Articles

PERSPECTIVES

Employees quitting jobs resigned to losing unemployment

"He is no wise man that will quit a certainty for an uncertainty"
Author Samuel Johnson (1760)

By Marshall H. Tanick

Employees faced with unpleasant conditions at work often feel that quitting will advance whatever legal claims they have. While they may have reasonable grounds to leave their jobs, resigning usually results in diminution, if not destruction, of their legal rights.

Unless they can meet the extraordinarily high standard for "constructive discharge," they will probably forfeit their common law or statutory claims. The standard includes very bad conduct by an employer that is so intolerable that no reasonable person could be expected to endure it, coupled with an intent by the employer to force the employee to quit.

Absent a constructive discharge, a quitting employee must show that the resignation was attributable to a "good reason caused by the employer," under Minn. Stat. § 268.095, subd. 1(1).

The statute defines "good reason" to consist of four elements: (a) one that is "directly related to the employment," (b) something "for which the employer is responsible," (c) is "adverse" to the employee, and (d) "would compel an average, reasonable worker to quit."

Employees generally win about 55 percent of contested applications for unemployment benefits - about 32,000 out of 58,000 total in both 2005 and 2006. But resigning employees have a substantially lower chance of prevailing, somewhere between slim and nearly none.

This tendency was reflected in four recent rulings of the Minnesota Court of Appeals. But in another case, one quitting employee managed to secure unemployment benefits because of substantial alterations in her working conditions imposed by her employer.

Litigation Losers

In Newcomb v. Work Connection, 2008 WL 73638 (Minn. App. Jan. 9, 2008) (unpublished), an employee who quit because the job became too stressful and some of her job responsibilities were taken away while new people were trained to replace her, was denied unemployment compensation benefits.

The Court of Appeals upheld a determination of the unemployment law judge that the claimant's own personal dissatisfaction with her supervisors and apprehension regarding potential job termination did not satisfy the "good reason" standard under § 268.095, subd. 1(1).

In Hicks v. McDonalds Restaurants of Minnesota, Inc., 2008 WL 73650 (Minn. App. Jan. 8, 2008) (unpublished), a maintenance worker quit his job at a fast food restaurant after he was told that he was being investigated for stealing food and was refused the key to the cooler. He was denied unemployment compensation benefits.

The Court of Appeals affirmed the ULJ's finding that the manager had simply outlined a plan to investigate the thievery and that it was reasonable for the employer to restrict the employee's access to the cooler pending that investigation.

Moreover, the conversation between the manager and the employee, which informed him of the tip that had been brought to the manager's attention, "would not compel an average, reasonable worker to quit."

In Foss v. St. Luke's Hospital Assn. of Duluth, 2008 WL 131668 (Minn. App. Jan. 15, 2008) (unpublished), unemployment benefits once denied to an employee who quit after being told by her boss that she would be fired because of time record falsification.

The employee's resignation, in lieu of being discharged, did not warrant benefits because, under § 208.095, subd. 3(e), the notification of prospective discharge does not constitute "good reason" to quit.

A personal care assistant, who quit after having arguments with the father of one of the students that she assisted, was denied unemployment compensation benefits in O'Claire v. Accra Care, Inc., 2007 WL 68738 (Minn. App. Jan. 8, 2008) (unpublished).

Problems that the employee encountered with the student's father were not known to the employer until the claimant faxed a copy of a resignation letter. That led the unemployment law judge to determine that the employee quit without "good reason" caused by the employer, especially because the father's remarks were not so unreasonable to compel an average, reasonable worker to quit.

The Court of Appeals affirmed on the grounds that the claimant did not complain to the employer or give his employer a reasonable opportunity to correct any adverse working conditions prior to resigning.

Alteration Appeal

But an employee who did quit succeeded in her unemployment appeal in Lynch v. Wal-Mart Associates, Inc., 2008 WL 170600 (Minn. App. Jan. 22, 2008) (unpublished).

The pro se claimant, a cash office supervisor at a Wal-Mart Store, quit after she was told that the company was planning on eliminating her position. She was offered another position, but it involved a less favorable work schedule with a 5 percent pay cut, and she would have lost her supervisory responsibilities and been forced to work alongside the subordinates she formerly managed. After denial of benefits by an unemployment compensation judge, she appealed, basing her action on alteration of her job terms.

The Court of Appeals found that Wal-Mart's offer of severance, if the employee did not take the demoted position, warranted a determination that the employee had "good reason" to quit. The severance offer constituted an "admission that the [demoted] position was a sufficiently significant alteration in job duties and benefits that an average employee might choose to quit rather than to accept the new position."

Further, the altering of "every aspect of [the employee's] job," including wages, hours, days of work, duties, and status, reflects that the employee would have "suffered a significant disadvantage in accepting the new job." Ordinarily, a reduction of 15% or less does not satisfy the "good reason" standard. See Sun Star Foods, Inc. v. Uhlendorf, 310 N.W2d 80 (Minn. 1981). Thus, although the 5 percent pay decrease was not enough in itself to warrant the employee receiving unemployment compensation benefits, in this case the employer's new position would have "significantly altered [the] pay schedule, and responsibilities, all of which combined to create an "adverse" situation that "would compel the average person ... to quit." Therefore, the employee was entitled to unemployment compensation benefits.

The Lynch case is a proverbial exception that proves the rule: when employees quit their jobs, they usually must be resigned to losing eligibility for unemployment compensation benefits.

Marshall H. Tanick is an attorney with the law firm of MANSFIELD, TANICK & COHEN, P.A., in Minneapolis and St. Paul. He is certified as a Civil Trial Specialist by the Minnesota State Bar Association (MSBA) and represents employers and employees in a variety of workplace related matters.