Today I received a notice from the state of Maryland unemployment office, that my former employee has a 'claimant dispute'- and we will settle this over the phone on Wednesday.

You seem young, so let me tell you the first thing you should learn. There are people who just don't care. I know you want to help but some people are more interested in being right and will not listen to you.

Second, unemployment is worth more to you than reference. The owner is trying to screw you and a letter of reference is not really worth that much. If you need a reference you can ask your direct boss for one and he should be able to do so on the side. You can always find references, even friends or other people you have worked with before. They are not hard to come by, you just have to be a little creative in who you ask(which means not just your boss).

Third, as for dealing with the unemployment, this is where you have to focus on the important things. Did your employer give you notice a project was going well? What steps were taken to address the issue? Does the owner have any documentation to support this assertion? Basically, it sounds like the owner tried to BS you and you fell for it. If you have never talked with the owner one-on-one before and there was a problem with the project, he should have come forward much earlier than preparing a termination paper.

The fact of the matter is the owner is trying to fire you for cause (a cause that makes you look like an undeserving slacker) so he does not have to pay additional unemployment benefits. If you think that this schmuck is going to do ANYTHING for you, you are sadly mistaken. If he did, you could bring it back to the Employment Office and point out what he gave you and what he said were two different things.

Sorry, there are just some people like that and the best thing you can do is mitigate the damage and move forward with your life. Don't get hung up on this issue but don't be a sucker and not fight for your benefits. Otherwise you are being a victim again.