• Minnesota Court of Appeals Affirms Denial of Unemployment Benefits Due to Employee Misconduct
  • June 11, 2010 | Author: David J. Duddleston
  • Law Firm: Jackson Lewis LLP - Minneapolis Office
  • Human resources professionals frequently address important business interests in claims for unemployment benefits.  In Goble v. Speedway SuperAmerica LLC, No. A09-924 (Minn. Ct. App. May 11, 2010), an employer challenged and defeated a claim for benefits due to employee misconduct.  Affirming the denial of unemployment insurance benefits, the Minnesota Court of Appeals held that Todd Goble was not eligible for benefits because the employer, a retail store, terminated him for misconduct -- using the store’s intercom system to speak disrespectfully to customers.

    The Facts
    Goble worked for Speedway SuperAmerica LLC, a gas station and convenience store, as the full-time lead.  On January 10, 2009, Goble’s co-worker refused to sell cigarettes to a customer, an African-American woman, because her driver’s license appeared to have been altered.  The customer became upset, yelled at Goble and his co-worker, calling them racist.  The customer also allegedly said, “[G]ood thing Obama was elected [because] the racism [is] going to stop.”  After the customer left the store, Goble broadcasted on the store’s outdoor intercom, “Obama sucks.”

    The customer complained to SuperAmerica’s customer service department.  SuperAmerica investigated the incident, and Goble and his co-worker admitted that they made the comments. 

    During the investigation, SuperAmerica also reviewed an incident in 1993 where Goble used the store intercom to make a comment to a customer who was using a squeegee to clean the windows of his vehicle.  Goble said, “Why don’t you clean your whole car with our squeegee?”  He was disciplined for the incident, and the following notation was included in his personnel file: “This type of behavior is totally unacceptable, and will not be tolerated.  This is Todd’s final notice, and any other similar complaints will result in termination.”  At the conclusion of its investigation of the latest incident, SuperAmerica terminated Goble’s employment.

    Goble sought unemployment benefits from the Department of Employment and Economic Development.  The Department determined that Goble was ineligible because he had been terminated for misconduct.  Goble filed an administrative appeal, and an unemployment law judge (“ULJ”) found him ineligible for unemployment benefits.  Goble appealed to the Court of Appeals.

    Legal Standard
    The Minnesota law provides that an employee who is discharged for employment misconduct is ineligible to receive unemployment benefits.  Minn. Stat. § 268.095, subd. 4(1) (2008).  Employment misconduct includes “any intentional, negligent, or indifferent conduct, on the job or off the job (1) that displays clearly a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee, or (2) that displays clearly a substantial lack of concern for the employment.”  Minn. Stat. § 268.095, subd. 6(a).

    As a general rule, refusing to follow an employer’s reasonable policies and requests is misconduct because it shows a substantial lack of concern for the employer’s interest.

    Court Decision
    According to the Court, the case depended on “was the employer’s expectation for the employee reasonable under the circumstances?”

    Goble argued that his actions “did not go beyond the conduct that could reasonably be expected of an employee under the circumstances.”  The Court rejected Goble’s argument, saying SuperAmerica is a retailer, “which means that it receives revenue from persons such as the woman whom Goble offended.”  The Court also observed that SuperAmerica had a duty to not interfere on the basis of race with its customers’ freedom to form and enjoy contractual relationships.  Accordingly, the Court found that SuperAmerica’s expectation that Goble refrain from intentionally offending its customers was objectively “reasonable under the circumstances.”

    Goble then argued that his conduct was not “a deliberate choice adverse to his employer” but “a short comment under the heat of the moment.”  This the Court also found unpersuasive because it was “not based on a viable legal theory.”  The once-accepted “isolated hotheaded incident” exception no longer exists because the Minnesota legislature amended the unemployment insurance law to remove the statutory language on which the exception was based.

    Finally, Goble argued that his misconduct fell within the single-incident exception to the definition of misconduct.  The exception excludes a “single incident that does not have a significant adverse impact on the employer.”  The ULJ held that the single-incident exception did not apply because SuperAmerica previously disciplined Goble for misconduct.  Goble challenged this ruling because too much time had passed between the two intercom incidents.  He also argued that the incident did not have a significant adverse impact on SuperAmerica.  The Court rejected both arguments.  With respect to the timing, the Court noted that the statute contained no time limit for considering prior incidents; thus, the ULJ did not err by considering the 2003 incident.  The Court also found that the employer had established that Goble’s conduct caused problems with customers and that it had lost trust in Goble to act appropriately.

    Lesson for Employers
    Employers often do not contest unemployment insurance claims because it is unlikely that benefits will be denied.  But when employers believe that the former worker committed misconduct that placed its business at risk, challenging a claim for benefits may be warranted.  This case illustrates employment-related “misconduct” that may deprive a former employee of unemployment insurance.  Where the misconduct precipitating a termination implicates important legal rights and business objectives, such as maintaining workplaces free from racial harassment, employers may want to consider contesting claims for unemployment insurance benefits.