Thank you for your reply.
At will employment means an employee can be terminated at any time, for any reason, yes, so long as it is not unlawful, or even no reason at all - just because the employer feels like it.
At an unemployment hearing, the employer has the burden of proof as I stated above - not you. If they are alleging misconduct due to theft as the reason for your termination
, then that is what they must prove. If they fail to meet this burden, then you win.
Defamation of character has 3 elements a plaintiff must be able to successfully prove:
1) An employer at least negligently, if not intentionally, made a false statement (either verbally or in writing) about them;
2) To a third person or persons;
3) Which resulted in damages to plaintiff.
If the only person the employer ever made the false statement(s) to was the plaintiff, that does not establish defamation, because no one else knew what was said.
Now, if an employer is going to tell unemployment that you were fired for theft, and that isn't true, well, then they already have made that false statement to others. Similarly. if they were to tell prospective other employers who called your old employer for a reference that you were fired for theft, that too meets the second element of defamation.