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  1. #1
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    Jan 2017
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    South Carolina
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    Default Will a Termination Agreement Prevent an Employee from Getting Unemployment

    My question involves labor and employment law for the state of: SC

    I was fired on Friday. No notice, no warnings, no discussions. No reason given beyond "just not a good fit". Small, family-run company with no real employee handbook. I had a few "flubs" but none were fireable offenses, and I'm still new, still learning. My direct boss never made any statement that let me know I was about to be fired. The president of the company did the firing. I've only been there 4 months. They gave me the termination agreement to sign (I don't think they're required to give me a severance) and said if I signed it, they'd pay me for the rest of the month, but if I don't, I only get paid through Friday. Termination agreement has all the standard "won't sue, won't disparage" etc.

    He also said, "When you're applying for unemployment, you can call this a layoff or resignation and I'll sign off on that."
    So isn't that asking me to lie on the application? He's not a nice man, and I'm worried that if I go against what he said and am truthful on the application, he won't approve it, or will make up some false story to make it so they don't have to pay me unemployment.

    I'm torn - sign the form, take the money and stay away from each other forever (and worry that if I talk to a friend about the situation and someone over hears me I'm going to get sued), or not sign the form, be out the money (that we kind of need, but we'll be okay, won't be destitute) and then worry myself to death that I will be denied unemployment?

    Something seems fishy to me. I have never been fired before so this is new.

  2. #2
    Join Date
    Jun 2006
    Location
    Massachusetts
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    "Not a good fit" and "poor performance" (which I suspect is more to the point) are neither of them going to disqualify you for unemployment. It is technically not a layoff since I don't think you have a realistic chance of being called back but I don't think you're in any trouble if you call it so. DO NOT under any circumstances call it a resignation - that WILL get you disqualified.

    What does the termination agreement say? It will not automatically disqualify you, no, but what's in it might. Exact wording counts.

  3. #3
    Join Date
    Jan 2015
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    1,142

    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    No sort of termination agreement will disqualify you from being able to file for and receive unemployment if you are otherwise qualified. As in, they cannot say, "employee agrees to accept xxx amount of severance and will not be filing an unemployment claim." It's like no agreement to be paid less will absolve the employer from having to pay you at least the minimum wage.

    But if your termination agreement says anything like that you are resigning voluntarily, that may be another story.. Any time you are out of work due to no fault of your own (and "not a good fit" falls into this definition, poor performance without feedback probably will too) you are probably eligible for unemployment benefits.

    If you state to the unemployment system that you have resigned, and they tell the unemployment system that you have resigned, and you've signed a separation letter with them that states that you've resigned of your own free will, then you are not going to be approved, most likely, for unemployment benefits, as you are not out of work through no fault of your own. If you quit, resign, you've voluntarily ended your employment with this company by your choice. That's not what has happened here. You showed up and did your best, your performance just didn't please them for some reason. They never let you know that it wasn't working out.

    When filing your claim for unemployment, just tell the truth, as you've told us here. The system will contact the employer, and ask them why you are not working anymore, regardless of what you say when you file the claim. But performance issues where you were not given any feedback about your performance and opportunity to change or improve that performance and keep the job is probably not going to be a disqualifying reason for termination that will keep you from drawing benefits. Putting down "not a good fit" or poor performance is in fact going to make you much more likely to receive unemployment than resignation or voluntary quit or any of those types of things. A "lack of work" separation will also get you approved, but that's not exactly what they told you, and I'm a fan of absolute honesty about this.

    When a person draws unemployment, it costs the employer money. That's why they do not get to say whether or not you will be paid unemployment benefits, that decision is made by the agency. If employers got the final say so, nobody would ever get unemployment insurance. If you were laid off due to lack of work, as in the employer didn't have any more work for you, you're almost an automatic approval. But that's not really what happened. And if you resigned, it's almost an automatic no go. So just tell the truth.

  4. #4
    Join Date
    Mar 2012
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    Quote Quoting peppergirlSC
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    "When you're applying for unemployment, you can call this a layoff . . ."
    I'm also a big fan of telling the truth, the truth that will get you UI with the least amount of work on your part. If the guy told you that, then go with it. If he was lying and wants to call it a firing when the UI people come calling, you can't control that and can deal with it later, but there is no good reason to make work for yourself.

  5. #5
    Join Date
    Jan 2015
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    The thing is, thousands of people tell us that they were laid off due to lack of work when they weren't. And then when the employer comes back and says they were actually fired, it may be interpreted that they committed fraud by lying about the reason they are out of work. I'm a fan of telling the truth. Even though the employer said he would, I would still insist on telling the truth, because unless he gives you a letter on the spot saying "lack of work" he might come back out later with the fight on and it would become very obvious you had lied.

  6. #6
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    Mar 2012
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    The reverse also happens where the employer tells the claimant to their face that they are laid off and then tells the UI people a different story. This claimant has a severance package. Since statistically people that get fired don't get one, I, as a claimant, would have no problem saying "laid off" if the employer told me that.

  7. #7
    Join Date
    Jan 2017
    Location
    South Carolina
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    Quote Quoting cbg
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    "Not a good fit" and "poor performance" (which I suspect is more to the point) are neither of them going to disqualify you for unemployment. It is technically not a layoff since I don't think you have a realistic chance of being called back but I don't think you're in any trouble if you call it so. DO NOT under any circumstances call it a resignation - that WILL get you disqualified.

    What does the termination agreement say? It will not automatically disqualify you, no, but what's in it might. Exact wording counts.

    It says I was terminated on x date, says I won't sue them for anything, says I won't talk badly about them to the media, etc, said I won't give trade secrets to other competing organizations or work for them for x years. (I'm not looking to work for any competing places nor do I have any desire to badmouth them publicly.) There's nothing on it about signing away unemployment rights. I had two of my lawyer friends look at it and tell me it looks pretty standard, and I should sign it to get paid for a few more weeks. One of them also said that I'd better be truthful on the UI application because if I signed a TERMINATION agreement and apply with layoff or another reason, it will make me look absolutely less credible/like a liar since I signed something saying I was terminated. Truth wins.

    Thanks for the help, I appreciate it. Also have ascertained through investigation of my own that I may have been let go in order for them to rehire my predecessor. (who is single, has no obligation to any children as I do, and probably was paid a bit less than I was.). It is what it is. UGH.

  8. #8
    Join Date
    Nov 2013
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    in alto mare
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    Yep. Employment at will and right to work sound pretty on paper, and have advantages, but also have drawbacks. It is wise to learn what those plusses and minuses are. If you were not let go for prohibited reasons such as protected status (sex, sexual orientation, race, handicap, etc) then they can pretty much do as they please.

    File for UI and tell the truth.

    I have a feeling you'll be working again soon so do the right thing and you won't have to keep looking over your shoulder.

  9. #9
    Join Date
    Jun 2006
    Location
    Massachusetts
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    It does sound pretty standard. Sign it and tell the truth.

    FYI, geek, right to work doesn't have anything to do with this situation - it means you don't have to join a union to get work. Employment at will, yes; but right to work is an entirely different concept.

  10. #10
    Join Date
    Mar 2012
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    Default Re: Will a Termination Agreement Prevent an Employee from Getting Unemployment

    Quote Quoting peppergirlSC
    View Post
    I signed something saying I was terminated.
    Even people that are "laid off" are "terminated." "Terminated" doesn't mean "fired for something bad." It just means you don't work there anymore for whatever reason.

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