Stephanie Kelley was a marketing director for Merle Norman Cosmetics.  In May 2010 she went on stress leave, one month after filing a DFEH claim alleging she was being retaliated against for complaining of sexual harassment.  She was cleared to return to work by her physician on November 15, 2010. 

Two days before she was cleared to return, her lawyer, Pam Teren, wrote to Merle Norman's attorney, Mike McGuiness, telling him Kelley was ready to return on the 15th and reminding McGuiness of Kelley's previous request for information: a written job description, a written statement of goals and objectives, a written confirmation of her job title, duties, pay, and benefits, and the status of her earlier request for vacation during the upcoming Christmas holiday.  Twenty minutes later, Teren sent another email, adding that Kelley would like written confirmation that she would not be subjected to retaliation for her earlier complaints of sexual harassment.  Teren explained that Kelley could not afford to take anymore unpaid time off and was ready to return to work.  She also noted that she heard a Merle Norman executive say she had already found a replacement for Kelley and was hoping to fire Kelley.

McGuiness replied the next day, telling Teren that the company was happy to have Kelley return to work, but the conditions set forth in Teren's email were unreasonable.  For example, Kelley had exhausted all of her vacation leave during her lengthy absence, and to request leave only a few weeks after returning was inappropriate.  McGuiness said Merle Norman did not tolerate retaliation in any form and proposed a return to work date of November 30 so that the company could prepare. 

Teren replied, claiming Kelley had almost 100 hours of vacation time left and that if Kelley were not granted vacation during the holidays it would be evidence of retaliation.  She disagreed that her requests for information were unreasonable.  She offered a compromise start date of November 22 and made a settlement demand of $300,000 for the DFEH claim.  McGuiness replied that these demands were unacceptable, and that Teren's false accusation against a Merle Norman executive was offensive.  Given these interactions, McGuiness said he considered Kelley's employment terminated as of November 18, 2010.

The EDD denied Kelley's claim for unemployment benefits, instead agreeing with Merle Norman's assessment that Kelley had voluntarily quit her position.  That decision was appealed to an administrative law judge, who found that Merle Norman had fired Kelley for reasons that did not amount to misconduct and therefore she was entitled to benefits.  The Unemployment Insurance Board rejected that ruling, finding that Kelley was more interested in pursuing her lawsuit against Merle Norman and refused to return unless her employer supplied information to which she was not entitled.

On appeal, the trial court found that even though Teren's emails were to some extent posturing for the threatened lawsuit, the requests in the emails were simply requests, not demands or conditions.  Merle Norman was not in a position where it had no option but to fire her.  The company should have waited to see if she returned to work without the information.

The court of appeal will affirm the trial court ruling if the findings are supported by substantial evidence.  Here the court explained the purpose of unemployment benefits was to protect those who became unemployed through no fault of their own.  But, if someone leaves employment voluntarily or is terminated due to misconduct, that person will not be entitled to benefits.

Under California's scheme, in order to overcome the presumption that an employee is entitled to benefits, an employer must show that the employee quit without good cause or was fired for misconduct.  The EDD regulations state that an employee voluntarily leaves work when it is the employee's own actions that cause the unemployment.  If an employee engages in conduct that leaves the employer no choice but to terminate employment, the employee is found to have voluntarily quit.  One example of this is if an employee drives drunk and loses his or her license, when having a license is a job requirement. 

Here the appeals court found Kelley did not voluntarily quit.  Though she did request information through her attorney before returning to work, these emails never stated these were demands or conditions to her employment.  Merle Norman fired Kelley without ever having found out if she would return to work even if they did not comply with Teren's requests.  There is no evidence that Kelley refused to return to work without the information she sought.  Therefore, she did not voluntarily quit and was entitled to unemployment benefits.

Kelley v. California Unemployment Insurance Appeals Board, -- Cal.Rptr.3d--, 2014 WL 505343