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PERSPECTIVES

Quitters are not winners in unemployment cases

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

By Marshall H. Tanick

Employees quit their jobs under a myriad of circumstances and for many different reasons.

But those who seek unemployment compensation benefits after they quit are likely to lose, as seven of them found this out this spring in recent rulings by the Minnesota Court of Appeals.

In each case, the court concluded that the employees did not have "good reason" to resign attributable to their employers, which disqualified them for benefits under Minn. Stat. § 268.095, subd. 1(1).

Salary Squabbles

A pair of employees was denied unemployment benefits when they quit following squabbles with the bosses over salaries.

In Davis v. EE- Jay Motor Transp., 2006 WL 771995 (Minn. Ct. App. March 28, 2006) (unpublished), an employee was denied benefits after he left the job within a week after his employer failed to re-issue a paycheck that the employee lost.

The Department of Employment & Economic Development (DEED) deemed him ineligible for unemployment benefits, and the Minnesota Court of Appeals agreed. Quitting before a week had elapsed from the time of the request for a check was insufficient. Therefore, he did not have "good" reason to resign.

Similarly, in Kehone v. Mankato Area Chamber of Commerce, 2006 WL 771567 (Minn. Ct. App. Mar. 28, 2006) (unpublished), an employee quit after she was denied a salary increase. She argued that she had good reason to quit her employment because she was expected to work two positions yet be compensated for one.

The DEED denied her benefits, and the Court of Appeals affirmed. The record did not reflect that she actually was required to perform additional duties. Furthermore, she was fairly compensated for the work that she did.

Five Failures

Five unemployment claimants simultaneously failed in their bids for benefits concurrently.

An employee whose salary was reduced by about 35 percent due to poor performance, and was told that her pay would be increased when her performance improved, was denied unemployment benefits after she quit working in Currie v. Help Sys, 2006 WL 1073072 (Minn. Ct. App. Apr. 25, 2006) (unpublished). Two weeks after her pay was cut, the employee complained about "harassment and discrimination" and subsequently took a leave of absence under the Family Medical Leave Act (FMLA) after an internal investigation revealed that her claims were groundless. After her 12-week leave expired, she resigned due to "discrimination and harassment," but never complained about her salary decrease.

Affirming the DEED's decision, the Court of Appeals held that she was not entitled to benefits. The salary reduction, which could have warranted her quitting and being eligible for benefits, was not the reason for her termination "because she rescinded her original [resignation] notice and continued her association" with the company during her leave of absence. Her salary reduction was "performance-based," but she would have received an increase if her work had improved. Accordingly, the "totality of circumstances" would not lead an "average, reasonable worker" to feel compelled to quit.

An employee who quit after she was accused of falsifying records was denied unemployment benefits in Chappelear v. Zale Delaware, Inc., 2006 WL 1073397 (Minn. Ct. App. Apr. 25, 2006) (unpublished).

The employee, who worked for a jeweler, was accused of falsifying merchandise accounts and told she might be terminated. She then quit and sought unemployment benefits, which were denied by DEED. The Court of Appeals affirmed, holding that the employee quit, rather than was discharged, because she felt that she was probably going to be fired.

The employee's claim that her manager was engaged in favoritism to other employees was unsubstantiated. Even if it were corroborated, her account constitutes the type of "personality conflicts and dissatisfaction with working conditions" that did not constitute a good reason to quit attributable to the employer.

A part-time assistant teacher at a child learning center, who quit because of staffing shortages, was denied benefits in Montague v. Alphabet Junction Learning Center, LLC, 2006 WL 1073400 (Minn. Ct. App. Apr. 25, 2006) (unpublished). The employee experienced a couple of instances in which the staff-child ratio was below legal requirements and then quit.

Affirming the decision of DEED, the Court of Appeals held that the employee was not entitled to unemployment benefits. The staffing shortage occurred twice during a two-week period. On the second occasion, the employee was told to call her boss if she needed help, but she did not do so. While "not insensitive to the importance of complying with state [staffing] regulations," the court saw no evidence that the workplace was unsafe or that the children or employees were placed in an "unacceptable work environment [or] the public is at risk."

The company apparently had a policy of allowing interim help on days of short staffing, which the employee failed to exercise by reporting any problem to her boss. Because there was "no evidence of actual safety or unacceptable risk, her departure was unjustified and she was not entitled to unemployment benefits.

A seasonal employee working for a sign company, who accepted the employer's proposal to claim to be laid off during the winter, was denied benefits in Gephart v. Safety Signs, LLC, 2006 WL 1073404 (Minn. Ct. App. Apr. 25, 2006) (unpublished).

The employer gave employees the option of working in the shop during the winter or being laid off and seeking unemployment; and the employee sought the latter. When he was recalled to work, he refused to return and sought unemployment benefits.

The DEED denied his claim, and the Court of Appeals affirmed for the period from the lay-off until the recall. Although an employee who is laid off is eligible for unemployment benefits, one who quits is not. The two are "easily distinguishable . . . in a lay-off, the decision is the employer's, but in a quit, the decision is the employee's."

The record here reflected that the employee "decided to stop working" in the middle of the winter, even though work was available. Therefore, he was not "laid off due to lack of work," because the employer "had work available for him." Under these circumstances, he quit, rather than was laid off, and was disqualified from receiving unemployment compensation benefits.

In a fifth case, the Court of Appeals also rejected a claim for unemployment benefits by a woman employee who quit because of discomfort in the workplace.

In Stewart v. American Tool Grinding, 2006 WL 1704198 (Minn. App. June 20, 2006) (unpublished), the office manager of a business quit after her husband, who owned and operated the 15-person family business, unexpectedly told her he wanted a divorce. The DEED denied benefits and the Court of Appeals affirmed.

While a marital breakup can cause "awkwardness, if not bitterness, in the workplace, there was no evidence to warrant an assumption that the situation was "intolerable." The wife failed to comply with § 268.095, subd. 3(c), which requires giving "the employer an opportunity to correct adverse conditions before quitting," an obligation that "even applies to ... the quitting spouse."

Since there was insufficient evidence of an attempt to "address" the situation before quitting or of "an impossible work situation" with the family members, the resigning spouse lacked good cause to quit and was not entitled to benefits.

There's an old saying that "quitters never win and winners never quit." As these cases reflect, employees who voluntarily leave their jobs are usually denied unemployment compensation benefits. When they quit, they should be resigned to this fate.

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 and other related matters.