Earlier this month, the Stark County Court of Appeals concluded that an unemployment compensation claimant was liable for a substantial fine and denial of future u/c compensation as a penalty for knowingly understating her bartending income after she had been laid off from her steel plant job. Carden v. Ohio Dept. of Job & Family Serv., 2022-Ohio-2786. In short, the claimant reported that she was receiving $100/week in bartending wages and tips, when she knew that she was being paid more than that and never updated or changed her weekly estimate. Not only was she responsible for repaying the $4,820 overpayment, but she was also fined 25% - $1,205 -- and declared ineligible for 18 weeks of u/c if she applied again before 2027 due to her fraudulent claims. Although the common pleas court relieved her of the fine and ineligibility sanction on the grounds that it was an honest mistake, the appellate court found fraudulent intent was implied by her admitted knowledge of her repeated erroneous reports.
According to the Court’s opinion, the claimant took a
part-time bartending job after she was laid off. When she filed her initial reports, she
reported $100 in weekly income and did not amend or change her weekly reports
after she started to receive tips in her paychecks on top of her hourly wages.
She “testified she did not know she could amend her claim after receiving her
paychecks, and did not know she could wait to report her earnings until she
received her paycheck.” However, when it
was pointed out that a booklet had been “mailed to her which explained this
procedure for reporting and amending claims, she testified she did not recall
receiving the booklet, although she admitted she might have” and just “didn’t
understand it fully.” She admitted that
there was not “a week where she had no tip income, although tip income varied.”
While other counties require a subjective intent to take
from the State that to which the claimant is not entitled, this Court noted
that it had previously ruled that fraudulent intent for purposes of filing
false unemployment claims does not require a subjective intent:
“[F]or purposes of [R.C. 4141.35], fraud simply refers to the making of a statement that is false, where the party making the statement does or should know that it is false.” . . . The party's “subjective intent * * * is irrelevant to a determination of whether [he or she] made fraudulent misrepresentations pursuant to R.C. 4141.35.” Id. at ¶ 35. The intent to commit fraud may be inferred from intrinsic or extrinsic evidence, as well as from the surrounding circumstances.
The hearing officer had found that individuals are deemed to
intend the natural consequences of their actions. She admittedly knew that her weekly reports
were inaccurate, but made no effort to correct them and merely continued
reporting the same incorrect amount every week.
The common pleas court found that she was overwhelmed by the stress of
her layoff and raising four children, simply did not understand the process and
would not have reported any earnings if she had intended to commit fraud. Yet, under the standard for reviewing
administrative decisions, the trial court was bound to affirm the UCBR’s
decision if there was any evidence in the record to support it, instead of re-weighing
the evidence. “Regardless of whether or not she reviewed and understood the
booklet, she knew or should have known she was consistently under-reporting her income,
yet failed to amend her earnings reports.”
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
