For the second time in two years, the Oklahoma Legislature has passed reform related to the definition of “misconduct” as defined in the Employment Security Act. The reform provides clarification to employers as to which employee actions may constitute misconduct so that the employee is not entitled to unemployment benefits.

Prior to the recent reforms, the statute was silent as to what employee conduct rose to the level of misconduct. The Oklahoma Supreme Court adopted a very narrow definition of misconduct, limiting it to:

“conduct evincing such wilful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed ‘misconduct’ within the meaning of the statute.” Vester v. Bd. of Review of Okla. Employment Sec. Com’n, 1985 OK 21, at ¶ 12.

Now, the Legislature has explicitly defined “misconduct” (codified at 40 O.S. § 2-406). Based on the language utilized by the Legislature, the Vester definition is no longer applicable in unemployment contests. Thus, misconduct is no longer limited only to those situations where the employee wilfully or wantonly disregarded an employer’s interests through intentional actions or to an extremely high degree of negligence.

Unlike last year’s reform, which provided a non-exclusive list of actions which may be considered misconduct, this year’s reform makes the list exclusive. In other words, the Oklahoma Employment Security Commission (OESC) no longer has any discretion to determine what may or may not constitute “misconduct.” In addition, this year’s revision also allows for employees to be terminated for misconduct without warning so long as the employee knew or should have reasonably known that a rule or policy of the employer was violated.

The following are reasons by which an employee may be found to have engaged in misconduct and thus be denied benefits (after the effective date of the reform):

• Any intentional act or omission by an employee which constitutes a material or substantial breach of the employee’s job duties or responsibilities or obligations pursuant to his or her employment or contract of employment;
• Unapproved or excessive absenteeism or tardiness;
• Indifference to, breach of, or neglect of the duties required which result in a material or substantial breach of the employee’s job duties or responsibilities;
• Actions or omissions that place in jeopardy the health, life, or property of self or others;
• Dishonesty;
• Wrongdoing;
• Violation of a law; or
• A violation of a policy or rule enacted to ensure orderly and proper job performance or for the safety of self or others.

If an employee is discharged for one of these reasons, the employee will not be entitled to unemployment benefits. While it remains to be seen how the OESC ultimately applies the new statutory definition of “misconduct,” it is clear that the new definition provides more certainty, allowing the employer to have a much better idea of how a claim will be adjudicated in advance of the hearing. Employers should make sure that the OESC follows the Legislature’s definition when considering claims for unemployment benefits.

The bill was signed into law by Governor Mary Fallin, and this change becomes effective as of November 1, 2014.