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Joseph
Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5299
Experience:  Extensive experience representing employees and management
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A question regarding a knowingly false statement made by employer

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A question regarding a knowingly false statement made by employer about my separation to the unemployment insurance board. They (the company) knowingly lied saying I was still employed so as to cause a loss of unemployment benefits. Under California law, I believe this communication is privileged as part of testimony during an administrative hearing. Is there any way around this privilege and what code section is it in? Can I bring an action for fraud?
Hello,

I'm sorry to hear about your situation and hope I can help.

My goal is to provide you with excellent service.

Did the statement wind up causing you a loss in unemployment benefits because EDD wrongfully relied on your employer's misrepresentation?

If so, do you have a way of proving that the statements are false (and were knowingly made to deny you unemployment benefits, e.g. that it was not due to some 'misunderstanding')?

Finally, have you appealed your denial of benefits based on your employer's knowingly false statements to EDD?
Customer: replied 4 years ago.


Hi Joseph - thanks for your answer. I have been denied and will appeal. However, I am bringing a maritime and Jones Act claim against this employer in the 9th circuit for a laundry list of indiscretions. There was no misunderstanding and I have proof in the form of a company memo. By saying I did not complete my contractual obligations - it is a reflection on my professional competence and defamatory. I would like to include this in my initial complaint because of the possibility of res judicata - claim preclusion. What about testimony given in this circumstance (unemployment dept. questionnaire) being privileged?

To clarify, do you want to claim that the statements that were made to EDD were defamatory?

Were these statements made to anyone else or only to EDD via the questionnaire that was sent to your employer?
Customer: replied 4 years ago.

I see the problem - they were made only to EDD. How about intentional infliction of emotional distress?

Do you mean intentional infliction of emotional distress by making the false statements to the EDD or through that and some additional action on their part?

Or do you just mean that you've experienced distress because the EDD has wrongfully denied you benefits?
Customer: replied 4 years ago.

I was on a ship in China and coughing up blood and having trouble breathing. I was locked in a room and denied medical help for several days. So there are other incidents that reflect inten. inf. of emotional distress, false imprisonment etc. However, I am claiming that by making a false statement to EDD they intentionally inflicted emotional distress.

Hello Russ,

Unfortunately, intentional infliction of emotional distress is an incredibly hard tort to prove, and I'm afraid that false statements to the EDD made with the intention of denying you unemployment benefits (even if done with malicious intent) do not qualify as intentional infliction of emotional distress. As the tort involves:

Defendant acted intentionally or recklessly; and
Defendant’s conduct was extreme and outrageous; and
Defendant’s act is the cause of the distress; and
Plaintiff suffers severe emotional distress as a result of defendant’s conduct.

I'm afraid that making a false statement to EDD to deny you benefits would just simply not constitute extreme and/or outrageous conduct, and it would be extremely difficult to prove that that action itself (rather than the other stuff you mentioned) cause you emotional distress even if it did. (Furthermore, the damage would need to be foreseeable, and it is way too attenuated for it be the proximate cause of distress as well).

However, it certainly seems like you have a great case for IIED based on the intentional actions of your employer regarding false imprisonment, denial of medical care, etc., and I would suggest you add negligent and/or intentional infliction of emotional distress to that cause of action.

As your correctly noted, communications to the EDD are privileged, which prevents you from suing based on defamation, as statements made to EDD are considered to have the same privilege as court testimony. Instead, you would have also needed your employer to make false statements about your work to a third party to have a defamation cause of action as well.

I'm afraid the only remedy that is provided for a false statements made by an employer in a willful manner to prevent an employee from receiving his or her unemployment is a rather meek one.

It is actually limited to 2 to 10 times the employee's weekly benefit amount, and the money is actually meant to be deposited in a contingency fund, so would not result in any additional compensation due to you. (Of course, you would receive the same amount of compensation you are entitled to for unemployment, but, unfortunately, EDD seems disinterested in providing compensation for the cost, inconvenience, and suffering a wrongful denial of benefits can cause a claimant. E.g., claimant fraud normally only winds up with the employee having to pay back their benefits plus a 30% fraud overpayment fee).

It is laid out in California Unemployment Insurance Code Section Unemployment Insurance Code Section 1142 and states:

(a) If the director finds that any employer or any employee, officer, or agent of any employer, in submitting facts concerning the termination of a claimant’s employment pursuant to Section 1030,1327, 3654, 3701, 4654, or 4701, willfully makes a false statement or representation or willfully fails to report a material fact concerning such termination, the director shall assess a penalty against the employer in an amount not less than 2 nor more than 10 times the weekly benefit amount of such claimant.

(b) If the director finds that any employer or any employee, officer, or agent of any employer, in submitting a written statement concerning the reasonable assurance, as defined in subdivision (g) of Section 1253.3, of a claimant’s reemployment, as required by subdivisions (b), (c), and (i) of Section 1253.3, willfully makes a false statement or representation or willfully fails to report a material fact concerning the reasonable assurance of that employment, the director shall assess a penalty against the employer in an amount not less than two nor more than 10 times the weekly benefit amount of that claimant.

(c) Penalties collected under this section shall be deposited in the contingent fund.

All that said, unforutnately, you need not worry about claiming anything additional due to res judicata concerns, since you don't have a cause of action here.

I realize the above information is not what you wanted to hear and I sincerely XXXXX XXXXX had better news to give you, but I hope you appreciate an honest and direct answer to your question. It would be unprofessional of me and unfair to you to provide you with anything less.


Thanks and best of luck!
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