It is fairly well-known that unemployment compensation in Minnesota favors employees, and employers have a high hurdle to reach in unemployment challenges.  There are times however when the Department of Employment and Economic Development and the Court of Appeals agree with the Employer and deny unemployment benefits to an employee.

In Bronstad v. House of Hope, Inc., A14-54 (Minn. App. 09/22/2014) the Court of Appeals upheld DEED’s determination that Ms. Bronstad was ineligible for unemployment benefits because she quit without good reason caused by her employer.  Ms. Bronstad was employed by House of Hope, Inc. as a full-time client manager from 2006-2013.  On September 23, 2013, she was notified she was being demoted from her supervisory position in the men’s program and transferred into a non-supervisory position in the women’s chemical dependency treatment program.  Ms. Bronstad’s demotion was due to past reprimands, client complaints, and medication errors.  As a result of performing more medication errors than other client managers, House of Hope, Inc. needed to try something different to address the issue, and avoid future problems.  House of Hope, Inc. wanted to keep her on staff and believed the best option was to transfer her to the women’s house which had fewer clients.  Ms. Bronstad refused the transfer to the women’s house, and she was instructed to turn in her company keys and credit card.

Minnesota Statute §268.095 states a quit “occurs when the decision to end the employment was, at the time the employment ended, the employee’s.”  In contrast, a discharge “occurs when any words or actions by an employer would lead a reasonable employee to believe that the employer will no longer allow the employee to work for the employer in any capacity.”

The ULJ found and the Court of Appeals agreed there was evidence that House of Hope, Inc. provided Ms. Bomstad continuing employment in the women’s program at the same pay rate, and therefore concluded the decision to quit employment was strictly Ms. Bronstad’s.  The Court next evaluated whether or not Ms. Bronstad’s decision to quit was based on a good reason caused by the employer.

The Court of Appeals has previously held a good cause to quit does not exist when an employer demotes an employee to a non-supervisory position when the employer has been dissatisfied with the employee’s job performance.  The Court of Appeals affirmed the ULJ’s denial of unemployment benefits.

It is helpful for employers to be familiar with the statutes surrounding unemployment compensation, because sometimes what appears to be a “discharge” is actually a “quit”.