Benefits, Employment Law

Employee Voluntarily Quits, Could She Be Eligible for Unemployment Benefits?

A New Jersey appellate recently heard claims from a former employee who alleged that she felt compelled to resign because of her supervisor’s inappropriate comments and other workplace disputes. Was the employee entitled to unemployment benefits?quit


Shiloh Community Development Corporation hired “Raegan” to work as a part-time data manager in February 2014. In October, Shiloh learned that certain data Raegan had supposedly entered into the computer had gone missing. She claimed that her supervisor, “Olive,” screamed at her during a meeting and prohibited her from attending a training session. In addition, Raegan—who describes herself as white and Hispanic—claimed that Olive made a comment referring to her as a “soul sister.”

In November, Raegan filed a complaint with Shiloh about Olive’s allegedly inappropriate comment. Within a week, Olive issued Raegan an employee warning notice and asked her to keep daily logs of her work because she had gotten behind on her assignments. After investigating her complaint about Olive, Shiloh transferred Raegan to a new supervisor, “Shelby.”

On December 4, Raegan reported that Shelby had incorrectly charged patients and improperly coded medical records. While Shiloh investigated her report, it asked her to take some time off. Before she left, Raegan locked her door and turned in her keys out of fear that she would be falsely accused of impropriety with her work.

After Raegan returned to work, she met with Olive and Shelby on December 11. At the meeting, Shelby allegedly commented that she “didn’t know what kind of Christian [Raegan] was.” Raegan claimed that 5 days later, Shelby came into her office and spoke to her in a hostile tone. She also accused Shelby of changing medical records.

Raegan claimed that around the same time, she began to see “strange people” in the office and she was worried that she would be falsely accused of fabricating data and possibly go to jail. She claimed those circumstances made her work environment “unbearable.” On January 14, 2015, she resigned from Shiloh and filed for unemployment benefits. The Division of Unemployment Insurance denied benefits, finding she had voluntarily resigned without good cause.

Raegan appealed, and the appeal tribunal affirmed the division’s decision, finding she didn’t demonstrate that her working conditions were abnormal or that her supervisors’ actions were unjustified and caused her to leave her job. The appeal tribunal cited her own admission that she left work because of “strange people” she saw around the office and her fear of being blamed for falsifying documents.

Appellate Court’s Ruling

Raegan appealed again, and a New Jersey appellate court upheld the decision of the appeal tribunal. The court noted that a person becomes disqualified for benefits when she voluntarily leaves work “without good cause attributable to [her] work” and the employee has the burden to prove good cause after a voluntary resignation.

The term “good cause” has been interpreted to mean “cause sufficient to justify an employee’s voluntarily leaving the ranks of the employed.” Moreover, the employee must have had no choice but to resign, and the resignation must be based on real and reasonable circumstances, not imaginary, trivial, or whimsical reasons.

The appellate court dismissed Raegan’s claim that she was retaliated against when Olive reprimanded her and required her to keep a performance log because those actions were the result of a performance warning. The court noted that “mere over-sensitivity to criticism” does not equal good cause. In addition, the court held that on-the-job reprimands, even if they’re public, humiliating, and borderline inappropriate, do not justify an employee’s resignation.

The court also concluded that the “soul sister” comment was a one-time remark that didn’t constitute discrimination or justify Raegan’s decision to leave her job. Finally, the court rejected her argument that the “strange people” caused her concern because there was no evidence that she attempted to determine their identities or that they were deserving of her suspicion.

Bottom Line

This “win” for employers demonstrates two things that every company should understand. First, be aware that it may be worth your time to object to unwarranted claims for unemployment benefits. Second—and more important—make sure that no inappropriate comments or similar behavior occurs in your workplace. While Shiloh won the battle this time, unprofessional behavior could tip the scales in favor of an award of benefits and might also open the door to claims of discrimination and harassment.

Gregory S. Tabakman, an associate with Day Pitney, LLP, is a contributor to New Jersey Employment Law Letter.