Gross Misconduct and COBRA: What Employers Need to Know

COBRA coverage must be offered to employees who experience voluntary or involuntary termination for any reason other than gross misconduct. Which makes us wonder – how bad does an action have to be before it qualifies as gross misconduct?

COBRA never explicitly defines the term “gross misconduct.” However, the Department of Labor does state that ordinary reasons for termination, such as excessive absences or poor performance, do not qualify.

Employers have been sued for not offering COBRA continuation on the basis of gross misconduct, so it’s important to be careful here. In general, the behavior should relate to the employer in some way, meaning it should involve the workplace, the company, coworkers, current clients and/or former clients. Additionally, the behavior should be outside the normal scope of poor performance. Instances of deliberate or reckless disregard for the employer’s interests are likely to be labeled as gross misconduct.

Here are some examples of gross misconduct.

  • Stealing from the company: The Department of Justice estimates that approximately one-third of employees are guilty of workplace theft. Theft of material property, money or intellectual property could qualify as gross misconduct.
  • Destroying company property: Like theft, intentional destruction of company property is a serious offence. If an employee purposefully or recklessly destroys company property – whether it’s equipment, important files or the building itself – this could qualify as gross misconduct.
  • Violence: The Occupational Safety and Health Administration reports that each year, approximately 2 million Americans report having been victims of workplace violence. In 2014, 403 workplace homicides occurred. Of course, violence doesn’t have to go to the point of murder to be considered serious. If an employee assaults a boss, coworker or client, there’s a solid case for gross misconduct.
  • Sexual assault: The National Sexual Violence Resource Center reports that rape and sexual assault accounted for 2.3 percent of all nonfatal incidents of workplace violence from 2005 to 2009. Sexual crimes against other employees or clients are definite examples of gross misconduct.

Note that gross misconduct often involves crimes that necessitate the involvement of law enforcement. Cases of assault and sexual assault also require medical attention.

Even when authorities do not need to be involved, the company should investigate the incident thoroughly and supply proof that the employee deliberately or recklessly acted against the company. One thing is for certain: If you fire an employee for gross misconduct, it’s essential that you have airtight documentation in case the decision is ever questioned. Need a COBRA software system that provides you with auditable documentation of COBRA notices, payments and more? COBRAGuard delivers – learn more here.

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