Benefits and Compensation, HR Management & Compliance

Sex Sting Creates a Hornet’s Nest for South Dakota Employer

An employee was netted in a sex sting after he arranged for an escort while he was off duty. Instead of finding love, he found himself suspended from his job—and eventually terminated. Was the employee entitled to unemployment benefits?termination

Employee Stung by ‘Love’

“Simon” began working as an applications analyst for Rapid City Regional Hospital in Rapid City in 2012. On September 29, 2017, he left the hospital for his half-hour lunch break. When he returned, he requested permission from his supervisor to work from home for the rest of the day because he was having service work performed. The supervisor approved his request, and Simon left the hospital and went home.

Around 3:00 p.m., Simon left his home and drove to a local hotel. Apparently, he had previously viewed an Internet post by “Eva Love” saying she would be in Rapid City on September 29. The online post further stated that Love was a 28-year-old “elite companion” and “the woman that gentlemen have been searching for.” Simon responded to the online post by arranging a tryst with her for September 29.

Simon arrived at the agreed-on location at the prearranged time. However, instead of finding Love, he found officers from the Rapid City Police Department, who had created the advertisement as part of a sting operation. His expectations for spending a blissful afternoon with Love were replaced by a citation for “hiring for sexual activity.”

News Buzz Makes Its Way to Employer

Unfortunately for Simon, his embarrassment didn’t end with a police citation. On October 2, a local news station posted an online article about the sting operation. The article named each individual who had responded to Eva Love’s online advertisement and were cited for hiring for sexual activity in violation of South Dakota law.

The day after news of the sting broke, the hospital suspended Simon pending the result of any legal proceedings. Eventually, the hospital discharged him even though his criminal case hadn’t been resolved. The South Dakota Unemployment Insurance Division initially concluded that Simon was disqualified from receiving unemployment benefits. He appealed that determination.

ALJ Stings Employer with Reversal

On appeal, the administrative law judge (ALJ) struggled with the initial finding that Simon was discharged for work-connected misconduct. To establish work-connected misconduct, the employer must show that the employee’s conduct (1) had a nexus with his work, (2) resulted in some harm to the employer’s interest, and (3) violated a code of behavior.

There was never a dispute that Simon’s actions were unrelated to his work at the hospital. He viewed and responded to the online advertisement while he was off duty. His supervisor had authorized him to work from home. The hospital didn’t terminate him because he left his home to go to the hotel. Rather, his discharge was solely based on the alleged criminal activity and subsequent news story naming him as one of the individuals caught in the sting operation.

Moreover, the citation wasn’t issued while Simon was at work, and the news article didn’t list his employer. While the hospital may have felt that his behavior posed potential harm to its interests, its concerns were merely speculative.

Because the testimony and evidence didn’t establish that Simon knowingly or willfully violated the hospital’s standards of performance or code of conduct policies, or acted with the intent of harming the hospital’s interests, the ALJ held that he was qualified to receive unemployment benefits.

Bottom Line

Many employers would have reacted the same way as the hospital if they had an employee who did what Simon was accused of doing. However, an unemployment judge won’t take the basis of a criminal case into consideration when he assesses the employee’s eligibility for benefits.

Don’t assume an employee isn’t entitled to unemployment benefits because he engaged in criminal conduct unrelated to the workplace. There are plenty of reasons to terminate an employee for such behavior. However, speculative concerns about the harm his actions may cause your organization won’t pass muster in an unemployment hearing.

Kassie McKie Shiffermiller is an editor of South Dakota Employment Law Letter and can be reached at kmckie@lynnjackson.com.