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First of all, an employee is only entitled to unemployment benefits if he was laid off. He is not entitled to those benefits if he quit for no reason or if he was fired for cause. If he quit because he was forced to by bad work conditions or something illegal, then he can potentially obtain a finding that he is entitled to benefits that way too.
You should deny his claim. His threat that he will get the dogs after you is simply that...a threat. Unless there is something egregious about the situation, like you were running a sweat shop or have illegalities at work (non-compliant work conditions, etc), then there is no one that will help him unless he hires them. Further, the Texas Workforce Commission will set up a hearing and will make a determination of whether he is entitled to unemployment benefits. Just tell the truth and follow their determination, which will be in your favor if what you told me above is correct.
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