I was denied unemployment insurance because i couldn't follow reasonable directions.

Since my employment there was never a specified lunch period it was a flexiable scheduled to work around the workload and work requirment. It was agreed to follow state standards with 1 hour meal break per 8 hour workday. Prior to my discharge there was an attempt to change the meal period betwen hours 12-1. If the work load requires me to stay in the office between 12-1 i could loose my lunch hour. I talked to the labor board they stated if your employer holds your lunch before 1 pm he can be charge 1 hour overtime plus one hour penalty charge. Should i appeal?

You can always appeal but you may end up with a denial again. It sounds like the reason behind the termination was under your control.