By: James B. Sherman Esq.
Troubled auto dealer Denny Hecker is finding his name on more than the front pages of Minnesota newspapers. The sudden collapse of Hecker's auto dealership last year also had a profound impact on its employees. One particular case involved an unfortunate fellow who was hired on as a parts manager just days before Hecker's dealership folded. His ensuing attempt to qualify for unemployment compensation benefits wound up in the Minnesota Court of Appeals, but it ended in more bad news for the man who may qualify for the "Top 10 Most Unlucky Minnesotans."
The case involved an individual who worked for a competing dealership until a friend told him Hecker was hiring at its Stillwater location (15 miles closer than his original job). Although the Hecker job paid $1.20 per hour less and the employee's portion of the premium for health insurance cost over $200.00 more per month, the shorter commute was too desirable to pass up. The man applied for and got the Hecker job, quit his other job and, sadly, watched his new job vanish along with the dealership just days later... bad timing!
Under Minnesota's unemployment compensation statute, as with most states, persons who voluntarily quit their jobs are ineligible for benefits. However, an exception exists where an applicant quit his/her job to "accept other covered employment [with] substantially better terms and conditions of employment," but does not work at the new job long enough to satisfy the eligibility period at that job. Applying these statutory provisions to the facts, the Court of Appeals noted there were no formal opinions in the Minnesota courts on what constitutes "substantially better terms and conditions of employment." The court stated that while more than just wages and benefits weigh into the consideration, the new job terms must be substantially better as measured on an objective basis (not based on which position is deemed more favorable by the applicant/employee, subjectively).
In the end, the court held although the applicant understandably preferred a job closer to home and family, that was not an objective measure of whether the new job had substantially better terms and conditions. Of course, had this poor guy only known how imminent the demise of the Hecker auto empire was, one suspects his subjective view of the new job would have drastically changed.
Questions? Please contact WS Shareholder and Senior Attorney James B. Sherman at (952) 746-1700, or jasherman@wesselssherman.com.
