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Termination From Gross Misconduct and COBRA Insurance

The Definition of Gross Misconduct

Gross misconduct is undefined in COBRA legislation. Only about 50 percent of the cases filed on this issue have been ruled in the employer's favor. the IRS does not provide guidance on what gross misconduct is. Courts have provided some guidance by ruling that "the nature of the conduct itself is reasonably outrageous to the employer" or conduct "so outrageous that it shocks the conscience." Courts have also looked to see the employee was denied unemployment benefits when deciding if an employee was fairly terminated.

In the past, acts of gross misconduct included theft, embezzlement, violation of company policy, misrepresentations and non- work-related violence effecting the workplace.

If you are an employer, make sure to communicate company standards upon hiring, and before any terminations, to all the employees. Document actions that indicate gross misconduct. It's a good idea to give employees a chance to explain themselves or correct their behavior, before terminating them for gross misconduct.