NASHVILLE, Tenn. -- Peter Demos runs four restaurants and has a lot of help to make it happen.

"I'm fortunate I have a lot of good people working for me," said Demos.

But he doesn't get to spend as much time doing what he loves because he spends a lot of time in front of an appeals judge trying to fight unemployment claims. Lately, he hasn't been very successful when he thinks the case is open and shut.

"We've had somebody who we've actually caught stealing on tape," said Demos. "The initial determination of that was they said that we did not give the person an opportunity to correct her behavior."

Down the street, Rutherford County's human resources director has the same problem.

From a sheriff's deputy who was fired for theft of property to another employee fired for padding time sheets to still another let go for racial harassment, these people are drawing unemployment.

"We were just astounded, because we do have facts to back up and witnesses in most cases to back up the cases that we present," said Sonya Stephenson.

Stephenson said of the $81,000 in unemployment claims paid to former county employees, the county feels only $2,000 in claims were legit.

"When I lose, it is frustrating, because I feel like that's money, you know, $80,000, that's several positions that could have been staffed, or it's $80,000 that could have been saved by the taxpayers for paying claims that I felt like were not due to those individuals," said Stephenson.

The unemployment trust fund dates back to the 1930s, and it's designed to help people who have lost their jobs through no fault of their own, such as layoffs, company relocation or business closings.

But if an individual fails a drug test, is fired for misconduct or quits because he or she didn't like the job, that person is not entitled to unemployment benefits.

"There's a lot of good people out there -- honest, hardworking people -- who are going to need these funds, but if you let these others abuse it, the funds are not going to be there for them to have," Stephenson said.

So why are these people getting paid?

"The abuse has been going on for a long time, and I think it's just now come to the forefront," said Susan Goyer, president and CEO of Aabakus Inc., a human resources consulting firm based in Nashville.

When someone files for unemployment, a determination is made on whether he or she qualifies for benefits. If either the employer or the employee doesn't like the decision, it can be appealed.

Employers said that's where the problem is. They said the handbook outlining the appeals process lacks clear rules about what must be done.

Also, different hearing officers have different interpretations of what evidence is needed.

"I think the hearing officers have taken the law and they've interpreted it, as I call, out into left field," said Goyer.

Demos has documentation of a server who was fired after nine customer complaints, multiple written and verbal reprimands and a one-week suspension.

But the employee won her hearing.

"They said that we could not bring in those customer comment cards as evidence because the customers did not come in to testify themselves," said Demos. "So therefore it was hearsay and not admissible, and so we didn't have grounds to fire her."

The Department of Labor said the reason employers are losing is simple: They are not providing the witnesses or documentation needed to win.

"In most cases where you have what seems to be a bad thing which does not result in disqualification of a claim, it's often because one party did not present what we call competent evidence, evidence with weight," said Michael Thomason with the Department of Labor.

Thomason said sworn statements are hearsay and don't hold the weight of in-person witnesses.

"Bring your eyewitness, bring the people who have personal knowledge of this incident or incidences for which you discharged an employee," he said.

Thomason said employers statewide still won 63 percent of the almost 20,000 appeals last year, which is more than the national average. And while the number of appeals is skyrocketing, staffing has stayed flat up until this point.

Employers said time constraints on the department keep them from making informed decisions.

The minutes from a board of review meeting last year show the board considered 151 cases in just more than two hours, meaning it spent an average of 50 seconds on each case.

No matter whose fault it is, the bottom line for many of these people is that the unemployment fund is going broke for the people who do deserve it, and those who don't are helping to suck the fund dry.

The Department of Labor is hiring more appeals officers to help take on the caseload. In addition, it is in the process of putting the separation notices an employer gives an employee when he or she is let go online so that the hearing officers can have that information readily available.

Lawmakers are also looking at legislation to better define misconduct to help clear up confusion about who qualifies for benefits.

People who qualify for unemployment benefits will get them no matter how low the fund gets. The Legislature is looking at a tax increase on businesses to stabilize the fund. Otherwise, the state will borrow money from the federal government to pay out benefits.