While most employees begin a new job with a positive outlook and high expectations, it’s not unusual for the employment relationship to take a wrong turn. It may be that the employee has been placed on a Performance Improvement Plan or is under an internal investigation. Or, the employee might be experiencing an intolerable working environment that she or he can no longer endure. In any event, whether an employee decides to voluntarily resign or waits to be (potentially) terminated makes a big difference for the employee going forward, both from a practical and legal perspective.
Will I Be Entitled to Unemployment Benefits?
One of the primary issues an employee must consider is whether they will be entitled to unemployment benefits. Under Minnesota law, the general rule is that employees who are terminated are entitled to unemployment benefits, while employees who resign are not entitled to benefits.
But not every employee who is terminated is entitled to unemployment benefits, as employees who are terminated for engaging in “employment misconduct” will not be eligible for benefits. Typically, an employee merely performing poorly is not considered to be “employment misconduct,” but other actions that are “a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee” (e.g., consistently being late to work) will be considered employment misconduct.
On the flip side, not every employee who resigns is automatically ineligible for unemployment benefits. Employees who resign “for a good reason caused by the employer” may be eligible to receive benefits, but the reason must be one that “would compel an average, reasonable worker to quit and become unemployed rather than remaining in employment.” If the employee is resigning due to working conditions, the employee also must give the employer an opportunity to take corrective action.
These situations are difficult for employees to navigate, in particular because an employee rarely can be sure of an employer’s ultimate intentions, both with respect to whether the employer might terminate the employee and whether the employer might contest an employee’s application for unemployment benefits.
Will I Be Able to Enforce My Legal Rights?
Another consideration for employees is whether their legal rights will be protected if they resign. Under both Title VII and the Minnesota Human Rights Act (which address many forms of discrimination), employees need to suffer an adverse employment action before their rights can be vindicated. In certain situations, the working conditions can be so hostile that an employee’s resignation amounts to a “constructive discharge,” which is considered to be an adverse employment action. However, it can be difficult to prove whether an employee has been “constructively discharged,” and employees should seek legal counsel to help evaluate their particular employment situation.
Will I Be Subject to a Non-Compete?
Employees must also consider whether they will be subject to non-compete provisions when evaluating how to get out of a difficult employment situation. Many non-compete agreements provide that the restrictions only apply if the employee voluntarily resigns or is terminated for cause. In these situations, the employee needs to evaluate whether there is cause to terminate his or her employment, and the likelihood of the employer ultimately terminating the employee. Our employment attorneys see this situation all the time, and we can proactively work with your employer to ensure you are able to find future fulfilling employment and aren’t bound by restrictive covenants.
Finally, an employee’s ability to get a positive or neutral reference letter may also play a role in whether an employee should choose to resign. Regardless of your circumstances, you will be well-served by speaking with one of our employment attorneys if you find yourself in a tough spot. Our extensive experience navigating an employees’ separation from employers, both in Minnesota and throughout the country, will be the best way to assure your legal rights are secured, and that you will be able to secure your next job.