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Does it Matter When an Employee Quits for Purposes of Unemployment Compensation? It Might.

November 2012

It is common knowledge that an employee who voluntarily quits employment is generally not entitled to unemployment compensation. However, many employers know that it is not always clear whether an employee has in fact resigned employment. Employees sometimes say they quit in a fit of anger, only to rescind their resignation within a day, hour, or sometimes even minutes. Sometimes the communication is vague, for example: "I ought to leave," or "I've had it with this place," etc. Can an employer show employees the door in these kinds of instances and later prevail on an unemployment compensation on grounds the employee quit? The decision often turns on whether or not the employee in fact resigned and, if so, whether it was voluntary. On November 13 the Minnesota Court of Appeals addressed a case that presented yet another issue to be decided - when did the employee resign? The Court's ruling in this case is instructive to employers beyond its implications for unemployment compensation; it provides guidance on how to handle any situation where an employee indicates (whether clearly or vaguely) an intention to resign.

The Minnesota unemployment compensation statute provides that an employee who quits unsuitable employment within the first 30 days may still be eligible for unemployment benefits. The employee in this particular case gave her employer a standard two-week notice of voluntary resignation and did so within 30 days of commencing employment. The employer agreed to allow the employee to work the remaining two-weeks. However, one week later the employee changed her mind and asked to continue working. The employer refused, holding the employee to her resignation because it had already been accepted and therefore her last day of work would remain as noted in her initial notice. Thereafter the employee filed for unemployment benefits even though she voluntarily resigned and her last day of employment was more than 30 days from her start date. Her argument was that she met the statutory exception because she quit unsuitable employment within 30 days, effective on the day she gave her two-week notice. The employer, however, argued that the employee effectively quit as of her official last day of employment which fell outside the 30 day exception under the statute. The court had to determine whether: (1) the employee quit when she gave notice (2) she quit when the employer refused to allow the employee to withdraw the notice; or (3) she quit on her last day of employment. The court ultimately determined that the employee quit employment on the day she provided notice to the employer.

This decision is important for two reasons. First it highlights that there are statutory exceptions whereby a resigning employee may nevertheless qualify for benefits. Second, it illustrates that an employee's notice of an intent to resign can be determinative both of the fact that an employee has voluntarily resigned and when resignation occurred. The employer's prompt acceptance of the employee's resignation; its agreement to permit the employee to work out the two week notice period; and its steadfast position of refusing to allow this employee to change her mind and rescind her two week notice of quitting, saved the day for this employer. All too often employers fail to respond to employee communications about quitting, leaving the entire matter uncertain. Not only does this leave uncertainty as to whether or not an employee remains committed to his or her job or will be leaving, it also may have legal consequences as demonstrated by the appellate court's decision in this recent case.

If you have any questions regarding the nuances of unemployment compensation appeals or the unemployment compensation statute in general, do not hesitate to contact Wessels Sherman's Minneapolis office for guidance.