Minnesota Supreme Court Rules on Definition of “employment Misconduct” for Denial of Unemployment Benefits

by | Apr 16, 2020 | Employment

On December 28, 2016, the Minnesota Supreme Court ruled that the statutory definition of employment misconduct (Minn. Stat. § 268.095, subd. 6(a) (2016)) is the “exclusive” definition for determining an employee’s eligibility for unemployment benefits. In so ruling the Court prohibited the application of the common law “materiality” definition in making eligibility determinations.

Minn. Stat. § 268.095, subd. 6(a) reads:

“Subd. 6. Employment misconduct defined. (a) Employment misconduct means any intentional, negligent, or indifferent conduct, on the job or off the job that displays clearly:

  1. a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee; or
  2. a substantial lack of concern for the employment.”

While there are exceptions enumerated in subdivisions (b)-(d) for specific reasons that might otherwise fall under the general definition, I will not discuss them in this article. However, Minn. Stat. § 268.095, subd. 6(e) clearly states:

“The definition of employment misconduct provided by this subdivision is exclusive and no other definition applies.”

The case, Nina Wilson vs. Mortgage Resource Center, Inc., Department of Employment and Economic Development, (A15-0435, 2016), involved the employee’s discharge for a misrepresentation on her employment application about her level of education. The application clearly stated that false information would be grounds for discharge. The background check done on the employee did not verify her having a GED as she claimed on the application. Nevertheless, she was hired. Eventually, the employer needed to verify the employee’s GED. While she was on an unrelated medical leave, she was asked to verify her GED claim. The employee failed to respond to the employers request for verification and was fired.

The Employee was initially determined to be ineligible for benefits and she appealed. The ULJ (Unemployment Law Judge) also determined she was ineligible and she appealed to the Court of Appeals. The Court of Appeals reversed the ULJ using the pre-statutory common law definition that the courts had been using starting with Tilseth v. Midwest Lumber Co., 204 N.W.2d 644 (Minn. 1973). Under Tilseth and subsequent cases employment misconduct was defined as:

“conduct evincing such willful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations to his employer.”

In addition, the courts had adopted an inquiry into the alleged misconduct that looked at whether the conduct was “material” to the employment. In particular, in the case of providing false information on an application, would the person not have been hired except for the false information?

DEED appealed and the Minnesota Supreme court reversed the Court of Appeals declaring the employee ineligible for unemployment benefits.

What does this mean for Employers? First, employers should have one or more policies that clearly define the standards of behavior it expects of its employees and the consequences for violating those standards. The policy(s) should be distributed to all employees and employees should be required to sign a written acknowledgement that they received the policy(s).

Second, if an employee terminated for violation of the policy(s) files for unemployment benefits the employer should (a) respond in detail to the DEED requests for information; (b) if the employee is deemed eligible for benefits, consider appealing that decision; and(c) if the employee is deemed ineligible for benefits and appeals, make certain to participate in the appeal hearing to defend the ineligibility determination.

What does this mean for employees? First, make sure you read and understand the employer’s policies governing your conduct.

Second, whether you deem the conduct expected by the employer as being “reasonable” or not, realize that if you are an “employee at will”, you will not be able to challenge the reasonableness the expected conduct for unemployment eligibility purposes until you are fired for violating the policy.

Finally, both employers and employees should seek legal advice on unemployment matters as early as possible. For employees, this may be well before you quit or are fired. For employers, this should be before actually firing an employee. Advice and counsel is less expensive than appealing adverse determinations. If an appeal is filed, our attorneys at Caldecott & Forro have a wealth of experience representing both employers and employees in those proceedings.