Employee who worked in one state but lived in another seeks unemployment

It can be confusing when an employee lives in one state but works in another and then seeks unemployment benefits after termination. In which state should she file? A recent case before the Arkansas Court of Appeals provides some guidance.

Facts

Monique Miller was an Arkansas resident working in Tennessee when she was laid off from Memphis Mill Services in March 2020 because of the COVID-19 pandemic. She was instructed by her employer to file for unemployment insurance benefits in Tennessee because that was the state where she was employed.

After filing in Tennessee, however, Miller was told by the Tennessee Department of Labor and Workforce Development to file for unemployment benefits in her state of residency—i.e., Arkansas. She began filing claims in Arkansas from April 11 through August 1, 2020, but was informed she couldn’t file for benefits in Arkansas until her claim in Tennessee was closed, which took approximately five months.

Once her Tennessee claim was closed, Miller filed for unemployment in Arkansas, requesting to backdate her claim from April 11 through August 1, 2020, when she originally filed in Arkansas. In April 2021, the Arkansas Division of Workforce Services issued her a “Notice of Agency Determination” finding she hadn’t shown good cause for backdating her claims. She then filed a timely appeal of that decision to the appeal tribunal, which conducted a hearing in June 2021 affirming the division’s determination.

Miller then appealed to the Board of Review, which affirmed the denial of her claim. It found that, because she had the ability to file her initial claim at an earlier date, she didn’t establish good cause for backdating her claim. She then appealed to the Arkansas Court of Appeals.

Court’s decision on appeal

As an initial matter, the court noted that it affirms Board of Review decisions when they are supported by substantial evidence, and it views the evidence and all reasonable inferences deducible from it in the light most favorable to the board’s decision. In this case, the court easily found the decision wasn’t supported by substantial evidence and reversed it.

The court noted Arkansas statutes provide that insured workers are eligible for benefits if they made a claim in accordance with the rules established by the Division of Workforce Services. It found the division’s own regulations specifically contemplated this very issue:

If a claimant files an initial claim for unemployment compensation against another state and fails to establish a valid claim, is faced with an indefinite postponement of benefits, or withdraws from a wage combining arrangement, his subsequent Arkansas initial claim for benefits shall be considered to have been filed on the date his original initial claim was filed against the other state.

Furthermore, it was undisputed that Miller was instructed by her employer to file her initial claim in Tennessee and was subsequently unable to establish a valid claim until filing in Arkansas.

What does this mean for employers?

First, hard facts make for hard decisions. The facts here show Miller followed the guidance she was given—first by her employer and later by the states of Tennessee and Arkansas. It isn’t surprising that the court would be sympathetic to her claim when she was an unsophisticated employee who relied on the directions of her much more sophisticated employer and the state agencies charged with implementing the unemployment benefits program.

Second, you need to provide employees the correct guidance on where to file for benefits. Although it didn’t arise in this case because Miller ultimately received her benefits, if the denial had been upheld, there’s a good chance she could have sued the employer because she justifiably relied on its direction to file in Tennessee. If she prevailed on such a claim, the employer would have been responsible for paying her the benefits that would otherwise have been paid by the state.

Steve Jones is an attorney with Jack Nelson Jones, P.A., in Little Rock, Arkansas, where he focuses his practice on labor and employment law and business litigation. He has served as Managing Partner and is presently Secretary and Vice-President for the firm. You can reach him at sjones@jacknelsonjones.com.