An employee voluntarily quits his or her employment with your company, and you think he or she will be unable to collect unemployment benefits due to the resignation. You may want to think twice! The Superior Court of New Jersey, Appellate Division, just issued a decision approved for publication reversing the Board of Review’s denial of unemployment benefits where an employee voluntarily quit her job after her employer told her she might be fired for her unexpected absence due to child care issues. Cottman v. Bd. of Review, No.: A-1908-16, __ N.J. Super. __ (App. Div. 2018).

The employee in Cottman had been working as an overnight residential counselor in a group home since April 2016. In August 2016, her babysitter, who cared for her three children with special needs, unexpectedly quit right before her overnight shift began. After her efforts to contact co-workers to cover her shift were unsuccessful, she called her supervisor to explain the issue. Her supervisor stated she had just ended her probationary period of employment and she could “either . . . come in or [she] might be fired.” Rather than be terminated, the employee quit her job.

Thereafter, the employee applied for unemployment benefits but was denied because, according to the deputy, she left work voluntarily, which under almost all circumstances precludes collection of unemployment benefits. The Board of Review affirmed this decision, reasoning that voluntarily leaving your employment for childcare purposes is not good cause that would justify an exception to the rule. On appeal, the employee argued that she was forced to quit because she could not leave her children unattended and her supervisor told her she might be fired if she did not attend her shift.

The Appellate Division reversed the Board of Review’s decision reasoning that where an employer conveys a very strong likelihood of imminent discharge, an employee’s resignation may be justified such that he or she could still collect unemployment benefits. It stated that the general rule disqualifies an employee from collecting unemployment benefits where he or she leaves work for personal reasons unrelated to work. The Court noted, however, that “when an employee knows he or she is about to be fired, the employee may quit without becoming ineligible” for benefits. It further explained that the circumstances surrounding an employee’s resignation “must be so compelling as to indicate a strong probability that fears about the employee’s job security will in fact materialize[.]” The Court found such circumstances existed here and justified the employee’s resignation in this narrow exception to the rule.

The Bottom Line

Cottman demonstrates how one remark by a supervisor to an employee could have serious and lasting implications for a company. It reminds us of the importance of managerial and supervisory training. Partnering with legal counsel experienced in employee and supervisory training is a wise move and could help businesses avoid the costly and time-consuming ramifications of litigations such as this.