Benefits and Compensation

Is South Dakota Employee Eligible for Unemployment Benefits After Stealing from Former Employer?

A pilfering employee of an assisted living facility resigned before she was caught. Can her new employer terminate her for something she did at her previous job?South Dakota

Employee Abruptly Changes Jobs

“Linda” started working as a medication aide at Orchard Hills, an assisted living facility in Dell Rapids, in April 2006. She held the position until March 2015, when she abruptly resigned.

After her resignation, Linda immediately applied for a residential attendant position at Bethel Lutheran Home, an assisted living facility in Madison. On Bethel’s employment application, she indicated that she had resigned from Orchard Hills. The application asked whether she had “ever [pleaded] ‘guilty’ or ‘no contest’ to . . . or been convicted of a crime.” Linda answered “no.”

After receiving Linda’s completed employment application, a Bethel representative contacted Orchard Hills to obtain a reference about her employment there. The Orchard Hills representative indicated that Linda’s work performance was good and that she left without providing notice.

Bethel offered Linda the residential attendant position, which she accepted. Of course, the offer was contingent on a background check. The background check found no reportable records regarding Linda’s criminal history.

Theft Tied to Linda

Prior to Linda’s resignation from Orchard Hills, she apparently stole money from a resident’s apartment. At the time she applied to work at Bethel, Orchard Hills’ employees were unaware of the theft, and no criminal charges had been filed.

Linda began working at Bethel on April 27, 2015. In July 2015, she was arrested and charged with crimes stemming from the Orchard Hills theft. The criminal case languished in court until February 18, 2016, when Linda pleaded guilty to second-degree burglary. However, Bethel’s assistant administrator, “Joan,” was not notified that Linda had pleaded guilty to a crime until August 2016.

Joan and Linda’s superiors confronted Linda about the criminal charges and her guilty plea. Linda admitted that she stole money from a resident at Orchard Hills while working there as a medication aide. When asked why she did not indicate that she had been convicted of a crime on her employment application, she explained that she had not pleaded guilty to or been convicted of a crime at the time.

After the meeting, Joan became aware of a state regulation that applied to nursing facilities in South Dakota. Under the regulation, no nursing facility licensed by the South Dakota Department of Health may knowingly employ any person convicted of abusing another person. As a licensed nursing facility, Bethel was subject to the regulation, and it promptly terminated Linda based on the regulation and her criminal conviction.

Benefits Denied, and Linda Appeals

Linda was initially denied unemployment benefits, and she appealed the decision. The administrative law judge (ALJ) presiding over her appeal was not bothered by her failure to report her criminal conduct on her employment application because she had not been charged with a crime at the time.

The ALJ noted that Linda’s misconduct occurred before she was employed by Bethel. In order to prove that her misconduct was connected to her work at Bethel, the nursing facility had to show that it (1) had a nexus with her work, (2) resulted in harm to the employer’s interests, and (3) violated a code of behavior contracted for between the employer and the employee and was done with the intent or knowledge that the employer’s interests would suffer.

The ALJ determined that Bethel could establish none of those factors. When Linda committed the crime, she was not employed by Bethel. Also, she had not been charged with or convicted of a crime when she filled out her application or started working.

Although the regulation restricted her from working in a nursing facility, it did not establish misconduct on her part while employed by Bethel. The ALJ reversed the denial of unemployment benefits and determined that Linda was qualified to receive benefits.

Bottom Line

The timeline of events in this case happened to work in Linda’s favor. Had Orchard Hills terminated her for stealing money from a resident, the ALJ likely would have found that she was disqualified from receiving benefits. However, she was terminated by Bethel for something that happened at her previous employer. The damage was not done directly to Bethel, and Linda did not lie on her application.

Unfortunately, there is not much an employer in Bethel’s position could do to avoid paying unemployment benefits to Linda. However, Bethel terminating her before she could victimize another resident and tarnish the facility’s reputation could be a blessing in disguise, even if it had to pay benefits.

Kassie McKie Shiffermiller is an editor of South Dakota Employment Law Letter and can be reached at