A new provision of the Minnesota unemployment statute became effective July 1. Enacted by the 2012 legislature, the new language could have an impact on Minnesota employers and employees, but just what that effect might be is not -- to be charitable -- entirely clear.
is not unusual for an employer to enter into an agreement with the
departing employee under which the employee releases potential claims
against the employer. To make such an agreement enforceable in a court
of law, the employer must provide the departing employee something of
value that, without the agreement, the employee would not get. One such
valuable item, which is often requested by the departing employees (and
their representatives) and granted by employers, is the employer's
promise not to oppose any claim for unemployment benefits that the
employee might make.
The new statutory provision may
alter the law in Minnesota with respect to agreeing to such requests. Specifically, the amendment adds a subdivision, 1a., to Section 268.192,
Subd. 1a. Agreements not allowed.
An employer may not make an agreement that in exchange for the employer
agreeing not to contest the payment of unemployment benefits, including
agreeing not to provide information to the department, an employee
(1) quit the employment;
(2) take a leave of absence;
(3) leave the employment temporarily or permanently;
(4) withdraw a grievance or appeal of a termination.
An agreement that violates this subdivision has no effect under this chapter.
It's hard to predict what the effect of this amendment will be, or even to understand the intent of the new language.
are several situations in which an agreement not to contest
unemployment might come up. The employer might wish to induce a problem
employee to leave voluntarily, but a voluntary departure reported to the
Department of Employment and Economic Development (DEED) usually
prevents the employee from being eligible to receive unemployment
benefits. The employee doesn't want an involuntarily termination to
show up in the employer's personnel records, but also doesn't want a
voluntary departure reported to DEED. If no one tells DEED the departure
was voluntary, the thinking goes, then both of the employee's goals are
met and the employer's only cost is the cost associated with paying its
share of unemployment benefits.
Perhaps it's that kind
of deal that this amendment seeks to eliminate. The legislative thinking
may have been that agreements of this type cause people who really
don't qualify to be paid unemployment benefits.
Or maybe not. The new provision amends existing Section 268.192
of the Minnesota Statutes, a section entirely focused on preventing
employers from obtaining waivers or other agreements from employees that
would interfere with employees' receipt of unemployment
benefits. Perhaps the amendment, like the rest of the section, is
concerned with protecting unemployment benefits instead of limiting
them. If so, it might apply to circumstances where the employer seeks to
avoid being accountable for benefits.
It remains to be
seen how DEED will handle issues that might arise over this new
provision, and how the courts will interpret the new statutory language.
Some employers and employees may now be wary of agreements that touch
the subject of unemployment benefits, regardless of how mutually
beneficial they might be. Others might well conclude that such
agreements are still viable. We should all keep an eye out for further