the employer’s attendance policy. The Applewhite petitioner did not present any evidence that she had an illness which made her medically incapable of compliance. She only demonstrated that, on one occasion, she became sick and was late returning to work. It is not clear whether this decision indicates the court’s desire to lower the disqualification standard for unemployment benefits when an employee is terminated for absenteeism due to minor and temporary illnesses. Thus, employers should remain prepared to pay the unemployment benefits of employees who are terminated for excessive attendance violations if they allege their tardiness or absence is related to some general, undefined “illness.”