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You are so right, your friend needs to find new employment as soon as possible. Maybe this time around she will find something she really likes :)
In any case, I'd suggest she start looking for another job now because it's going to be a while to get this sorted out and get benefit checks going. Plus she'll make more at a job than on unemployment, and they will also require her to be job hunting anyhow. And when she gets a job, she won't need to fight the unemployment benefits battle and she will also know she hasn't been blackballed. As for her being "blackballed", there's no way in God's green earth that any sane employer will give any info about reason for termination or whether they'd rehire the person.I worked in a HR position years ago and had a call from a prospective employer about a long gone employee who'd been terminated for theft. Now, this person may have changed and deserved a chance, or was still shifty. I declined to answer whether we'd rehire her because I didn't want to cost a good person a job and I didn't want repercussions if she wasn't hired.
The whole "relinguished pay for 20 weeks" seems odd to me - in our state, you either get approved or denied benefits, not we'll give you benefits in 20 weeks. Something else unknown here too.
Yeah, she can sue. But in order to win? First she has to prove that the facility reported something that wasn't true to someone that cost your friend $$. Prove it. How much did it cost her? You say she's been "black balled." Dollars to donuts this is simply not true. If someone calls for a reference from them on her? They'll undoubtedly give them the dates she worked there, what she did, and other clinical-type information. And that's it. A caller might ask, "Would you rehire this person?" If they're smart, they say, "We don't answer that question by policy." If they ask, "Why did she leave?" The stock answer is usually "That information is confidential." What proof do you have that they said anything different?
If they outright lied to unemployment, she may have a point. But first, I'd say unemployment has a process in place to contest their twenty-week decision where they get more details from her ex-employer and then ask your friend to respond. Based on those details and their ultimate finding? Your friend may have grounds for a lawsuit for lying and delaying her benefits. *shrug*
Unless she is under contract? They can fire her "just because" unless one can prove discrimination based on The Civil Rights Act and the various protected classes. That's PROVE discrimination, not just claim it.
I'm not attorney, I'm a common-senser. Of course, your friend should consult an attorney if SHE believes what YOU believe. Otherwise? I'd suggest you back off. You don't know the actual details. You only know what she told you. And, believe me, that is not always the truth.