Not offering COBRA
Redbudpt
55 Posts
Our company let an employee go due to this person trying to persuade another employee to take a job elsewhere. It was stated on the termination letter that the behavior was considered gross misconduct due to the fact that if the employee who was being persuaded had taken the job then it would have been detrimental to the company. The company is not wanting to offer this employee COBRA benefits based on "gross misconduct". I feel that it would be best to offer the COBRA since this could get us into a legal situation since different courts have defined "gross misconduct" in many different ways. A point was brought to my attention that if unemployment benefits were denied to this individual we would not have to offer COBRA, however, if fighting an unemployment claim takes the full amount of time with disputing back and forth the COBRA notice period would have lapsed.... Please share your thoughts.
Comments
This is pretty rare and there are a number of things you should think about first . . . see discussion at http://www.ask.com/bar?q=does+gross+misconduct+cut+off+COBRA&page=1&qsrc=0&ab=0&u=http%3A%2F%2Fwww.uslaw.com%2Flaw_blogs%2F%3Fitem%3D143030 for more information
[quote user="Redbudpt"][...] A point was brought to my attention that if unemployment benefits were denied to this individual we would not have to offer COBRA [...][/quote]
False. You can be fired for failing to meet the employer's standards, lose your bid for unemployment, and still be eligible for COBRA. You can also be fired for failing to meet the employer's standards and win your bid for unemployment. The standards are different and UI administration is nowhere near as tight as the decision making processes of the courts. Completely separate.
Denying COBRA coverage has such vast potential for expense compared to granting it, not many people spend much time considering the gross misconduct clause. Trying to recruit employees away to a competitor COULD be gross misconduct but I'd definitely talk to counsel before going there. The very cost of researching it can exceed the cost of granting COBRA coverage.